{"operation":"document","citation":"CPF 320131006","title":"TEXAS EASTERN TRANSMISSION, LP (SPECTRA ENERGY PARTNERS, LP) — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2013-05-02","effective_on":null,"summary":"CLOSED notice of probable violation citing 190.203(f).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320131006.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320131006.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320131006","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320131006","body":"Notice of Probable Violation involving TEXAS EASTERN TRANSMISSION, LP (SPECTRA ENERGY PARTNERS, LP). PHMSA's enforcement data identifies the cited regulation as 190.203(f). The case was opened on 2013-05-02 and is reported as closed as of 2014-10-08. Proposed civil penalty: $96,200. Assessed civil penalty: $96,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320131006_Final Order_09222014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320131006/320131006_Final%20Order_09222014.pdf\n\n320131006_Final Order_09222014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320131006/320131006_Final%20Order_09222014_text.pdf\n\n320131006_NOPV PCP SP_05022013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320131006/320131006_NOPV%20PCP%20SP_05022013.pdf\n\n320131006_NOPV PCP SP_05022013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320131006/320131006_NOPV%20PCP%20SP_05022013_text.pdf\n\n320131006_Operator Response to Final Order_11122014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320131006/320131006_Operator%20Response%20to%20Final%20Order_11122014.pdf\n\n320131006_NOPV PCP SP_05022013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nand\nPROPOSED CIVIL PENALTY\nSPECIAL PERMIT LETTER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMay 2, 2013\nMr. Theopolis Holeman\nGroup Vice President\nSpectra Energy Transmission, LLC\n5400 Westheimer Court\nP.O Box 1642\nHouston, Texas 77251-1642\nCPF 3-2013-1006\nDear Mr. Holeman:\nOn April 23, 2004, pursuant to 49 U.S.C. §60118(c) and 49 C.F.R. §190.341, Spectra\nEnergy Transmission, LLC (SET) filed a special permit request with the Pipeline &\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), for\na waiver from certain provisions of 49 C.F.R. § 192. PHMSA issues special permits to\npipeline operators if the agency determines that a waiver of a particular regulation or\nstandard is not inconsistent with pipeline safety. On March 6, 2008, PHMSA issued an\norder granting SET a special permit with certain conditions and limitations (Order). See\nPHMSA PHMSA-RSPA-2004-19469, SET Special Permit Scioto County, Ohio.\nThe Order allows SET to continue operating its pipeline without having to rebuild or\nconform it to changes in the code. Specifically, the Order allows SET to continue to\noperate two pipeline segments, Line 10 and Line 15, at the same maximum allowable\noperating pressure (MAOP) despite a change in class designation from Class 1 to Class 2.\nThe two special permit segments are located approximately 5.3 miles downstream of the\nTexas Eastern Wheelersburg Compressor Station and are approximately 720 feet long.\nEach line also contains a special permit inspection area, which extends 220 yards on each\nside of the pipeline and up to 25 miles upstream and downstream from each end of the\nspecial permit segment.\n\n\n\nOn August 9-10, 2011, representatives of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49\nUnited States Code, inspected the pipeline facilities and records of SET to confirm the\ncompany’s compliance with the Order.\nAs a result of the inspection, it appears that SET has committed probable violations of the\nOrder. As stated in 49 C.F.R. § 190.203(f), when information obtained from an inspection\nindicates that further OPS action is warranted, OPS may initiate one or more enforcement\nproceedings prescribed in § 190.207 through § 190.235.\nThe items inspected and the probable violation(s) are:\n1. Condition “2”\nSET must incorporate the Line 10 special permit segment and the Line 15 special\npermit segment into its written integrity management plan (IMP) as \"covered\nsegments\" in a high consequence area (HCA) per 49 CFR § 192.903, except for\nthe reporting requirements contained in 49 CFR § 192.945. The special permit\nsegments included in this special permit need not be included in SET's IMP\nbaseline assessment plan.\nSET failed to comply with Condition 2 of the Order. Condition 2 required SET to\nincorporate the Line 10 and Line 15 special permit segments into its written integrity\nmanagement plan (IMP) as \"covered segments\" in a high consequence area (HCA).