{"operation":"document","citation":"CPF 320190001","title":"FERRELLGAS — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-04-29","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.285(a), 192.285(c), 192.513(a), 192.513(c), 192.603(b), 192.605(a), 192.605(b)(1), 192.605(b)(8), 192.619(a)(1), 192.741(a), 192.743(a), 192.743(b), 192.805(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320190001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320190001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320190001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320190001","body":"Notice of Probable Violation involving FERRELLGAS. PHMSA's enforcement data identifies the cited regulations as 192.285(a),  192.285(c),  192.513(a),  192.513(c),  192.603(b),  192.605(a),  192.605(b)(1),  192.605(b)(8),  192.619(a)(1),  192.741(a),  192.743(a),  192.743(b),  192.805(b). The case was opened on 2019-04-29 and is reported as closed as of 2020-10-02. Proposed civil penalty: $19,600. Assessed civil penalty: $19,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320190001_Closure Letter_10022020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320190001/320190001_Closure%20Letter_10022020.pdf\n\n320190001_Closure Letter_10022020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320190001/320190001_Closure%20Letter_10022020_text.pdf\n\n320190001_Final Order_04062020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320190001/320190001_Final%20Order_04062020.pdf\n\n320190001_Final Order_04062020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320190001/320190001_Final%20Order_04062020_text.pdf\n\n320190001_NOPV PCP PCO_04292019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320190001/320190001_NOPV%20PCP%20PCO_04292019.pdf\n\n320190001_NOPV PCP PCO_04292019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320190001/320190001_NOPV%20PCP%20PCO_04292019_text.pdf\n\n320190001_Operator Response to Notice_07102019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320190001/320190001_Operator%20Response%20to%20Notice_07102019.pdf\n\n320190001_Closure Letter_10022020_text.pdf\n\nVIA ELECTRONIC MAIL TO: JordanBurns@ferrellgas.com and\nrufusyoungblood@Ferrellgas.com\nOctober 2, 2020\nJordan Burns\nVice President - Legal\nFerrellgas\nOne Liberty Plaza\nLiberty, MO 64068\nRE: CPF 3-2019-0001\nDear Mr. Burns:\nOn August 7-9, 2018, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49\nUnited States Code (U.S.C.) inspected your liquid propane gas distribution facilities in northern\nWisconsin. As a result of the inspection, the Director, Central Region, OPS issued a Notice of\nProbable Violation, Proposed Civil Penalty and Proposed Compliance Order on April 29, 2019.\nOn April 6, 2020, PHMSA issued a Final Order which made findings of violation, assessed a\ncivil penalty and ordered Ferrellgas to take certain compliance measures.\nThe records show that Ferrellgas has paid the civil penalty, in addition to submitting records of\ndetermining the maximum allowable operating pressure of its systems and the relieving capacity\nof its relief devices or changing the overpressure protection to monitor regulators. My staff has\nreviewed these documents and determined that the terms of the Compliance Order have been\nmet. The case is now closed. Thank you for your cooperation in this matter.\nSincerely,\nGregory A. Ochs\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\ncc. Rufus Youngblood, Director Safety, Ferrellgas, rufusyoungblood@Ferrellgas.com\n\n320190001_NOPV PCP PCO_04292019_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nApril 29, 2019\nJordan Burns\nVice President - Legal\nFerrellgas\nOne Liberty Plaza\nLiberty, MO 64068\nCPF 3-2019-0001\nDear Mr. Burns:\nOn August 7-9, 2018, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49\nUnited States Code (U.S.C.) inspected your liquid propane gas distribution facilities in\nnorthern Wisconsin.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items\ninspected and the probable violation(s) are:\n\n\n\n1. §192.285 Plastic pipe: Qualifying persons to make joints\n(a) No person may make a plastic pipe joint unless that person has been qualified\nunder the applicable joining procedure by:\n(c) A person must be re-qualified under an applicable procedure once each\ncalendar year at intervals not exceeding 15 months, or after any production joint\nis found unacceptable by testing under §192.513.\nFerrellgas did not re-qualify one person in 2015 under the applicable plastic joint\nprocedure once each calendar year at intervals not exceeding 15 months. The\nindividual made pipe joints in 2015, but had not been qualified by making specimen\njoints for inspection and testing as required by the regulation and their procedures.\n2. §192.513 Test requirements for plastic pipelines.\n(a) Each segment of a plastic pipeline must be tested in accordance with this\nsection.\n(c) The test pressure must be at least 150 percent of the maximum operating\npressure or 50 p.s.i. (345 kPa) gage, whichever is greater. However, the maximum\ntest pressure may not be more than three times the pressure determined under\n§192.121, at a temperature not less than the pipe temperature during the test.