{"operation":"document","citation":"CPF 420065030","title":"RIO VISTA ENERGY PARTNERS, LP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2006-06-01","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(c)(3), 195.404(c)(3), 195.412, 195.559(f), 195.571, 195.573, 195.573(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065030.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065030.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065030","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420065030","body":"Notice of Probable Violation involving RIO VISTA ENERGY PARTNERS, LP. PHMSA's enforcement data identifies the cited regulations as 195.402(c)(3),  195.404(c)(3),  195.412,  195.559(f),  195.571,  195.573,  195.573(c). The case was opened on 2006-06-01 and is reported as closed as of 2010-12-03. Proposed civil penalty: $60,000. Assessed civil penalty: $60,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420065030_Final Order_03252008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065030/420065030_Final%20Order_03252008.pdf\n\n420065030_final order_03252008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065030/420065030_final%20order_03252008_text.pdf\n\n420065030_final order_03252008_text.pdf\n\no\nU S Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety\nAdministration\n1200 New Jersey Ave S E\nWashington DC 20590\nMAR 2 5 Boll\nVIA CERTIFIED MAIL — RETURN RECEIPT RE UESTED\nMr. Ian Bothwell\nPresident\nRio Vista Energy Partners L P,\n2121 Rosecrans Ave Ste. 3355\nEl Segundo, CA 90245\nRe: CPF No. 4-2006-5030\nDear Mr. Bothwell\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation\nand assesses a civil penalty of $60, 000. It further finds that you have completed the actions\nspecified in the Notice required to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. This enforcement action closes automatically\nupon payment. Your receipt of the Final Order constitutes service of that document under 49\nC. F. R. $ 190. 5.\nThank you for your cooperation in this matter,\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr, Fred Dennis\nDirector, Regulatory Compliance\nTransmontaigne Incorporated\n1670 Broadway, Suite 3100\nDenver, CO 80202\n\n\n\nU. S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D. C. 20590\nIn the Matter of\nRio Vista Energy Partners L. P.\n,\nRespondent\nCPF No. 4-2006-5030\nFINAL ORDER\nOn March 13 — 15, 2006, pursuant to 49 U. S, C. $ 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration's Office of Pipeline Safety (OPS) conducted an on-\nsite pipeline safety inspection of Rio Vista Energy Partners L. P. 's (Respondent's) pipeline\nfacility in Brownsville, Texas. As a result of the inspection, the Director, Southwest Region,\nOPS, issued to Respondent, by letter dated June 1, 2006, a Notice of Probable Violation,\nProposed Civil Penalty, and Proposed Compliance Order (Notice). ' In accordance with 49\nC. F. R. $ 190. 207, the Notice proposed finding that Respondent had committed violations of 49\nC. F. R. Part 195, proposed assessing a civil penalty of $60, 000 for the alleged violations, and\nproposed ordering Respondent to take certain measures to correct the alleged violations. The\nNotice also proposed finding that Respondent had committed a probable violation of 49 C. F. R.\n$ 195. 404 and warned Respondent to take appropriate corrective action to address the probable\nviolation or be subject to future enforcement action.\nRespondent responded to the Notice by letter dated June 19, 2006 (Response). Respondent did\nnot contest the allegations of violation but requested that the proposed civil penalty be reduced.\nRespondent did not request a hearing and therefore has waived its right to one. In a subsequent\nletter received February 21, 2007, Respondent advised OPS that it had sold a portion of its\npipeline assets to Transmontaigne Inc.\n,\nand requested that future correspondence be addressed to\nTransmontaigne Inc.\n,\nas well as Respondent. Respondent indicated the assets that were sold\nwere not subject to this enforcement action.\nFINDINGS OF VIOLATION\nIn its Response, Respondent did not contest the allegations in the Notice that it violated 49\nC. F. R. Part 195, as follows:\n' The Notice mcorrectly mdicated the Compliance Progress File (CPF) number for this matter as \"2006-\n5030. \" The correct CPF number is \"4-2006-5030 \"\n\n\n\nItem 1: The Notice alleged that Respondent violated 49 C. F. R. )$ 195. 402(c)(3), 195, 559,\n195. 571, and 195. 573(c), which state:\ng 195. 402 — Procedural manual for operations, maintenance, and emergencies.\n(a) General Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations\nand maintenance activities. . . .\n(c) Maintenance and normal operations The manual required by\nparagraph (a) of this section must include procedures for the following to\nprovide safety during maintenance and normal operations. . .\n(3) Operating, maintaining, and repairing the pipeline system in\naccordance with each of the requirements of. . . subpart H\n[$$ 195. 551 — 195. 589] of this part. . . .\ng 195. 559 — What coating material may I use for external corrosion control?\nCoating material for external corrosion control. . . must-\n(a) Be designed to mitigate corrosion of the buried or submerged\npipeline;\n(b) Have sufficient adhesion to the metal surface to prevent under\nfilm migration of moisture;\n(c) Be sufficiently ductile to resist cracking;\n(d) Have enough strength to resist damage due to handling and soil\nstress;\n(e) Support any supplemental cathodic protection; and\n(f) If the coating is an insulating type, have low moisture\nabsorption and provide high electrical resistance.