{"operation":"document","citation":"CPF 320186002","title":"HAWTHORN OIL TRANSPORTATION (NORTH DAKOTA), INC. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2018-05-03","effective_on":null,"summary":"CLOSED notice of probable violation citing 194.107(c)(1)(ix), 194.7(b), 195.262(d), 195.403(b)(1), 195.440, 195.507(a)(4), 195.61(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320186002.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320186002.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320186002","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320186002","body":"Notice of Probable Violation involving HAWTHORN OIL TRANSPORTATION (NORTH DAKOTA), INC.. PHMSA's enforcement data identifies the cited regulations as 194.107(c)(1)(ix),  194.7(b),  195.262(d),  195.403(b)(1),  195.440,  195.507(a)(4),  195.61(b). The case was opened on 2018-05-03 and is reported as closed as of 2019-07-22. Proposed civil penalty: $74,100. Assessed civil penalty: $60,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320186002_Final Order_06272019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320186002/320186002_Final%20Order_06272019.pdf\n\n320186002_Final Order_06272019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320186002/320186002_Final%20Order_06272019_text.pdf\n\n320186002_NOPV PCP_05032018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320186002/320186002_NOPV%20PCP_05032018.pdf\n\n320186002_NOPV PCP_05032018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320186002/320186002_NOPV%20PCP_05032018_text.pdf\n\n320186002_Operator Response to Notice_10032018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320186002/320186002_Operator%20Response%20to%20Notice_10032018.pdf\n\n320186002_Final Order_06272019_text.pdf\n\nJune 27, 2019\nMr. Bill Thomas\nPresident and Chief Executive Officer\nHawthorn Oil Transportation (North Dakota), Inc.\n1111 Bagby Sky Lobby 2\nHouston, Texas 77002\nRe: CPF No. 3-2018-6002\nDear Mr. Thomas:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a reduced civil penalty of $60,600. The penalty payment terms are set\nforth in the Final Order. This enforcement action closes automatically upon receipt of payment.\nService of the Final Order by certified mail is effective upon the date of mailing, as provided\nunder 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Allan C. Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA\nMr. Michael D. Mitchell, Ogletree, Deakins, Nash, Smoak & Stewart, PC, One Allen\nCenter, 500 Dallas Street, Suite 500, Houston, Texas 77002\nMr. Nicholas Groves, Vice President, Safety and Environmental, Hawthorn Oil\nTransportation (North Dakota), Inc.\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____________________________________\nIn the Matter of )\nHawthorn Oil Transportation )\n(North Dakota), Inc., ) CPF No. 3-2018-6002\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom April 4 through 6, 2017, pursuant to 49 U.S.C. § 60117, representatives 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 Hawthorn Oil\nTransportation (North Dakota), Inc. (Hawthorn or Respondent), including its Stanley to Railyard\npipeline in Stanley, North Dakota.\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated May 3, 2018, a Notice of Probable Violation and Proposed Civil Penalty (Notice),\nwhich also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R.\n§ 190.207, the Notice proposed finding that Hawthorn had violated 49 C.F.R. §§ 194.7(b),\n195.61(b), 195.403(b), and 195.440(c) and proposed assessing a civil penalty of $74,100 for the\nalleged violations. The warning items required no further action, but warned the operator to\ncorrect the probable violations or face possible future enforcement action.\nHawthorn responded to the Notice by letter dated October 3, 2018 (Response). The company\ncontested several of the allegations of violation and requested that the proposed civil penalty be\nreduced or eliminated. Respondent did not request a hearing and therefore has waived its right to\none.\nFINDINGS OF VIOLATION\nIn its Response, Hawthorn did not contest the allegations in the Notice that it violated 49 C.F.R.\nParts 194 and 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 194.7(b), which states:\n§ 194.7 Operating restrictions and interim operating authorization.\n\n\n\nCPF No. 3-2018-6002\nPage 2\n(a)…\n(b) An operator must operate its onshore pipeline facilities in\naccordance with the applicable response plan.\nThe Notice alleged that Respondent violated 49 C.F.R. § 194.7(b) by failing to operate its\nonshore pipeline in accordance with its response plan. Specifically, the Notice alleged that\nHawthorn’s response plan required that it conduct announced and unannounced drills and\nreferenced the National Preparedness for Response Exercise Program (PREP) guidelines for\nadditional details.1 Under the PREP guidelines incorporated into its plan, the Notice alleged,\nRespondent was required to complete 22 drills for the period from 2010 to 2013. At the time of\nthe inspection, however, Respondent could not provide records to demonstrate that any of the\nrequired PREP drills were conducted.