\nFerrillgas did not test its plastic pipelines to at least a pressure of 50 psig. Ferrellgas\ninstalled three (3) plastic service lines in 2017 and 2018 which were not pressure\ntested to at least 50 psig. The service locations, dates and pressures are:\nAddress Date Test Pressure (psig)\n7219 W. Courtland Circle, Egg Harbor, WI 5-5-2017 28\n7192 Ida Red Rd., Egg Harbor, WI 7-19-2018 24\n7300 McIntosh Way, Egg Harbor, WI 8-28-2017 24\n3. §192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline, a manual of\nwritten procedures for conducting operations and maintenance activities and for\nemergency response. For transmission lines, the manual must also include\nprocedures for handling abnormal operations. This manual must be reviewed and\nupdated by the operator at intervals not exceeding 15 months, but at least once\n2\n\n\n\neach calendar year. This manual must be prepared before operations of a pipeline\nsystem commence. Appropriate parts of the manual must be kept at locations\nwhere operations and maintenance activities are conducted.\nFerrellgas did not conduct annual reviews of its written procedures. Ferrellgas\npersonnel informed PHMSA that it had not conducted annual reviews of its written\nprocedures for the last two years.\n4. §192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) . . . .\n(b) Maintenance and normal operations. The manual required by paragraph (a)\nof this section must include procedures for the following, if applicable, to provide\nsafety during maintenance and operations.\n(8) Periodically reviewing the work done by operator personnel to determine the\neffectiveness, and adequacy of the procedures used in normal operation and\nmaintenance and modifying the procedures when deficiencies are found.\nFerrellgas did not periodically review the work done by operator personnel to\ndetermine the effectiveness and adequacy of the procedures in normal operations and\nmaintenance. Ferrellgas informed PHMSA that these effectiveness reviews had not\nbeen conducted for the last two year.\n5. §192.619 Maximum allowable operating pressure: Steel or plastic pipelines\na) No person may operate a segment of steel or plastic pipeline at a pressure that\nexceeds a maximum allowable operating pressure determined under paragraph\n(c) or (d) of this section, or the lowest of the following:\n(1) The design pressure of the weakest element in the segment, determined in\naccordance with subparts C and D of this part. However, for steel pipe in\npipelines being converted under §192.14 or uprated under subpart K of this part,\nif any variable necessary to determine the design pressure under the design\nformula (§192.105) is unknown, one of the following pressures is to be used as\ndesign pressure:\nFerrellgas did not determine its maximum allowable operating pressure (MAOP) to be\nthe design pressure of the weakest element of the segment. Ferrellgas stated that its\nMAOP in each system was 30 psig, but the PHMSA inspector found house service\nregulators having a maximum inlet pressure limit of 10 psig. This would restrict the\nMAOP to not be above 10 psig.\n3\n\n\n\n6. §192.603 General provisions.\n(a) . . . .\n(b) Each operator shall keep records necessary to administer the procedures\nestablished under §192.605.\n§192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) . . .\n(b) Maintenance and normal operations. The manual required by paragraph (a) of\nthis section must include procedures for the following, if applicable, to provide\nsafety during maintenance and operations.\n(1) Operating, maintaining, and repairing the pipeline in accordance with each of\nthe requirements of this subpart and subpart M of this part.\n§192.741 Pressure limiting and regulating stations: Telemetering or recording\ngauges.\n(a) Each distribution system supplied by more than one district pressure\nregulating station must be equipped with telemetering or recording pressure\ngauges to indicate the gas pressure in the district.\nFerrellgas did not keep records of recording pressure gauges for two multiple feed\nsystems. The monthly pressure recording charts for the Horse Shoe Bay distribution\nsystem were not keep for August of 2016, October and February of 2017, and June of\n2018. The same records for Heritage Lake distribution system were not kept for\nAugust and October of 2016, Febuary, April, May, and June of 2017, and March of\n2018.\n7. §192.743 Pressure limiting and regulating stations: Capacity of relief devices.\n(a) Pressure relief devices at pressure limiting stations and pressure regulating\nstations must have sufficient capacity to protect the facilities to which they are\nconnected. Except as provided in §192.739(b), the capacity must be consistent\nwith the pressure limits of §192.201(a). This capacity must be determined at\nintervals not exceeding 15 months, but at least once each calendar year, by testing\nthe devices in place or by review and calculations.