{"operation":"document","citation":"CPF 420091008","title":"AIR PRODUCTS & CHEMICALS INC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2009-03-13","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.937(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420091008.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420091008.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420091008","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420091008","body":"Notice of Probable Violation involving AIR PRODUCTS & CHEMICALS INC. PHMSA's enforcement data identifies the cited regulation as 192.937(b). The case was opened on 2009-03-13 and is reported as closed as of 2009-12-31. Proposed civil penalty: $20,000. Assessed civil penalty: $20,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420091008_FinalOrder_12012009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_FinalOrder_12012009.pdf\n\n420091008_FinalOrder_12012009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_FinalOrder_12012009_text.pdf\n\n420091008_NOPV PCP PCO_03132009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_NOPV%20PCP%20PCO_03132009.pdf\n\n420091008_NOPV PCP PCO_03132009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_NOPV%20PCP%20PCO_03132009_text.pdf\n\n420091008_Operator Response_04092009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_Operator%20Response_04092009.pdf\n\n420091008_FinalOrder_12012009_text.pdf\n\nDEC 01 2009\nMr. Joseph M. Pietrantonio\nVice President, Global Operations\nAir Products and Chemicals, Inc.\n7201 Hamilton Blvd\nAllentown, PA 18195\nRe: CPF No. 4-2009-1008\nDear Mr. Pietrantonio:\nEnclosed is the Final Order issued in the above-referenced case. It makes a finding of violation\nand assesses a civil penalty of $20,000. It further finds that Air Products and Chemicals, Inc. has\ncompleted the actions specified in the Notice to comply with the pipeline safety regulations.\nWhen the civil penalty has been paid, this enforcement action will be closed. Your receipt of the\nFinal Order constitutes service of that document under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. R. M. Seeley, Director, Southwest Region, PHMSA\nMr. Kevin Kosh\nGlobal Pipeline Operations Manager\nAir Products and Chemicals, Inc.\n7201 Hamilton Blvd\nAllentown, PA 18195\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5166]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nAir Products and Chemicals, Inc., ) CPF No. 4-2009-1008\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nBetween August 6-10 and August 13-16, 2007, pursuant to 49 U.S.C. § 60117, representatives of\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site inspection of the Integrity Management Program of Air Products\nand Chemicals, Inc., (Air Products or Respondent) in La Porte, Texas. Respondent operates\napproximately 500 miles of gas pipelines in Texas, Louisiana, California, and Ohio.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated March 13, 2009, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Respondent had violated 49 C.F.R. § 192.937, and proposed\nassessing a civil penalty of $20,000 for the alleged violation. The Notice also proposed ordering\nRespondent to take certain measures to correct the alleged violation.\nRespondent responded to the Notice by letters dated April 9 and August 7, 2009 (collectively,\nResponse). Air Products did not contest the allegation of violation but offered an explanation\nand requested that the proposed civil penalty be reduced. The company also provided\ndocumentation of the corrective actions it has taken. Air Products did not request a hearing and\ntherefore has waived its right to one.\nFINDING OF VIOLATION\nItem 1 in the Notice alleged that Respondent violated 49 C.F.R. § 192.937 which states:\n§ 192.937 What is a continual process of evaluation and assessment\nto maintain a pipeline’s integrity?\n(a) General. After completing the baseline integrity assessment of a\ncovered segment, an operator must continue to assess the line pipe of that\n\n\n\n2\nsegment at the intervals specified in § 192.939 and periodically evaluate\nthe integrity of each covered pipeline segment as provided in paragraph\n(b) of this section. An operator must reassess a covered segment on which\na prior assessment is credited as a baseline under § 192.921(e) by no later\nthan December 17, 2009. An operator must reassess a covered segment on\nwhich a baseline assessment is conducted during the baseline period\nspecified in § 192.921(d) by no later than seven years after the baseline\nassessment of that covered segment unless the evaluation under paragraph\n(b) of this section indicates earlier reassessment.\n(b) Evaluation. An operator must conduct a periodic evaluation as\nfrequently as needed to assure the integrity of each covered segment. The\nperiodic evaluation must be based on a data integration and risk\nassessment of the entire pipeline as specified in § 192.917. For plastic\ntransmission pipelines, the periodic evaluation is based on the threat\nanalysis specified in [§] 192.917(d). For all other transmission pipelines,\nthe evaluation must consider the past and present integrity assessment\nresults, data integration and risk assessment information (§ 192.917), and\ndecisions about remediation (§ 192.933) and additional preventive and\nmitigative actions (§ 192.935). An operator must use the results from this\nevaluation to identify the threats specific to each covered segment and the\nrisk represented by these threats.