\nIn its response, Hawthorn provided documents showing that it conducted three drills between\n2010 and 2013, but did not provide documentation for the remaining 19 drills. This lessens the\nnumbers of drills that were not conducted from 22 to 19.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 194.7(b) by failing to operate its onshore pipeline in accordance with its response plan.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.61(b), which states:\n§ 195.61 National Pipeline Mapping System.\n(a) Each operator of a hazardous liquid pipeline facility must provide\nthe following geospatial data to PHMSA for that facility…\n(b) This information must be submitted each year, on or before June 15,\nrepresenting assets as of December 31 of the previous year. If no changes\nhave occurred since the previous year's submission, the operator must refer\nto the information provided in the NPMS Operator Standards manual\navailable at www.npms.phmsa.dot.gov or contact the PHMSA Geographic\nInformation Systems Manager at (202) 366-4595.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.61(b) by failing to submit\ngeospatial data of its hazardous liquid pipeline facilities to PHMSA each year, on or before June\n15, representing assets as of December 31 of the previous year. Specifically, the Notice alleged\nthat Hawthorn failed to submit data to the National Pipeline Mapping System in 2013 and 2015.\nHawthorn was unable to provide documentation demonstrating that annual submittals had\noccurred and PHMSA records indicated the required pipeline mapping information was not\nsubmitted by Respondent for 2013 or 2015.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.61(b) by failing to submit\ngeospatial data of its hazardous liquid pipeline facilities to PHMSA each year, on or before June\n1 Section 194.107(c)(1)(ix) requires an operator to have a drill program in its response plan and states that an\noperator may satisfy this requirement by following the PREP guidelines.\n\n\n\nCPF No. 3-2018-6002\nPage 3\n15, representing assets as of December 31 of the previous year.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.403(b)(1), which:\n§ 195.403 Emergency response training.\n(a)…\n(b) At the intervals not exceeding 15 months, but at least once each\ncalendar year, each operator shall:\n(1) Review with personnel their performance in meeting the objectives\nof the emergency response training program set forth in paragraph (a) of\nthis section…\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.403(b)(1) by failing to review with\npersonnel their performance in meeting the objectives of the emergency response training\nprogram at intervals not exceeding 15 months, but at least once each calendar year. Specifically,\nthe Notice alleged that Hawthorn could not provide evidence demonstrating the reviews occurred\nat the required intervals during calendar years 2014, 2015, and 2016.\nIn its response, Respondent submitted additional sign-in sheets showing that training had been\nconducted during 2014, 2015, and 2016. While it is evident from the sign-in sheets that training\nsessions had occurred, the sign-in sheets themselves do not constitute evidence that Hawthorn\nreviewed with its personnel their performance in meeting the objectives of the emergency\nresponse training. Section 195.403(b)(1) requires more than conducting emergency response\ntraining; it requires the operator to engage with its personnel in reviewing their performance.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 195.403(b)(1) by failing to review with personnel their performance in meeting the\nobjectives of the emergency response training program at intervals not exceeding 15 months, but\nat least once each calendar year.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.440(c), which states:\n§ 195.440 Public awareness.\n(a) Each pipeline operator must develop and implement a written\ncontinuing public education program that follows the guidance provided in\nthe American Petroleum Institute's (API) Recommended Practice (RP)\n1162 (incorporated by reference, see § 195.3)…\n(c) The operator must follow the general program recommendations,\nincluding baseline and supplemental requirements of API RP 1162, unless\nthe operator provides justification in its program or procedural manual as to\nwhy compliance with all or certain provisions of the recommended practice\nis not practicable and not necessary for safety.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.440(c) by failing to follow the\ngeneral program recommendations and supplemental requirements of API RP 1162, section 8.3,\n\n\n\nCPF No. 3-2018-6002\nPage 4\nin its public education program.2 Specifically, the Notice alleged that Hawthorn did not conduct\nannual audits or reviews in 2013 and 2014 to demonstrate whether its public awareness program\nhas been developed and implemented according to the guidelines of API RP 1162.\nIn its response, Respondent provided records showing that it reviewed and updated its public\nawareness program in 2013 and 2014. The records included revision logs from 2013 and 2014, a\n2013 effectiveness review, and a 2015 multi-year assessment covering years 2011-2014. I find\nthese records show that Hawthorn reviewed the public awareness program annually and updated\nits program as required by the regulation.