{"operation":"document","citation":"CPF 320205005","title":"EXPRESS HOLDINGS (USA), LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2020-03-19","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.401(b)(1), 195.406(a)(3), 195.406(b), 195.410(a)(1), 195.410(a)(2)(ii), 195.412(a), 195.581(a), 195.583(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205005.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205005.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205005","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320205005","body":"Notice of Probable Violation involving EXPRESS HOLDINGS (USA), LLC. PHMSA's enforcement data identifies the cited regulations as 195.401(b)(1),  195.406(a)(3),  195.406(b),  195.410(a)(1),  195.410(a)(2)(ii),  195.412(a),  195.581(a),  195.583(b). The case was opened on 2020-03-19 and is reported as closed as of 2021-08-16. Proposed civil penalty: $346,400. Assessed civil penalty: $264,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320205005_Decision on Petition for Reconsideration_07262021_(16-153538S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Decision%20on%20Petition%20for%20Reconsideration_07262021_(16-153538S).pdf\n\n320205005_Decision on Petition for Reconsideration_07262021_(16-153538S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Decision%20on%20Petition%20for%20Reconsideration_07262021_(16-153538S)_text.pdf\n\n320205005_Final Order_05202021_(16-153538S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Final%20Order_05202021_(16-153538S).pdf\n\n320205005_Final Order_05202021_(16-153538S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Final%20Order_05202021_(16-153538S)_text.pdf\n\n320205005_NOPV PCP_03192020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_NOPV%20PCP_03192020.pdf\n\n320205005_NOPV PCP_03192020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_NOPV%20PCP_03192020_text.pdf\n\n320205005_Operator Petition for Reconsideration_06092021_(16-153538S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Operator%20Petition%20for%20Reconsideration_06092021_(16-153538S).pdf\n\n320205005_Operator Post-Hearing Submission_11232020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Operator%20Post-Hearing%20Submission_11232020.pdf\n\n320205005_Operator Pre-Hearing Submission_10132020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Operator%20Pre-Hearing%20Submission_10132020.pdf\n\n320205005_Operator Response to Notice and Request for Hearing and Statement of Issues_07032020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing%20and%20Statement%20of%20Issues_07032020.pdf\n\n320205005_PHC Hearing Scheduled_07202020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_PHC%20Hearing%20Scheduled_07202020.pdf\n\n320205005_PHC Hearing Scheduled_07202020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205005/320205005_PHC%20Hearing%20Scheduled_07202020_text.pdf\n\n320205005_Final Order_05202021_(16-153538S)_text.pdf\n\nMay 20, 2021\nVIA ELECTRONIC MAIL TO: ver.yu@enbridge.com\nMr. Vern Yu\nExecutive Vice President and President, Liquid Pipelines\nEnbridge, Inc.\n200 Fifth Avenue Place\n425 – 1st Street S.W.\nCalgary, Alberta, Canada T2P 3L8\nRe: CPF No. 3-2020-5005\nDear Mr. Yu:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nExpress Holdings (USA), LLC. It withdraws one allegation of violation, makes findings of\nviolation, and assesses a civil penalty of $264,500. The penalty payment terms are set forth in\nthe Final Order. This enforcement action closes automatically upon receipt of payment. Service\nof the Final Order by electronic mail is effective upon the date of transmission as provided under\n49 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. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA\nMr. Darren Hunter, Hunter Masalski LLC, Counsel for Enbridge, darren@huntermasalski.com\nMr. David Stafford, Manager, U.S. Compliance, Enbridge, david.stafford@enbridge.com\nMr. Michael Koby, Vice President, U.S. Operations, Enbridge, michael.koby@enbridge.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\n____________________________________\nIn the Matter of )\nExpress Holdings (USA), LLC, ) CPF No. 3-2020-5005\na subsidiary of Enbridge, Inc., )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nBetween November 14, 2016 and February 3, 2017, pursuant to 49 U.S.C. § 60117, representatives\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the Platte pipeline system based in Casper,\nWyoming operated by Express Holdings (USA), LLC (Express or Respondent). Express operates\nthe Platte crude oil pipeline system consisting of approximately 933 miles of 20-inch diameter pipe,\n33 storage/breakout tanks, and 19 pump stations running from Casper Wyoming to Wood River\nIllinois.1 Express is a subsidiary of Enbridge, Inc. which acquired the system through a merger with\nSpectra Energy Corporation in February of 2017.2\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent, by\nletter dated March 19, 2020, 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 Express had committed eight violations of 49 C.F.R.