{"operation":"document","citation":"CPF 420065032","title":"MAGELLAN PIPELINE COMPANY, LP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2006-08-17","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(a), 195.420(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065032.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065032.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065032","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420065032","body":"Notice of Probable Violation involving MAGELLAN PIPELINE COMPANY, LP. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.420(c). The case was opened on 2006-08-17 and is reported as closed as of 2008-06-09. Proposed civil penalty: $10,000. Assessed civil penalty: $10,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420065032_Final Order_05232008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065032/420065032_Final%20Order_05232008.pdf\n\n420065032_final order_05232008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065032/420065032_final%20order_05232008_text.pdf\n\n420065032_final order_05232008_text.pdf\n\nU S Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety\nAdministration\n1200 New Jersey Ave S E\nWashington DC 20590\nMAY 2 3 2008\nVIA CERTIFIED MAIL — RETURN RECEIPT RE UESTED\nMr. Rick A. Olson\nVice President of Operations\nMagellan Pipeline Company, L. P.\nOne Williams Center\nTulsa, OK 74172-0140\nRe: CPF No. 4-2006-5032\nDear Mr Olson:\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation\nand assesses a civil penalty of $10, 000. The penalty payment terms are set forth in the Final\nOrder. This enforcement action closes automatically upon payment. Your receipt of the Final\nOrder constitutes service of that document under 49 C. F. R. ) 190. 5.\nThank you for your cooperation in this matter\nSincerely,\n' & ~~ /~C~k\nJeffrey D. Wiese\nAssociate Admmistrator\nfor Pipeline Safety\nEnclosure\n\n\n\nU. S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D. C. 20590\nIn the Matter of\nMagellan Pipeline Company,\nRespondent.\nCPF No. 4-2006-5032\nFINAL ORDER\nOn November 14 — 18, 28 — 30, and December 1, 2005, pursuant to 49 U S. C. ) 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Admimstration, Office of Pipeline\nSafety (OPS) conducted an on-site pipeline safety inspection of Longhorn Pipeline, which is\noperated by Magellan Pipeline Company (Magellan or Respondent) in Texas. Respondent's\npipeline system operates in 13 Midwestern states and transports refined petroleum products,\nliquefied petroleum gases, and highly volatile liquids. As a result of the inspection, the Director,\nSouthwest Region, OPS, issued to Respondent by letter dated August 17, 2006, a Notice of\nProbable Violation and Proposed Civil Penalty (Notice). In accordance with 49 C. F. R.\n$ 190. 207, the Notice proposed finding that Respondent had committed violations of 49 C. F. R.\nPart 195 and proposed assessing a civil penalty of $10, 000 for the alleged violations. In\naccordance with 49 C. F. R. $ 190. 205, the Notice also proposed finding that Respondent had\ncommitted another probable violation of 49 C. F. R. Part 195 and warned Respondent to take\nappropriate corrective action to address the item or be subject to future enforcement action.\nRespondent responded to the Notice by letter dated September 21, 2006 (Response). Respondent\ndid not contest the allegations of violation but offered an explanation and requested that the\nproposed civil penalty be reduced to $5, 000. Respondent did not request a hearing and therefore\nhas waived its right to one.\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:\nItem 1A: The Notice alleged that Respondent violated 49 C. F. R, $ 195. 402(a), which states:\ng 195. 402 — Procedural manual for operations, maintenance, and\nemergencies.\n\n\n\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations and\nmaintenance activities, . . .\nThe Notice alleged that Respondent did not follow its own written procedures for inspecting\ncathodic protection rectifiers. Respondent's procedures required that each rectifier be inspected\nat least 12 times each calendar year, with intervals not to exceed 45 days. Respondent's records\nindicated that several rectifiers were inspected during the 2005 calendar year at intervals that\nexceeded 45 days. Respondent did not contest this allegation of violation and explained that the\nissue resulted from an employee's deficient job performance. Accordingly, I find that\nRespondent violated 49 C. F, R. ) 195. 402(a) by failing to follow its manual of written procedures\nfor regularly inspecting cathodic protection rectifiers.\nItem 1B: The Notice also alleged that Respondent violated 49 C. F. R. $ 195. 402(a), as quoted\nabove, by failing to follow its own written procedures for inspecting foreign crossings and\ninterference currents. Respondent's procedures required that each interference or foreign bond\nwhose failure would jeopardize structure protection be inspected at least 12 times each calendar\nyear, with intervals not to exceed 45 days. Respondent's records indicated that several foreign\nbonds were inspected during the 2005 calendar year at intervals that exceeded 45 days.