# TC OIL PIPELINE OPERATIONS INC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 320155010
- **title:** TC OIL PIPELINE OPERATIONS INC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2015-11-20
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.401(a), 195.573(a)(1), 195.573(e), 195.577(a).
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-320155010.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-320155010
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/320155010
**body:**

Notice of Probable Violation involving TC OIL PIPELINE OPERATIONS INC. PHMSA's enforcement data identifies the cited regulations as 195.401(a),  195.573(a)(1),  195.573(e),  195.577(a). The case was opened on 2015-11-20 and is reported as closed as of 2017-06-15. Proposed civil penalty: $187,200. Assessed civil penalty: $135,400. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

320155010_Final Order_05312017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155010/320155010_Final%20Order_05312017.pdf

320155010_Final Order_05312017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155010/320155010_Final%20Order_05312017_text.pdf

320155010_NOPV PCP PCO_11202015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155010/320155010_NOPV%20PCP%20PCO_11202015.pdf

320155010_NOPV PCP PCO_11202015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155010/320155010_NOPV%20PCP%20PCO_11202015_text.pdf

320155010_Operator Response to Notice and Request for Hearing_12182015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155010/320155010_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing_12182015.pdf

320155010_NOPV PCP PCO_11202015_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
November 20, 2015
Mr. Vern Meier
President
TransCanada (TC) Oil Pipeline Operations, Inc.
717 Texas Avenue
Houston, Texas 77002-2761
CPF 3-2015-5010
Dear Mr. Meier:
On multiple occasions between April 2 and November 15, 2012, representatives of the Pipeline
and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
pursuant to Chapter 601 of 49 United States Code inspected TransCanada Oil Pipeline
Operations Inc.’s (TransCanda’s) Keystone Pipeline throughout the central United States.
Physical facilities and records were inspected on the mainline from the Canadian Border to
Patoka, Illinois and the Cushing Extension.
Background
TransCanada’s Keystone Pipeline (Keystone) is a hazardous liquid pipeline transporting crude
oil from Canada to facilities in the central United States comprised of the following two lines:
• A 1,025-mile, 30-inch diameter, Mainline from the Canadian border at Cavalier County,



North Dakota, traversing the states of North Dakota, South Dakota, Nebraska, Kansas
and Missouri, to Wood River and Patoka, Illinois; and
• A 291-mile, 36-inch diameter, Cushing Extension from Steele City (Jefferson County),
Nebraska through Kansas, to Cushing (Marion County), Oklahoma.
TransCanada completed construction of the Keystone mainline segment from the Canadian
border to Steele City, Nebraska in 2008 followed by construction of the mainline segment from
Steele City, Nebraska to Wood River and Patoka, Illinois in 2009-2010, all of which were then
placed in service by June 30, 2010. The Cushing Extension from Steele City, Nebraska to
Cushing, Oklahoma was placed in service by February 8, 2011. In October 2012, Keystone
reported to PHMSA four significant metal loss anomalies from an in-line inspection (ILI)
requiring immediate pressure reduction and verification digs in the Salisbury, Missouri to
Patoka, Illinois segment (MP 868 to 1083). The digs validated that stray current D.C.
interference from foreign pipelines near MP 995 had caused four metal loss features over sixty
percent deep (97%, 69%, 74%, 61%). The 97% deep anomaly left a remaining wall thickness of
0.0120 inch, which is less than 1/64 inch. Keystone conducted a close interval survey in
December 2011 which had identified cathodic protection potentials that were below criteria,
along with the existence of interference from other pipeline operators in the vicinity. A report,
Corrosion Anomaly at MP 995 KS9 Salisbury to Patoka on Keystone Pipeline (Report), issued
on November 21, 2012, identified the primary cause of the pitting mechanism as the inadequacy
of the original CP design. The secondary cause identified was the timeliness of corrective actions
that could have been accelerated to mitigate the corrosion.
As a result of the inspection, it appears that TransCanada has committed probable violations of
the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and
the probable violations are:
1. §195.401 General requirements.
(a) No operator may operate or maintain its pipeline systems at a level of safety
lower than that required by this subpart and the procedures it is required to
establish under §195.402(a) of this subpart.
TransCanada did not operate the Steele City to Patoka and Cushing Extension at a level
of safety as required by Subpart F and the procedures required by §195.402(a). Part 195.402(a)
requires each operator to prepare and follow procedures for normal operations and maintenance
activities which are further described in §195.402(c)(3) to include “operating, maintaining, and
repairing the pipeline system in accordance with each of the requirements of this subpart and
subpart H of this part.” Subpart H – Corrosion Control includes Part 195.563(a) which requires
each pipeline to have cathodic protection (CP) in operation no later than 1 year after the pipeline
is constructed.
The mainline segment from Steele City, Nebraska to Patoka, Illinois was placed in
service by June 30, 2010. Corrective measures to complete the installation of the CP did not
occur until November 2012 and then again in 2013. According to the criteria in TransCanada’s
2