\nPart 195, two of which were warning items. The Notice proposed assessing a civil penalty of\n$346,400 for six of the alleged violations. The two warning items required no further action, but\nwarned Respondent to correct the probable violations or face possible future enforcement action.\nAfter being granted an extension of time by the Director, Express responded to the Notice by letter\ndated July 3, 2020 (Response). Express contested three of the allegations and requested a hearing.\nA hearing was subsequently held on October 23, 2020, via video teleconference before a PHMSA\nPresiding Official. At the hearing, Respondent was represented by counsel. Respondent provided\nadditional written material for the record prior to the heating on October 13, 2020 (Pre-hearing\nsubmission) and following the hearing on November 23, 2020 (Post-hearing submission). The\n1 PHMSA Safety Violation Report (Violation Report), (March 19, 2020) (on file with PHMSA), at 1.\n2 Enbridge, Inc. website, Enbridge’s Energy Infrastructure Assets, Factsheet 53, available at\nhttps://www.enbridge.com/~/media/Enb/Documents/Factsheets/FS EnergyInfrastructureAssets.pdf?la=en (last visited\nApril 22, 2021). Spectra Energy Corporation acquired the Platte pipeline system from Kinder Morgan Pipelines (USA)\nInc. in March of 2013.\n\n\n\nCPF No. 3-2020-5005\nPage 2\nDirector submitted a post-hearing recommendation on December 23, 2020 (Recommendation).\nFINDINGS 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. § 195.401(b)(1), which states:\n§ 195.401 General requirements.\n(a)…\n(b) An operator must make repairs on its pipeline system\naccording to the following requirements:\n(1) Non Integrity management repairs. Whenever an\noperator discovers any condition that could adversely affect the\nsafe operation of its pipeline system, it must correct the\ncondition within a reasonable time. However, if the condition is\nof such a nature that it presents an immediate hazard to persons\nor property, the operator may not operate the affected part of the\nsystem until it has corrected the unsafe condition.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.401(b)(1) by failing to make non-\nintegrity management repairs on its pipeline system within a reasonable time after it discovered a\ncondition that could adversely affect the safe operation of the pipeline system. Specifically, the\nNotice alleged that between July 10, 2013 and August 24, 2018, Respondent operated the pipeline\nwith a condition that permitted the pressure of the pipeline to potentially exceed 110 percent of the\nMaximum Operating Pressure (MOP) in the event of an inadvertent mainline-valve closure, power\nfailure, loss of communication, or other abnormal operation. The Notice cited a transient study\nconducted by Respondent’s predecessor that identified the risk of overpressure conditions and set\nforth recommendations designed to prevent the pipeline pressure from exceeding 110 percent of the\nMOP. This included a recommendation for the installation of an Automated Pipeline Shutdown\n(APS) between Casper and Salisbury and the modification of an existing APS between Salisbury\nand Wood River.3\nIn its Response and at the hearing, Respondent argued that it complied with the applicable\nregulations and requested that the allegation and the associated proposed civil penalty be withdrawn.\nRespondent argued that transient study, which was commissioned by the prior operator, contained\nrecommendations, not mandates. Respondent stated that there is no regulatory requirement under\nPart 195, including under the Control Room Management (CRM) standard set forth in Section\n195.446, for operators to install an APS making the installation of an APS a voluntary measure that\nwould supplement existing practices and provide an additional layer of surge protection.4 In its\nresponse and at the hearing, Respondent described these existing protections and noted the lack of\ninstances where the MOP was actually exceeded by 110 percent as tending to corroborate that the\n3 These actions were ultimately taken after another transient study was conducted by Respondent in August of 2018.\n4 Post-hearing submission, at 4.