{"operation":"document","citation":"CPF 420045004","title":"EXXONMOBIL PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2004-03-09","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.403(a), 195.406(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420045004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420045004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420045004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420045004","body":"Notice of Probable Violation involving EXXONMOBIL PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.403(a),  195.406(b). The case was opened on 2004-03-09 and is reported as closed as of 2009-06-15. Proposed civil penalty: $110,000. Assessed civil penalty: $25,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420045004_FinalOrder_05182009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420045004/420045004_FinalOrder_05182009.pdf\n\n420045004_FinalOrder_05182009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420045004/420045004_FinalOrder_05182009_text.pdf\n\n420045004_FinalOrder_05182009_text.pdf\n\nMAY 18 2009\nMr. Gary W. Pruessing\nPresident\nExxonMobil Pipeline Company\nP.O. Box 2220\nHouston, Texas 77252-2220\nRe: CPF No. 4-2004-5004\nDear Mr. Pruessing:\nEnclosed is the Final Order issued in the above-referenced case. It withdraws one of the\nallegations of violation, makes a finding of violation on another, and assesses a reduced civil\npenalty of $25,000. The penalty payment terms are set forth in the Final Order. This\nenforcement action closes automatically upon payment. Your receipt of the Final Order\nconstitutes service of that document under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: R.M. Seeley, Director, Southwest Region, PHMSA\nCandice Frembling Dykhuizen, Esq., Law Department, ExxonMobil\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 1160 0001 0047 7100]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n______________________________\n)\nIn the Matter of )\n)\nExxonMobil Pipeline Company, ) CPF No. 4-2004-5004\n)\nRespondent. )\n______________________________)\nFINAL ORDER\nPursuant to 49 U.S.C. § 60117, a representative of the Research and Special Programs\nAdministration (RSPA)1, Office of Pipeline Safety (OPS), conducted an investigation of an\nAugust 19, 2002 accident involving the release of approximately seven barrels of crude oil from\na pipeline operated by ExxonMobil Pipeline Company (ExxonMobil or Respondent) at its\nRaceland station in Lafourche Parish, Louisiana (Accident).2 Respondent operates four pipeline\ninvestigation, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter\ndated March 9, 2004, a Notice of Probable Violation and Proposed Civil Penalty (Notice). In\naccordance with 49 C.F.R. § 190.207, the Notice proposed finding that Respondent had violated\n49 C.F.R. §§ 195.403(a) and 195.406(b) and proposed assessing a civil penalty of $110,000 for\nthe alleged violations.\nsystems that transport crude oil into and out of the Raceland station.3 As a result of the\nRespondent responded to the Notice by letter dated April 8, 2004 (Response). Respondent\ncontested both of the allegations, offered information in explanation thereof, sought elimination\nor mitigation of the proposed penalty, and requested a hearing. A hearing was held on October\n5, 2004, in Houston, Texas. Following the hearing, Respondent provided additional information\nby letter dated October 29, 2004 (Closing). A second hearing was held on March 29, 2007, in\nHouston, Texas. By letter dated April 30, 2007, Respondent provided a summary of the\ninformation that it had presented at the 2007 hearing (Summary).\n1 On November 30, 2004, the Norman Y. Mineta Research and Special Programs Improvement Act, Pub. L. No.\n108-426, 118 Stat. 2423, created the Pipeline and Hazardous Materials Safety Administration (PHMSA) and\ntransferred the authority of RSPA exercised under chapter 601 of title 49, United States Code, to the Administrator\nof PHMSA. See also 70 Fed. Reg. 8299, 8301-8302 (2005) (delegating authority to the Administrator of PHMSA).\n2 Respondent reported the Accident to the National Response Center (NRC). NRC Incident Report No. 620402.\n3 The two incoming systems are known as the Empire and Grand Isle pipelines. The two outgoing systems are\nknown as the Anchorage and St. James pipelines.\n\n\n\n2\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. § 195.403(a), which states:\n§ 195.403 Emergency response training.\n(a) Each operator shall establish and conduct a continuing training program to\ninstruct emergency response personnel to:\n(1) Carry out the emergency procedures established under 195.402 that relate\nto their assignments;\n(2)…\n(3) Recognize conditions that are likely to cause emergencies, predict the\nconsequences of facility malfunctions or failures and hazardous liquids or carbon\ndioxide spills, and take appropriate corrective action. [Emphasis added.]