{"operation":"document","citation":"CPF 420058004","title":"BBT MIDLA, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2005-04-18","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.505(b), 192.805(a), 192.805(b), 195.505(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420058004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420058004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420058004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420058004","body":"Notice of Probable Violation involving BBT MIDLA, LLC. PHMSA's enforcement data identifies the cited regulations as 192.505(b),  192.805(a),  192.805(b),  195.505(a). The case was opened on 2005-04-18 and is reported as closed as of 2009-10-22. Proposed civil penalty: $100,000. Assessed civil penalty: $70,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420058004_Decision On Petition For Reconsideration_10022009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420058004/420058004_Decision%20On%20Petition%20For%20Reconsideration_10022009.pdf\n\n420058004_Decision On Petition For Reconsideration_10022009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420058004/420058004_Decision%20On%20Petition%20For%20Reconsideration_10022009_text.pdf\n\n420058004_FinalOrder_08222007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420058004/420058004_FinalOrder_08222007.pdf\n\n420058004_finalorder_08222007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420058004/420058004_finalorder_08222007_text.pdf\n\n420058004_Petition for Reconsideration_09172007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420058004/420058004_Petition%20for%20Reconsideration_09172007.pdf\n\n420058004_Decision On Petition For Reconsideration_10022009_text.pdf\n\nOCT 02 2009\nVIA CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7004 2510 0003 6895 8709]\nMr. Richard Adams\nVice President\nOperations & Technology\nEnbridge Energy Company, Inc.\n1100 Louisiana\nSuite 3300\nHouston, TX 77002\nRe: CPF No. 4-2005-8004\nDear Mr. Adams:\nEnclosed is the decision on the Petition for Reconsideration filed by Enbridge Energy Company,\nInc., in the above-referenced case. For the reasons specified in the decision, the Petition is\ngranted in part and denied in part. Payment of the reduced civil penalty of $70,000 is due within\n20 days of service. The findings of the Final Order are unaltered and stand as stated therein.\nWhen the civil penalty has been paid, this enforcement action will be closed. Your receipt of\nthis decision constitutes service 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: Mr. Rod Seeley, Director, Southwest Region, OPS\nEdward C. Lewis, Esq., Fulbright & Jaworski, LLP\n1301 McKinney, Suite 5100, Houston, Texas 77010\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\n_________________________________________\nIn the Matter of )\nEnbridge Energy Company, Inc., ) CPF No. 4-2005-8004\n)\n)\n)\n)\nPetitioner. )\n_________________________________________ )\nDECISION ON PETITION FOR RECONSIDERATION\nOn August 22, 2007, pursuant to chapter 601, title 49, of the United States Code, the Associate\nAdministrator for Pipeline Safety (Associate Administrator), Pipeline and Hazardous Materials\nSafety Administration (PHMSA), issued a Final Order (Order) in this case against Enbridge\nEnergy Company, Inc. (Enbridge or Petitioner), finding that Petitioner had committed two\nviolations of the Pipeline Safety Regulations, codified at 49 C.F.R. Parts 192 and 195, and\nassessing a civil penalty in the amount of $100,000. Petitioner operates natural gas and\nhazardous liquid pipeline systems throughout the United States and Canada. Both violations\nconcerned Petitioner’s Operator Qualification Plan (OQ Plan).\nThe Pipeline Safety Regulations allow a respondent to file a petition with the Associate\nprovide a right of appeal or de novo review, but, rather, to allow the presentation of previously\nunknown or unavailable information or arguments and to allow the agency to correct any errors\nprovide valid reasons why new facts or arguments were not presented in a timely manner.\nAdministrator for reconsideration of a Final Order.1 The purpose of this procedure is not to\nin the Final Order. For these reasons, the regulations state that the Associate Administrator is not\nobliged to consider repetitious information, arguments or petitions, and that a petitioner must\nIn this case, Petitioner filed a timely Petition for Reconsideration (Petition) on September 17,\n2007. In its Petition, Enbridge argues that the Order should be set aside because PHMSA: (1)\nmade Findings of Violation in the Order that were not alleged in the Notice of Probable\nViolation (Notice), thereby depriving Petitioner of proper notice of the allegations; (2) failed to\nmeet its burden of proving the violations cited in the Notice and the Findings of Violations in the\nOrder; and (3) failed to meet its burden of proving the assessment of the civil penalty in the\nOrder. Petitioner further requests that PHMSA stay the effectiveness of the Order to allow\n1 49 C.F.R. § 190.215.