procedures and Part 195.563(a), adequate CP should have been in operation on the pipeline by
June 30, 2011.
Upon investigation, the CP system was not designed properly as stated in TransCanada’s
Corrosion Anomaly at MP 995 KS9 Salisbury to Patoka on Keystone Pipeline Report (Report),
and did not meet its procedure TED-CP-DD Cathodic Protection Design Directive regarding
sufficient current supplied to the pipeline as described in Section 9 “Current Required for
Protection.” The summary of the Report found (in part):
“The anomalies in the MP995 Anomaly Area were unprecedented…..(they) are believed
to be a direct result of low cathodic protection levels caused by an inadequate cathodic
protection design which did not fully consider all of the bare metallic structures including
substation grounding grids in the pump stations.”
In discussions with TransCanada’s personnel in November 2012 and as documented in
the CP reports, TransCanada determined that design changes made to the pump stations early in
the project were not communicated to the personnel designing the CP system. The design
changes in the pump stations created an increased demand for CP current, which was not
adequately incorporated into the final design of the CP system. In addition, the initial CP design
only called for ground beds at the pump stations on the mainline between Steele City, Nebraska
and Patoka, Illinois. The CP system on the mainline from the Canadian border to Steele City, on
the other hand, had ground beds at both the pump stations and midway between the pump
stations.
TransCanada’s initial CP survey of the Steele City to Patoka mainline completed in
December 2010 and the Cushing Extension segments completed in August 2011 showed low CP
in numerous locations. As a result, TransCanada installed 12 new ground bed systems on the
mainline between Steele City and Patoka and an additional 4 ground beds installed on the
Cushing Extension in 2012. An additional 5 ground beds were installed on the Steele City to
Patoka segment of the mainline in 2013, primarily at the eastern end of the mainline just west of
St. Louis. An additional two ground beds were installed on the Cushing Extension in 2013.
TransCanada operated its cathodic protection system on the Keystone Pipeline at a level
of safety below that required by Subpart F; therefore specifically violating §195.401(a).
2. §195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine whether cathodic
protection required by this subpart complies with Sec. 195.571:
(1) Conduct tests on the protected pipeline at least once each calendar year, but
with intervals not exceeding 15 months. However, if tests at those intervals are
3