\nThe Notice alleged that Respondent violated § 195.403(a) by failing to train one of its contract\nconsequence of facility malfunctions or failures and hazardous liquid spills, and to take\nappropriate corrective action. Specifically, the Notice alleged that on August 19, 2002, the\nemployee closed Station Valve 1165 on an active crude oil pipeline at the Raceland station,\ninstead of closing the adjacent firewall drain valve that he had been instructed to close. The\nemployees4 to recognize conditions that were likely to cause emergencies, to predict the\nfirewall drain valve had been opened earlier that day, apparently to drain water from one area at\nthe Raceland station to another. When the employee closed Station Valve 1165, Respondent’s\npipeline systems were subjected to an overpressure condition, which resulted in the release of\napproximately seven barrels of crude oil from three different locations at the station.\nIn its Response, ExxonMobil did not contest that a release occurred or that the contract employee\nclosed Station Valve 1165 instead of the adjacent firewall drain valve. Respondent argued,\nhowever, that the cited regulation did not apply to a contract employee because he was not\nauthorized to operate a regulated valve. Respondent also argued that the contractor was not\nbeing utilized in an emergency response capacity and that therefore there was no requirement to\ntrain the contractor’s employees to have the skills described in § 195.403(a)(3).\nBefore discussing the merits of the allegation, I will clarify that the regulatory requirement cited\nin the Notice was not the version in place at the time of the Accident. The regulation in place at\nthe time of the Accident stated:\n§ 195.403 Training.\n(a) Each operator shall establish and conduct a continuing training program\nto instruct operating and maintenance personnel to:\n(1) Carry out the operating and maintenance, and emergency procedures\nestablished under § 195.402 that relate to their assignments;\n(2)…\n4 The individual was an employee of Danos & Curole, a company hired by ExxonMobil to provide various services\nat its facilities.\n\n\n\n3\n(3) Recognize conditions that are likely to cause emergencies, predict the\nconsequences of facility malfunctions or failures and hazardous liquid or carbon\ndioxide spills, and to take appropriate corrective action. [Emphasis added.]\nThe regulation in place at the time of the Accident is controlling in this case, not the one in effect\nat the time the Notice was issued. At the time of the Accident, § 195.403 applied to operating\nand maintenance personnel, not emergency personnel.5 Neither Respondent nor OPS raised this\ndisparity until long after the Notice was issued. As a result, the discussion and arguments\npresented by Respondent and OPS focused primarily on whether the contractor had emergency\nresponse duties. During the March 29, 2007 hearing, OPS and Respondent agreed that the\nversion of the regulation in place at the time of the Accident, applicable to operating and\nmaintenance personnel, should control.6\nTo determine whether Respondent violated the version of § 195.403(a) that was in effect at the\ntime of the Accident, the first question is whether the contractor was, in any manner, performing\nthe duties of operating and maintenance (O&M) personnel. If so, did the contractor’s employees\nreceive the training required by the regulation?\nRespondent argued that the contractor was not authorized to operate a DOT-regulated valve7 and\ntherefore the company could not be held responsible for failing to train him to perform duties\nthat were not O&M related. More broadly, the company argued that its contractor was hired to\ntasks do not appear to include operation and maintenance of Respondent’s pipeline system.\nSince there is no information in the record showing that Respondent’s contractor was in fact\nperform “general housekeeping, vegetation control, painting and building maintenance.8 ” Such\nperforming O&M duties, I can only conclude that ExxonMobil was not required to provide\ntraining to the contractor on the topics set out in § 195.403(a)(3).\nAccordingly, I find that there is insufficient evidence in the record to demonstrate that\nRespondent’s contractor was performing the duties of O&M personnel on its pipeline facilities.\nBased upon the foregoing, I order that this allegation of violation be withdrawn.\nItem 2: 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 during surges or other\nvariations from normal operations to exceed 110 percent of the operating\n5 RSPA amended Section 195.403 on August 27, 1999, with the passage of the Operator Qualification Final Rule, 64\nFed. Reg. 46853, 46866. Effective October 28, 2002, the amendment moved the requirement that pipeline operators\nestablish and conduct training of operating and maintenance personnel from 195.403(a). Training requirements for\noperating and maintenance personnel are now addressed in Part 195, Subpart G, Qualification of Pipeline Personnel.\n6 See also, Closing at 3. Respondent stated that “the actions that are the subject of this NOPV should be held to the\nstandards in place at the time at which they were carried out, on August 19, 2002.”\n7 Response at 3.\n8 Respondent’s March 29, 2007 Hearing Presentation, Ex. 3 at 1.\n\n\n\n4\npressure limit established under paragraph (a) of this section. Each operator\nmust provide adequate controls and protective equipment to control the pressure\nwithin this limit.\nThe Notice alleged that Respondent violated § 195.406(b) by permitting the pressure in its\npipeline system to exceed 110 percent of the operating pressure limit established under §\n195.406(a). Specifically, the Notice alleged that on August 19, 2002, the pressure at the\nRaceland station reached 500 psi, which is 165 percent of the operating pressure limit at that\nlocation.