\n\n\n\n2\nfurther proceedings in this matter. Petitioner also requests that PHMSA withdraw the Findings\nof Violation or, alternatively, reduce the amount of the civil penalty assessed in the Order.\nDiscussion\nAs a preliminary procedural matter, Petitioner acknowledges that 49 C.F.R. § 190.215(b)\nrequires that if Enbridge “requests the consideration of additional facts or arguments, the\n[petitioner] must submit the reasons they were not presented prior to issuance of the final order.”\nThe company bases its Petition on the fact that\n[t]his Petition for Reconsideration represents the first opportunity for\nEnbridge to raise these issues due to the manner in which the record\nwas considered and allegations were raised, sua sponte, without\nproviding the required notice and opportunity for hearing to\nEnbridge.2\nAs explained more fully below, there is nothing in the record to support this claim. There is no\nevidence or finding in the Order that lies outside the scope of the Notice and the administrative\nrecord upon which it was based. Further, Enbridge was not only given the opportunity to a full\nadministrative hearing under 49 C.F.R. § 190.211 on all the issues presented in the Notice,\nincluding the proposed $100,000 penalty, but the company actually requested a hearing by letter\ndated October 11, 2005. Enbridge subsequently withdrew this request voluntarily, by letter dated\nFebruary 3, 2006. Therefore, Enbridge waived its right to a hearing on the Notice and the case\nwas decided on the basis of the written record alone.\nSince the Findings of Violation are based solely on the record that was fully available to Enbridge\nprior to entry of the Order, the Petition fails to present any valid reason why the additional facts\nor arguments raised in the Petition could not have been presented prior to issuance of the Order.\nTherefore, the Petition could be summarily dismissed for failure to comply with the procedural\nrequirements of 49 C.F.R. § 190.215(b). Notwithstanding the insufficiency of the Petition, I have\nreviewed the entire record and the Petition so that Enbridge may be afforded every opportunity to\nreceive full consideration of all the issues raised in the Petition. The following decision discusses\neach of the issues raised by Petitioner in light of the standard of review set forth in 49 C.F.R.\n§ 190.215 and other applicable law. For the reasons discussed below, I deny the Petition in part\nand grant it in part.\nI. The Order Did Not Violate Petitioner’s Right of Due Process.\nAs noted above, Petitioner requests that PHMSA withdraw the Findings of Violation in the\nOrder because the agency “raised allegations, sua sponte, and seeks to hold Enbridge in violation\nof those allegations that have never been brought to Enbridge’s attention, in violation of\nEnbridge’s due process rights.”3\nPetitioner compares the language PHMSA used in describing\nthe alleged violations in the Notice with the language used in the Order to describe the Findings\n2 Petition, at 2.\n3 Petition, at 1\n\n\n\n3\nof Violation. Item 1 of the Notice alleged two separate violations of 49 C.F.R. §§ 192.805(a)\nand 195.505(a). These provisions, the former for gas and the latter for hazardous liquid pipeline\nfacilities, require that “[e]ach operator shall have and follow a written qualification program.\nThe program shall have provisions to: (a) Identify covered tasks….” The Notice alleged that\nEnbridge violated § 195.505(a), because “Enbridge Transportation Group South’s (Enbridge\nTGS) written OQ plan did not address any covered tasks that were performed on the hazardous\nliquid portions of their facilities. It was noted that the plan had not been revised since Enbridge\nTGS acquired hazardous liquid facilities.” 4\nIn its Response, Enbridge stated that it had acquired the TGS hazardous liquid facilities prior to\n2002, that those facilities and personnel were indeed addressed in its OQ Plan,\n5 and that although\nthe original Enbridge OQ Plan was dated April 27, 2001, there had been numerous revisions\nafter that date. The Order discounted this evidence, however, and found that although Petitioner\nhad included some references to its hazardous liquid pipelines in the OQ Plan, the covered tasks\nlist included only two covered tasks that pertained specifically to the company’s hazardous liquid\npipelines. It also found that although the company had made various revisions to its plan, it “still\nfailed to update the plan to identify each covered task performed on the liquid pipelines.\nTherefore, Respondent did not comply with § 195.505(a).”6\nIn its Petition, Enbridge argues that because PHMSA alleged in the Notice that Enbridge had not\naddressed any hazardous liquid covered tasks yet found in the Order that the company had\nincluded two, this somehow reflects a fatal variance between the allegations in the Notice and the\nfindings in the Order. In other words, Petitioner contends that because PHMSA found that two\ncovered tasks had been identified, the alleged violation of 195.505(a) was disproved entirely.