\ng 195. 571 — What criteria must I use to determine the adequacy of cathodic\nprotection?\nCathodic protection required by this subpart must comply with one or\nmore of the applicable criteria and other considerations for cathodic\nprotection contained in paragraphs 6. 2 and 6. 3 of NACE Standard RP\n0169 (incorporated by reference, see ) 195. 3).\ng 195. 573 — What must I do to monitor external corrosion control?\n(a)\n(c) Rectifiers and othev devices You must electrically check for\nproper performance each . . rectifier. . . at least six times each calendar\nyear, but with intervals not exceeding 2 I/2 months. . . .\nThe Notice alleged that Respondent failed to have a written manual that included procedures for\noperating and maintaining its pipeline system in accordance with the following requirements of\nsubpart H: $$ 195. 559, 195. 571, and 195. 573(c). Specifically, Respondent failed to include in its\nmanual: procedures for using coating to control external corrosion, in accordance with $ 195. 559\n(Item 1A); procedures for determining the adequacy of cathodic protection, in accordance with\n$ 195. 571 (Item 1B), and procedures for monitoring and inspecting each cathodic protection\nrectifier at designated intervals, in accordance with ( 195. 573(c) (Item 1C).\n\n\n\nRespondent did not contest these allegations of violation. Accordingly, I find Respondent\nviolated $ 195, 402(c)(3) by failing to have written procedures for operating and maintaining its\npipeline system in accordance with the following requirements of subpart H: $$ 195. 559,\n195. 571, and 195. 573(c),\nItem 3: The Notice alleged that Respondent violated 49 C. F. R. $ 195. 412(a), which states:\ng 195. 412 — Inspection of rights-of-way and crossings under navigable waters.\n(a) Each operator shall, at intervals not exceeding 3 weeks, but at least\n26 times each calendar year, inspect the surface conditions on or adjacent\nto each pipelme right-of-way, .\nThe Notice alleged that Respondent failed to inspect surface conditions on or adjacent to each\npipeline right-of-way at intervals not exceeding 3 weeks, but at least 26 times each calendar year.\nRespondent's records showed that it conducted a right-of-way patrol on September 22, 2004, but\ndid not conduct another one until August 10, 2005. Respondent missed approximately 15 patrol\nintervals. In its Response, Respondent stated that it believed most of the patrols during the\nperiod were performed but acknowledged that it did not have documentation to substantiate this\nbelief, Accordingly, I find Respondent violated ) 195412(a) by failing to inspect surface\nconditions on or adjacent to each pipeline right-of-way at the required intervals between\nSeptember 22, 2004 and August 10, 2005.\nItem 4: The Notice alleged that Respondent violated 49 C. F. R. ) 195. 573(c), as quoted above,\nby failing to electrically check the performance of each rectifier at least six times each calendar\nyear, with intervals not exceeding 2 I/2 months. Respondent's records show that it performed\nrectifier inspections on August 27, 2004, but did not perform another one until August 10, 2005.\nRespondent missed approximately 4 inspection intervals. In its Response, Respondent stated that\nit believed most of the inspections during the period were performed but acknowledged that it\ndid not have documentation to substantiate this belief. Accordingly, I find Respondent violated\n$ 195. 573(c) by failing to electrically check the performance of each rectifier at the required\nintervals between August 27, 2004 and August 10, 2005.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken 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. The Notice proposed a total civil penalty of $60, 000 for the violations.\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.\n\n\n\nIn its Response, Respondent requested that the civil penalty be reduced for two reasons. First, it\nrequested that the civil penalty be reduced because the company would have difficulty paying the\nentire amount. Respondent explained that its current level of business operations was only 40\npercent of historic levels and that Respondent's earnings were projected to be negative for the\nforeseeable future; however, Respondent did not submit any financial documentation, such as an\naudited financial statement, to substantiate its claim of financial hardship. Furthermore, in its\nResponse, Respondent noted that a pending sale of some of its pipeline assets to\nTransmontaigne, Inc. \"would allow [Respondent] to pay off the entire fine. \" By letter received\non February 21, 2007, Respondent notified OPS that the sale to Transmontaigne, Inc. was\ncompleted in August 2006. For these reasons, I do not find Respondent has shown an inability to\npay the proposed civil penalty,\nRespondent also requested that the civil penalty be reduced due to \"extenuating circumstances\nsurrounding the difficulties [Respondent] encountered in the hiring of a qualified Compliance\nEmployee. \" Respondent did not explain in its Response the details of those circumstances and\nwhy they might justify reducmg the civil penalty. By letter received February 21, 2007,\nRespondent renewed its request for a reduction in the civil penalty \"due to some extenuating\ncircumstances leading to the infractions and our recognized good performance since then. \"\nAgain, Respondent did not explain what the \"circumstances\" were or why they would justify a\npenalty reduction. Therefore, I find that Respondent has failed to provide sufficient evidence to\nsupport a reduction of the proposed penalty, Furthermore, I find that Respondent's performance\nsince the time of the inspection does not justify a reduction in the proposed penalty since\nRespondent always has a continuing obligation to comply with the pipeline safety regulations\nand to correct any issues of noncompliance.