\nRespondent did not contest this allegation of violation and explained that the issue resulted &om\nan employee's deficient job performance, Accordingly, I find that Respondent violated 49\nC. F. R, $ 195. 402(a) by failing to follow its manual of written procedures for regularly inspecting\nforeign crossings and interference currents\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 $10, 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: 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.\nIn its Response, Magellan explained that the violations identified in the Notice resulted from the\ndeficient ~ob performance of a certain individual and that action had been taken to permanently\naddress the issue, Respondent also reported that it had undertaken additional mitigation\nmeasures, such as transferring job duties to a NACE-certified corrosion technician.\n\n\n\nRespondent indicated that it found no pipeline damage resulting from the conduct that led to the\nviolations. Respondent also contended that the violations were \"self-reported, \" but there is no\nevidence in the record supporting such contention. Based upon the foregoing, Respondent\nrequested that the civil penalty be reduced to $5, 000 for its good faith efforts to achieve\ncompliance and because the violations did not result m any harm to the pipeline or the public.\nAlthough the violations committed by Magellan may have been caused by a single employee,\nRespondent is nevertheless responsible for the conduct of its employees and is culpable for\nviolations of the pipeline safety regulations resulting from employee misconduct. Respondent's\nfailure to perform cathodic protection inspections at the intervals specified by its procedures for\nsafe operations had the potential to impact the safety of Respondent's pipeline. Inadequate\ncathodic protection can allow corrosion to develop on pipelines, and is one of the major causes\nof pipeline failures presenting a threat to public safety and the environment.\nAlthough Respondent may have determined that no injuries or damage resulted from these\nviolations, I still find that the nature, circumstances, and gravity of the violations warrant the\nproposed civil penalty amount. While Respondent did undertake corrective action by making\nchanges in company policies and personnel, such measures were taken to ensure compliance\nafter the violations had been identified by OPS and therefore are not considered in determining\nwhether or not Respondent had made a good faith effort to achieve compliance as of the time the\nviolations occurred.\nAccordingly, having reviewed the record and considered the assessment criteria, I hereby assess\nRespondent a total civil penalty of $10, 000.\nPayment of the civil penalty must be made within 20 days of service. Payment may be made by\nsending a certified check or money order (containing the CPF Number for this case) payable to\n\"U. S. Department of Transportation\" to the Federal Aviation Administration, Mike Monroney\nAeronautical Center, Financial Operations Division (AMZ-341), P. O. Box 25082, Oklahoma\nCity, OK 73125.\nFederal regulations (49 C. F. R. $ 89. 21(b)(3)) also permit this payment to be made by wire\ntransfer, through the Federal Reserve Communications System (Fedwire), to the account of the\nU. S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire\ntransfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, P. O. Box 25082, Oklahoma City, OK\n73125; (405) 954-8893,\nFailiue to pay the $10, 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.\n\n\n\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of 49 C. F. R. Part 195 but did not\npropose a civil penalty or compliance order for this item. Therefore, this is considered to be a\nwarning item. The warning was for:\n49 C. F. R. $ 195. 420(c) — Respondent's alleged failure to provide protection from\nvandalism for each valve. A large number of valves on Respondent's pipeline were not\nprotected from vandalism, even though they had been chained and locked to protect\nagainst unauthorized operation.\nThe Notice acknowledged, and Respondent confirmed in its Response, that the company was in\nthe process of installing security fencing to protect valve sites from vandalism. Having\nconsidered such information, I find pursuant to 49 C. F. R. ) 190. 205, that a probable violation of\n49 C. F. R. $ 195. 420(c) has occurred and Respondent is hereby advised to correct such\nconditions. In the event that OPS finds a violation for this item in a subsequent inspection,\nRespondent may be subject to future 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. The terms and conditions of this Final Order shall\nbe effective upon receipt.\nMAY 2 3 2098\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nDate Issued","truncated":false,"body_characters":11900}