TEXAS EASTERN PRODUCTS PIPELINE CO — Notice of Probable Violation

420025010_Final Order_07122004.pdf, page 1Official PDFt} US Deportmenl of Tronsporlolion neseorch ond Speciol Progroms Adminiilrofion 400 Sevenlh St . S.W Wash rngton D C 20590 JUL 1 2 2964 Barry R. Pearl President Texas Eastern Products Pipeline Company LLC 2929 AllenParkway Houston, TX77019 Re: CPFNo.4-2002-5010 DearMr. Pearl: Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the above-referenced case. It makes findings ofviolation and assesses a civil penalty of$45,000. The penaltypal,rnenttermsaresetforthintheFinalOrder. Thisenforcementactionclosesautomatically upon palment. Your receipt ofthe Final Order constitutes service ofthat document under 49 C.F.R. 6 190.5. Sincerely, {\ rA )h,*, l/lt-- Vu-.t Reynolds Pipeline Compliance Registry Office of Pipeline Safety Enclosure cc: Leonard Mallett Vice President, OPerations CERTIFIED MAIL - RETIIRN RECEIPT REOIIESTED#

420025010_Final Order_07122004.pdf, page 2DEPARTMENT OF TRANSPORTATION RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, DC 20590 In the Matter of Texas Eastem Products Pipeline Company, LLC Respondent. CPF No. 4-2002-5010 I FINAL ORDER Pursuant to 49 U.S.C. $ 60117, representatives ofthe Office ofPipeline Safety (OPS) conducted an investigation of the Novemb er 17;2000 accident resulting in the release of crude oil at Respondent's tankfarmnear Texas City, Texas. As aresultoftheinvestigation, theDirector, SouthwestRegion, OPS, issued to Respondent, by letter dated May 30,2002, a Notice of Probable Violation and Proposed Civil Penalty (Notice). In accordance with 49 C.F.R. $ 190.207, the Notice proposed finding that Respondent had yiolated 49 C.F.R. $$ 195.4060), 199.1050),1 and 199.225(a)(l) and proposed assessing a civil penalty of$45,000 for the alleged violations. Respondent responded to the Notice by letter dated June27,2002 (Response). Respondent did not contest the allegations ofviolation but provided information conceming the corrective actions it has taken and requested that tlrc proposed civil penalty be reduced. Respondent did not request a hearing, and therefore has waived its right to one. FINDINGS OF VIOLATION In its Response, Respondent did not contest the alleged violations in the Notice. Accordingly, I find that Respondent violated the following sections of 49 C.F.R. Parts 195 and 199, as more fully described in the Notice: 49 C.F.R. $ 195.406(b) - failing to provide adequate controls and protective equipment to control pipeline pressure within 1 l0 percent of the established maximum operating pressure (MOP) when the improper closure of an inlet valve (#15) to Tank No. 3 caused pressure to increase above MOP: I The requirements previously imposed by 49 C.F.R, $ 199. 1 1(b) can now be found at $ 199.105(b), as redesignated by Final Rule dated September 11,2001 (66 Fed. Reg. 47114).#