\nAccordingly, after considering all of the evidence, I hereby order that Item 5 be withdrawn.\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$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.3 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; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $74,100 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $23,000 for Respondent’s violation of 49 C.F.R.\n§ 194.7(b) by failing to operate its onshore pipeline in accordance with its response plan.\nHawthorn provided records showing that, rather than the 22 instances of violation cited in the\nViolation Report, there were only 19 instances of violation. Other than demonstrating\ncompliance with regard to three instances, Hawthorn did not present any evidence or argument\njustifying further reduction in the proposed penalty under the assessment criteria. Based upon\nthe foregoing, therefore, I assess Respondent a reduced civil penalty of $22,600 for violation of\n49 C.F.R. § 194.7(b).\nItem 2: The Notice proposed a civil penalty of $18,900 for Respondent’s violation of 49 C.F.R.\n§ 195.61(b) by failing to submit geospatial data of its hazardous liquid pipeline facilities to\n2 Section 8.3 of API RP 1162 states that operators should complete an annual audit or review of whether the\nprogram has been developed and implemented according to the guidelines in the RP.\n3 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223; Revisions to Civil Penalty Amounts,\n83 Fed. Reg. 60732, 60744 (Nov. 27, 2018).\n\n\n\nCPF No. 3-2018-6002\nPage 5\nPHMSA each year, on or before June 15, representing assets as of December 31 of the previous\nyear. Hawthorn did not contest the allegation that it failed to submit the geospatial data in 2013\nand 2015, but requested that the penalty be reduced based on compliance in 2014, 2016, 2017,\nand 2018. Compliance in other years does not excuse Hawthorn’s failure to meet its regulatory\nresponsibilities in 2013 and 2015. In addition, I find the proposed penalty amount already\nreflects that pipeline safety was minimally affected. I therefore find no justification to reduce the\npenalty. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $18,900 for violation of 49 C.F.R. § 195.61(b).\nItem 4: The Notice proposed a civil penalty of $19,100 for Respondent’s violation of 49 C.F.R.\n§ 195.403(b)(1) by failing to review with personnel their performance in meeting the objectives\nof the emergency response training program at intervals not exceeding 15 months, but at least\nonce each calendar year. Hawthorn requested the proposed civil penalty be withdrawn or\nreduced because it had conducted emergency response trainings. However, I have found that\nalthough training sessions were conducted, no review with personnel regarding their\nperformance occurred. I therefore find no justification for a reduction in the proposed penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $19,100 for violation of 49 C.F.R. § 195.403(b)(1).\nItem 5: The Notice proposed a civil penalty of $13,100 for Respondent’s violation of 49 C.F.R.\n§ 195.440(c) by failing to follow the general program recommendations and supplemental\nrequirements of API RP 1162. I have withdrawn this Item; therefore, the associated proposed\npenalty is also withdrawn.\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 $60,600.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.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 (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $60,600 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\n\n\n\nCPF No. 3-2018-6002\nPage 6\nWARNING ITEMS\nWith respect to Items 3 and 6, the Notice alleged probable violations of Part 195, but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 195.262(d) (Item 3) ─ Respondent’s alleged failure to have pumping\nequipment installed on property under its control and at least 50 feet from the\nboundary of the pump station; and\n49 C.F.R. § 195.507 (Item 6) ─ Respondent’s alleged failure to include\ndocumentation supporting selected qualification methods in 2014 and 2015.\nHawthorn presented information in its Response showing that it had taken certain actions to\naddress the cited items. If OPS finds a violation of any of these items in a subsequent inspection,\nRespondent may be subject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of the\nFinal Order by Respondent. Any petition submitted must contain a brief statement of the issue(s)\nand meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically\nstays the payment of any civil penalty assessed. The other terms of the order, including any\ncorrective action, remain in effect unless the Associate Administrator, upon request, grants a\nstay. If Respondent submits payment of the civil penalty, the Final Order becomes the final\nadministrative decision and the right to petition for reconsideration is waived.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nJune 27, 2019\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":18419}