{"operation":"document","citation":"CPF 420055013","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":"2005-03-31","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.571.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420055013.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420055013.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420055013","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420055013","body":"Notice of Probable Violation involving LINK ENERGY PIPELINE LIMITED PARTNERSHIP. PHMSA's enforcement data identifies the cited regulation as 195.571. The case was opened on 2005-03-31 and is reported as closed as of 2006-01-10. Proposed civil penalty: $50,000. Assessed civil penalty: $50,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420055013_Final Order_12152005.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420055013/420055013_Final%20Order_12152005.pdf\n\n420055013_final order_12152005_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420055013/420055013_final%20order_12152005_text.pdf\n\nFinal Order Link Energy LLC CPF No 4-2005-5013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420055013/Final%20Order%20Link%20Energy%20LLC%20CPF%20No%204-2005-5013.pdf\n\nFinal Order Link Energy LLC CPF No 4-2005-5013.pdf\n\nJ.S. Depanmen\nf Transportatiol\nWashington, D.C. 20590\n400 Seventh Street, S.W.\nPipeline and\nAdministration\nHazardous Materials Safety\nDEC 15\n2005\nMr. Thomas M. Mathews\nChairman and Chief Executive Officer\nLink Energy LLC\n2000 W Sam Houston Pkwy S Ste 300\nHouston, TX 77042-3627\nRe: CPF No. 4-2005-5013\nDear Mr. Mathews:\nEnclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in\nthe above-referenced case. It makes a finding of violation and assesses a civil penalty of\n$50,000. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon payment. Your receipt of the Final Order constitutes service under\n49 C.F.R. § 190.5.\nSincerely,\nJamM\nJames Reynolds\nPipeline Compliance Registry\nOffice of Pipeline Safety\nEnclosure\ncc:\nMr. Troy E. Valenzuela\nVice President of EH&.\nlains Pipeline L.P\n333 Clay St Ste 1600\nHouston, TX 77002-4101\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\nIn the Matter of\nLink Energy LLC,\nCPF No. 4-2005-5013\nRespondent\nFINAL ORDER\nOn March 17, 2004, pursuant to 49 U.S.C. § 60117, a representative of the Office of Pipeline\nSafety (OPS) conducted an investigation of a pipeline failure reported by Link Energy on the\n10-inch Red River hazardous liquids pipeline in Texas. As a result of the inspection, on March\n31, 2005, the Director, Southwest Region, OPS, issued to Plains Pipeline L.P., the current\noperator of the Red River pipeline, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Plains\nPipeline had violated 49 C.F.R. § 195.571 and proposed assessing a civil penalty of $50,000 for\nthe alleged violation.\nPlains Pipeline responded on April 28, 2005 and explained that pursuant to a purchase and sale\nagreement with Link Energy, \"Link retained responsibility for any fines, penalties, or sanctions\nimposed by any governmental authority for pre-closing (i.e. April 1, 2004) action by Link.\"\"\nAlthough Link Energy was not initially named as a party in the Notice, Link Energy responded\nto the Notice by letter dated June 20, 2005. Link Energy agreed that under the sale agreement\n\"Link would arguably be responsible for any potential penalty arising out of this matter.\"2\nOn August 9, 2005, OPS issued an Amended Notice of Probable Violation and Proposed Civil\nPenalty in order to make Link Energy a party to this enforcement action. Link Energy (hereafter\n\"Respondent\") responded by letter dated September 29, 2005, provided an update on spill\nremediation efforts, and incorporated by reference prior submissions dated April 28, 2005 and\nJune 20, 2005. Respondent contested the allegation of violation and requested that the proposed\ncivil penalty be reduced or eliminated. Respondent and Plains Pipeline did not request a hearing,\nand therefore have waived their right to one.\nPlains Pipeline response dated April 28, 2005, page 1 (parenthetical in original).\nLink Energy response dated June 20, 2005, page 1.\n\n\n\n2\nFINDING OF VIOLATION\nSection 195.571 of Title 49 of the Code of Federal Regulation requires that cathodic protection\ncomply with one or more of the applicable criteria and other considerations for cathodic\nprotection contained in paragraphs 6.2 and 6.3 of NACE Standard RP0169-96 (incorporated by\nreference) to protect steel pipelines from external corrosion. The Notice alleged Respondent\nmaintained cathodic protection on the Red River Pipeline that did not comply with the applicable\ncriteria.\nOn March 10, 2004, the Red River Pipeline failed due to external corrosion, causing the release\nof mites east oly Snyder, Tes ap on and Respondeal pes one do perted a field insal aren\nOPS and Respondent personnel conducted a field inspection\nshortly after the failure. The OPS inspector observed external corrosion on the pipe at the site of\nthe perforation. OPS and Respondent measured pipe-to-soil potentials on the pipeline and found\nthat the failure site and multiple locations nearby did not meet the applicable -0.850v criterion\nfor adequate cathodic protection. The Notice alleged Respondent subsequently performed a\nclose-interval survey and found a few locations in the vicinity of the failure that did not meet\neither the -0.850v or the 100mV criteria. Based on the cause of the failure (external corrosion)\nand survey records demonstrating inadequate cathodic protection, the Notice alleged that the\npipeline did not have adequate cathodic protection in accordance with 49 C.F.R. § 195.571.