{"operation":"document","citation":"CPF 420025011","title":"LINK ENERGY PIPELINE LIMITED PARTNERSHIP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2002-07-31","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(b)(4), 195.452(c), 195.452(c)(1)(i).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420025011.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420025011.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420025011","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420025011","body":"Notice of Probable Violation involving LINK ENERGY PIPELINE LIMITED PARTNERSHIP. PHMSA's enforcement data identifies the cited regulations as 195.452(b)(4),  195.452(c),  195.452(c)(1)(i). The case was opened on 2002-07-31 and is reported as closed as of 2006-08-18. Proposed civil penalty: $110,000. Assessed civil penalty: $90,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420025011_Final Order_06232004.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420025011/420025011_Final%20Order_06232004.pdf\n\n420025011_Final Order_06232004.pdf\n\no\nUSDeportrnent of Tronsportolion\nRe3eorEh ond\nsPccaol P\"ogroms\nAdmihistrEfion\n{00 Sevenlh Sl . S W\nWashrngton. D.C 20590\nJUN 2 3 2004\nMr. Louis Soldano\nVice President and Assistant General Counsel\nEnron Pipeline Services Company\nP.O. Box 1188\nHouston, TX 77251-1 188\nRe; CPF No. 4-2002-5011\nDear Mr. Soldano:\nEnclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the\nabove-referenced case. It makes findings of violation and assesses a civil penalty of $90,000.\nBecause Enron Pipeline Services Company (EPSC) filed for Chapter 11 bankruptcy on June 16,\n2003, the civil penalty will be collected through the bankruptcy proceeding. Based on information\nyou provided that EPSC is no longer continuing in the business ofoperating pipelines and has no\nintention of conducting such business in the future, the Final Order also withdraws the Proposed\nCompliance Order as moot. Your receipt of the Final Order constitutes service of that document\nunder 49 C.F.R. 6 190.5.\nSincerely,\n$*\nJames ReYnolds\nPiPeline ComPliance RegistrY\nOffice of PiPeline SafetY\nEnclosure\nCERTIFIED MAIL. RETURN RECEIPT REqUESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION\nRESEARCH AND SPECIAL PROGRAMS ADMIMSTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON. DC 20590\nIn the Matter of\nEnron Pipeline Services Company,\nRespondent.\nCPF No. 4-2002-5011\nFINAL ORDER\nOn April 3,2002, pursuant to 49 U.S.C, $ 60117, a representative of the Office of Pipeline Safety\n(OPS) inspected Enron Pipeline Services Company's @espondent's) integritymanagement program\nat Respondent's facility in Houston, Texas. As a result of the inspection, the Director, Southwest\nRegion, OPS, issued to Respondent, by letter dated July 31,200?, a Notice of Probable Violation,\nProposed Civil Penalty, and Proposed Compliance Order (Notice). [n accordance with 49 C.F.R.\n$ 190.207, the Notice proposed finding that Respondent had committed multiple violations of\n49 C.F.R. S 195.452 and proposed assessing civil penalties totaling $110,000 for the alleged\nviolations. The Notice also proposed that Respondent take certain measures to correct the alleged\nviolations.\nAfter requesting and receiving an extension oftime to respond, Respondent responded to the Notice\nby letter dated October 9,2002 (Response). Respondent presented information and arguments\ncontesting the alleged violations, contested any assessment of civil penalties in this enforcement\naction on procedural grounds, and requested a hearing. By letter dated February 12,2004,\nRespondent withdrew its request for a hearing.\nFINDINGS OF VIOLATION\nItem I in the Notice alleged that Respondent violated 49 C.F.R. $ 195.452(c) by failing to include\na schedule prioritizing the baseline assessm€nts of its pipeline segments that could affect a high\n,onr\"qu*.i area (\"HCA segments') by certain risk factors as an element of its baseline assessment\nplan. itre integrity management regulations require pipeline operators to establish a schedule for\ntheir baseline assessments that prioritizes HCA segments according to specified factors that reflect\nthe risk conditions on each segment, These risk factors are listed in $ 195.a52(e)' Operators of\nCategory 1 pipelines are requirid to assess at least 50 percent of the HCA segments, beginning with\nthe hlghest risk pipe, not later than September 30, 2004 and must complete all baseline assessments\nby March 31, 2008.\n\n\n\nz\nIl its response' Respondent presented a one-page flow chart and an short excerpt fiom its baseline\nassessment plan indicating that it had planned to conduct all of its baseline assessments ..in the next\nfive years\" and that the results ofits existing risk analysis process were to be used in setting priorities\nfor the baseline assessment schedule. Under the ,\"I\"u*t provision, however, the baseline\nassessment schedule itself had to be in place as an element of thebaseline assessment plan. On this\npoint, Respondent asserts that it \"had available at that time a sogment listing in risk ranking order,\"\nand claims that it did not provide this list to the OPS inspectorbecause thisinformation \"w:6 never\nrequested\" by the inspector. As a required element of its baseline assessment plan, however,\nRespondent had the burden of producing a completed baseline assessment schedule reflecting the\nmanner in which the risk factors listed in section 195.452(e) were weighed. If its basJline\nassessment schedule was not included in Respondent's plan, Respondent bears the responsibility for\nthe omission. Moteover, in its response to the Notice issued in this enforcement action, Respondent\nstill has not demonstrated that it had a baseline assessment schedule in place at the time of the\ninspection. For example, in its response, Respondent did not identify its highest and lowest risk\nHCA segments or give the dates that were scheduled for the first and last baseline assessments on\nthese segments, much less provide a copy of the schedule in its entirety. Accordingly, I find that\nRespondent violated 49 C.F.R. $ 195.452(c) by failing to include a schedule prioririzingthe baseline\nassessments of its HCA segments by the specified risk factors as an element of its baseline\nassessment plan.