\nThis is incorrect. The evidence shows, and the Order acknowledges, that Enbridge’s OQ Plan\nspecified only two covered tasks with respect to its hazardous liquid facilities. Petitioner has\nfailed to produce any evidence that its OQ Plan complied with the requirements and intent of\n§ 195.505(a) by identifying each and every covered task performed on its liquid pipelines. The\ncited pipeline regulations cannot be interpreted to mean that an operator need only identify a\ncouple of covered tasks; on the contrary, it must identify them all.\nPetitioner argues that this variance between the Notice and the Order violates the company’s\nright of due process by failing to provide the company with adequate notice of all of the details\nof the allegations that were outlined in the Violation Report and reiterated in the Order.\nPetitioner states that the entire record consists of only two documents, namely, “the inspection\nreport,”7\nwhich it contends it never received before issuance of the Order, and the Notice itself.\n4 Notice, at 2.\n5 “The Enbridge OQ plan lists liquid specific knowledge requirements and additional covered tasks specific to\nliquids systems.” Response, at 2.\n6 Order, at 3.\n7 Petitioner is apparently referring to the “Pipeline Safety Violation Report,” dated April 11, 2005 (Violation\nReport), that serves as the evidentiary basis for the Notice.\n\n\n\n4\nAccording to Enbridge, “This [Violation Report] was not provided to Enbridge, and Enbridge\nhad no opportunity to contradict any issues raised therein.”8\nPetitioner is correct that these two documents, plus Enbridge’s Response and supporting\nevidence, constitute the entire record in this case. The company is also correct that PHMSA did\nnot provide a copy of the Violation Report to Enbridge at the time the agency issued the Notice.\nSection 190.207 of the Pipeline Safety Regulations provides that to begin an enforcement\nproceeding, the Regional Director must serve a notice on the respondent that includes a\n“[s]tatement of the provisions of the laws, regulations or orders which the respondent is alleged\nto have violated and a statement of the evidence upon which the allegations are based.” PHMSA\ncomplied with this provision, as the Notice included a statement that the allegations were based\non the “onsite pipeline safety inspection of your Operator Qualification (OQ) records and\nprocedures at your headquarters in Houston, Texas” on November 17-18, 2004.9\nIf a respondent wishes to contest a Notice of Probable Violation in an enforcement action, it may\neither submit written explanations, information or other materials in answer to the allegations or\nin mitigation of the proposed penalty, or it may request a hearing. In this case, Petitioner initially\nrequested a hearing. Under 49 C.F.R. § 190.211(e) and in accordance with other applicable law,\na respondent has the right to request the contents of the entire case file upon which the Notice is\nfor the Violation Report or any other portion of its case file until April 9, 2008, after filing the\nPetition. If Enbridge had wanted to learn more about the evidence supporting the allegations in\nbased, including a copy of the Violation Report.10 Petitioner, however, never made any request\nthe Notice or the basis for the proposed penalty, it could have easily requested the case file in a\ntimely manner, rather than waiting until after the Order had already been issued.\n8 Petition, at 4.\n9 Petitioner cites several cases in support of its argument that its due process rights were violated by PHMSA’s\nfailure to provide the company with an opportunity to submit evidence on the “new” allegations in the Final Order.\nNone of the cases cited by Petitioner is applicable. None involves administrative enforcement proceedings or a\nrespondent/applicant who declines to avail itself of a right to a hearing or to obtain copies of the evidence in the\nadministrative record. In Chocolate Mfrs. Ass'n of U.S. v. Block, 755 F.2d 1098 (4th Cir. 1985), the court found that\nthe Department of Agriculture had promulgated a final rule that was “a complete reversal from its treatment in the\nproposed rule.” The court ordered the rulemaking comment period reopened because “ultimate changes in the\nproposed rule were [not] in character with the original scheme or a logical outgrowth of the notice.) (Id. at 1107).