\n1 Upon\ninspection, there is no reference to the special permit segments included in SET’s IMP.\nAlthough, SET did include the special permit conditions within its Standard Operating\nProcedures, it failed to follow the express terms of Condition 2.\n2. Condition “3”\nSET must perform a close interval survey (CIS) of Line 10 and Line 15 along the\nentire length of each special permit inspection area not later than one year after\nthe grant of this special permit and remediate any areas of inadequate cathodic\nprotection (CP). A CIS and remediation need not be performed on either Line 10\nor Line 15 if a CIS and remediation have been performed on the corresponding\nspecial permit inspection area less than 6 years prior to the grant of this special\npermit. If factors beyond SET's control prevent the completion of the CIS and\nremediation within one year, a CIS and remediation must be completed as soon as\npracticable and a letter justifying the delay and providing the anticipated date of\ncompletion must be submitted to the Director, PHMSA Central Region not later\nthan one year after the grant of this special permit.\nSET failed to comply with Condition 3 of the Order. Condition 3 required SET to conduct\na CIS of Line 10 and Line 15 along the special permit segment and to remediate any areas\nwith inadequate cathodic protection by March 6, 2009. SET conducted a CIS in 2008 but\n1 An HCA is a location that is specifically defined in pipeline safety regulations as an area where pipeline\nreleases could have greater consequences to health and safety or the environment. See §192.903.\n2\n\n\n\nhas failed to properly remediate all the areas of inadequate cathodic protection within the\nproscribed time period. As indicated in SET’s own records it continued to correct areas of\ninadequate cathodic protection originally identified in its 2008 CIS in 2010, well after the\nproscribed deadline.\n3. Condition “20”\nAnomaly Evaluation and Repair:\n(a)…\n(b) Dents: SET must repair dents to Line 10 and Line 15 in the special permit\ninspection areas in accordance with 49 CFR §192.933…\n(c) …\n(d) Response Time for ILI Results: The following guidelines provide the\nrequired timing for excavation and investigation of anomalies based on ILI\nresults, Reassessment by ILI will “reset” the timing for anomalies not already\ninvestigated and/or repaired. SET must evaluate ILI data by using either the\nASME Standard B31G, Manual for Determining the Remaining Strength of\nCorroded Pipelines (AMSE B31G), or the modified B31G(dL) for calculating\nthe predicted failure pressure ratio to determine anomaly responses.\ni) Special Permit Segments:…\nii) Special Permit Inspection Areas: The response time must be in accordance\nwith 49 CFR Part 192, Subpart O, AMSE B31.8S (applicable edition) and\nSET’s IMP\nSET failed to comply with Condition 20 of the Order. Condition 20 sets forth the criteria\nand response time for repairing dents located in Line 10 and Line 15 within the special\npermit inspection areas. Specifically, if an anomaly is discovered and identified to be a\ndent with metal loss, SET must reduce the operating pressure immediately and repair the\nanomaly. See §192.933(d)(1)(ii).\nIn this instance, SET failed to temporarily reduce their operating pressure after determining\nthat “immediate conditions” existed on pipeline segments that are considered HCA due to\nthe Order. SET discovered five (5) anomalies on June 30, 2012. Per Set’s own description,\nall five (5) anomalies were dents with metal loss. On July 2, 2012, SET notified the Central\nRegion of the anomalies. Pursuant to §192.933(d)(1)(ii), SET was required to lower its\noperating pressure and make the repairs immediately. SET waited three (3) days to notify\nthe Central Region of the anomalies and only lowered its operating pressure after the\nRegion Director demanded that it do so on July 3, 2012. SET knowingly violated\nCondition 20 of the Order for four (4) continuous days.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a\nrelated series of violations. For violations occurring prior to January 3, 2012, the maximum\npenalty may not exceed $100,000 per violation per day, with a maximum penalty not to\nexceed $1,000,000 for a related series of violations. The Compliance Officer has reviewed\n3\n\n\n\nthe circumstances and supporting documentation involved in the above probable\nviolation(s) and has recommended that you be preliminarily assessed a civil penalty of\n$96,200 as follows:\nItem number PENALTY\n1 $31,200\n2 $27,500\n3 $37,500\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the response\noptions. All material you submit in response to this enforcement action may be made\npublicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document\nyou must provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted\ninformation qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for\nPipeline Safety to find facts as alleged in this Notice without further notice to you and to\nissue a Final Order.