\nIn Respondent's response dated June 20, 2005, Respondent acknowledged that the initial field\ninspection indicated three locations that did not meet the - 0.850v criterion.* However, according\nto Respondent, a subsequent close-interval survey demonstrated that the pipeline was adequately\nprotected. Respondent explained the results of the close-interval survey, which indicated that the\nleak site and one other location within 8,400 feet upstream of the leak site did not comply with\neither the -0.850v or the 100mV criteria.\nfeet downstream of the leak site that did not comply. Respondent concluded these findings\ndemonstrated adequate levels of cathodic protection on the pipeline in the vicinity of the failure.\nRespondent also contended that it acted as a \"reasonable and prudent\" operator by installing test\nstations at sufficient intervals, conducting annual surveys, and taking necessary corrective action\nto achieve compliance.\" These actions alone, however, do not necessarily demonstrate\ncompliance with § 195.571. Annual monitoring surveys may demonstrate cathodic protection\nadequacy at test station locations, but might not detect below-criteria levels between test stations.\nAlthough Respondent correctly argued that regulations do not explicitly require close-interval\nsurveys annually to demonstrate compliance, 49 C.F.R. § 195.573(a) does require Respondent to\nidentify circumstances in which close-interval surveys are necessary to determine cathodic\nprotection adequacy. Ultimately, these issues are separate from the violation alleged in the\nNotice, which is whether or not Respondent complied with 49 C.F.R. § 195.571 by maintaining\ncathodic protection in accordance with the applicable criteria.\nSee Accident Report No. 20040091--2397 (form 7000-1) filed April 12, 2004.\nLink Energy response dated June 20, 2005, page 3.\nId.\nId. at 3-4.\n\n\n\n3\nThe record shows that while most of the pipeline had adequate cathodic protection in the vicinity\nof the failure site, several specific locations including the failure site itself were not adequately\nprotected. Respondent acknowledged in its response dated June 20, 2005 that both the initial\nfield survey and subsequent close-interval survey show cathodic protection at the failure site and\nat least one other location did not comply with either the -0.850v or 100mV criteria in\naccordance with 49 C.F.R. § 195.571. In addition, the OPS inspector observed external\ncorrosion at the failure site and Respondent noted in its Accident Report filed April 12, 2004,\nthat the primary cause of the accident was external corrosion (localized pitting). The evidence\ndemonstrates that Respondent maintained cathodic protection that did not comply with the\napplicable criteria at the failure site and at least one other location. Accordingly, I find\nRespondent violated § 195.571 as alleged in the Notice.\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. The Notice proposed a total civil penalty of $50,000 for the violation.\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,\ndegree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability\nto pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on\nRespondent's ability to continue in business, and such other matters as justice may require.\nRespondent explained that it acted in good faith to achieve compliance by conducting annual\ncathodic protection surveys and by taking necessary corrective action when problems were\nideney perfore in 2lo, indicaded seered festions shale did not comply und bed -0.850a\npotential criterion. Respondent also provided an account of its remediation efforts since the\nRespondent has spent considerable resources performing soil and groundwater\nremediation and monitoring and has confirmed that the impacted area has been returned to its\npre-release state.\nRespondent's good faith efforts to achieve compliance and post-accident remediation efforts are\nrecognized; however, I find those actions do not justify reducing the proposed civil penalty.\nRespondent failed to maintain adequate cathodic protection in violation of 49 C.F.R. § 195.571.\nInadequate cathodic protection is known to lead to external corrosion on steel pipelines and left\nunabated, external corrosion can cause pipeline failures that release hazardous liquids into the\nenvironment, as occurred on the Red River Pipeline. The release of crude petroleum presents an\noverwhelming danger to public safety and the environment. Accordingly, the gravity of this\nviolation is significant.\nHaving reviewed the record and considered the assessment criteria, I assess Respondent a total\ncivil penalty of $50,000. Respondent has the ability to pay this penalty without adversely\naffecting its ability to continue in business.