\nPetitioner also cites Williston Basin Interstate Pipeline Co. v. F.E.R.C., 165 F.3d 54, 63 (D.C. Cir. 1999), in which\nF.E.R.C. made factual findings in a ratemaking proceeding using a methodology not discussed by either party. The\ncourt found that use of the new methodology prohibited the pipeline from understanding “the issues on which the\ndecision will turn.” Id. Finally, Petitioner cites Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419\nU.S. 281, 288 (1974), where the court held that an agency must apprise a party of the facts and issues on which the\nagency relies so that the party may rebut them. In the current case, by contrast, the Notice informed Petitioner of the\nregulations that Petitioner allegedly violated, based upon the agency’s review of Petitioner’s own OQ Plan. The\nOrder made findings of violation based upon the same OQ Plan and did not rely upon any new facts or allegations\nnot contained in the record.\n10 49 C.F.R. § 190.211(e) states: “Upon request by respondent, and whenever practicable, the material in the case\nfile pertinent to the issues to be determined is provided to the respondent 30 days before the hearing. The\nrespondent may respond to or rebut this material at the hearing.”\n\n\n\n5\nIt is fallacious to suggest that the Order somehow reflected new allegations not set forth in the\nrecord, since all of the allegations and findings came directly from the Violation Report, which\nrelied in turn upon Enbridge’s own OQ Plan. The Violation Report and the Notice simply\nalleged that certain elements were missing from Petitioner’s OQ Plan. Since Enbridge chose to\nrely upon the written record rather than to exercise its right to a hearing or to obtain a copy of the\ncase file, it is specious to suggest that the company was somehow unduly surprised when the\nOrder relied upon that same record as the basis for its Findings of Violation.\nAccordingly, upon review of the entire record, including the Petition, I find that PHMSA did not\nviolate Petitioner’s right of due process by making findings of violation in the Order that were\nbased upon evidence contained in the Violation Report and Petitioner’s own records but that\nwere not fully described in the Notice.\nII. PHMSA Met its Burden of Proving the Findings of Violation in the Order.\nThe Petition also challenges the Findings of Violation in Items 1A and 1B of the Order on the\nground that PHMSA failed to meet its burden of proof. Item 1A found that Enbridge violated 49\nC.F.R. § 195.505(a) by failing to have and follow an OQ program that identified each covered\ntask performed on the company’s hazardous liquid pipeline system. Item 1B found that\nEnbridge violated 49 C.F.R. § 192.805(a) by failing to have and follow an OQ program that\nidentified each covered task performed on the company’s natural gas pipeline system.\nAs for Item 1A, Petitioner argues that PHMSA failed to meet its burden of proof because it failed\nto rebut evidence submitted by Petitioner in its Response. Enbridge argues that in its Response,\nit “submitted clear evidence showing that hazardous liquid systems are addressed in Enbridge’s\nqualification program; and that Enbridge had revised its qualification program on numerous\nPetition highlights certain language in the OQ Plan referring to liquid pipelines and covered tasks\nthat was in effect at the time of the inspection. None of these references or tasks, however, adds\nnew information or additional evidence to the record, as these documents were considered as part\noccasions to address hazardous liquid systems and to make other necessary changes.”11 of the record prior to issuance of the Order.\nThe\nThe key document here is the covered tasks list. The Order found that Enbridge’s OQ Plan only\nhas still not produced any evidence or information refuting this finding. As PHMSA stated in\nthe Order, Petitioner’s other references to hazardous liquid pipelines in its OQ Plan are\nidentified two covered tasks specifically applicable to its hazardous liquid facilities.12 Petitioner\ninconsequential in determining whether Petitioner properly identified all covered tasks for such\nfacilities; only the covered tasks list itself is probative on that issue.\n11 Petition, at 5.\n12 The Order states, “ . . . I find Respondent had included some references to its hazardous liquid pipelines and the\napplicable regulations. However, with respect to the requirement that Respondent identify each covered task\nperformed on its hazardous liquid pipelines, I find that Respondent had identified only two specific covered tasks\nthat pertained to hazardous liquid pipelines.”\n\n\n\n6\nI have reviewed the record for Item 1A and affirm the finding that Petitioner’s list of 65 covered\nspecifically speaks in terms of natural gas operations and does not mention liquid products,\ntasks (“Evaluation Requirements for Covered Tasks”)13 in effect at the time of inspection\nexcept for two tasks that are identified as applying to hazardous liquid products.\nAccordingly, upon review of all of the evidence and the Petition, I deny Petitioner’s request for\nreconsideration of Item 1A on two grounds. First, Petitioner has failed to present any valid\nreason why the additional facts or arguments raised in the Petition were not presented prior to\nissuance of the Order, as required under 49 C.F.R. § 190.215(a). Second, I find that PHMSA has\nsustained its burden of proving that Petitioner violated 49 C.F.R. § 195.505(a) by failing to\nidentify each covered task on its hazardous liquid pipeline facilities.