\nIn your correspondence on this matter, please refer to CPF 3-2013-1006 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nRight to Modify, Suspend, or Revoke a Special Permit\nIssuance of this enforcement action does not preclude PHMSA’s authority to seek\nmodification, suspension or revocation of the special permit issued under “PHMSA\nPHMSA-RSPA-2004-19469” at any time, as provided in 49 C.F.R. § 190.341(h)(1).(v). If\nsuch action is taken, PHMSA will provide SET with the opportunity to show cause why the\nproposed action should not be taken.\nSincerely,\nDavid Barrett\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Response Options for Pipeline Operators in Compliance Proceedings\n4\n\n320131006_Final Order_09222014_text.pdf\n\nSEPTEMBER 22, 2014\nMr. Greg Ebel\nPresident-CEO\nSpectra Energy Transmission, LLC\n5400 Westheimer Court\nHouston, Texas 77251-1642\nRe: CPF No. 3-2013-1006\nDear Mr. Ebel:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $96,200. 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: Ms. Linda Daugherty, Director, Central Region, OPS\nBizunesh Scott, Esq., Counsel for Spectra Energy Transmission, LLC, Steptoe &\nJohnson, LLP, 1330 Connecticut Avenue, NW, Washington DC 20036\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)\nSpectra Energy Transmission, LLC ) CPF No. 3-2013-1006\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn April 23, 2004, pursuant to 49 U.S.C. § 60118(c) and 49 C.F.R. § 190.341, Spectra Energy\nTransmission, LLC (SET or Respondent) filed a special permit request with the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), for a\nwaiver from certain provisions of 49 C.F.R. Part 192. On March 6, 2008, PHMSA issued an\norder, in docket number PHMSA-RSPA-2004-19469, granting SET a special permit with certain\nconditions and limitations (special permit).\nOn August 9-10, 2011, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of SET in Danville,\nKentucky. SET owns and operates over 22,000 miles of natural gas, natural gas liquids, and\ncrude oil pipeline. The special permit relevant to this case applied to Lines 10 and 15 within\nScioto County, Ohio of the Texas Eastern Pipeline. The special permit waived the pipe\nreplacement/pressure reduction requirements of 49 C.F.R. § 129.611(a). The special permit\nsections on the two lines are approximately 720 feet long. Each line also contains a special\npermit inspection area, which extends up to 25 miles upstream and downstream from each end of\nthe special permit segment.\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated May 2, 2013, a Notice of Probable Violation and Proposed Civil Penalty (Notice).\nIn accordance with 49 C.F.R. § 190.207, the Notice proposed finding that SET had violated\nvarious conditions of the special permit described above.\nSET responded to the Notice by letter dated May 29, 2013 and requested a 30-day extension,\nwhich was granted. On June 21, 2013 Respondent provided its full, initial response to the Notice\n(Response). SET contested two of the three allegations, offered additional information in\nresponse to the Notice and requested a hearing. A hearing was subsequently held on November\n5, 2013, at the Central Region Office in Kansas City, Missouri, with an attorney from the Office\n\n\n\n2\nof Chief Counsel, PHMSA, presiding. At the hearing, Respondent was represented by counsel.\nOn December 12, 2013, SET submitted its Post Hearing Brief (Brief) for this case.\nFINDINGS OF VIOLATION\nItem 1: The Notice alleged that Respondent violated Condition “2” of the special permit which\nstates:\nCondition “2”\nSET must incorporate the Line 10 special permit segment and the Line\n15 special permit segment into its written integrity management plan\n(IMP) as “covered segments” in a high consequence area (HCA) per 49\nCFR § 192.903, except for the reporting requirements contained in 49\nCFR § 192.945. The special permit segments included in this special\npermit need not be included in SET’s IMP baseline assessment plan.