\n(b) If review and calculations are used to determine if a device has sufficient\ncapacity, the calculated capacity must be compared with the rated or\nexperimentally determined relieving capacity of the device for the conditions\nunder which it operates. After the initial calculations, subsequent calculations\nneed not be made if the annual review documents that parameters have not\nchanged to cause the rated or experimentally determined relieving capacity to be\ninsufficient.\n4\n\n\n\nFerrellgas did not determine pressure relief capacity at intervals not exceeding 15\nmonths, but at least each calendar year, by testing the devices in place or by review\nand calculations of the capacity of its regulator station relief devices. None of\nFerrellgas’ nine (9) regulator stations had been tested in place or calculated capacities\nreviewed to determine if the relieving capacities were sufficient. Ferrellgas had no\ncapacity design sheets for its regulator stations to even review.\n8. §192.805 Qualification program.\nEach operator shall have and follow a written qualification program. The\nprogram shall include provisions to:\n(a) . . . .\n(b) Ensure through evaluation that individuals performing covered tasks are\nqualified;\nFerrellgas did not ensure through evaluation that individuals performing covered tasks\nare qualified. The operator 2015 qualification records for one individual who\nperformed 19 covered tasks had none of the proficiency (performance) evaluations\ncompleted, but all the written tests had been completed. The individual performed\nthese tasks multiple times during the period from 2015 to 2018. His records for 2018\nfor all qualifications were complete. This individual was in charge of qualifying most\nof the staff.\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to\nexceed $213,268 per violation per day the violation persists, up to a maximum of $2,132,679\nfor a related series of violations. For violation occurring on or after November 2, 2015 and\nbefore November 27, 2018, the maximum penalty may not exceed $209,002 per violation per\nday, with a maximum penalty not to exceed $2,090,022. For violations occurring prior to\nNovember 2, 2015, the maximum penalty may not exceed $200,000 per violation per day,\nwith a maximum penalty not to exceed $2,000,000 for a related series of violations. The\nCompliance Officer has reviewed the circumstances and supporting documentation involved\nin the above probable violation(s) and has recommended that you be preliminarily assessed a\ncivil penalty of $19,600 as for Item 2.\nWarning Items\nWith respect to item(s) 1, 3, 4, 6 and 8, we have reviewed the circumstances and supporting\ndocuments involved in this case and have decided not to conduct additional enforcement\naction or penalty assessment proceedings at this time. We advise you to promptly correct\nthese items. Failure to do so may result in additional enforcement action.\n5\n\n\n\nProposed Compliance Order\nWith respect to item 5 and 7 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Ferrellgas. Please\nrefer to the Proposed Compliance Order, which is enclosed and made a part of this Notice.\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 publicly\navailable. If you believe that any portion of your responsive material qualifies for confidential\ntreatment under 5 U.S.C. 552(b), along with the complete original document you must provide\na second copy of the document with the portions you believe qualify for confidential treatment\nredacted and an explanation of why you believe the redacted information qualifies for\nconfidential treatment under 5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, or request\na hearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this\nNotice, this constitutes a waiver of your right to contest the allegations in this Notice and\nauthorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this\nNotice without further notice to you and to issue a Final Order. If you are responding to this\nNotice, we propose that you submit your correspondence to my office within 30 days from\nreceipt of this Notice. This period may be extended by written request for good cause.\nIn your correspondence on this matter, please refer to CPF 3-2019-0001 and, for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n6\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to FerrellGas a Compliance Order incorporating\nthe following remedial requirements to ensure the compliance of Ferrellgas with the pipeline\nsafety regulations:\n1. 2. 3. 4. In regard to Item Number 5 of the Notice pertaining to determining pipeline\nmaximum allowable operating pressure (MAOP), Ferrellgas must evaluate its\npipelines and determine the MAOP according to §192.619 and document its\nfindings for each of its systems.\nIn regard to Item Number 7 of the Notice pertaining capacity of relief valves at\nregulator stations, Ferrellgas must determine if the reliefing capacity is\nsufficient by testing the devices in place or by capacity calculations of each\nstation.\nWithin 90 days after receipt of the Final Order FerrellGas must have completed\nItems 1 and 2 of the compliance order and sent the appropriate documentation\nto Allan Beshore, Director, Central Region, OPS.