\nAs for Item 1B, Petitioner challenges the finding that Enbridge’s covered tasks list for its natural\ngas pipeline facilities failed to include certain covered tasks such as start-up, shut-down,\ncompressor station inspection, testing of remote control shut down devices, remediation of\ninternal corrosion, maintenance and repair of relief valves, etc. Upon review of the record, I find\nthat all of the missing tasks listed in the Order qualify as “covered tasks,” as defined in 49 C.F.R.\n14\n§ 192.801.\nPetitioner argues, however, that its covered tasks list complied with § 192.801 because it\ncomported with “the original intent of the negotiated rulemaking committee that drafted the rules\nat issue in this matter.”15 On the contrary, I believe that the meaning of § 192.801 is clear from\nthe plain language of the regulation; therefore, no consideration of the intent of the negotiated\nrulemaking committee is necessary or relevant.\n16\nPetitioner’s argument is both untimely and\nunsupported. First, this is an argument that Petitioner could have easily made in its Response or\nat a hearing but chose not to do so; therefore, there is not need to consider it here. Furthermore,\n13 Although Petitioner’s OQ Plan contains various lists related to operator knowledge and that contain references to\n“LPG” and 49 C.F.R. Part 195, the list entitled “Evaluation Requirements for Covered Tasks” is identified as the\n“covered tasks” list by the following language: “Covered tasks below are geared towards natural gas operations. In\ncases when individuals are qualifying on liquid pipeline systems, natural gas specified evaluations such as K1\nshould be substituted with liquid specific evaluations such as K1A.” Furthermore, it is noteworthy that all but two\n(63 total) covered tasks contain “K1” evaluations and specific mention of natural gas, yet only the two covered tasks\nmentioned in the Order and this Decision related to “LPG” contain “K1A” evaluations. Therefore, by Petitioner’s\nown admission, the 63 listed covered tasks with no “K1A” evaluations or references to “LPG” apply only to natural\ngas facilities.\n14 49 C.F.R. § 192.801 defines a “covered task” as “an activity, identified by the operator, that: (1) Is performed on\na pipeline facility; (2) Is an operations or maintenance task; (3) Is performed as a requirement of this part; and (4)\nAffects the operation or integrity of a pipeline.”\n15 Petition, at 7.\n16 Solis v. Summit Contractors, Inc., 558 F.3d 815, 823 (8th Cir. 2009) (“In examining the meaning of § 1910.12(a),\nour inquiry begins with the regulation's plain language. We look to see ‘whether the language at issue has a plain\nand unambiguous meaning with regard to the particular dispute in the case.’”).\n\n\n\n7\nPetitioner presented no evidence or discussion as to how the intent of the negotiated rulemaking\ncommittee supports its development of a covered tasks list.\nFinally, Petitioner argues that various tasks were not included in its covered tasks list because the\ncompany had conducted an in-depth analysis of such tasks and determined that they were not\nnumber of covered tasks that were not identified as such by Enbridge, including:\n“covered tasks,” based upon its interpretation of 49 C.F.R. § 192.801.17 The Order identified a\n Isolation of a gas compressor unit\n Compressor station inspection and testing of remote control shutdown devices\n Start-up\n Shutdown\n Operation of a turbine-driven gas compressor unit\n Maintenance of rectifiers\n Electrical inspection of bare pipe\n Remediation of internal controls\n Maintenance and repair of relief valves, and\n Preparation of lines for ILI runs.\nThe Order found that the documentation provided by Enbridge to justify its “non-covered tasks\nlist” did not address the issue of why these particular tasks were not considered “covered.”\nLikewise, the Petition fails to present any evidence or explanation as to why these tasks were not\nincluded.\nAccordingly, upon review of the record and the Petition, I deny Petitioner’s request for\nreconsideration of Item 1B on two grounds. First, Petitioner has failed to present any valid\nreason why the additional facts or arguments raised in the Petition were not presented prior to\nissuance of the Order, as required under 49 C.F.R. § 190.215(a). Second, I find that PHMSA\nsustained its burden of proving that Petitioner violated 49 C.F.R. § 192.805(a) by failing to\nidentify all covered tasks performed on its natural gas pipeline facilities.\nIII. The Penalty Imposed in the Order Is Insufficiently Supported by the Record and\nShould Be Reduced.