impractical for separately protected short sections of bare or ineffectively coated
pipelines, testing may be done at least once every 3 calendar years, but with
intervals not exceeding 39 months.
TransCanada failed to conduct tests to monitor the protected pipeline at least once each
calendar year, but with intervals not exceeding 15 months. According to TransCanada’s records,
fifty-one (51) required annual cathodic protection test station readings were not taken from 2010
to 2012 on the East Leg of Keystone from Steel City, Nebraska to Patoka, Illinois. Twenty-three
(23) were from Steele City to Salisbury and the other twenty-eight 28 were from Salisbury to
Patoka. TransCanada provided no rational for the failure to conduct and record the required
testing.
3. §195.573 What must I do to monitor external corrosion control?
(e) Corrective action. You must correct any identified deficiency in corrosion
control as required by Sec. 195.401(b).
TransCanada failed to correct cathodic protection deficiencies found in 62 locations within
a reasonable time. TransCanada’s records indicate deficiencies that remained uncorrected for
multiple years.
On the TransCanada Keystone Pipeline from Steel City, Nebraska to Patoka, Illinois
compiled records from 2010 to 2012 documented the following 56 deficiencies:
• 44 multiple-year cathodic protection test station deficient (low) readings with 5
still not remediated by March 2013;
• 3 test stations at 1 pump station not remediated by March 2013; and
• 9 multiple-year cathodic protection deficient (low) readings at 5 valve sites.
In addition, on the TransCanada Keystone Cushing Extension from Steele City, Nebraska
to Cushing, Oklahoma records from 2010 to 2012 documented the following 6 deficiencies:
• 3 mainline multiple-year cathodic protection test station deficient readings; and
• 3 multiple-years of cathodic protection deficient readings at 1 pump station.
4. §195.577 What must I do to alleviate interference currents?
(a) For pipelines exposed to stray currents, you must have a program to identify,
test for, and minimize the detrimental effects of such currents.
TransCanada failed to minimize the detrimental effect of interference currents on at least
two areas under the influence of another pipeline CP system in a timely manner. Records
document that at MPs 991 to 998 on the mainline near St. Louis and MP 137 on the Cushing
Extension, stray currents existed on the pipeline over a year after installing corrosion control
4



measures meant to alleviate the problem. TransCanada reported to PHMSA on March 27, 2012,
in the Special Permit Condition #37 Response, the existence of interference locations and
mitigation efforts taken to address those problems. Phase 1 refers to the pipeline from the
Canadian/US border to Illinois and Phase 2 refers to the Cushing Extension.
The response stated in part:
• “Phase 1
o A review of the 2010 annual survey data indicates potential DC interference
conditions existed at thirty (30) locations. Prior to the 2011 annual survey,
remedial action had been completed at all thirty (30) potential interference
sites. A review of 2011 annual survey data indicates the potential for DC
interference exists at five (5) locations of which four (4) are from the initial
sites identified in 2010; one (1) new location has been identified in 2011. Site
testing has been planned at these 5 sites in Q2 2012.”
• “Phase 2
o A review of the 2011 survey data indicates potential DC interference
conditions existed at two (2) locations.
o Both sites identified as having potential interference issues have had remedial
facilities installed.”
TransCanada’s own contractor finding from its National Pipeline Service report dated
October 23, 2013 stated:
“The existing cathodic protection systems at St. Paul and Hartford Pump Stations
were installed and energized in June of 2010, approximately 9 months after
installation of the pipeline. The temporary bonds were then installed
approximately one year later in August of 2011, after baseline annual test point
surveys indicated inadequate potentials and then ensuing investigation
determined the strong possibility for stray current interference from neighboring
pipelines.”
Severe interference corrosion anomalies were identified in October 2012 near St. Louis MP
998. On November 14, 2012, TransCanada’s Close Interval Survey dated November 14, 2012,
showed interference current still on the pipeline from MP 991 to 998 which was 28 months after
the pipeline was placed in service. Keystone had knowledge of the foreign pipelines in these
locations as this was a common pipeline corridor as shown in alignment sheets.
TransCanada also continued to remediate interference on the Cushing Extension near MP
137 through 2012 which involved another operator’s facility that had been in place over 50
years. TransCanada did not correct the interference until November 2, 2012, almost 21 months
after deliveries began on February 8, 2011. Problems continued to persist requiring one rectifier
to be installed at MP 136.62 in May 2013. TransCanada continued to identify anomalies from
5