\nIt is requested (not mandated) that Ferrellgas maintain documentation of the\nsafety improvement costs associated with fulfilling this Compliance Order and\nsubmit the total to Allan C. Beshore, Director, Central Region, OPS, Pipeline\nand Hazardous Materials Safety Administration. It is requested that these costs\nbe reported in two categories: 1) total cost associated with preparation/revision\nof plans, procedures, studies and analyses, and 2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n7\n\n320190001_Final Order_04062020_text.pdf\n\nVIA EMAIL TO: jamesferrell@ferrellgas.com, jordanburns@ferrellgas.com, and\nrufusyoungblood@ferrellgas.com\nMr. James E. Ferrell\nChairman, Interim Chief Executive Officer and President\nFerrellgas Partners, LP\nOne Liberty Plaza\nLiberty, Missouri 64068\nRe: CPF No. 3-2019-0001\nDear Mr. Ferrell:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $19,600, and specifies actions that need to be taken by your\nsubsidiary, Ferrellgas, LP, to comply with the pipeline safety regulations. The penalty payment\nterms are set forth in the Final Order. When the civil penalty has been paid and the terms of the\ncompliance order completed, as determined by the Director, Central Region, this enforcement\naction will be closed. Service of the Final Order by e-mail is effective upon the date of mailing\nas provided under 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 Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA\nMr. Jordan Burns, Vice President and General Counsel, Ferrellgas\nMr. Rufus Youngblood, Director Safety, Ferrellgas\nVIA EMAIL – CONFIRMATION OF RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\nIn the Matter of )\nFerrellgas, LP, ) CPF No. 3-2019-0001\na subsidiary of Ferrellgas Partners, LP, )\nRespondent. )\n)\n)\n)\n)\nFINAL ORDER\nFrom August 7, 2019, through August 9, 2019, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of\nFerrellgas, LP’s (Ferrellgas or Respondent) liquid propane distribution facilities in northern\nWisconsin. Ferrellgas, a subsidiary of Ferrellgas Partners, LP,1 operates six small liquid propane\ndistribution systems in Wisconsin.2 The systems are comprised of plastic mains, plastic services,\nand some copper lines supplied by underground and above-ground 1,000-gallon tanks.3\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated April 29, 2019, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice), which also included warnings pursuant to 49 C.F.R.\n§ 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Ferrellgas\nhad violated 49 C.F.R. §§ 192.513, 192.619, and 192.743, and proposed assessing a civil penalty\nof $19,600 for the alleged violation of § 192.513. The Notice also proposed ordering\nRespondent to take certain measures to correct the alleged violations. The warning items\nrequired no further action, but warned the operator to correct the probable violations or face\npossible future enforcement action.\nFerrellgas responded to the Notice by letter dated July 10, 2019 (Response). The company did\nnot contest the allegations of violation of §§ 192.513 and 192.743 (Items 2 and 7, respectively),\noffered additional information in response to the allegation of violation of § 192.619 (Item 5),\n1 Ferrellgas Partners, LP Form 10-K, available at https://ferrellgas.gcs-web.com/static-files/e9dc3d5d-7b17-4295-\n9729-cc99c18488c4 (last accessed March 10, 2020).\n2 Pipeline Safety Violation Report (Violation Report), (April 29, 2019) (on file with PHMSA), at 1 (on file with\nPHMSA).\n3 Id.\n\n\n\nCPF 3-2019-0001\nPage 2\nand requested that the proposed civil penalty be reduced or eliminated for § 192.513 (Item 2).\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.513, which states, in\nrelevant part:\n§ 192.513 Test requirements for plastic pipelines.\n(a) Each segment of a plastic pipeline must be tested in accordance with\nthis section.\n(b) ….\n(c) The test pressure must be at least 150 percent of the maximum\noperating pressure or 50 p.s.i. (345 kPa) gage, whichever is greater.\nHowever, the maximum test pressure may not be more than 3 times the\npressure determined under § 192.121 at a temperature not less than the pipe\ntemperature during the test.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.513 by failing to test its plastic\npipelines to a pressure of at least 50 psi. Specifically, the Notice alleged that Ferrellgas installed\nthree plastic service lines in 2017 and 2018 that were not pressure tested to at least 50 psi.\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. § 192.513 by failing to test its plastic\npipelines to a pressure of at least 50 psi.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a), which states, in\nrelevant part:\n§ 192.619 Maximum allowable operating pressure: Steel or plastic\npipelines.