\nThe Petition challenges the civil penalty imposed in the Order on the ground that PHMSA failed\nto meet its “burden of proof” in assessing the penalty. Petitioner makes three distinct arguments\nfor elimination or reduction of the penalty. First, Petitioner contends that there is no evidence in\nthe record indicating how the penalty was “calculated,\n” that the Order contains only a brief\ndiscussion of “the facts related to the statutory and regulatory factors to be considered in the\nassessment of the penalty,” and that such discussion is both incomplete and inaccurate.18\nSecond, it contends that the Order failed to address any of the information submitted by Enbridge\nor to make any adjustment in the penalty based upon such evidence. Third, it contends that\n17 Petition, at 5, 6.\n18 Petition, at 8-11.\n\n\n\n8\nPHMSA has been inconsistent in its assessment of civil penalties in cases involving violations of\n49 C.F.R. §§ 192.805 and 195.505 and that the agency is legally required “to provide an\nadequate explanation before treating similarly situated parties differently.”19\nAs for the first argument regarding the failure to show how the penalty was calculated, both 49\nU.S.C. § 60122 and 49 C.F.R. § 190.225 set forth the criteria by which PHMSA must determine\nthe amount of a civil penalty.\n20 In this case, the Violation Report expressly listed and considered\nof fact that served as the basis for assessing the penalty and elaborated on the statutory criteria\nthese factors in proposing the $100,000 penalty.21 Moreover, the Order made specific findings\nthat had been discussed in the Violation Report.\nSpecifically, the Order found that Enbridge had failed to identify all but two specific covered\ntasks on its hazardous liquid pipeline system and had omitted “many” of the covered tasks being\nperformed on its natural gas system. It noted that the OQ regulations were first promulgated in\n1999, became effective in April 2001, and had to be implemented by all operators not later than\nOctober 2002, thus giving Enbridge ample time to develop a covered tasks list that met\nregulatory requirements.\nThe Order also emphasized the gravity of the offense, noting that Enbridge had a large\nworkforce, with 179 employees and approximately 50 contractor personnel. It stated that the OQ\nregulations are designed to ensure that all operators have a qualified work force “to reduce the\nprobability and consequence of pipeline incidents caused by human error.” A key component of\nthe program is to ensure that operators can “identify each activity that could affect the safe\noperation and integrity of its pipelines.” In addition, operators must “ensure through evaluation\nthat individuals performing such covered tasks can perform them safely and recognize and react\nto abnormal operating conditions.” None of this is possible if an operator fails to take the first\nstep of properly identifying all covered tasks. Having considered all of these factors, the Order\nconcluded that the combination of violations involving two separate pipeline systems\n“constituted a significant safety risk, considering their potential to affect the safe operation and\n19 Petition, at 11. Petitioner cites two cases as legal support for this proposition. Burlington Northern and Santa Fe\nRy. Co. v. Surface Transp. Bd., 403 F.3d 771, 776-777 (D.C. Cir. 2005); Willis Shaw Frozen Express, Inc. v. I. C.\nC., 587 F.2d 1333, 1338 (D.C. Cir. 1978). Both cases, however, are distinguishable from the instant case. First,\nthose cases involve administrative proceedings that are substantially different than an enforcement case, namely, a\nratemaking case and the issuance of a certificate of public convenience. In both, the complainants were private\nbusinesses seeking to maintain competitive parity with one or more of its competitors. In Willis Shaw, the court\nupheld the agency’s administrative decision, stating that “[w]here the issue is whether an agency’s action is\narbitrary, capricious, and an abuse of discretion, the scope of review is narrow, and the court may not substitute its\njudgment for that of the agency.”\n20 49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of the civil penalty, PHMSA\nconsider the following criteria: the nature, circumstances, and gravity of the violation, including adverse impact on\nthe environment; the degree of Respondent’s culpability; the history of Respondent’s prior offenses; the\nRespondent’s ability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition,\nPHMSA may consider the economic benefit gained from the violation and such other matters as justice may require.\n21 Violation Report, at 6.\n\n\n\n9\nintegrity of Respondent’s pipelines, the number of workers concerned, and the long period of\nnoncompliance.”22\nTherefore, I reject Petitioner’s argument that the record somehow fails to show that the agency\nconsidered the statutory criteria in determining the penalty. Both the Violation Report and the\nOrder show that the agency carefully considered the facts and circumstances of this particular\ncase in terms of the criteria set forth in the statute.