\n\n\n\nCPF No. 3-2020-5005\nPage 3\nsurge protections in place were effective.5\nFor its part, OPS maintained that the transient study identified conditions where abnormal operation\nwould result in 110 percent exceedance at various locations on the pipeline and served to identify\nthe need for action to address the potential for overpressure conditions.6 The transient study stated,\nin pertinent part:\n4.2.1.1 No Surge Mitigation --- Without the relief and HULP\nNeither relief nor [High Upstream Line Pressure] HULP were\ninstalled in these stations and mainline valves: Douglas, Yoder,\nHarrisburg, Centralia, Monte, Ethlyn, Howpoint, Troy, Daniel\nand Wood River ESDV4003, the simulation results show:\n Douglas and Centralia: complies with the code (ASME B31.4 –\n2009) in that the maximum transient surge pressure is less than\n110% MOP if the mainline valve fail closed.\n Yoder, Harrisburg, Monte and Ethlyn: do NOT comply with the\ncode (ASME B31.4 – 2009) in that the maximum transient surge\npressure is greater than 110% MOP if the mainline valve fail\nclosed.\n Hawpoint, Troy and Daniel: do NOT comply with the code\n(ASME B31.4 – 2009) in that the maximum transient surge\npressure is greater than 110% MOP if the mainline valve fail\nclosed.\n Wood River ESDV4003: this valve located upstream of the relief\nvalve, does NOT comply with the code (ASME B31.4 – 2009) in\nthat the maximum transient surge pressure is greater than 110%\nMOP if fail closed.\nThe simulation shows that either relief or HULP should be\nconsidered in order to comply with the code and ensure the\npipeline safety for the following stations and mainline valves:\nYoder, Harrisburg, Monte, Ethlyn, Hawpoint, Troy, Daniel and\nWood River ESDV4003.7\nThus, the transient study concluded that due to the absence of surge mitigation at certain pump\nstations, the pipeline would not comply with ASME B31.4-2009 (“Pipeline Transportation Systems\nfor Liquid Hydrocarbons and Other Liquids”) if the mainline valves fail-closed, because the\n5 Post-hearing submission, at 5.\n6 Recommendation, at 4.\n7 Transient Study, at 11.\n\n\n\nCPF No. 3-2020-5005\nPage 4\nmaximum surge pressure would exceed 110 percent of the MOP. Respondent noted that ASME\nB31.4 is not incorporated by reference in Section 195.401(b)(1), and is only incorporated by\nreference in Sections 195.110(a) and 195.452(b). (See 49 C.F.R. § 195.3). Respondent is correct\nthat it would be inappropriate for PHMSA to rely on this consensus standard to support a regulatory\nrequirement to install an APS. However, the manner in which this standard was referenced in the\ntransient study is indicative of Respondent’s awareness that its existing overpressure protections\nwere not sufficient to meet consensus industry practices.\nOPS also noted that in addition to the transient study, the potential overpressure condition had been\nidentified in 2014 in Facility Procedure Modification Request (FPMR) #2108. FPMR #2108 calls\nfor a solution to address potential surges associated with an unplanned valve failure. The FPMR\nstated, in pertinent part:\nAs a result of the recently completed PHMSA Inspection on the\nPlatte Pipeline System, a solution is required to prevent\nprolonged exceedances of the licensed Maximum Allowable\nOperating Pressure as measured by the discharge pressure\ntransmitters. This is applicable to two pump stations -\nHarrisburg and Marysville.8\nIn response to Respondent’s contention that it had sufficient overpressure protections in place that\nmade further action to address the potential safety condition identified in the transient study\nunnecessary, OPS pointed out that the Wood River relief valve had been improperly set and had to\nbe lowered from 260 to 218 psi in 2016.9 OPS also pointed to the fact that incorrect set-points were\nin place for the supervisory control and data acquisition (SCADA) controls at the Harrisburg Pump\nStation and the Marysville Pump Station during the relevant time frame. OPS explained that if\nRespondent had reviewed the required hydrostatic pressure test information and set up a new surge\nanalysis, these inaccurate controls could have been identified and corrected, but instead incorrect\nset-points continued for an extended period of time.10 In discussing the notable absence of a surge\nanalysis being performed, Respondent stated that it had incorporated additional block valves with\ninstrumentation. OPS believed that this type of change would itself call for a new surge analysis\nsince the addition of these valves could actually make the transients worse if not properly controlled\nthrough proper set-points on discharge pressure and adequate employment of valve timing.11\nFinally, if the pressure control measures identified by Respondent as having been sufficient to\naddress the overpressure condition such as adherence to its control room management procedures\nhad been adequate, there would have been no need to issue MOC 2018-246 in 2018, which\nultimately implemented APS and changes to APS systems.12\nHaving considered these arguments, I find that Respondent had sufficient information identifying\n8 Violation Report, Exhibit A.