\nThe Notice alleged that Respondent violated Condition “2” by failing to incorporate the special\npermit line segments into its IMP as “covered segments.” Specifically, the Notice alleged that\nupon review of SET’s IMP, PHMSA inspectors saw no reference to the special permit segments\nin SET’s IMP. The Notice stated that SET did include the special permit conditions in its\nStandard Operating Procedures (SOP), but asserted that SET did not follow the express terms of\nCondition “2,” which required incorporation directly into the written IMP and amounted to\nviolation of the condition.\nRespondent contested this allegation of violation. In its Response, at the hearing, and in its\nBrief, SET argued that its inclusion of the special permit segments in its SOP and not explicitly\ninto the IMP amounted to compliance with Condition “2” because: 1.) the IMP states that the\nIMP “is comprised of multiple documents” and lists “Standard Operating Procedures and\nTransmission Guidelines” as a “section” of the IMP1, 2.) PHMSA’s regulations “establish a\nprecedent for incorporation by reference” with its use of industry standards2, 3.) PHMSA did not\nexplicitly state that it “wanted a specific reference literally to be included within the 62 pages of\nthe Manual,” such that SET did not have notice of the requirement3\n, and 4.) PHMSA did not\nallege that incorporation into the SOP instead of directly into the IMP resulted in management\nof the segments in a way that was inconsistent with the IMP or Condition “2.” Finally, SET\nargues that the SOP is the most proper place for the inclusion of the Condition “2” requirements\nbecause the purpose of the SOP is to “provide direction for operational personnel to execute the\nwork.”4\nSET’s most persuasive argument is that its IMP states that it is comprised of multiple documents,\n1 Response at 2.\n2 Brief at 4.\n3 Brief at 5-6\n4 Brief at 4.\n\n\n\n3\nincluding the SOP, such that the special permit conditions actually are included in the IMP\nthough incorporation by reference. However, at the hearing the Region raised the argument that\nfrom a compliance standpoint, in order to incorporate documents by reference into the IMP, the\nincorporation reference to other documents must appear in the IMP itself. As discussed in SET’s\nbrief and at the hearing, SET’s IMP “includes a suite of documents.” Given that this is the case,\nin order for the IMP and all of its incorporated documents to actually apply to the special permit\nsegments as required, the reference to its applicability needs to appear in the most general\ndocument, the IMP itself, affirmatively stating that any incorporated documents apply to the\nspecial permit segments. Instead, the reference to the special permit segments only appeared in\none of the incorporated documents. Therefore, in performing any task or analysis that required\nreference to the IMP itself or any incorporated document besides the SOP, the operator would\nhave no practical knowledge that the special permit segments has to be treated as “covered\nsegments.” SET’s reliance on PHMSA’s practice of incorporation of documents is unassailing.\nIt is appropriate for PHMSA’s Pipeline Safety Regulations to incorporate by reference more\nspecific documents, such as industry standards, because the regulations, like an IMP, serve as the\nstarting point for action or analysis.\nNext, I am not persuaded by SET’s argument that PHMSA did not provide adequate notice that\nSET was required to incorporate the special permit segments into the IMP itself. The\nrequirement that “SET must incorporate the Line 10 special permit segment and the Line 15\nspecial permit segment into its written integrity management plan (IMP) as “covered\nsegments,”” (Emphasis added) is clear and unambiguous. If SET thought it was best to\nincorporate the segments into the SOP rather than directly into the IMP itself, it was required to\ninquire with the Region about this before proceeding.\nFinally, I disagree with SET’s argument that its incorporation of the segments into the SOP\nrather than into the IMP was of no consequence because PHMSA did not allege that the action\nresulted in failure to manage the segments in a way that was inconsistent with the IMP or\nCondition “2.” On the contrary, Item 3 of the Notice alleged that SET failed to manage dents as\ndirected in the special permit as part of IMP. Therefore, SET’s implication that it was following\nthe terms of the special permit despite its failure to incorporate the segments directly into the\nIMP is untrue.