low cathodic protection levels as documented in its Letter to PHMSA December 9, 2013 – KS 10
Proposed Excavation. The letter stated:
“In accordance with special condition 42, TransCanada hereby informs PHMSA
of a proposed correlation excavation on the Cushing Extension of Keystone on or
around Dec 20th, 2013. Specifically, the excavation is on the KS10 section in
Kansas near the Burns receipt barrel. Although the metal loss anomaly is not in a
HCA (or in a could affect segment), nor does it meet any prescribed response
criteria, with a reported depth of 67%WT the feature has been flagged for
correlation in support of the final report for the ILI. This feature is in an area of
initially low CP potentials that were subsequently remediated with the addition of
new anode beds. The dig sheet for the proposed excavation is attached.”
The dig sheet called pits with depths of 34.1 to 66.9 percent through wall which were later
validated in TransCanada’s “Summary of Initial Correlation Excavation on KS10” report to be
32 to 34 percent through wall.
The multiple anomalies found on TransCanada’s Keystone segments near St. Louis,
Missouri and on the Cushing Extension near Burns, Kansas were the result of not correcting the
effects of interference corrosion in a timely manner as required by §195.577.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000
per violation per day the violation persists up to a maximum of $2,000,000 for a related series of
violations. For violations occurring prior to January 4, 2012, the maximum penalty may not
exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for a
related series of violations. The Compliance Officer has reviewed the circumstances and
supporting documentation involved in the above probable violation(s) and has recommended that
you be preliminarily assessed a civil penalty of $187,200 as follows:
Item number PENALTY
1 $53,800
2 $51,800
3 $53,200
4 $28,400
Proposed Compliance Order
With respect to item(s) 1, 3, and 4 pursuant to 49 United States Code § 60118, the Pipeline and
Hazardous Materials Safety Administration proposes to issue a Compliance Order to
TransCanada. Please refer to the Proposed Compliance Order, which is enclosed and made a
part of this Notice.
6



Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators
in Compliance Proceedings. Please refer to this document and note the response options. All
material you submit in response to this enforcement action may be made publicly available. If
you believe that any portion of your responsive material qualifies for confidential treatment
under 5 U.S.C. 552(b), along with the complete original document you must provide a second
copy of the document with the portions you believe qualify for confidential treatment redacted
and an explanation of why you believe the redacted information qualifies for confidential
treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice,
this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the
Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further
notice to you and to issue a Final Order.
In your correspondence on this matter, please refer to CPF 3-2015-5010 and for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Allan C. Beshore
Director, Central Region, OPS
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
7



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to TransCanada (TC) Oil Pipeline Operations, Inc. a
Compliance Order incorporating the following remedial requirements to ensure the compliance
of TransCanada Oil Pipeline Operations, Inc. with the pipeline safety regulations:
1. 2. 3. 4. In regard to Items Number 1 and 4 of the Notice pertaining to an inadequate
cathodic protection system, TC Keystone must provide records of facilities
installed and close interval surveys taken on the Keystone Pipeline confirming
that the pipeline is adequately protected on the East Leg segment from Steele
City, Nebraska to Patoka, Illinois and interference currents have been alleviated.
In regard to Item Number 3 of the Notice pertaining to deficiencies in corrosion
control, TC Keystone must correct the remaining deficiencies listed in Item 3 of
the NOPV and record the cathodic protection pipe-to-soil potentials.
TC Keystone must provide the records in Item 1 and 2 of the proposed
compliance order within six (6) months of the date of the Final Order.
It is requested (not mandated) that TransCanada (TC) Oil Pipeline Operations Inc.
maintain documentation of the safety improvement costs associated with fulfilling
this Compliance Order and submit the total to Allan Beshore, Director, Central
Region, Pipeline and Hazardous Materials Safety Administration. It is requested
that these costs be reported in two categories: 1) total cost associated with
preparation/revision of plans, procedures, studies and analyses, and 2) total cost
associated with replacements, additions and other changes to pipeline
infrastructure.
8