\n(a) No person may operate a segment of steel or plastic pipeline at a\npressure that exceeds a maximum allowable operating pressure determined\nunder paragraph (c) or (d) of this section, or the lowest of the following:\n(1) The design pressure of the weakest element in the segment,\ndetermined in accordance with subparts C and D of this part. However, for\nsteel pipe in pipelines being converted under § 192.14 or uprated under\nsubpart K of this part, if any variable necessary to determine the design\npressure under the design formula (§ 192.105) is unknown, one of the\nfollowing pressures is to be used as design pressure: ….\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(1) by failing to determine\nits maximum allowable operating pressure (MAOP) in conformance with the design pressure of\n\n\n\nCPF 3-2019-0001\nPage 3\nthe weakest element in the pipeline segment. Specifically, the Notice alleged that Ferrellgas’\nprocedures stated that its MAOP for each system was 30 psi, even though its house-service\nregulators have a maximum inlet pressure limit of 10 psi. Therefore, the Notice alleged that\nFerrellgas’ MAOP should be not have exceeded 10 psi.\nIn its Response, Ferrellgas stated that the MAOP in its Operations and Maintenance Manual\n(O&M Manual) is set at 30 psi because 30 psi is the limit for propane vapor in polyethylene\n(poly) pipe. Ferrellgas also stated that no further MAOP calculations were needed “because poly\npipe used in the propane industry has a design pressure far above 30 psi.” Ferrellgas\nacknowledged nevertheless that the second-stage regulators used in its systems have a maximum\ninlet pressure of 10 psi.4\nSection 192.619(a)(1) provides that no person may operate a segment of plastic pipeline at a\npressure that exceeds the MAOP of the design pressure of the weakest element in the segment.\nRespondent’s second-stage regulators constitute a part of the pipeline segment and have a\nmaximum inlet pressure of 10 psi. The design pressure of the poly pipe is therefore immaterial\nbecause the second-stage regulator is the weaker element on the pipeline segment.\nConsequently, the MAOP should not have exceeded 10 psi.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.619(a) by failing to determine its MAOP in conformance with the design pressure of the\nweakest element in the pipeline segment.\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 192.743, which states, in\nrelevant part:\n§ 192.743 Pressure limiting and regulating stations: Capacity of relief\ndevices.\n(a) Pressure relief devices at pressure limiting stations and pressure\nregulating stations must have sufficient capacity to protect the facilities to\nwhich they are connected. Except as provided in § 192.739(b), the capacity\nmust be consistent with the pressure limits of § 192.201(a). This capacity\nmust be determined at intervals not exceeding 15 months, but at least once\neach calendar year, by testing the devices in place or by review and\ncalculations.\n(b) If review and calculations are used to determine if a device has\nsufficient capacity, the calculated capacity must be compared with the rated\nor experimentally determined relieving capacity of the device for the\nconditions under which it operates. After the initial calculations, subsequent\ncalculations need not be made if the annual review documents that\nparameters have not changed to cause the rated or experimentally\ndetermined relieving capacity to be insufficient. . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.743 by failing to determine the\ncapacity of its regulator-station relief devices at intervals not exceeding 15 months, but at least\n4 Response, at 4.\n\n\n\nCPF 3-2019-0001\nPage 4\nonce each calendar year, by testing them in place or by review and calculations. Specifically, the\nNotice alleged that none of Ferrellgas’ nine regulator stations had been tested in place or by\ncalculation to determine if the relieving capacities were sufficient. The Notice also alleged that\nFerrellgas did not have any capacity-design sheets for its regulator stations available for the\nPHMSA inspector to review.\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. § 192.743 by failing to determine the\ncapacity of its regulator-station relief devices at intervals not exceeding 15 months, but at least\nonce each calendar year, by testing in place or by review and calculations.\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.5 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 $19,600 for the violation of Item 2.\nItem 2: The Notice proposed a civil penalty of $19,600 for Respondent’s violation of 49 C.F.R.\n§ 192.513, for failing to test its plastic pipelines to a pressure of 50 psi. In its Response,\nFerrellgas explained that its employees had mistakenly tested the lines using the parameters\nfound in NFPA 54 and 58, which have a lower minimum test pressure than those established in\nPart 192. Ferrellgas noted that it had re-tested all of the lines in accordance with its O&M\nManual and that the new tests showed that the lines were safe and their integrity had not been\ncompromised. In light of these mitigating factors, Ferrellgas requested that the proposed penalty\nbe rescinded or reduced.