\nAs for the second argument that the Order failed to take into consideration any of the information\nsubmitted by Enbridge or to make any adjustment in the penalty based upon such evidence, I\nbelieve this statement is partially correct. Item 1A of the Notice alleged that Enbridge’s OQ Plan\nfailed to address any covered tasks on its hazardous liquid facilities, yet the Order acknowledged\nthat the company had indeed identified two specific tasks that were applicable to such system.\nItem 1A also alleged that Enbridge had not revised its OQ Plan since the company had acquired\nits hazardous liquid facilities, yet the Order acknowledged that revisions had indeed been made\nbut that the covered tasks list was still inadequate. Therefore, the Order did address and take into\nconsideration the information submitted by Petitioner in making its Findings of Violation.\nOn the other hand, Petitioner is correct that the evidence submitted by Enbridge and reflected in\nthe Order did not result in any mitigation of the penalty. In fact, the Order expressly rejected any\nreduction in the penalty, stating:\nAlthough Respondent contested the allegation of violation, Respondent\ndid not present any information specific to mitigating the proposed civil\npenalty in accordance with the assessment criteria. Therefore, Respondent\nhas not justified a reduction in the civil penalties.23\nUpon full review of the evidence, I still believe that PHMSA was justified in declining to reduce\nthe proposed penalty based upon the evidence supplied by Enbridge and acknowledged in the\nFindings of Violation. The fact that the company had only specified two covered tasks on its\nentire hazardous liquid pipeline system and that it had made various revisions in its OQ Plan\nunrelated to its covered tasks list does not warrant any reduction in the proposed penalty.\nAs for the third argument that that PHMSA has been inconsistent in its assessment of civil\npenalties in cases involving the same violations, I do not agree that the record shows any\ninconsistency or arbitrariness in the assessment of the $100,000 penalty. On the one hand,\nPetitioner cites a Final Order issued in May 2006 against a small company operating a 10-mile\njet fuel pipeline in Puerto Rico. In that case, In the Matter of Pipelines of Puerto Rico,24\nPHMSA found that the operator had violated various provisions of § 195.505 and assessed a civil\npenalty of $12,000. I have reviewed and compared the facts and circumstances of these two\n22 Order, at 4, 5.\n23 Id.\n24 CPF No. 2-2005-6022 (May 11, 2006), 2006 WL 3825352 (D.O.T.).\n\n\n\n10\ncases, including the penalty assessment, and have concluded that there are significant differences\nbetween them that support a substantial difference in the amount of the penalties assessed,\nincluding the fact that Pipelines of Puerto Rico is a small operator that operates one short\nhazardous liquid pipeline, only 10 miles in length, whereas Enbridge is a major pipeline\ncompany operating two large systems involving 1,539 miles of hazardous liquid and natural gas\npipelines, with approximately 179 employees and 50 contract personnel.\nThe process by which PHMSA sets administrative penalties is not formulaic and depends upon\nthe unique facts and circumstances of each case. PHMSA is not required by the Federal Pipeline\nSafety Laws to produce a precise accounting of how penalties are determined, nor has Petitioner\npresented any information or relevant legal authority to support its assertion that the penalty\ncalculation process used in this case was somehow inadequate.\nOn the other hand, I have reviewed the record in this case and cannot find a sufficient factual or\nlegal basis for the assessment of the $100,000 penalty. While I believe there are valid reasons\nfor the wide disparity in penalties between these two specific cases, such reasons are not readily\ndiscernible from the record or other agency documents. I have therefore decided to reconsider\nthe penalty in light of all of the evidence in the record, the statutory penalty criteria, and the\npenalties assessed for similar violations in other cases.\nBased upon such review, I have determined that the total penalty in this case is excessive and\nshould be reduced to $35,000 for Item 1A of the Notice, involving Enbridge’s hazardous liquid\npipeline system, and $35,000 for Item 1B, involving the company’s natural gas pipeline system.\nThis reduced penalty is based, inter alia, on Petitioner’s compliance history, the gravity and\nduration of the separate violations for the company’s hazardous liquid and natural gas pipeline\nsystems, the consistency of the penalty with other penalties assessed for similar violations, and\nthe ability of the operator to pay.\nConclusion\nFor the reasons set forth above, I deny Petitioner’s request for reconsideration of the Findings of\nViolation in the Order. Such request is denied, first, on the ground that Petitioner failed to meet\nthe procedural requirements of 49 C.F.R. § 190.215. Second, it is denied on the ground that\nPHMSA did not violate Petitioner’s due process rights and that the agency met its burden of\nproving the allegations set forth in the Notice and the Findings of Violation in the Order.