320155010_Final Order_05312017_text.pdf

Mr. Russell K. Girling
President and Chief Executive Officer
TransCanada Corporation
450 - First Street SW
Calgary, Alberta, Canada
T2P 5H1
Re: CPF No. 3-2015-5010
Dear Mr. Girling:
Enclosed please find the Final Order issued in the above-referenced case to your subsidiary, TC
Oil Pipeline Operations, Inc. It withdraws one of the allegations of violation and the proposed
compliance order, makes three other findings of violation, and assesses a reduced civil penalty of
$135,400. The penalty payment terms are set forth in the Final Order. This enforcement action
closes automatically upon receipt of payment. Service of the Final Order by certified mail is
deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Allan Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA
Mr. Vern J. Meier, President, TC Oil Pipeline Operations Inc., 700 Louisiana Street,
Suite 700, Houston, Texas 77002
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
________________________________________________
In the Matter of )
)
)
TC Oil Pipeline Operations, Inc., )
a/k/a TransCanada Oil Pipeline Operations, Inc., )
Respondent. )
________________________________________________)
) CPF No. 3-2015-5010
FINAL ORDER
On multiple occasions between April 2 and November 15, 2012, pursuant to 49 U.S.C. § 60117,
a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA),
Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities
and records of TC Oil Pipeline Operations, Inc. (TransCanada or Respondent), throughout the
central United States, including the company’s mainline from the Canadian border to Patoka,
Illinois (Mainline Segment), and its 291-mile, 36-inch-diameter Cushing Extension pipeline from
Steele City, Nebraska, through Kansas to Cushing, Oklahoma (Cushing Extension). 1
TransCanada is a multi-national corporation with tens of thousands of miles of oil and gas
pipelines, as well as extensive oil and gas storage assets, throughout North America. The
facilities are part of TransCanada’s Keystone Pipeline System within the United States.2
As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,
by letter dated November 20, 2015, a Notice of Probable Violation, Proposed Civil Penalty and
Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed
finding that TransCanada had committed four violations of 49 C.F.R. Part 195, assessing a civil
penalty of $187,200 for the alleged violations, and ordering Respondent to take certain actions to
correct the alleged violations.
TransCanada responded to the Notice by letter dated December 18, 2015 (Response). The
company contested one of the allegations of violation, provided an explanation of its actions, and
requested that the proposed civil penalties for the uncontested Items be reduced. Respondent
initially requested a hearing but subsequently waived that right, based on discussions with the
1 TC Oil Pipeline Operations, Inc., is a wholly indirectly-owned subsidiary of TransCanada Corporation. See
Complaint, TransCanada Keystone Pipeline, LP, and TC Oil Pipeline Operations, Inc., v. John Kerry, et als (January
6, 2016), available at http://www.keystone-xl.com/wp-content/uploads/2016/01/TransCanada-Complaint-January-6-
2016.pdf (last accessed March 24, 2017).
2 See http://www.transcanada.com/facts-figures.html. (current as of 8/17/16)