\nThe Notice proposed a civil penalty of $24, 000 for the violation of 49 C. F. R. ) 195. 412(a) (Item\n3). Respondent violated ( 195. 412(a) by failing to inspect surface conditions on or adjacent to\neach pipeline right-of-way at the required intervals. The patrolling of rights-of-way is essential\nto help identify potential problems associated with third-party activities along the pipeline.\nPatrolling is also crucial for leak detection. Right-of-way patrols are required every three weeks;\nhowever, Respondent failed to patrol its rights-of-way for 46 straight weeks, thereby increasing\nthe potential for harm to the pubhc and the environment from third-party damage or an\nundetected pipeline leak.\nThe Notice proposed a civil penalty of $36, 000 for the violation of 49 C. F. R. $ 195. 573(c) (Item\n4). Respondent violated ) 195. 573(c) by failing to verify the proper performance of cathodic\nprotection rectifiers at the required intervals. Checking the proper performance of cathodic\nprotection rectifiers is a key aspect of ensuring that pipelines are protected from corrosion. In\norder for a pipeline system's corrosion control program to be effective, the cathodic protection\nrectifiers must be monitored at regular intervals. A nonfunctioning rectifier may result in\ninadequate cathodic protection, which is known to lead to external corrosion on steel pipelines,\nLeft unabated, external corrosion can cause a pipeline failure. Therefore, it is critical for\noperators to regularly verify the proper operation of rectifiers. Rectifier inspections are required\nevery 2 I/2 months; however, Respondent failed to inspect its rectifiers for almost one full year,\nthereby increasing the risk of inadequate cathodic protection and pipeline failure.\n\n\n\nRespondent has not submitted any information that warrants a reduction in the civil penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I hereby assess\nRespondent a total civil penalty of $60, 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 m 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 25082, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $60, 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.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1(A), 1(B), and 1(C) for\nviolations of 49 C. F. R $$ 195. 402(c)(3), 195. 559, 195, 571, and 195. 573(c). Under 49 U. S. C,\n$ 60118(a), each person who engages in the transportation of hazardous liquid by pipeline or\nwho owns or operates a hazardous liquid pipeline facility is required to comply with the\napplicable safety standards established under chapter 601. The Director, Southwest Region,\nOPS, has indicated that Respondent has taken the following actions specified in the proposed\ncompliance order:\nRespondent submitted documentation verifying that it had developed and implemented\nacceptable procedures for usmg coating material for external corrosion control.\nRespondent submitted documentation verifying that it had developed and implemented\nacceptable procedures for determining the adequacy of cathodic protection using\napplicable criteria.\nRespondent submitted documentation verifying that it had developed and implemented\nacceptable procedures for inspectmg and monitoring rectifiers.\nRespondent incorporated the above-referenced procedures into its written manual of\nprocedures for operations and maintenance.\nAccordingly, since compliance has been achieved with respect to these violations, the\ncompliance terms are not included in this Final Order.\nWARNING ITEM\n\n\n\nItem 2: The Notice alleged a probable violation of 49 C. F. R. $ 195. 404(c)(3) but did not propose\na civil penalty or compliance order for this item. Therefore, this is considered to be a warning\nitem. Section 195, 404(c)(3) states:\ng 195. 404 — Maps and records.\n(a) . . .\n(c) Each operator shall maintain the following records for the periods\nspecified. . .\n(3) A record of each inspection and test required by this subpart\n[$) 195. 400 — 195. 444j shall be maintained for at least 2 years or until\nthe next inspection or test is performed, whichever is longer.\nThe Notice alleged that Respondent failed to retain records of mainline valve inspections for the\nperiod between August 2003 through February 2004. Mainline valve inspections are required to\nbe performed pursuant to $ 195. 420; therefore, records of those inspections must be maintained\npursuant to $ 195. 404(c)(3). Records of mainline valve inspections were observed by OPS in\nApril 2004, but Respondent no longer had those records during the March 2006 OPS inspection.\nRespondent acknowledged during the inspection that it had not retained some of the records in\nquestion. Piirsuant to 49 C. F. R. $ 190. 205, I find that a probable violation of $ 195. 404(c)(3)\noccurred. Respondent is hereby advised to ensure compliance with respect to this item. In the\nevent OPS finds a violation of this item in a subsequent inspection, Respondent may be subject\nto further enforcement action.\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.\nThe terms and conditions of this Final Order shall be effective upon receipt.\n'. d(gu (k~ MAP 25 %03\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nDate Issued","truncated":false,"body_characters":18507}