\n9 Recommendation, at 8.\n10 Recommendation, at 9.\n11 Recommendation, at 6.\n12 Recommendation, at 10.\n\n\n\nCPF No. 3-2020-5005\nPage 5\npotential overpressure conditions that could adversely affect the safe operation of its pipeline system\nthat action was required to address these conditions under the cited regulation. While Respondent is\ncorrect that the particular remedy recommended by the transient study—installation of an APS—is\nnot a code requirement, some action that would have addressed the potential overpressure condition\nin a comparably effective manner was required by the cited regulation. OPS met its burden of\nshowing that Respondent did not take action that would have been comparable to an APS to address\nthe adverse condition on its system identified in the transient study and the FPMR.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that\nRespondent violated 49 C.F.R. § 195.401(b)(1) by failing to make non-integrity management repairs\non its pipeline system within a reasonable time after it discovered a condition that could adversely\naffect the safe operation of the pipeline system.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.406(a)(3), which states:\n§ 195.406 Maximum operating pressure.\n(a) Except for surge pressures and other variations from\nnormal operations, no operator may operate a pipeline at a\npressure that exceeds any of the following:\n(1)…\n(3) Eighty percent of the test pressure for any part of the\npipeline which has been pressure tested under subpart E of this\npart.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.406(a)(3) by operating a part of its\npipeline at a pressure that exceeded 80 percent of the test pressure of the pipeline portion that had\nbeen tested under Subpart E of Part 195. Specifically, the Notice alleged 22 instances in which the\nactual discharge pressure exceeded 80 percent of test pressure (Maximum Operating Pressure or\nMOP) at the Harrisburg, Holdrege, Blue Hill, Deshler, Marysville, and Quote pump stations.\nIn its Response and at the hearing, Respondent argued that it complied with the applicable\nregulations and requested that the allegation and the associated proposed civil penalty be withdrawn.\nExpress contended that the cited incidents were either surges or other variations from normal\noperations, as permitted under Section 195.406(a), were permissible calibrations, or otherwise did\nnot exceed MOP.13 At the hearing, OPS stated that having had an opportunity to review new\ndocumentation that was not provided at the time of the inspection but newly submitted by Express at\nthe hearing, it would no longer pursue violations for 20 of the 22 alleged incidents, but stated that it\nstill had questions regarding the following two incidents at Marysville Pump Station:\n13 Post-hearing submission at 6.\n\n\n\nMonth of Pressure\nExceedance\nHydrostatic Test\nPressure (psi)\nActual Discharge\nPressure (psi)\n1/2015 1424 1139.2 1144.138551\n1/2016 1424 1139.2 80% of Test Pressure 1166.845526\nExpress argued that the two remaining incidents, like the other 20, were permissible surges or\nother variations from normal operations, or otherwise did not exceed 80 percent of test\npressure.14 At the hearing, Express presented testimony from its Technical Services Operations\nSpecialist explaining why the two referenced events were not violations of Section\n195.406(a)(3). In reviewing the data, this individual explained that there was a change in the\nSCADA system after Enbridge became the pipeline owner. In August of 2017, the legacy\nOASyS SCADA system was replaced by a new CygNet SCADA system and records transferred\nto the new system. Express presented evidence that this incident was very brief (less than 1\nminute) and a very minor exceedance (only 100.1 percent of MOP). Regarding the January 2016\nincident, the MOP was 1139.2 psi, and the actual recorded discharge was 1166.8 psi, which\nequates to 102.6 percent of MOP. The archived SCADA data matched the data provided to OPS\nat the time of the inspection, showing that this incident was also very brief and lasted less than\ntwo minutes.15 Express further explained that it conducted a follow-up review of the amp data\nfor the Marysville pumps and found that a smaller horsepower (“HP”) pump was turned off, and\nthen a larger HP pump was started, which caused the brief pressure surge. More specifically,\nMain Pump 1 (“MP1”) with 450 HP was turned off, and then MP2 with 1500 HP was started.