420025010_Final Order_07122004.pdf, page 3z 49 C.F'R. $ 199.105(b) -- failing to drug test, within 32 hours after the accident, the employee responsible for closing the tank valve that caused the system pressure to exceed MOP;and 49 C'F.R. $ 199'225(a)(1) - failing to test for alcohol, as soon as pracficable following the accident, the employee responsible for closing the tank valve that caused the system p...-rur" to exceed MOP. These findings ofviolation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OFPENALTY Under 49 U.S.C' 5 60122, Respondent is subject to a civil penalty not to exceed $100,000 per violation for each day of the violation up to a maximum of $1,000,000 for any related series of violations. 49 U'S.C. 5 60122 and 49 C.F.R. $ 190.225 require that, in determining the amount of the civil penaltS I consider the following criteria: nature, circumstances, and gravit5r of the violation, degree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to puy ttr. penalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondint's ability to continue in business, and such other matters as justice may require. The Notice proposed a total civil penalty of $45,000 for the violations. I have determined that Respondent has no financial circumstances that would prevent it from paying on the assessed amounts and that Respondent's ability to continue in business will not be signifi cantly affected. OPS staff took Respondent's good faith into account when proposing civil penalties in the Notice. I have also considered Respondent's good faith in determining the assessed penalty amounts, In its Response, Respondent provided information on actions it has taken to ensure compliance with the pipeline safety regulations subsequent to the accident at its Texas City Tank Farm. The actions described in the Response, including incorporation of a new SCADA interlock and revisions to Respondent's drug and alcohol procedures and training, are commendable, but are also necessary to ensure compliance with the pipeline safety regulations. Therefore, I frnd that these actions do not mitigate the proposed civil penalties. The Notice proposed a civil penalty of $25,000 for violation of 49 C.F.R. $ 195.406(b). Respondent failed to provide adequate controls and protective equipment to control the oressure within 110 percent of the established MOP at its Texas City Tark Farm. Having controls and equipment in place to limit pressure in the event of a surge or other abnormal operating condition is critical to reducing the likelihood of a release and the risk posed to persons and the environment in the event of an accident. The nature and gravity of the violation justify the proposed civil penalty amount. Therefore, I assess a civil penalty of$25,000.#

420025010_Final Order_07122004.pdf, page 4J The Notice proposed a civil penalty of $ I 0,000 for violation of49 C.F.R. $ 199. 1 05(b). Respondent failed to drug test its employee in a timely manner after the Texas City Tank Farm accident. Drug testing an employee whose performance either contrjbuted to the accident or could not be completely discounted as a contributing factor to the accident is a necessary part of establishing accident causation. Accordingly, failure to perform drug testing can deprive the operator and OPS of necessary safety information to prevent future accidents. Therefore, I assess a civil penalty of $10,000. The Notice proposed a civil penalty of $10,000 for violation of 49 C.F.R. $ 199.225(a)(1). Respondent failed to test its employee for alcohol in a timelymanner after the Texas City Tank Farm accident. Testing an employee for alcohol whose performance either contributed to the accident or could not be completely discounted as a contributing factor to the accident is a necessary part of establishing accident carrsa-tion. Aecordingly, failure to perform testing for alcohol can deprive the operator and OPS of necessary safety information to prevent future accidents. Therefore, I assess a civil penalty of $ 1 0,000. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a total civil penalty of $45,000. Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. $ 89.21(bX3) require this paymentbe made bywire transfer, throughtheFederal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions conceming wire transfers should be directed to: Financial Operations Division (ANIZ-120), Federal Aviation Administration, Mike MonroneyAeronautical Center, P.O. Box 25082, Oklahoma City, OK 73125; (405) 954-4719. Failure to pay the $45,000 civil penalty will result in accrual of interest at the current annual rate in accordancewith3lU.S.C.93777,31C.F.R.$901.9and49C.F.R.$89.23. Pursuanttothosesame authorities, a late penalty charge of six percent (6%) per rurnum will be charged if payment is not made within 1 I 0 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attomey General for appropriate action in a United States District Court. Under 49 C.F.R. $ 190.215, Respondent has a right to submit a Petition for Reconsideration of this Final Order. The petition must be received within 20 days of Respondent's receipt of this Final Order and must contain a brief statement of the issue(s). The filing of the petition automatically stays the payment of any civil penalty assessed. However if Respondent submits paynent for the civil penalty, the Final Order becomes the final administrative decision and the right to petition for rgeqnsideration is waived. The terms and conditions of this Final Order are effective on receipt. lt \ L+ ,r) \ ' n \;x J JUL l2 ztl Stacey Gerard Date IssuedAssociate Administrator forPipeline Safety#