CPF No. 3-2015-5010
Page 2
Region by email on April 1, 2016. By letter of the same date, the Region withdrew Item 2 and
the associated civil penalty and, based on the additional information provided by TransCanada
showing that the requested corrective actions had been completed, withdrew the Proposed
Compliance Order.
FINDINGS OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.401(a), which states:
§ 195.401 General requirements.
(a) No operator may operate or maintain its pipeline systems at a level
of safety lower than that required by this subpart and the procedures it is
required to establish under §195.402(a) of this subpart.
The Notice alleged that Respondent violated 49 C.F.R. § 195.401(a) by failing to operate the
Mainline Segment and the Cushing Extension at the required level of safety. Specifically, the
Notice alleged that the Mainline Segment had been in service since June 30, 2010, but corrective
measures to complete the installation of cathodic protection (CP) were not begun until November
2012 and not completed until 2013. According to TransCanada’s own procedures established
under § 195.402(a) and 49 C.F.R. § 195.563(a), adequate CP should have been in operation on
the pipeline by June 30, 2011.3
The Notice further alleged that TransCanada’s initial CP survey of the Mainline Segment was
completed in December 2010 and the survey of the Cushing Extension was completed in August
2011. According to the Notice, both surveys revealed low CP readings at “numerous locations”
but the company failed to install additional ground beds until 2012-13. The company’s own
investigation revealed that TransCanada’s CP system had not been designed properly and did not
meet the company’s own procedure (TED-CP-DD, Cathodic Protection Design Directive)
regarding sufficient current being supplied to the pipeline.4
In its Response, TransCanada did not contest the allegations of violation, acknowledging that the
original CP system had inadequately compensated for the amount of current lost to substation
grounding grids at pump stations and that such lost current had had an adverse effect on localized
portions of the pipeline. However, TransCanada noted that the issues were identified within six
months of the line being placed in service, even though the time required to implement those
3 49 C.F.R. § 195.563(a) states:
“(a) Each buried or submerged pipeline that is constructed, relocated, replaced, or
otherwise changed after the applicable date in § 195.401(c) must have cathodic protection.
The cathodic protection must be in operation not later than 1 year after the pipeline is
constructed, relocated, replaced or otherwise changed, as applicable.”
4 As detailed in TransCanada’s Corrosion Anomaly at MP 995 KS9 Salisbury to Patoka on Keystone Pipeline
Report. See Pipeline Safety Violation Report, TransCanada Oil Pipeline Operations, Inc., CPF No. 3-2015-5010
(Violation Report), Nov. 20, 2015 (on file with PHMSA).



CPF No. 3-2015-5010
Page 3
measures was extended by factors outside its control.5
The Region met with TransCanada to receive additional information on February 4, 2016. At
that meeting, TransCanada indicated it was not contesting this Item but requested that PHMSA
consider withdrawing it altogether or reducing the proposed penalty.6 Given the seriousness of
TransCanada’s failure to maintain adequate cathodic protection of its pipeline over an extended
period of time and the fact that TransCanada did not dispute the allegations of violation, I see no
basis for withdrawing this Item. As for the alternative request that the penalty be reduced, I will
address that issue in the “Assessment of Penalty” section below.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.401(a) by failing to operate the Mainline Segment and the Cushing Extension at the
required level of safety.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine
whether cathodic protection required by this subpart complies with
§ 195.571:
(1) Conduct tests on the protected pipeline at least once each calendar
year, but with intervals not exceeding 15 months. However, if tests at those
intervals are impractical for separately protected short sections of bare or
ineffectively coated pipelines, testing may be done at least once every 3
calendar years, but with intervals not exceeding 39 months.
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct
tests to monitor protected pipelines at least once each calendar year, but with intervals not
exceeding 15 months. Specifically, the Notice alleged that TransCanada’s records showed 51
required annual CP-test-station readings were not taken from 2010 to 2012 on the East Leg of the
Mainline Segment but did not provide any rationale for its failure to conduct and record the tests
in a timely manner.
TransCanada contested this allegation, claiming that each of the required readings was timely
taken, in compliance with the regulations, but that the data presented to PHMSA may have been
confusing in its tabulation, formatting, and naming conventions. TransCanada initially requested
a hearing to re-present the data in a better format and to demonstrate compliance. The Region
subsequently met with TransCanada on February 4, 2016, to allow the company to provide
further information about the proposed compliance items and then, on the next day, to provide
the re-formatted data.
As a result of this meeting, the Central Region has reviewed the re-formatted data, concluded
5 In its Response, TransCanada stated that the time required to complete its CP remediation program “was affected
by unavoidable factors such as acquiring land access permission, environmental permitting, and the need for the
supplemental facilities to polarize the pipeline before they could be adequately assessed.” Response, at 5.
6 Response, at 10.