\nExpress stated that the brief two-minute surge event was a result of this start-up. (Marysville\nPump Amp Trends for January 2016).16\nFor its part, OPS expressed a desire for more information to be further satisfied that the two\nreferenced incidents amounted to allowable surges and stated that there may be various\nalternative explanations for the exceedances besides an allowable surge, such as the\nmanipulation of data in the process of changing from one SCADA system to another.17 OPS,\nhowever, did not have persuasive evidence to support the notion that there may be other\nexplanations, and specifically did not present any evidence of manipulation of data.\nAt the hearing, OPS conceded that with respect to 20 of the 22 instances cited in the Notice,\nExpress had established compliance. With respect to the other two instances, Express provided\ninformation and explanations demonstrating that both incidents were surges of very brief\nduration and occurred during start-up operations which are allowed under the regulation.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that the\nevidence does not support the allegation in the Notice. Based upon the foregoing, I hereby order\nthat this Item be withdrawn.\n14 Post-hearing submission, at 7.\n15 Id.\n16 Id.\n17 Recommendation, at 17.\n\n\n\nCPF No. 3-2020-5005\nPage 2\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.406(b), which states:\n§ 195.406 Maximum operating pressure.\n(a)…\n(b) No operator may permit the pressure in a pipeline\nduring surges or other variations from normal operations to\nexceed 110 percent of the operating pressure limit\nestablished under paragraph (a) of this section. Each\noperator must provide adequate controls and protective\nequipment to control the pressure within this limit.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.406(b) by failing to provide\nadequate controls and protective equipment to control the operating pressure of the pipeline\nsystem to prevent it from exceeding 110 percent of the MOP established under § 195.406(a)\nduring surges or other variations from normal operations. Specifically, the Notice alleged that\nfive pressure safety valves located at the Ogallala, Yoder, and Guernsey pump stations were set\nat 1300 psig when they were required to be set at 1100 psig.\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.406(b) by failing to provide adequate\ncontrols and protective equipment to control the operating pressure of the pipeline system to\nprevent it from exceeding 110 percent of the MOP established under § 195.406(a) during surges\nor other variations from normal operations.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.412(a), which states:\n§ 195.412 Inspection of rights-of-way and crossings\nunder navigable waters.\n(a) Each operator shall, at intervals not exceeding 3\nweeks, but at least 26 times each calendar year, inspect the\nsurface conditions on or adjacent to each pipeline right-of-\nway. Methods of inspection include walking, driving, flying\nor other appropriate means of traversing the right-of-way.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.412(a) by failing to inspect the\nsurface conditions on or adjacent to the pipeline right-of-way at intervals not exceeding 3 weeks,\nbut at least 26 times each calendar year by an appropriate means for traversing the right-of-way.\nSpecifically, the Notice alleged that Respondent’s aerial patrols of Unit 3773 did not allow for\nobservation of the surface conditions at 17 specified locations where PHMSA inspectors\nobserved excessive vegetation and/or tree canopy overgrowth preventing a clear view of the\nground.\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.412(a) by failing to inspect the surface\nconditions on or adjacent to the pipeline right-of-way at intervals not exceeding 3 weeks, but at\nleast 26 times each calendar year by an appropriate means for traversing the right-of-way.\n\n\n\nCPF No. 3-2020-5005\nPage 3\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.581(a), which states:\n§ 195.581 Which pipelines must I protect against\natmospheric corrosion and what coating material may I\nuse?\n(a) You must clean and coat each pipeline or portion of\npipeline that is exposed to the atmosphere, except pipelines\nunder paragraph (c) of this section.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.581(a) by failing to clean and coast\neach pipeline or portion of pipeline that was exposed to the atmosphere. Specifically, the Notice\nalleged that Respondent failed to clean and coat a portion of its pipeline near Richmond, Kansas\nwhere disbanded coating was present which resulted in external corrosion at that location.\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.581(a) by failing to clean and coast\neach pipeline or portion of pipeline that was exposed to the atmosphere.\nItem 8: The Notice alleged that Respondent violated 49 C.F.R. § 195.583(b), which states:\n§ 195.583 What must I do to monitor atmospheric\ncorrosion control?