{"operation":"document","citation":"CPF 320195006","title":"PHILLIPS 66 PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-06-14","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.264(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195006.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195006.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195006","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320195006","body":"Notice of Probable Violation involving PHILLIPS 66 PIPELINE LLC. PHMSA's enforcement data identifies the cited regulation as 195.264(a). The case was opened on 2019-06-14 and is reported as closed as of 2020-05-20. Proposed civil penalty: $67,300. Assessed civil penalty: $39,700. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320195006_Final Order_05112020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195006/320195006_Final%20Order_05112020.pdf\n\n320195006_Final Order_05112020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195006/320195006_Final%20Order_05112020_text.pdf\n\n320195006_NOPV PCP_06142019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195006/320195006_NOPV%20PCP_06142019.pdf\n\n320195006_NOPV PCP_06142019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195006/320195006_NOPV%20PCP_06142019_text.pdf\n\n320195006_Operator Response to Notice_07152019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195006/320195006_Operator%20Response%20to%20Notice_07152019.pdf\n\n320195006_Final Order_05112020_text.pdf\n\nMay 11, 2020\nVIA ELECTRONIC MAIL TO: greg.garland@p66.com\nMr. Greg C. Garland\nChairman and Chief Executive Officer\nPhillips 66 Company\n2331 CityWest Boulevard\nHouston, Texas 77042\nRe: CPF No. 3-2019-5006\nDear Mr. Garland:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation against your subsidiary, Phillips 66 Pipeline, LLC, and assesses a civil penalty of\n$39,700. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon receipt of payment. Service of the Final Order by electronic mail is\neffective upon the date of transmission, as 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. C. Todd Denton, President, Phillips 66 Pipeline, LLC, todd.denton@p66.com\nMr. Van P. Williams, Senior Counsel, Phillips 66 Company, van.p.williams@p66.com\nCONFIRMATION 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 )\nPhillips 66 Pipeline, LLC, ) CPF No. 3-2019-5006\na subsidiary of Phillips 66 Company, )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn August 22, 2017, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Phillips 66\nPipeline, LLC (Phillips or Respondent), a subsidiary1 of Phillips 66 Company, in East St. Louis,\nIllinois.2 Phillips 66 Company processes, transports, stores, and markets hydrocarbon fuels and\nproducts globally, with more than 18,000 miles of hazardous liquid and natural gas pipelines\nacross the United States.3\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated June 14, 2019, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Phillips had\nviolated 49 C.F.R. § 195.264(a) and proposed assessing a civil penalty of $67,300 for the alleged\nviolation.\nPhillips 66 Company responded to the Notice on behalf of Respondent by letter dated July 15,\n2019 (Response). The company did not contest the allegation of violation but provided an\nexplanation of its actions and requested that the proposed civil penalty be reduced. Respondent\ndid not request a hearing and therefore has waived its right to one.\n1 Phillips 66 Company Form 2018 10-K, available at https://investor.phillips66.com/financial-information/sec-\nfilings/sec-filings-details/default.aspx?FilingId=13246402 (last accessed March 9, 2020).\n2 The Notice of Probable Violation incorrectly noted the location of the inspected facility.\n3 Phillips 66 Company website, available at https://www.phillips66midstream.com/EN/Pages/pipelines.aspx and\nhttps://www.phillips66pipeline.com/ (last accessed March 9, 2020).\n\n\n\nCPF No. 3-2019-5006\nPage 2\nFINDING OF VIOLATION\nIn its Response, Phillips did not contest the allegation in the Notice that it violated 49 C.F.R. Part\n195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.264(a), which states:\n§ 195.264 Impoundment, protection against entry, normal/emergency\nventing or pressure/vacuum relief for aboveground breakout tanks.\n(a) A means must be provided for containing hazardous liquids in the event of\nspillage or failure of an aboveground breakout tank.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.264(a) by failing to provide a\nmeans for containing hazardous liquids in the event of spillage or failure of an aboveground\nbreakout tank. Specifically, the Notice alleged that while Phillips had installed diking around\nTank 6818 at the company’s East St. Louis terminal, an abandoned pipe provided an open path\nthrough the diking in the event of a spill or failure of the tank.\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. § 195.264(a) by failing to provide a\nmeans for containing hazardous liquids in the event of spillage or failure of an aboveground\nbreakout tank.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken 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.4 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 $67,300 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $67,300 for Respondent’s violation of 49 C.F.R.\n§ 195.264(a), for failing to provide a means for containing hazardous liquids in the event of\nspillage or failure of an aboveground breakout tank. Phillips argued for a reduction in the\n4 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 3-2019-5006\nPage 3\nproposed civil penalty, stating that the violation had been identified during the PHMSA\ninspection, corrected the same day, and did not result in any damages or impact on the\nenvironment.\nI have considered the arguments raised by Phillips and reviewed the Violation Report and find\nthat a penalty reduction in this case is warranted. Like all of PHMSA’s proposed penalties, the\none in this case was based on assessment criteria set out by statute5 and on specific facts\nindicated in Parts E4 through E10 of the Violation Report. I find that OPS correctly noted the\nviolation was discovered by PHMSA and not by the operator, that the non-compliance had been\npresent for more than 10 days, and that Phillips failed to comply with a requirement that was\nclearly applicable. Further, I reject the notion that Phillips’ post-inspection corrective actions\nwarrant a penalty reduction since those actions were only taken after PHMSA had already\nidentified the violation.\nHowever, with respect to the “gravity” criterion under Part E6, I find that the penetration of the\ndiking occurred on a secondary containment structure and that a failure of the breakout tank\nwould have been necessary for the violation to result in a serious impact to pipeline safety. That\ndid not happen. Part E6 of the Violation Report provides that the lowest level of gravity should\nbe attributed to this violation since there was minimal impact on pipeline safety. Accordingly, I\nfind that the penalty assessment criterion for gravity should be reduced from Category 3 to\nCategory 5, thus justifying a substantial penalty reduction.\nBased on the foregoing, I assess Respondent a reduced civil penalty of $39,700 for violation of\n49 C.F.R. § 195.264(a).\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 $39,700 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.\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\n5 49 U.S.C. § 60122(b)\n\n\n\nCPF No. 3-2019-5006\nPage 4\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.\nMay 11, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":11187}