\n\n\n\n4\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-120), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73125; (405) 954-4719.\nrallure to pay the $30,000 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 action and the\nright to petition for reconsideration is waived. The terms and conditions of this Final Order are\neffective on receipt.\nDEC 15 2005\nStace\ndy Gerard\nDate Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420055013_final order_12152005_text.pdf\n\nO\nU. S. Department\nof Transportation\nPipeline and\nHazardous Materials Safety\nAdministration\n400 Seventh Street, S W\nWashington, D C 20590\nDEC 15 7. \"r35\nMr Thomas M Mathews\nChairman and Chief Executive Officer\nLink Energy LLC\n2000 W Sam Houston Pkwy S Ste 300\nHouston, TX 77042-3627\nRe. CPF No. 4-2005-5013\nDear Mr. Mathews:\nEnclosed is the Fmal Order issued by the Associate Administrator for Pipelme Safety in\nthe above-referenced case It makes a finding of violation and assesses a civil penalty of\n$50, 000. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon payment. Your receipt of the Final Order constitutes service under\n49 C. F. R $ 190. 5.\nSincerely,\nJames Reynolds\nPipeline Compliance Registry\nOffice of Pipeline Safety\nEnclosure\nCC. Mr. Troy E Valenzuela\nVice President of EHkS\nPlains Pipeline L P.\n333 Clay St Ste 1600\nHouston, TX 77002-4101\nCERTIFIED MAIL — RETURN RECEIPT RE UESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\nIn the Matter of\nLink Energy LLC,\nRespondent\nCPF No. 4-2005-5013\nFINAL ORDER\nOn March 17, 2004, pursuant to 49 U. S. C. $ 60117, a representative of the Office of Pipeline\nSafety (OPS) conducted an investigation of a pipeline failure reported by Link Energy on the\n10-inch Red River hazardous liquids pipeline in Texas. As a result of the inspection, on March\n31, 2005, the Director, Southwest Region, OPS, issued to Plains Pipehne L. P.\nthe current\n,\noperator of the Red River pipeline, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C. F. R. $ 190207, the Notice proposed finding that Plains\nPipeline had violated 49 C. F. R. ) 195. 571 and proposed assessmg a civil penalty of $50, 000 for\nthe alleged violation.\nPlains Pipeline responded on April 28, 2005 and explained that pursuant to a purchase and sale\nagreement with Link Energy, \"Link retained responsibility for any fines, penalties, or sanctions\nimposed by any governmental authority for pre-closing (i e April 1, 2004) action by Link. \"'\nAlthough Link Energy was not initially named as a party m the Notice, Link Energy responded\nto the Notice by letter dated June 20, 2005. Link Energy agreed that under the sale agreement\n\"Link would arguably be responsible for any potential penalty arising out of this matter. \"\nOn August 9, 2005, OPS issued an Amended Notice of Probable Violation and Proposed Civil\nPenalty m order to make Link Energy a party to this enforcement action. Link Energy (hereafter\n\"Respondent\" ) responded by letter dated September 29, 2005, provided an update on spill\nremediation efforts, and incorporated by reference prior submissions dated April 28, 2005 and\nJune 20, 2005. Respondent contested the allegation of violation and requested that the proposed\ncivil penalty be reduced or ehminated. Respondent and Plains Pipeline did not request a hearing,\nand therefore have waived their right to one.\nPlams Pipeline response dated Apnl 28, 2005, page 1 (parenthetical m original)\nLink Energy response dated June 20, 2005, page 1\n\n\n\nFINDING OF VIOLATION\nSection 195. 571 of Title 49 of the Code of Federal Regulation requires that cathodic protection\ncomply with one or more of the applicable criteria and other considerations for cathodic\nprotection contained in paragraphs 6. 2 and 6. 3 of NACE Standard RP0169-96 (incorporated by\nreference) to protect steel pipelines from external corrosion. The Notice alleged Respondent\nmaintained cathodic protection on the Red River Pipeline that did not comply with the applicable\ncriteria.\nOn March 10, 2004, the Red River Pipeline failed due to external corrosion, causing the release\nof approximately 350 barrels (approximately 14, 700 gallons) of crude petroleum in a rural area\n20 miles east of Snyder, Texas. ' OPS and Respondent personnel conducted a field inspection\nshortly after the failure. The OPS inspector observed external corrosion on the pipe at the site of\nthe perforation. OPS and Respondent measured pipe-to-soil potentials on the pipeline and found\nthat the failure site and multiple locations nearby did not meet the applicable -0. 850v criterion\nfor adequate cathodic protection. The Notice alleged Respondent subsequently performed a\nclose-interval survey and found a few locations in the vicinity of the failure that did not meet\neither the -0. 850v or the 100mV criteria. Based on the cause of the failure (external corrosion)\nand survey records demonstrating inadequate cathodic protection, the Notice alleged that the\npipeline did not have adequate cathodic protection in accordance with 49 C. F. R. $ 195 571\nIn Respondent's response dated June 20, 2005, Respondent acknowledged that the initial field\ninspection indicated three locations that did not meet the -0. 