CPF No. 3-2015-5010
Page 4
that the readings were indeed properly taken, and recommends that this Item be withdrawn.
Accordingly, after considering all of the evidence, I hereby order that Item 2 be withdrawn,
including the related civil penalty and Proposed Compliance Order.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e), which states, in
relevant part:
§ 195.573 What must I do to monitor external corrosion control?
(a) . . .
(e) Corrective action. You must correct any identified deficiency in
corrosion control as required by § 195.401(b). . . .
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) by failing, within a
reasonable time, to correct cathodic protection deficiencies found at 62 locations, as required
under § 195.401(b).7 Specifically, the Notice alleged that TransCanada’s records indicated CP
deficiencies had remained uncorrected for multiple years. The inspection documented 56
deficiencies from Steele City, Nebraska, to Patoka, Illinois, that persisted from 2010 to 2012. An
additional six deficiencies were documented from Steele City, Nebraska, to Cushing, Oklahoma,
from 2010 to 2012.
In its Response, TransCanada did not contest PHMSA’s allegations, but outlined the company’s
efforts to remedy known CP deficiencies throughout the relevant time period. At its meeting with
the Region on February 4, 2016, TransCanada requested that PHMSA consider eliminating this
Item or reducing the proposed penalty.8 As noted above, given the seriousness of TransCanada’s
failure to maintain proper cathodic protection on the pipeline over an extended period of time
and the fact that TransCanada did not dispute the allegations of violation, I see no basis to
withdraw this Item. As for the alternative request that the proposed penalty be reduced, I will
discuss this issue in the “Assessment of Penalty” section below.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.573(e) by failing, within a reasonable time, to correct cathodic protection deficiencies
found at 62 locations, as required under § 195.401(b).
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.577(a), which states:
§ 195.577 What must I do to alleviate interference currents?
(a) For pipelines exposed to stray currents, you must have a program
to identify, test for, and minimize the detrimental effects of such currents.
7 49 C.F.R. § 195.401(b) states:
“(b) An operator must make repairs on its pipeline system according to the
following requirements:
(1) Non integrity management repairs. Whenever an operator discovers
any condition that could adversely affect the safe operation of its pipeline system,
it must correct the condition within a reasonable time…”
8 Region Recommendation, at 2 (on file with PHMSA).



CPF No. 3-2015-5010
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The Notice alleged that Respondent violated 49 C.F.R. § 195.577(a) by failing to minimize the
detrimental effects of interference currents on at least two areas under the influence of another
pipeline’s CP system. Specifically, the Notice alleged that TransCanada’s records showed stray
currents existed on the pipeline from milepost (MP) 991 to MP 998 on the Mainline Segment
near St. Louis and at MP 137 on the Cushing Extension, over one year after installing corrosion-
control measures to alleviate the problem.
PHMSA further alleged that TransCanada reported the existence of these interference locations
to PHMSA on March 27, 2012, and detailed the company’s efforts to mitigate them.9 According
to the Notice, a third-party report by a TransCanada contractor confirmed the problem when it
indicated the “strong possibility for stray current interference.” In addition, TransCanada’s own
November 14, 2012 Close Interval Survey showed interference current on the pipeline from MP
991 to MP 998 (28 months after the pipeline was put in-service). Finally, the Notice alleged that
by letter to PHMSA dated December 9, 2013, TransCanada acknowledged its continuing efforts
to identify and remedy anomalies from low CP levels and that these efforts were the result of
TransCanada failing to timely correct the effects of interference currents.
In its Response, TransCanada did not contest the allegations of violation, but noted that it had
developed and implemented a stray-current interference program designed to identify, test for,
and minimize stray-current interference once the company recognized that it had a problem.
TransCanada’s program identified the existence of stray-current interference during both a
December 2010 survey and an August 2011 survey (both conducted within six months of the
facilities going into service). TransCanada outlined a number of steps it had taken upon its
recognition of the problems on both systems, but did not contest the allegation that stray-current
interference existed well after the initial identification of the problem. However, TransCanada’s
efforts to identify stray-current interference were not initiated right away and only gradually
addressed the problem, despite the fact that both pipelines operated in shared pipeline corridors
where stray currents were likely to occur.
On February 4, 2016, the Region met with TransCanada to receive further information from the
company about the proposed compliance terms. At that meeting, TransCanada did not contest
this Item but requested that PHMSA consider eliminating this Item and/or reducing the proposed
penalty.10 Given the seriousness of TransCanada’s failure to maintain proper cathodic protection
on the pipeline over an extended period of time and the fact that the company did not contest the
allegations of violation, I see no basis to withdraw this Item. As for the request that the proposed
penalty be reduced, I will discuss this issue in the “Assessment of Penalty” section below.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.577(a) by failing to minimize the detrimental effect of interference currents in at least two
areas that were under the influence of another pipeline’s cathodic protection system.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
9 Violation Report at 24-26.
10 Region Recommendation, at 2 (on file with PHMSA).