\n(a)…\n(b) During inspections you must give particular attention\nto pipe at soil-to-air interfaces, under thermal insulation,\nunder disbonded coatings, at pipe supports, in splash zones,\nat deck penetrations, and in spans over water.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.583(b) by failing in three instances\nto give particular attention to pipe at pipe supports and in spans over water during atmospheric\ncorrosion inspections. Specifically, the Notice alleged that Express: (1) failed to remove seven\nof the nine pipe supports of the Meng cable suspended span over water so that the pipe surface\nunder all of the supports could be inspected; (2) failed to remove a metallic child guard at Span\n9-1446+87-9350 so that the pipe surface under the guard could be inspected; and (3) failed to\nremove a metallic child guard at Span 6-5526+67-5260 so that the pipe surface under the guard\ncould be inspected.\nIn its Response and at the hearing, Respondent argued that it complied with the applicable\nregulations and requested that the allegation and the associated proposed civil penalty be\nwithdrawn. Respondent argued that OPS erred by alleging in the Notice that Express failed to\ninspect under the pipe supports when the regulation requires attention be paid at the pipe\nsupports.18 Respondent explained that it did give particular attention to the pipe supports, that no\nstaining or other evidence of atmospheric corrosion was present at any of the nine supports, and\nargued that its removal of two of the nine supports complied with the requirement to sufficiently\n18 Post-hearing submission, at 8.\n\n\n\nCPF No. 3-2020-5005\nPage 4\nmonitor for atmospheric corrosion.19 Respondent argued that Section 195.583(b) uses precise\nlanguage to instruct pipeline operators where to conduct atmospheric corrosion inspections on\nthe pipeline. The regulation specifically states that operators are required to conduct atmospheric\ncorrosion inspections of the pipe as follows:\n AT soil-to-air interfaces;\n UNDER thermal insulation;\n UNDER disbonded coatings;\n AT pipe supports;\n IN splash zones;\n AT deck penetrations; and\n IN spans over water.20\nRespondent argued that if OPS wanted to enforce a requirement that operators inspect under\nevery pipe support, the agency would have needed to specify that requirement clearly in the\nstandard in the same way that it spelled out that operators are required to inspect under thermal\ninsulation and under disbonded coatings. Respondent argued that Section 195.583(b) is not\nvague or ambiguous and “at” does not equal “under.” Respondent argued that OPS’ attempt to\nimpose a requirement to inspect under every pipe support in this enforcement proceeding was\ninconsistent with the plain language of the regulation and therefore was arbitrary and\nimpermissible.21\nOPS disagreed with Respondent’s argument and explained the safety benefits of inspecting under\nall pipe supports, even in the absence of any staining or other evidence of atmospheric corrosion.\nOPS explained that staining is not always visible at different angles or even the same angles, and\nby the time staining has occurred and is visible to the naked eye, active corrosion on the pipeline\nis likely. OPS believes that waiting for staining to be detectable around the pipe support is\ninconsistent with the intent of § 195.583 and that operators are obligated to look for the problem\nand mitigate the issue before it occurs, not after.22 OPS also took issue with Express’s reference\nto in-line inspection (ILI) data to demonstrate that there was no corrosion at the pipe supports on\nthe Meng Span that would affect the safe operation of the pipeline before the next scheduled\ninspection. OPS noted that while an ILI does provide valuable information, the additional metal\nof the pipeline supports makes the metal loss of the pipeline difficult to detect.23\nOPS also disagreed with Respondent’s argument concerning the use of the word “under” the pipe\nsupports in the allegation as the basis for the violation. OPS explained its position that pipe\nsupports can have different configurations. Supports can be off to the side, and not necessarily\nunder or over, thus “at a pipe support” would encompass all configurations of a pipe support. In\n19 Post-hearing submission, at 9.\n20 Post-hearing submission, at 10.\n21 Id.\n22 Recommendation, at 23.\n23 Id.