850v criterion However, according\nto Respondent, a subsequent close-interval survey demonstrated that the pipeline was adequately\nprotected Respondent explained the results of the close-mterval survey, which indicated that the\nleak site and one other location within 8, 400 feet upstream of the leak site did not comply with\neither the -0. 850v or the 100mV criteria Respondent did not find any locations withm 1, 245\nfeet downstream of the leak site that did not comply. Respondent concluded these findings\ndemonstrated adequate levels of cathodic protection on the pipeline in the vicinity of the failure\nRespondent also contended that it acted as a \"reasonable and prudent\" operator by instalhng test\nstations at sufficient intervals, conducting annual surveys, and taking necessary corrective action\n6\nto achieve compliance. These actions alone, however, do not necessarily demonstrate\ncompliance with ) 195. 571. Annual monitoring surveys may demonstrate cathodic protection\nadequacy at test station locations, but might not detect below-criteria levels between test stations\nAlthough Respondent correctly argued that regulations do not explicitly require close-interval\nsurveys annually to demonstrate compliance, 49 C. F. R. ( 195. 573(a) does require Respondent to\nidentify circumstances in which close-interval surveys are necessary to determine cathodic\nprotection adequacy. Ultimately, these issues are separate from the violation alleged in the\nNotice, which is whether or not Respondent complied with 49 C. F. R. ) 195. 571 by maintaining\ncathodic protection in accordance with the applicable criteria\nSee Accident Report No 20040091 — 2397 (form 7000-1) filed April 12, 2004\nLink Energy response dated June 20, 2005, page 3.\nId\nId at 3-4\n\n\n\nThe record shows that while most of the pipeline had adequate cathodic protection in the vicinity\nof the failure site, several specific locations including the failure site itself were not adequately\nprotected. Respondent acknowledged in its response dated June 20, 2005 that both the initial\nfield survey and subsequent close-interval survey show cathodic protection at the failure site and\nat least one other location did not comply with either the -0. 850v or 100mV criteria in\naccordance with 49 C. F. R. ) 195. 571. In addition, the OPS mspector observed external\ncorrosion at the failure site and Respondent noted in its Accident Report filed April 12, 2004,\nthat the primary cause of the accident was external corrosion (localized pitting) The evidence\ndemonstrates that Respondent maintained cathodic protection that did not comply with the\napplicable criteria at the failure site and at least one other location. Accordingly, I find\nRespondent violated $ 195. 571 as alleged in the Notice.\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. The Notice proposed a total civil penalty of $50, 000 for the violation.\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,\ndegree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability\nto pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on\nRespondent's ability to contmue in business, and such other matters as justice may require.\nRespondent explained that it acted in good faith to achieve compliance by conducting annual\ncathodic protection surveys and by taking necessary corrective action when problems were\nidentified For example, Respondent's predecessor installed additional ground beds when a\nsurvey performed in 2001 indicated several locations that did not comply with the -0. 850v\npotential criterion Respondent also provided an account of its remediation efforts since the\nrelease. Respondent has spent considerable resources performing soil and groundwater\nremediation and monitoring and has confirmed that the impacted area has been returned to its\npre-release state.\nRespondent's good faith efforts to achieve comphance and post-accident remediation efforts are\nrecognized; however, I find those actions do not justify reducing the proposed civil penalty.\nRespondent failed to maintain adequate cathodic protection in violation of 49 C. F. R. ) 195 571.\nInadequate cathodic protection is known to lead to external corrosion on steel pipelines and left\nunabated, external corrosion can cause pipeline failures that release hazardous liquids into the\nenvironment, as occurred on the Red River Pipeline. The release of crude petroleum presents an\noverwhelming danger to public safety and the environment Accordingly, the gravity of this\nviolation is significant.\nHaving reviewed the record and considered the assessment criteria, I assess Respondent a total\ncivil penalty of $50, 000. Respondent has the ability to pay this penalty without adversely\naffecting its ability to continue in business.\n\n\n\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-120), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P. O Box 25082, Oklahoma City, OK 73125; (405) 954-4719.\nFailure to pay the $50, 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 action and the\nright to petition for reconsideration is waived. The terms and conditions of this Final Order are\neffective on receipt.\nDEC 'I 5 2005\nDate Issued\nStac er\nAss ciat Administrator\nfo i line Safety","truncated":false,"body_characters":24116}