\nItem 2 in the Notice alleged that Respondent committed multiple violations of 49 C.F.R.\n$ 195.452(bX4) by failing to adequately address six of the elements required in to be included in its\nwritten integrity management program including: (1) a process for integrated information analysis;\n(2) a process for continual integrity assessments at intervals not to exceed five years; (3) a process\nfor identification of preventative and mitigative measures to protect each HCA; (4) methods to\nmeasure the program's effectiveness; (5) a process for review of the results of certain program\nactivities by a qualified individual; and (6) a proc€ss for making decisions regarding implementation\nof each program requirement (Elements 1-6).\nIn its response, Respondent contended that each of these required elements were adequately\naddressed in its program. With respect to Element 1, a process for integrated information analysis,\noperators are required to have a comprehensive plan for systematically collecting and effectively\nutilizing all data on a system-wide basis, particularly the data sets necessary to evaluate areas of\nknown concern. Existing management information system (MIS) databases are one source of data,\nas are external sources such as industry-wide and agency reports and databases that include\ninformation such as soil data, demographics, and hydrology, as examples. An effective data\nintegration plan would explain, among other things, how data elements are structured and the manner\nin which consistency in units is achieved or graphical overlays are utilized. In this case, Respondent\nprovided only a general statement about an existing database of information about its pipelines, and\nnoted that it used algorithms to model the relative risks based on the inputs from this information\ndatabase. Respondent, howover, failed to demonstrate that its written integrity management program\ndescribed its information analysis process in sufficient detail that would have permitted the OPS\ninspector to evaluate the capacity ofthis process to produce the intended results.\n\n\n\nJ\nWith respect to Element 2, a process for continual integnty assessments, after completing the\nbaseline assessment, an operator must periodically assess the integrity of its HCA segments as\nfrequently as needed to assure pipeline integrity. An operator must base the frequency of the\nperiodic assessments on risk factors specific to its line pipe except that the interval may not exceed\nfive years. kr this case, Respondent provided a general statement about including relevant\ninformation when evaluating risks and identified four personnel groupings who would be available\nto provide input and guidance in the application of its program. Respondent, however, failed to\ndemonstrate that its written program described its periodic integrity assessment process in sufficient\ndetail that would have permitted the OPS inspector to evaluate the appropriateness of the chosen\ninterval or the validity ofits engineering basis.\nWith respect to Element 3, a process for identification of additional preventative and mitigative\nmeasures to protect each HCA, Respondent stated that a number of mitigative measures already\nformed part ofits ongoing operational activities and pointed out that it did include a list ofsuch\nmeasures in its written program. Respondent, however, failed to recognize that this is a process-\noriented requirement and as such it requires pipeline operators to go beyond merely identifying\nknown mitigative measures and listing equipment. In order to comply with this requirement,\noperators must establish criteria that, when encountered, will trigger implementation of the\nadditionalpreventativeandmitigativemeasrrgs(l.e.,installationoftheequipment). Initsresponse,\nRespondent acknowledged that its written program failed to identify the circumstances and criteria\nby which determinations that additional mitigative measures were needed would be made.\nWith respect to Element 4, methods to measure the program's effectiveness, Respondent points out\nthat it did include a list of metrics that it intended to track in order to judge the effectiveness of its\nprogram. Although we believe operators would be well-served by enhancing the implementation\naspects of this elernent of their programs well beyond Respondent's effort, I find that Respondent\nhas met the minimum threshold of this aspect of the implementation requirements at this stage of\nthe development of its program. Accordingly, the relevant fraction of the civil penalty amourt\nproposed for this element will be withdrawn.