\n\n\n\nCPF No. 3-2020-5005\nPage 5\nthis case, the pipe supports identified on the Meng span were located under the pipe. OPS also\nfelt the comparison with the use of “under” with respect to thermal insulation was incorrect\nbecause of how the thermal insulation versus pipe supports can be installed on the pipe. Thermal\ninsulation wraps around and blankets the pipe and the use of under makes sense logically\nwhereas for pipeline supports, “under” would not always be applicable based on the style or\ndesign.24\nHaving considered these arguments, this issue turns on whether the regulation at issue put\noperators on notice that OPS expects operators to remove every pipe support when conducting\natmospheric corrosion inspections even in the absence of any staining. I find that with respect to\nthe specific facts in this case, Respondent has the better of the argument concerning the words\n“at” or “under”. With regard to OPS’ point that in the case of thermal wraps, the use of “under”\nmade more sense, this argument could equally be seen as supporting Respondent’s position and\nOPS did not explain why the regulation could not have simply stated that all supports must be\nremoved to inspect for non-visible atmospheric corrosion if that was the intent.25 There is no\navoiding the fact that the regulation does not use the word “under” and the prior enforcement\ncases cited by OPS are not clear and authoritative to the extent that would have put Respondent\non Notice that all pipe supports must be removed. For example, the Cenex case cited by OPS\nwas a case in which “Areas in the vicinity of the pipe supports had rust on the pipe” that may\nhave indicated corrosion between the pipe and the support, yet the support was not lowered.26 If\nRespondent had similarly observed external rust in the vicinity of the pipe supports, it would\nhave called for additional removal of the supports. In this case, however, there is no evidence of\nsuch rust in the record. The Cenex case does not establish that all supports must be removed\neven in the absence of visible rust or staining. Respondent reasoned that removal of two of the\nnine supports constituted a representative sample (over 20 percent) of the supports which was\nsufficient to meet the minimum requirement of the regulation to pay particular attention at pipe\nsupports in spans over water.\nThe regulation gives a fair amount of discretion to operators concerning the manner in which\nattention is paid at supports during atmospheric corrosion monitoring. While OPS may have\ngood reasons for wanting the removal of all supports to be mandatory even in the absence of any\nstaining, based on the plain language of this one-sentence regulation, and in the absence of any\nauthoritative history of any pipeline operator being found in violation of the cited regulation\nunder similar circumstances, I find that the use of an alleged violation of § 195.583(b) to\nestablish a new requirement for Express regarding the need to remove all pipe supports even in\nthe absence of any staining would not be consistent with OPS’ obligations under fair notice.\nOPS should have used means other than a civil penalty enforcement action to notify operators\nsuch as Respondent that all pipe supports must be removed during atmospheric corrosion\n24 Recommendation, at 22.\n25 In the case of a thermal insulation inspection, which has its own considerations such as the potential for excessive\nmoisture to remain present, OPS has never required that all insulation must be removed and has accepted removal of\na representative sample as acceptable. Moreover, external observations such as areas where the thermal insulation\nhas deteriorated can inform the extent to which removal is called for.\n26 In the Matter of Cenex Pipeline, LLC, CPF No. 5-2012-5013, at 9.\n\n\n\nCPF No. 3-2020-5005\nPage 6\ninspections, even in the absence of any staining, and should have done so in advance.27\nTherefore, I find that the withdrawal of this instance of the allegation in Item 8 is warranted in\nthis case.28\nWith respect to the other two instances of inadequate atmospheric corrosion inspections cited in\nthe Notice involving the child supports, however, Respondent’s argument is unpersuasive. Color\nphotographs of these child supports presented at the hearing clearly showed staining from\natmospheric corrosion was present at the interface between the guards and the pipe.29 In these\ntwo instances, the removal of the guards for further inspection was necessary to fulfill the\nrequirement to give particular attention to these pipe span areas during the inspections and their\nremoval was deemed necessary by the operator in the next round of inspections in 2017.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.583(b) by failing in two instances at the specified child guard locations to give particular\nattention to pipe at pipe supports in spans over water during atmospheric corrosion inspections.\nThe Assessment of Penalty below will reflect a reduction to account for only two of the three\nalleged instances of violation having been proven.