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\nCondition “2” of the special permit by failing to incorporate the special permit segments into the\n“written integrity management plan,” as required.\nItem 2: The Notice alleged that Respondent violated Condition “3”, which states:\nCondition “3”\nSET must perform a close interval survey (CIS) of Line 10 and Line\n15 along the entire length of each special permit inspection area not later\nthan one year after the grant of this special permit and remediate any areas\nof inadequate cathodic protection (CP). A CIS and remediation need not\nbe performed on either Line 10 or Line 15 if a CIS and remediation have\n\n\n\n4\nbeen performed on the corresponding special permit inspection area less\nthan 6 years prior to the grant of this special permit. If factors beyond\nSET’s control prevent the completion of the CIS and remediation within\none year, a CIS and remediation must be completed as soon as practicable\nand a letter justifying the delay and providing the anticipated date of\ncompletion must be submitted to the Director, PHMSA Central Region not\nlater than one year after the grant of this special permit.\nThe Notice alleged that Respondent violated Condition “3” of the special permit which requires\nthat SET perform a CIS and remediate any CP deficiency within one year of the grant of the\npermit. Specifically, the Notice alleged that SET had failed to properly remediate all areas of\ninadequate CP within the proscribed time period. Respondent did not contest this allegation of\nviolation. Accordingly, after considering all of the evidence, I find that Respondent violated\nCondition “3” when it failed to remediate all CP deficiencies within one year of the grant of the\nspecial permit.\nItem 3: The Notice alleged that Respondent violated Condition “20,” which states:\nCondition “20”\nAnomaly Evaluation and Repair:\n(a) ...\n(b) Dents: SET must repair dents to Line 10 and Line 15 in the special\npermit inspection areas in accordance with 49 CFR §192.933 ...\n(c) ...\n(d) Response Time for ILl Results: The following guidelines provide\nthe required timing for excavation and investigation of anomalies based on\nILI results. Reassessment by ILl will \"reset\" the timing for anomalies not\nalready investigated and/or repaired. SET must evaluate ILl data by using\neither the ASME Standard B31G, Manual for Determining the Remaining\nStrength of Corroded Pipelines (AMSE B31G), or the modified\nB31G(0.85dL) for calculating the predicted failure pressure ratio to\ndetermine anomaly responses.\ni) Special Permit Segments:...\nii) Special Permit Inspection Areas: The response time must be in\naccordance with 49 CFR Part 192, Subpart 0, AMSE B31.8S (applicable\nedition) and SET's IMP.\nThe Notice alleged that Respondent violated Condition “20” by failing to reduce pressure as\nrequired after it discovered anomalies during the in-line-inspection (ILI) data analysis that\nqualified as “immediate repair conditions.” 49 C.F.R. § 192.933(d) establishes repair and\npressure reduction requirements for “immediate repair conditions.” Specifically, the Notice\nalleges that on June 30, 2011, SET discovered five dents with metal loss, which qualify as\n“immediate repair conditions” per “Condition 20” and 49 C.F.R. § 192.933(d)(1)(ii) but failed to\nreport the dents to PHMSA until July 2, 2011. The Notice further alleges that once PHMSA\nlearned of the dents, PHMSA made various attempts to determine from SET’s compliance\n\n\n\n5\nofficer whether pressure had been/would be reduced, as required by § 192.933(d). When these\nattempts to confirm pressure reduction with SET were unsuccessful, PHMSA contacted SET’s\ncontrol room directly. At the hearing, the Region Director stated that control room personnel\ntold her they had received no direction to reduce pressure. Later that day (July 2, 2011),\nPHMSA sent email inquiries about when the pressure reduction would take effect. SET reduced\npressure on July 3, 2011, which PHMSA contends was 4 days after discovery of the immediate\nrepair conditions.