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ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.11 In determining the amount of a civil penalty under 49 U.S.C.
§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,
circumstances, and gravity of the violation, including adverse impact on the environment; the
degree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect
that the penalty may have on its ability to continue doing business; and the good faith of
Respondent in attempting to comply with the pipeline safety regulations. In addition, I may
consider the economic benefit gained from the violation without any reduction because of
subsequent damages, and such other matters as justice may require. The Notice proposed a total
civil penalty of $187,200 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $53,800 for Respondent’s violation of 49 C.F.R.
§ 195.401(a), for failing to operate the Mainline Segment and the Cushing Extension at the
required level of safety. TransCanada did not contest this Item but asked that the proposed
penalty be reduced because (1) it had identified problems with its CP system within six months
of Phase I of the project being placed in service, (2) it took additional time to implement the
corrective measures due to circumstances beyond its control, and (3) the company had
“commenced remediation and mitigation efforts prior to any response or direction from
PHMSA.”12 I have reviewed the record and the penalty-assessment factors that the Region
considered in proposing the penalty and believe that the penalty is appropriate. The Violation
Report noted, among other things, that the inadequate CP system caused metal loss anomalies up
to 97 percent of pipe wall loss at one location located within a High Consequence Area near St.
Paul, Missouri, and that the company’s initial CP surveys showed low CP levels at numerous
locations.13 In other words, this violation came extremely close to causing a pipeline failure in a
location that could have resulted in serious damage to life, property or the environment.
Further, the proposed penalty did recognize and take into account Respondent’s efforts to
address its CP problems. Under the “Culpability” penalty factor, the Violation Report noted that
TransCanada took significant steps to comply with the regulation but that it did not achieve
compliance in a timely manner.14 I fail to see how any of the additional or any other arguments
presented by the company provide a basis for reducing the proposed penalty. Accordingly,
having reviewed the record and considered the assessment criteria, I assess Respondent a civil
penalty of $53,800 for violation of 49 C.F.R. § 195.401(a).
11 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.
1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per
violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.
12 Response, at 5.
13 Violation Report, at 8.
14 Id., at 9.



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Item 3: The Notice proposed a civil penalty of $53,200 for Respondent’s violation of 49 C.F.R.
§ 195.573, for failing, within a reasonable time, to correct cathodic protection deficiencies found
at 62 locations, as required under § 195.401(b). TransCanada did not contest PHMSA’s
allegations of violation, but requested that the proposed penalty be reduced on account of the
company’s “good faith efforts” to come into compliance. First, it outlined the company’s
ongoing and progressive efforts to remedy known CP deficiencies throughout the relevant time
period. Second, it asserted that TransCanada had self-reported the issue to PHMSA before
taking various corrective measures.
I do not find these arguments persuasive. First, the company’s attempts to correct the CP
deficiencies were taken into account in calculating the proposed penalty. Under the
“Culpability” penalty assessment factor, the Violation Report noted that after TransCanada found
the non-compliance, it took action to address the cause of the violation and was in the process of
correcting the problem before PHMSA learned of the violation.15 Second, TransCanada asserts
in its Response that it self-reported the violation, but the Violation Report alleged that PHMSA
discovered the violation.16
While TransCanada may be correct in its assertion, I can find no evidence in the rec
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