\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.30 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; the good faith of Respondent in\nattempting to comply with the pipeline safety regulations; and self-disclosure or actions to\ncorrect a violation prior to discovery by PHMSA. In addition, I may consider the economic\nbenefit gained from the violation without any reduction because of subsequent damages, and\nsuch other matters as justice may require. The Notice proposed a total civil penalty of $346,400\nfor the violations cited above.\n27 This holding does not mean that the regulation never requires operators to look under the supports. It only holds\nthat OPS did not present evidence under the particular facts of this case that indications of corrosion that would have\ncalled for removal of the other 7 of the 9 supports.\n28 It should be emphasized that this determination is based on the particular circumstances of this case and should\nnot be construed to broadly prohibit OPS from pursuing enforcement actions in other instances in which a particular\npublic safety concern indicates a need for enforcement.\n29 Violation Report, Exhibit C.\n30 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 3-2020-5005\nPage 7\nItem 1: The Notice proposed a civil penalty of $46,600 for Respondent’s violation of 49 C.F.R.\n§ 195.401(b)(1), for failing to make non-integrity management repairs on its pipeline system\nwithin a reasonable time after it discovered a condition that could adversely affect the safe\noperation of the pipeline system. With respect to the nature and circumstances of the violation,\npromptly addressing an adverse condition is a fundamental responsibility of pipeline operator.\nThe fact that no major overpressure event occurred is fortunate, but does not negate the\nimportance of addressing the known potential for such an event. With respect to gravity,\nensuring that the risk of an overpressure condition is addressed before becoming a potential\nintegrity threat is a key part of safely operating a hazardous liquid pipeline system. With respect\nto culpability and good faith, Respondent’s failure to correct the adverse condition was not\nconsistent with the purpose of the regulation. I find that nothing in the record would indicate that\nthe proposed civil penalty amount would impact Respondent’s ability to continue in business.\nRespondent has not presented any information or arguments that would warrant a reduction in\nthe civil penalty amount proposed in the Notice for this violation. Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $46,600\nfor violation of 49 C.F.R. § 195.401(b)(1).\nItem 2: The Notice proposed a civil penalty of $76,000 for Respondent’s violation of 49 C.F.R.\n§ 195.406(a)(3) by operating a part of its pipeline at a pressure that exceeded 80 percent of the\ntest pressure of the pipeline portion that had been tested under Subpart E of Part 195. For the\nreasons discussed above, I found that Respondent did not violate this regulation and withdrew\nthe allegation. Accordingly, the penalty proposed in the Notice for this violation is also\nwithdrawn\nItem 3: The Notice proposed a civil penalty of $58,400 for Respondent’s violation of 49 C.F.R.\n§ 195.406(b), for failing to provide adequate controls and protective equipment to control the\noperating pressure of the pipeline system to prevent it from exceeding 110 percent of the MOP\nestablished under § 195.406(a) during surges or other variations from normal operations.\nExpress neither contested the allegation nor presented any evidence or argument that would\nwarrant any reduction in the proposed penalty. Having reviewed the record and the penalty\nfactors including the nature, circumstances, gravity, and Respondent’s culpability, I find that the\nrecord supports the proposed penalty. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $58,400 for violation of 49 C.F.R.\n§ 195.406(b).\nItem 6: The Notice proposed a civil penalty of $77,700 for Respondent’s violation of 49 C.F.R.\n§ 195.412(a), for failing to inspect the surface conditions on or adjacent to the pipeline right-of-\nway at intervals not exceeding 3 weeks, but at least 26 times each calendar year by an\nappropriate means for traversing the right-of-way. Express neither contested the allegation nor\npresented any evidence or argument that would warrant a reduction in the proposed penalty.\nHaving reviewed the record and the penalty factors including the nature, circumstances, gravity,\nand Respondent’s culpability, I find that the record supports the proposed penalty. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $77,700 for violation of 49 C.F.R. § 195.412(a).\n\n\n\nCPF No. 3-2020-5005\nPage 8\nItem 7: The Notice proposed a civil penalty of $29,300 for Respondent’s violation of 49 C.F.R.\n§ 195.581(a), for failing to clean and coast each pipeline or portion of pipeline that was expose","truncated":true,"body_characters":64654}