{"operation":"document","citation":"CPF 320195019","title":"ENTERPRISE PRODUCTS OPERATING LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-05-28","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.54(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195019.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195019.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195019","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320195019","body":"Notice of Probable Violation involving ENTERPRISE PRODUCTS OPERATING LLC. PHMSA's enforcement data identifies the cited regulation as 195.54(b). The case was opened on 2019-05-28 and is reported as closed as of 2020-03-16. Proposed civil penalty: $36,600. Assessed civil penalty: $19,354. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320195019_Final Order_02242020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195019/320195019_Final%20Order_02242020.pdf\n\n320195019_Final Order_02242020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195019/320195019_Final%20Order_02242020_text.pdf\n\n320195019_NOPV PCP_05282019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195019/320195019_NOPV%20PCP_05282019.pdf\n\n320195019_NOPV PCP_05282019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195019/320195019_NOPV%20PCP_05282019_text.pdf\n\n320195019_Operator Response to Notice_07152019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195019/320195019_Operator%20Response%20to%20Notice_07152019.pdf\n\n320195019_Final Order_02242020_text.pdf\n\nFebruary 24, 2020\nMr. A.J. Teague\nDirector and Chief Executive Officer\nEnterprise Products Partners, LP\n1100 Louisiana Street, 10th Floor\nHouston, Texas 77002\nRe: CPF No. 3-2019-5019\nDear Mr. Teague:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nEnterprise Products Operating, LLC. It makes a finding of violation and assesses a reduced civil\npenalty of $19,354. The penalty payment terms are set forth in the Final Order. This\nenforcement action closes automatically upon receipt of payment. Service of the Final Order by\ncertified mail is effective upon the date of mailing, 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. Alan Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA\nMr. Graham Bacon, Executive Vice President, Operations and Engineering, Enterprise\nProducts Partners, LP, 1100 Louisiana Street, 10th Floor, Houston, Texas 77002\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 )\nEnterprise Products Operating, LLC, ) CPF No. 3-2019-5019\na subsidiary of Enterprise Products Partners, LP, )\n)\n)\n)\nRespondent. )\n________________________________________________)\nFINAL ORDER\nOn January 3, 2019, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nreviewed and inspected the supplemental final Accident Report DOT Form 7000-1 (DOT No.\n20160413-21972), that Enterprise Products Operating, LLC (Enterprise), filed electronically on\nJanuary 2, 2019. Enterprise submitted the original Accident Report DOT Form 7000-1 on\nDecember 19, 2016, following a rupture and fire on Enterprise’s East Red Pipeline (Line ID 603)\non November 29, 2016, in Platte County, Missouri (Original Accident Report). The rupture\nresulted in the release of approximately 5,000 barrels of highly volatile liquid.1 Respondent is a\nwholly-owned subsidiary of Enterprise Products Partners, LP, which operates approximately\n50,000 miles of natural gas, natural gas liquid, crude oil, refined products, and petrochemical\npipelines throughout the United States.2\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated May 28, 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 Enterprise\nhad violated 49 C.F.R. § 195.54(b) and proposed assessing a civil penalty of $36,600 for the\nalleged violation.\nEnterprise responded to the Notice by letter dated July 15, 2019 (Response). The company\ncontested the allegation, offered additional information in response to the Notice, and requested\nthat the proposed civil penalty be reduced or eliminated. Respondent did not request a hearing\nand therefore has waived its right to one.\n1 As a result of the accident, PHMSA issued a Corrective Action Order to Enterprise on December 6, 2016 (CAO).\n2 Enterprise Products Partners, LP website, available at www.enterpriseproducts.com (last accessed January 16,\n2020).\n\n\n\nCPF No. 3-2019-5019\nPage 2\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.54(b), which states:\n§ 195.54 Accident reports.\n(a) ….\n(b) Whenever an operator receives any changes in the information\nreported or additions to the original report on DOT Form 7000-1, it shall\nfile a supplemental report within 30 days.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.54(b) by failing to file a\nsupplemental accident report with PHMSA within 30 days of receiving changes in the\ninformation reported or additions to the original report. Specifically, the Notice alleged that\nEnterprise submitted its Original Accident Report in 2016 but did not file any supplemental\naccident report until January 2, 2019 (Supplemental Report). However, a review of the\nSupplemental Report allegedly showed that Enterprise had received a significant amount of\nadditional information regarding the reportable accident on various occasions between the date\nof the Original Accident Report in December 2016 and the date of the Supplemental Report in\nJanuary 2019, but failed to file any additional reports as required by the regulation.