\nWith respect to Element 5, a process for review of the results of program activities by a qualified\nindividual, Respondent stated that as it interprets this provision, the normal process of conducting\nphysical assessments performed by trained personnel would satisfy this requirement. Respondent's\nint,erpretation, however, is incorrect. In order forpipeline integritymanagement programs to be fully\neffective, a high-level quality review process is essential. A qualifred individual who may not have\nbeen directly involved in conducting the field assessments provides a means of reviewing the tool\nrun logs and other relevant data and ensuring that integrity threat de terminations and other j udgments\nhave been appropriately made. An adequate quality review process involves at a minimum the\nidentification ofthe title ofthe person designated as the qualified individual, a description ofthe\nqualifications needed to perform this function, and a detailed description of the manner in which\ninformation and decisions are to be reviewed and the results of the quality review are to be\ndocumented and records kept. In its response, Respondent acknowledged that its program had no\nsuch descriptive process for this required element'\n\n\n\n4\nWith respect to Element 6, a process for making decisions regarding implementation of each\nprogram element, Respondent noted that decision making is inherent to the process ofprogram\nimplementation itself and as a result, citing this provision is redundant in light of the process-\noriented violations already covered. While we believe that establishing and following sound\nprocesses is important to consistency in achieving the best outcomes, I do not find it appropriate in\nthis case to cite $ 195.452OX4)(ii) as an additional violation in light of the violations already\ncovered in Item 2. Accordingly, the relevant fraction of the civil penalty amount proposed for this\nelement will be withdrawn.\nAccordingly, I find that Respondent violated 49 C.F.R. $ 195.452(b)(4) by failing to adequately\naddress the following four elements required in to be included in its written integrity management\nprogram: aprocess for integrated information analysis; aprocess for continual integrity assessments\nat intervals not to exceed five years; a process for identification of preventative and mitigative\nmeasures to protect each HCA; and a process for review of the results of program activities by a\nqualified individual.\nItem 3 in the Notice alleged that Respondent violated 49 C.F,R. $ 195.452(c)(1)(i) by failing to\ndocument the capability of its assessment methods to evaluate, among other things, seam integrity\non low frequency electric resistance welded (ERW) pipe or lap welded pipe susceptible to\nlongitudinal seam failures.\nIn its response, Respondent contends that none ofits pipe is susceptible to longitudinal seam failures\nand that as a result, documenting the capability of its intemal inspection tools to assess seam\nintegrity was not required by the regulation. Respondents argument, however, is unpersuasive'\nRespondent has acknowledged that largeportions ofits system are composed of ERW or lap welded\npipe manufactured prior to 1970. It is well established in the pipeline safety regulations that all pre-\n1970 ERW pipe and lap welded pipe is deemed susceptible to longitudinal seam failures unless an\nengineering analysis shows otherwise (See, e.g.,the pressure-testing requirements at 49 C.F.R.\n$195.303(d). Initsresponse,RespondentreferencesanarticleintheAugust5,2002editionofthe\nOil and Gas Journal and asserts that it worked through a decision algorithm from the article and\nconcluded that an assessment ofseam integrity was not necessary on any ofthe pipelines it operated.\nA comparison ofpipeline characteristics with an articlepublished in an industryperiodical, however,\ndoes not constitute an engineering analysis for purposes ofovercoming the presumption that pre-\n1970 ERW or lap weldeJpipe is susceptible to longitudinal seam failures. ln conducting such an\nengineering analysis on *y giu\"n portion of a pipeline, an operator must consider the seam-related\nteat tristory ofthi pipe andpipe manufacturinginformation such as the mechanical properties of the\nsteel including fracture toughness; the manufacturing process and controls related to seam properties\nincluding whether the ERW process was high-frequency or low-frequency, whether the weld seam\nwas heat treated, whether the seam was inspected, the test pressure and duration during mill\nhydrotest; the quality control of the steel-making process; and other factors pertinent to seam\nproperties and quality. No such engineering analysis report was submitted to the OPS inspector or\nin r\"rponr. to tiis enforcernent actlon. Accordingly, I find that Respondent violated 49 C'F'R'\n$ 195.452(cxl)(i) by failing to document the capability of its assessment methods to assess seam\nintegrity onii, ptu-ifZO niW pipe or lap welded pipe susceptible to longitudinal seam failures'\n\n\n\n5\nThese findings of violation will be considered prior offenses in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to a civil penalty not to exceed $100,000 per\nviolation for each day of the violation up to a maximum of $1,000,000 for any related series of\nviolations.\nIn its response, Respondent contested any assessment of civil penalties in this enforcement action\non procedural grounds, contending that the Notice subjected Respondent to civil penalties in a\nmanner contrary to the requirements of 49 C.F.R. Part 190. Specifically, Respondent cited\n49 C.F.R. § 190.223(d) which states that:\nNo person shall be subject to a civil penalty under this section for the violation of any\nrequirement of this subchapter and an order issued under § 190.217, § 190.219 or\n§ 190.233 if both violations are based on the same act.