\nRespondent contested this allegation of violation. In its Response, at the hearing, and in its\nBrief, Respondent argued that only three, not five, dents with metal loss anomalies were\ndiscovered in the special permit inspection area. Also, SET claimed that the pressure reduction\nactually took place within 72 hours (i.e. three days) of discovery of the dents because the\ndiscovery was made on the afternoon of Thursday June 30, 2011 and the pressure reduction took\neffect in the morning of Sunday July 3, 2011. Furthermore, SET maintains that it had\ndetermined that the dents did not constitute an “imminent threat” because “the metal loss\nidentified was approximately 10% of the wall thickness.”5 In SET’s closing brief, it stated that\nfollowing the discovery of an “immediate repair condition,” “there are a range of appropriate\nactions, from immediate shutdown of a pipeline to spending the time to gather data and make\nnotifications depending on the severity and risk of the immediate repair conditions.”6\nSET further argued that waiting three days to reduce pressure is not a violation of\n§ 192.933(d). It notes that § 192.933(d) does not specify how soon an operator must reduce\npressure after discovering an immediate repair condition. Next, SET cited PHMSA FAQ-215,\nwhich states that, “immediate conditions shall be examined within five days after determination\nof the condition.” The FAQ further states that pressure reductions should be taken “promptly”\nand that, “[o]perators need only notify PHMSA of their inability to examine immediate repair\nconditions within 5 days if they cannot reduce pressure.” Furthermore, SET cites\n§ 192.933(a)(1), which states, “If an operator is unable to respond within the time limits for\ncertain conditions specified in this section, the operator must temporarily reduce the operating\npressure.” SET maintained that given that the time frame for examination is five days and that\nthe requirement to reduce pressure only applies once the operator has determined it cannot\nexamine or repair the condition within 5 days, the requirement for pressure reduction can’t\ntechnically take effect until after the 5-day period has lapsed.\nHowever, upon closer examination, this language in § 192.933(a) is not applicable to the timing\nof pressure reductions for “immediate repair conditions” because § 192.933(d) speaks more\nspecifically on how to address these conditions. It states, “ . . To maintain safety, an operator\nmust temporarily reduce operating pressure in accordance with paragraph (a) of this section or\nshut down the pipeline until the operator completes the repair of these conditions.” (emphasis\nadded) Here, the word “until” clarifies that the pressure reduction is the first step in addressing\nan “immediate repair condition;” there is no language, as in (a), that indicates a pressure\nreduction is only necessary if a repair cannot be made in a certain time frame. SET’s reliance on\nthe statement in § 192.933(d)(1) that pressure should be reduced “in accordance with paragraph\n5 Response at 5.\n6 Brief at 11.\n\n\n\n6\n(a)” is incorrect because the reference to (a) speaks to calculating the reduction in the operating\npressure, not the timing.\nFurther analysis of the FAQs that SET relies on indicates that pressure reduction should occur as\nsoon as possible upon discovery. In FAQ-215, after discussion of the 5-day repair requirement,\nthe FAQ goes on to say, “However, the rule also requires that pressure be reduced once an\nimmediate repair condition is discovered. Pressure reductions should be taken promptly.”\n(Emphasis added.) While this FAQ also does not specify the number of hours or days that may\npass between discovery of an immediate repair condition and pressure reduction, the use of the\nwords “once” and “promptly” are intended to establish that the operator should take action to\nreduce pressure as soon as possible. I am not persuaded that a time period of Thursday to\nSunday meets this standard, whether that is considered three or four days. Additionally, the\nregion director’s difficulty in receiving confirmation that a pressure reduction was forthcoming\nfrom SET and the subsequent indication from the SET’s control room that no pressure reduction\nwas planned is evidence that the delay in instituting the pressure reduction was not the result of\nsome technical or logistical difficulty. Furthermore, SET’s contention that the dents were not\n“imminent threats” because there was only 10% metal loss is unavailing, as § 192.933\nestablishes that, “a dent that has any indication of metal loss” is an “immediate repair condition.”\nTherefore, with respect to pressure reduction, I reject SET’s contention that upon discovery of an\nimmediate repair condition, “there are a range of appropriate actions.” The first action, taken as\nsoon as possible, must be to reduce operating pressure.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\nCondition “20” when it failed to reduce operating pressure as required in 49 C.F.R. § 192.933.