\nWhile I acknowledge, and appreciate, Ferrellgas’ willingness to re-test its pipelines following the\nissuance of the Notice, I do not find that such corrective actions warrant the withdrawal or\nreduction of the civil penalty. Regarding the nature and circumstances of the violation, PHMSA\nnoted in the Violation Report that the alleged violation related to a failure to perform a required\nactivity and that the violation had been discovered by PHMSA or a State Partner. It is\nuncontested that Ferrellgas failed to test its plastic pipelines to a pressure of at least 50 psi and\nthat PHMSA, rather than the company, had discovered the violation.\n5 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF 3-2019-0001\nPage 5\nRegarding gravity, PHMSA noted in the Violation Report that pipeline safety was minimally\naffected; therefore, the proposed civil penalty has already accounted for the fact that pipeline\nintegrity was never compromised. Regarding culpability, Ferrellgas did not contest the violation\nand has thus acknowledged that it failed to comply with an applicable requirement of Part 192.\nRegarding good faith, Ferrellgas seeks a penalty reduction because its employees mistakenly\nused the wrong standard when testing the lines. Ferrellgas stated that in most other\ncircumstances where these lines had been installed to serve a single customer from a stationary\nASME tank, the test pressure used would have been acceptable under the codes that it uses for\nthe safe installation and operation of propane systems.\nI am unconvinced that it would be appropriate to reduce a proposed penalty because an employee\nmade a mistake or used the wrong standard while performing a safety task. On the contrary,\npipeline operators are and should be expected to ensure that their personnel perform all safety-\nrelated tasks using the correct standards and procedures. As such, a reduction of the proposed\ncivil penalty under the “good faith” standard is not warranted.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $19,600 for violation of 49 C.F.R. § 192.513.\nFailure to pay the $19,600 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.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 5 and 7 in the Notice for\nviolations of 49 C.F.R. §§ 192.619 and 192.743, respectively. Under 49 U.S.C. § 60118(a), each\nperson who engages in the transportation of gas or who owns or operates a pipeline facility is\nrequired to comply with the applicable safety standards established under chapter 601. Pursuant\nto the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take\nthe following actions to ensure compliance with the pipeline safety regulations applicable to its\noperations:\n1. With respect to the violation of § 192.619 (Item 5), Respondent must evaluate its\npipelines and determine the MAOP according to § 192.619 and document its findings\nfor each of its systems.\n2. With respect to the violation of § 192.743 (Item 7), Respondent must determine if\nthe relieving capacity of its regulator-station relief devices is sufficient by testing the\ndevices in place or by capacity calculations of each station.\n3. All documentation demonstrating compliance with items 1 and 2 of the\n\n\n\nCPF 3-2019-0001\nPage 6\ncompliance order must be submitted to the Director, Central Region, Pipeline and\nHazardous Safety Materials Administration, for review within 90 days of receipt of\nthe Final Order.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nIt is requested (not mandated) that Respondent maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total to the\nDirector. It is requested that these costs be reported in two categories: (1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated\nwith replacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nWARNING ITEMS\nWith respect to Items 1, 3, 4, 6 and 8, the Notice alleged probable violations of Part 192 but did\nnot propose a civil penalty or compliance order for these items. Therefore, these are considered\nto be warning items. The warnings were for the following:\n49 C.F.R. § 192.285 (Item 1) ─ Respondent’s alleged failure to re-qualify a\nperson under an applicable plastic joint procedure once each calendar year, with\nintervals not exceeding 15 months, in 2015. The individual made pipe joints in\n2015, but had not been requalified by making specimen joints and testing them as\nrequired by the § 192.285 and Respondent’s own procedures.\n49 C.F.R. § 192.605(a) (Item 3) ─ Respondent’s alleged failure to conduct an\nannual review of its written procedures.\n49 C.F.R. § 192.605(b)(8) (Item 4) ─ Respondent’s alleged failure to periodically\nreview the work done by its personnel to determine the effectiveness and\nadequacy of the procedures used in normal operations and maintenance.\n49 C.F.R. § 192.603(b) (Item 6) ─ Respondent’s alleged failure to keep records\nof recording pressure gauges for two multiple feed systems.\n49 C.F.R. § 192.805(b) (Item 8) ─ Respondent’s alleged failure to ensure through\nevaluation that individuals performing covered tasks were qualified.\n\n\n\nCPF 3-2019-0001\nPage 7\nFerrellgas 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 this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nApril 6, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":35680}