\nIn its Response, Respondent acknowledged that the Raceland station piping experienced a\npressure surge in excess of 110 percent of the operating pressure limit. Respondent explained\nthat the overpressure event occurred when a contract employee mistakenly closed Station Valve\n1165, rather than a firewall drain valve. Respondent also argued that it did not authorize or\nanticipate the actions of its contractor and, therefore, that the alleged violation should be\nwithdrawn. Although Respondent’s contractor mistakenly closed the station valve, Respondent,\nas operator of the pipeline, is responsible for the company’s compliance with the pipeline safety\nregulations. Respondent’s reliance on a contractor does not negate this responsibility. To find\notherwise would permit pipeline operators to shield themselves from their obligation to comply\nwith the Pipeline Safety Laws simply by contracting out their functions. Neither the Pipeline\nSafety Laws nor regulations allow such a nullification of operator responsibility.9\nRespondent also argued that its pipeline system was designed and installed with adequate\ncontrols and protective equipment to control pressure within established limits but that such\nequipment could not function as designed due to the valve closure. While this may be accurate,\nthe violation simply alleged that ExxonMobil failed to adequately “control” the pressure within\nthe operating pressure limits.\nAfter considering all the evidence, I find that Respondent violated 49 C.F.R. § 195.406(b) by\npermitting the pressure in its pipeline system at the Raceland station to exceed 110 percent of the\noperating pressure limit established under § 195.406(a).\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to a civil penalty not to exceed $25,000 per\nviolation for each day of the violation, up to a maximum of $500,000 for any related series of\nviolations.10\n9 See, e.g., In the Matter of Williams Gas Pipeline–Transco, Final Order at 4, CPF No. 1-2005-1007 (July 30,\n2007), 2007 WL 2475903; In the Matter of Koch Pipelines, Inc., Final Order at 7, CPF No. 32506 (April 28, 1998),\n1998 WL 35166464.\n10 Subsequent to the accident that gave rise to this case, the Pipeline Safety Improvement Act of 2002 (PSIA), Pub.\nL. No. 107-355, § 8(b)(1), 116 Stat. 2992, increased the civil penalty liability for violating a pipeline safety standard\n\n\n\n5\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: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; the Respondent’s ability to pay the penalty and 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 $110,000 for the violations.\nNotice Item 1 proposed a civil penalty of $10,000 for violation of 49 C.F.R. § 195.403(a), for\nRespondent’s alleged failure to properly train a contract employee to recognize conditions that\nwere likely to cause emergencies, to predict the consequence of facility malfunctions or failures\nand hazardous liquid spills, and to take appropriate corrective action. As discussed above, the\nrecord does not contain sufficient evidence to show that Respondent violated the regulation at the\ntime of the Accident. Accordingly, I withdraw the proposed penalty for Item 1.\nNotice Item 2 proposed a civil penalty of $100,000 for Respondent’s alleged violation of 49\nC.F.R. § 195.406(b), caused when Respondent permitted the pressure in its pipeline system at the\nRaceland station to exceed 110 percent of the operating pressure limit established under §\n195.406(a). Respondent sought mitigation or elimination of the proposed civil penalty.\n1. Maximum Penalty.\nBefore reaching Respondent’s arguments for reduction or elimination of the proposed penalty, I\nwill address the issue of the maximum civil penalty applicable to this violation. In Respondent’s\nSummary, submitted after the 2007 hearing, Respondent argued, for the first time, that the\nmaximum penalty applicable to the violation was $25,000, not $100,000. Respondent is correct.\nAt the time of the August 19, 2002 violation, 49 U.S.C. § 60122(a)(1) provided that a person\nfound to have violated a pipeline safety regulation was liable for a civil penalty of not more than\nexceeded the statutory maximum per-day penalty applicable at the time the violation took place.\nTherefore, the penalty for this one-day violation cannot exceed $25,000.\n$25,000 per violation for each day the violation continued.11 The proposed civil penalty\n2. Respondent’s Arguments for Mitigation or Elimination of the Penalty.\nIn its Response, ExxonMobil argued that the proposed penalty should be eliminated or mitigated\non the basis of several “unique circumstances” related to the Accident. Respondent argued that\nsuch circumstances, analyzed in light of the penalty assessment considerations in 49 C.F.R. §\n190.225, justify the elimination or mitigation of the proposed penalty.12\nto $100,000 per violation for each day of the violation up to a maximum of $1,000,000 for any related series of\nviolations.\n11 Id. The PSIA was enacted on December 17, 2002.\n12 Response at 4.