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken 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 $96,200 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $31,200 for Respondent’s violation of Condition\n“2” of the special permit, for failing to include the special permit segments of Line 10 and Line\n\n\n\n7\n15 into its written IMP. SET contends that the gravity assigned by PHMSA in the violation\nreport is not warranted and that pipeline safety was not “potentially compromised” as alleged but\nwas at most “minimally affected.”7 However, given the significant difference between\nmanagement of “covered segments” and “non-covered segments” due to the requirements of the\nIMP, I agree with the assertion in the violation report that safety was “potentially compromised,”\nespecially given SET’s failure to respond to immediate repair conditions in a manner consistent\nwith the IMP regulations (i.e. § 192.933), as discussed in Item 3. SET also argued that it took\ncertain steps to comply with Condition “2” such that the “culpability” description in the\nViolation Report was inaccurate. However, the “culpability” description does acknowledge\n“minimal” or “some steps” to achieve compliance. Given that SET did not follow the express\nterms of Condition “2,” when the language in the special permit was unambiguous, I see no\njustification in reducing the civil penalty as assessed. Accordingly, having reviewed the record\nand considered the assessment criteria, I assess Respondent a civil penalty of $31,200 for\nviolation of Condition “2.”\nItem 2: The Notice proposed a civil penalty of $27,500 for Respondent’s violation of Condition\n“3” of the special permit for failing to remediate any areas of deficient CP within one year of the\nissuance of the special permit. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $27,500 for violation of Condition “3.”\nItem 3: The Notice proposed a civil penalty of $37,500 for Respondent’s violation of Condition\n“20” of the special permit, for failing to treat dents with metal loss as “immediate repair\nconditions” and reduce pressure promptly. SET contends that the gravity assigned by PHMSA in\nthe Violation Report is not warranted and that pipeline safety was not “potentially compromised”\nas alleged but was at most “minimally affected.”8 However, dents with any amount of metal loss\nare characterized as “immediate repair conditions” because of the threat they pose, and failure to\nreduce pressure promptly certainly increased the chances that a release could have occurred.\nNext, SET argued that it took certain steps to comply, such that the “culpability” assessment in\nthe Violation Report was not accurate. However, as noted above, the Region Director’s\ncommunications with SET indicated that the delay in pressure reduction was not due to logistical\nor technical complications. Instead, they were based on the belief that a pressure reduction was\nnot necessary when a prudent reading of § 192.933(d) and the FAQs directed otherwise. Finally,\nSET argued that there should be a finding that SET’s actions were in good faith given that the\npressure reduction took place within three days. A reduction in the civil penalty based on “good\nfaith” must result from a reasonable misinterpretation of the regulatory requirement. In this case,\nSET asserted that the dents did not pose “imminent hazard” despite the fact that §192.933(d)\nspecifically states that “A dent that has any indication of metal loss” qualifies as an “immediate\nrepair condition.” Therefore, I reject this argument as well. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $37,500 for\nviolation of Condition “20.”\n7 Brief at 7\n8 Brief at 12\n\n\n\n8\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 $96,200.\nPayment of the civil penalty must be made within 20 days of service of this Final Order.\nPayment may be made by sending a certified check or money order (containing the CPF Number\nfor this case), made payable to “U.S. Department of Transportation,” to the Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, Financial Operations Division (AMK-\n325), P.O. Box 269039, Oklahoma City, Oklahoma 73125. Federal regulations (49 C.F.R.\n§ 89.21(b)(3)) also permit payment to be made by wire transfer through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions\nare contained in the enclosure. Questions concerning wire transfers should be directed to:\nFinancial Operations Division (AMK-325), Federal Aviation Administration, Mike Monroney\nAeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial\nOperations Division telephone number is (405) 954-8845.\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":35661}