\nNotwithstanding the above, I grant Petitioner’s request for reconsideration of the penalty\nimposed in the Order, despite Petitioner’s failure of to meet the procedural requirements of 49\nC.F.R. § 190.215. I find that there is insufficient evidence in the record to support the penalty\namount assessed in this case. Accordingly, having considered the arguments raised in the\nPetition and reconsidered all of the evidence, I have reviewed and reduced the total civil penalty\nin this matter to $70,000 for the violations of 49 C.F.R. §§ 192.805(a) and 195.505(a) set forth in\nthe Order. Finally, in light of this penalty reduction and Petitioner’s failure to present any\ncompelling reason to justify the need for further proceedings in this case, I deny Petitioner’s\nrequest for rehearing.\n\n\n\n11\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. Questions\nFederal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039,\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nconcerning wire transfers should be directed to: Financial Operations Division (AMZ-341),\nOklahoma, OK 73125; (405) 954-8893.\nFailure to pay the civil penalty will result in accrual of interest at the current annual rate in\naccordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to the\nsame authorities, a late penalty charge of six percent (6%) per annum will be charged if payment\nis not made within 110 days of service. Failure to pay the civil penalty may result in referral of\nthe matter to the Attorney General for appropriate action in a United States District Court.\nThis decision on reconsideration is the final administrative action in this proceeding.\n_________________________ _______________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420058004_finalorder_08222007_text.pdf\n\no\nU S Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety\nAdministration\n1200 New Jersey Ave S E\nWashington DC 20590\nAU~ 2 2 2007\nMr. Rich Adams\nVice President of Operations A. Technology\nEnbridge Energy Company, Inc.\n1100 Louisiana\nSuite 3300\nHouston, TX 77002\nRe: CPF No. 4-2005-S004\nDear Mr. Adams:\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 $100, 000.\nIt further finds that you have completed the actions specified in the Notice to comply with the\npipeline safety regulations. 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 under 49 C. F, R. $ 190. 5.\nSincerely,\nJames Reynolds\nPipeline Compliance Registry\nOffice of Pipeline Safety\nEnclosure\nVIA CERTIFIED MAIL — RETURN RECEIPT RE UESTFD\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D. C. 20590\nIn the Matter of\nEnbridge Energy Company, Inc.\n,\nRespondent\nCPF No. 4-2005-S004\nFINAL ORDER\nOn November 17 and 18, 2004, pursuant to 49 U. S. C. ( 60117, representatives of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety, conducted\nan on-site pipeline safety inspection of Enbridge Energy Company, Inc. (Respondent), the\noperator of an interstate natural gas and hazardous liquid pipeline system located primarily in the\nMidwest. The inspection took place at Respondent's headquarters in Houston, Texas, and\nfocused on Respondent's operator qualification program and records. As a result of the\ninspection, the Director, Southwest Region, issued to Respondent, by letter dated April 18, 2005,\na Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order\n(Notice). In accordance with 49 C. F. R. $ 190. 207, the Notice proposed finding that Respondent\nhad violated 49 C. F. R. $$ 192. 805 and 195. 505, proposed assessing a civil penalty of $100, 000\nfor the alleged violations, and proposed that Respondent take certain corrective measures to\nremedy the alleged violations. The Notice also contained a warning item regarding other\nprobable violations of )$ 192, 805 and 195, 505 and advised Respondent to take appropriate\ncorrective action.\nRespondent responded to the Notice by letter dated May 18, 2005 (Response). Respondent\ncontested the allegations of violation, requested the proposed civil penalty be eliminated or\nreduced, and requested an informal hearing. Respondent subsequently withdrew its request for a\nhearing and submitted a copy of its revised operator qualification program by letter dated\nFebruary 3, 2006,\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent committed violations of 49 C. F. R. Parts 192 and 195, as\nfollows:\n\n\n\nItem 1A: The Notice alleged that Respondent violated 49 C. F. R. $ 195. 505(a), which states,\ng 195. 505. Qualification Program\nEach operator shall have and follow a written qualification program. The\nprogram shall include provisions to:\n(a) Identify covered tasks. . . .\nThe Notice alleged that Respondent violat","truncated":true,"body_characters":54205}