\n\n\n\n6\nFirst, Respondent argued that OPS and the Louisiana Department of Natural Resources had\ninspected the pipeline facilities numerous times, and that ExxonMobil had demonstrated its\ncommitment to operate safely. The occurrence of past inspections and Respondent’s\nunexplained assertion that it somehow “demonstrated” a commitment to safety does not warrant\nelimination or reduction of the proposed penalty. Respondent is responsible for compliance with\n§ 195.406(b) at all times. ExxonMobil violated § 195.406(b) by exceeding the maximum\noperating pressure at the time of the Accident.\nSecond, Respondent argued that it quickly responded to and mitigated the overpressure situation,\nand later implemented corrective actions to prevent a recurrence. Respondent explained that it\nhad contained the spill and that there was never a safety hazard to the environment or the public.\nPHMSA expects that all operators, at a minimum, will quickly respond to spills and prevent or\nmitigate any resulting harm. Respondent’s actions after the overpressure violation do not\nwarrant elimination or reduction of the proposed penalty. Here again, Respondent is responsible\nfor compliance with § 195.406(b) at all times. PHMSA disagrees that there was never a safety\nhazard to the environment or the public. Any overpressure condition or unplanned release of\nhazardous liquid presents safety hazards.\nThird, Respondent argued that the overpressure event was caused by a contractor mistake that\noccurred after ExxonMobil had directed the contractor to close an unregulated drain valve.\nWhile the contractor’s action appears to have been unintentional, additional facts relating to the\nnature, circumstances and gravity of the violation weigh against a reduction or elimination of the\ncivil penalty.\nAs discussed above, Respondent is responsible at all times for the acts and omissions of its\ncontractors. The contractor who closed Station Valve 1165 was working unsupervised inside\nRespondent’s pipeline facility, in close proximity to active pipelines and valves. Though\nRespondent argued that the contractor’s duties did not include operating regulated valves,\nRespondent provided the contract employee with a key that he subsequently used to unlock the\nregulated valve. If the contractor’s training and duties did not include the operation of regulated\nvalves, Respondent should not have provided the contract employee with a key that permitted\nhim to gain access to and operate a critical valve.\nFinally, during both hearings, Respondent argued that the proposed penalty was excessive in\nlight of two other “similar” enforcement cases in which PHMSA found violations of §\n195.406(b).13\nWhen the former $25,000 per day cap is taken into account, the penalties assessed\nin the cases cited by Respondent actually exceed the maximum penalty in this case because the\nother cases involved repeated violations over multiple days. Nevertheless, I will address\nRespondent’s argument regarding similarities of penalties. PHMSA proposes and assesses civil\npenalties on a case-by-case basis, based on the facts and circumstances presented in each case\nand the assessment criteria set forth in 49 C.F.R. § 190.225. Respondent’s citation of past Final\nOrders that it claims are somehow “similar” to the present case does not acknowledge the reality\n13 Respondent’s October 5, 2004 Hearing Presentation, Ex. 3 at 4. Respondent cited In the Matter of Alyeska\nPipeline Service Company, Final Order, CPF No. 5-2000-5006, December 31, 2003, 2003 WL 25429833; and In the\nMatter of Colonial Pipeline Company, Final Order, CPF No. 2-2000-5001, April 23, 2002.\n\n\n\n7\nthat each case presents unique facts. The unique facts of each case, even in those involving\nsimilar violations, often have a significant impact on the penalties proposed and eventually\nassessed.\nMoreover, even if the present case were similar to past ones, the Supreme Court has held that\nabsent a statutory provision to the contrary, “uniformity of sanctions for similar violations” is not\nuniformity of penalties for similar violations. Therefore, PHMSA is not legally required, nor\nwould it be practicable, to consider the factual circumstances of every past case when proposing\nprevious past cases does not support reduction or elimination of the penalty.\nrequired.14 Neither the Pipeline Safety Laws nor the implementing regulations require\nor assessing penalties. Respondent’s argument that the proposed civil penalty is dissimilar to\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a reduced total civil penalty of $25,000.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. § 89.21(b)(3)) require this payment 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 (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $25,000 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 United\nStates District Court.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be received within 20 days of Respondent’s receipt of this\nFinal Order and must contain a brief statement of the issue(s). The filing of the petition\nautomatically stays the payment of any civil penalty assessed. However if Respondent submits\npayment for the civil penalty, the Final Order becomes the final administrative decision and the\nright to petition for reconsideration is waived. The terms and conditions of this Final Order shall\nbe effective upon receipt.\n__________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n14 See Butz v. Glover Livestock Commission Company, Inc., 411 U.S. 182, 186-87 (1973).","truncated":false,"body_characters":22980}