\nWhile it is true that the July 31, 2002 Notice issued to Respondent involves both a civil penalty and\na § 190.217 order, Respondent's contention that § 190.223(d) is applicable to this enforcement\nproceeding is incorrect. Section 190.223(d) applies only when OPS has previously issued an order\nunder § 190.217, § 190.219 or § 190.233 that assessed monetary civil penalties, and the pipeline\noperator subject to that existing order subsequently fails to comply with the terms of that order.\nTherefore, § 190.223(d) is inapplicable in this instance because this enforcement action is not based\non a failure to comply with a previously existing order.\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of the civil\npenalty, I consider the following criteria: nature, circumstances, and gravity of the violation, degree\nof Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the\npenalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's\nability to continue in business, and such other matters as justice may require.\nWith respect to Item 1, the Notice proposed a civil penalty of $25,000 for Respondent's failure to\ninclude a schedule prioritizing the baseline assessments of its HCA segments by the specified risk\nfactors as an element of its baseline assessment plan. In the absence of a complete schedule, OPS\nis unable to determine whether the actual result of a given operator's application of its risk ranking\nprocess to its HCA segment list corresponds to the required risk factors or evaluate the feasibility\nan operator's plan to complete the requisite number of HCA segment assessments within the relevant\ntime frame. Respondent has presented no information that would warrant mitigation of the proposed\npenalty amount. Accordingly, having reviewed the record and considered the assessment criteria,\nI assess Respondent a civil penalty of $25,000 for this Item.\n\n\n\n6\nWith respect to Item 2, the Notice proposed a civil penalty of $60,000 for Respondent's failure to\nadequately address six elements required to be included in its written integrity management program\n(referenced above as Elements 1-6) including a process for integrated ihformation analysis; aprocess\nfor continual integrity assessments at intervals; a process for identification ofpreventative and\nmitigativemeasures to protect eachHCA;methods to measwethe program's effectiveness; aprocess\nfor review of the results of certain progam activities by a qualified individual; and a process for\nmaking decisions regarding implementation of each progam element. In the absence of detailed\ndescriptions of the processes for implementing these program elements, OPS is unable to determine\nwhether the relevant processes are likely to be employed in a successful manner and achieve a result\nconsistent with public safety. As noted above, Respondent did present information that wa:ranted\nwithdrawal of the penalty amounts proposed for the adequacy of Respondent's methods to measure\nthe program's effectiveness and Respondent's process for making decisions regarding\nimplementation of each program element. Therefore, I find that a proportional reduction in the civil\npenalty amount for two of the six elements of this Item is warranted. Respondent has presented no\ninformation that would warrant mitigation of the proposed penalty amount for the other four\nelements. Accordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $40,000 for this Item.\nWith respect to Item 3, the Notice proposed a civil penalty of $25,000 for Respondent's failure to\ndocument the capability of its assessment methods to assess seam integrity on its pre-1970 ERW\npipe or lap welded pipe susceptible to longitudinal seam failures. In the absence of such\ndocumentation, OPS is unable to determine whether the assessment methods selected by an operator\nare suitable for the particular application. Respondent has presented no information that would\nwarrant mitigation of the proposed penalty amount. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $25,000 for this Item.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess Respondent\na total civil penalty ofg90,000. Because Respondent filed for Chapter I I banlruptcy on June 16,\n2003, the civil penalty will be collected through the bankruptcy proceeding (In re Enron Pipeline\nServices Company,CaseNo. 03-13918 AJG, jointlyadministeredwithft re Enron Corp., et al,Case\nNo. 01-16034 AJG, S.D. New York). A proof of claim has been filed with the banlffuptcy court\n(Claim No. 0000024624).\nCOMPLIANCE ORDER\nThe Notice proposed a Compliance Order in connection with the above referenced violations.\nBecause Respondent has informed us that it is no longer continuing in the business of operating\npipelines und h* no intention of conducting such business in the future, the Proposed Compliance\nOrder is withdrawn as moot.\nunder 49 C.F.R. $ 190.215, Respondent has a right to petition for reconsjderation of this Final\nOrder. Should Respondent etect io do so, the petition must be received within 20 days of\n\n\n\nI\nRespondent's receipt of this Final Order and must contain a brief statement of the issue(s). In the\nabsence of a timely filed pefition, this Final Ord.er is the final administrative action in this\nproceeding. The terms and conditions ofthis Final order are effective on receipt.\nW,/1.r^f1G*:.\nStacey Gerard\nAssociate Administrator\nfor Pipeline Safety\niuN 2 3 2004\nDate Issued","truncated":false,"body_characters":21927}