\nFor example, the Notice alleged that Enterprise had stated in a quarterly report3 submitted to\nPHMSA on April 13, 2017, under the CAO that \"[p]ipeline repairs and startup were completed\non December 6, 2016.\" Therefore, by April 13, 2017, Enterprise had received additional\ninformation to report under \"Part D — Additional Consequence Information Question &\nEstimated Cost to Operator\" of DOT Form 7000-1. However, Enterprise failed to report this\ninformation to PHMSA, as required, until January 2, 2019, over 20 months after Enterprise\nreceived this additional information.\nAdditionally, Enterprise allegedly received information from a metallurgical analysis report\nprepared by Kiefner & Associates, Inc., dated March 28, 2017, related to the reportable accident.\nInformation from the Kiefner report was also incorporated into Enterprise's Failure Analysis\nReport dated June 14, 2017. These reports stated that \"[t]he pipe rupture was due to external\nnear-neutral stress corrosion cracking (SCC) along and adjacent to the Electronic Resistance\nWelded (ERW) seam.\"4 Accordingly, the information included in these reports would\nnecessitate Enterprise filing a supplemental report on DOT Form 7000-1 within 30-days of\nreceiving this information because it addressed questions under Part G of Form 700-1, Apparent\nCause, in particular G5 — Material Failure of Pipe or Weld. However, Enterprise first included\nthis additional information in the Supplemental Report on January 2, 2019, more than 18 months\nafter Enterprise first received it.\n3 The quarterly report was required to be submitted to PHMSA pursuant to the CAO.\n4 See Failure Analysis Report, Enterprise Products Operating, LLC (June 6, 2017) (on file with PHMSA).\n\n\n\nCPF No. 3-2019-5019\nPage 3\nIn its Response, Enterprise contested the allegation of violation and stated that it complied with\nthe intent of the regulation through its ongoing communications and reports to PHMSA under the\nCAO. Enterprise “acknowledge[d] that the first DOT Form 7000-1 containing the metallurgical\nand cost information at issue was filed on January 2, 2019,”5 and that a supplemental report\ncontaining the additional information identified in the Notice was not filed with PHMSA within\n30 days of receiving such information. However, Enterprise argued that all of the information\nidentified in the NOPV had been provided to PHMSA during the course of its reporting\nobligations under the CAO, and that it “reasonably relied on the CAO reporting framework and\ndiscussions under it as the proper means for keeping PHMSA staff updated regarding the\nincident, and … that this met the intent of the § 195.54(b) reporting requirement.”6 Enterprise\nfurther argued that even if it were found to be in violation of the regulation, the facts warranted a\nreduction in the civil penalty. Enterprise’s argument regarding the civil penalty is addressed\nbelow in the Assessment of Penalty section.\nAlthough it is undisputed that Enterprise provided PHMSA with additional information about the\nreportable incident in the context of its reporting requirements under a CAO, it is also clear that\nEnterprise did not file a supplemental report within 30 days of receiving such information, as\nrequired by the regulation. Section 195.54(b) imposes a mandatory obligation on operators to\nsubmit a supplemental report within 30 days of receiving additional information from what was\nreported in an original accident report on DOT Form 7000-1. The regulation neither permits nor\ncontemplates that an operator may comply with this requirement by providing PHMSA with\nsuch information outside of filing a supplemental report to an original DOT Form 7000-1\naccident report within the requisite timeframe.\nThis is because the reporting requirement in § 195.54, as well as other reports such as safety-\nrelated condition reports required under § 195.55, serve an entirely different purpose than the\nreporting requirements imposed under a unique CAO or compliance order tailored to a specific\naccident or violation. The former reports provide important statistical information used by\nPHMSA to identify industry-wide safety concerns and trends, as well as responses to specific\nquestions designed to provide useful quantitative data to PHMSA and the public. Accident\nreports are separate reports serving separate purposes.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.54(b) by failing to file a supplemental accident report with PHMSA within 30 days of\nreceiving changes or additions to the original report.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\n5 Id.\n6 Response, at 3 (on file with PHMSA).\n\n\n\nCPF No. 3-2019-5019\nPage 4\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.7 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 $36,600 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $36,600 for Respondent’s violation of 49 C.F.R.\n§ 195.54(b), for failing to file a supplemental accident report with PHMSA within 30 days of\nreceiving changes or additions to the original report. Enterprise initially argued that it was not in\nviolation of the regulation and that the proposed civil penalty should be withdrawn in its entirety.\nIn the alternative, it argued that if it were found in violation, then the penalty should be reduced.\nHaving found Enterprise in violation of the regulation as alleged in the Notice, I next address\neach of Enterprise’s arguments in support of its position that the civil penalty should be\neliminated. Enterprise presented three arguments in support of its position. First, the company\nrelied on sections from PHMSA’s Pipeline Safety Enforcement Procedures to argue that\nimposing a civil penalty for this type of violation would be inconsistent with PHMSA policy\nbecause none of the criteria for applying a civil penalty applied in this case. Second, Enterprise\nargued that the proposed civil penalty and enforcement action in this case should be addressed\nthrough a warning letter because the failure to report is a low-risk violation that does not affect\npipeline safety. Finally, Enterprise cited to a public statement made recently by PHMSA\nAdministrator Skip Elliott that industry and PHMSA could work together to meet the goals of\nsimplifying rules and investing resources where they are needed most and have the greatest\nsafety benefit. According to Enterprise, the proposed enforcement action and civil penalty in this\ncase “do not have a pipeline safety implication in the specific facts of this matter” and therefore\nthe penalty should be withdrawn.8\nI reject each of Enterprise’s arguments. First, PHMSA’s procedures, while useful as guidance to\nregional directors in evaluating an enforcement action, are not mandatory and do not have the\nforce of regulations. The Director in this case clearly acted within his discretion to bring this\ncase as an alleged violation and not as a warning, and properly exercised his discretion to request\na civil penalty. Second, Enterprise failed to comply with an explicit regulatory requirement, and\nsuch violation lasted for over 20 months before it was cured by the filing of the Supplemental\nReport. Third, the Violation Report, which was used to calculate the proposed civil penalty in\nthis case, noted that the alleged violation minimally impacted pipeline safety and was therefore\n7 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n8 Response, at 4.\n\n\n\nCPF No. 3-2019-5019\nPage 5\ntaken into account in calculating the proposed penalty.\nFinally, Enterprise’s reliance on a statement purportedly made by Administrator Elliott is\nmisplaced. While it is true that PHMSA is committed to acting in concert with the pipeline\nindustry to direct their combined resources to promoting safety, simplifying burdensome rules,\nand investing resources where they are needed most, it is inaccurate to suggest that there are no\nsafety implications arising out of this violation. As noted above, the filing of accident reports\nand supplemental reports serves an important purpose in providing tangible safety benefits to\noperators and the public. With data compiled from the reports, PHMSA is able to determine\nwhich violations are commonly associated with accidents and to dedicate appropriate resources\nto reduce their occurrence. For these reasons, I find that a civil penalty is appropriate in this\ncase.\nOn the other hand, I find merit in Enterprise’s alternative argument that the proposed penalty\nshould be reduced under the “good faith” criteria. Enterprise argued that its good faith in\nattempting to comply with the intent of the regulation is evidenced by its communications with\nPHMSA in the context of the CAO, which related to the same accident that required the filing of\nthe Original Accident Report and the Supplemental Report. The record reflects that although\nEnterprise violated the regulation at issue, this is not a case where an operator failed entirely to\nprovide PHMSA with supplemental information relevant to an accident report. Enterprise is\ncorrect that certain information that should have been provided to PHMSA in the context of a\nsupplemental accident report was otherwise provided to PHMSA in a timely manner through the\nCAO correspondence. There is nothing in the record suggesting that Enterprise withheld or\nfailed to provide the information at issue, but merely failed to provide it in the prescribed time\nand format that would serve the purposes of § 195.54(b). For this reason, I find that the civil\npenalty should be reduced under the good faith criteria to reflect that Enterprise had a reasonable\njustification for its non-compliance.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a reduced civil penalty of $19,354 for violation of 49 C.F.R. § 195.54(b).\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 $19,354 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. 3-2019-5019\nPage 6\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.\nFebruary 24, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":18882}