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.937(b) by failing to perform\nperiodic evaluations as frequently as needed to assure the integrity of each covered segment.1\nSpecifically, the Notice alleged Respondent could not provide any documentation during the\nPHMSA inspection to demonstrate that the company had performed periodic evaluations. The\nNotice alleged the violation included Respondent’s failure to confirm the adequacy of pipeline\ndata, verify the appropriate reassessment interval, and determine if changes to assessment\nmethods were needed since the inception of Respondent’s Integrity Management Program (IMP).\nIn its Response, Respondent did not contest the allegation. Accordingly, after considering all the\nevidence, I find Respondent violated 49 C.F.R. § 192.937(b) by failing to perform periodic\nevaluations to assure the integrity of each covered segment. This finding of violation will be\nconsidered a prior offense in any subsequent enforcement action taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. The Notice proposed a civil penalty of $20,000 for Respondent’s\nviolation of 49 C.F.R. § 192.937(b).\n1 A covered segment is defined in § 192.903 as a segment of gas transmission pipeline located in a high consequence\narea.\n\n\n\n3\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of a 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, Air Products requested that the civil penalty for this violation be reduced based\nupon mitigating circumstances. Respondent explained that in February 2007, prior to the\nPHMSA inspection, the company had completed integrity management risk assessments for each\nof the high consequence areas (HCAs) identified at the time of the inspection. The evaluations,\naccording to Respondent, included reviews of pipeline data, risk assessments, assessment\nmethodology relative to individual HCA segment threats, and appropriate preventative and\nmitigative measures based upon the results of this evaluation. Respondent also contended that\nsince the PHMSA inspection, the company reviewed and revised its IMP procedures by\nproviding additional process description, and transitioned to an enhanced pipeline data\nmanagement application and an enhanced pipeline risk model in order to address the issues\npresented in the Notice.\nAir Products also stated that it has a new risk assessment process, which will assure its IMP\nremains up to date as the company’s pipeline system grows and changes. The company\nindicated that it has performed preliminary risk assessments for its regulated pipeline segments\nand is presently reviewing the data to confirm the accuracy of the assessment and to adjust, if\nnecessary, its baseline assessment schedule.\nRespondent’s efforts to implement an IMP in accordance with applicable safety regulations are\nacknowledged. The efforts taken prior to the PHMSA inspection in August 2007 are noted, and\nwhile they may achieve compliance with other requirements in the pipeline integrity\nmanagement regulations (49 C.F.R. §§ 192.901–192.951), the integrity assessments were not by\nthemselves an acceptable substitute for performing periodic evaluations as required by\n§ 192.937(b). An operator’s failure to perform periodic evaluations after completing baseline\nassessments presents a risk to high consequence areas, particularly where integrity reassessments\nmay not have been conducted at the proper intervals (based on the results of periodic\nevaluations) necessary to assure public safety. Furthermore, the record demonstrates\nRespondent’s IMP included provisions about performing periodic evaluations and specified a\nfrequency in which Respondent would conduct them, yet Respondent still failed to perform\nperiodic evaluations.\nRespondent’s efforts to come into compliance following the company’s receipt of the Notice are\nalso acknowledged, but do not warrant reducing the civil penalty because the company has an\naffirmative obligation to comply with the pipeline safety regulations applicable to its pipeline\nsystem, particularly after PHMSA has already notified the operator of a deficiency. Therefore, I\ndo not find Respondent has submitted information that warrants a reduction in the civil penalty\nproposed for the violation.\n\n\n\n4\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $20,000 for the violation of 49 C.F.R. § 192.937(b).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $20,000 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 Item 1 in the Notice for violation of 49\nC.F.R. § 192.937(b). Under 49 U.S.C. § 60118(a), each person who engages in the\ntransportation of gas, hazardous liquids, or who owns or operates a pipeline facility is required to\ncomply with the applicable safety standards established under chapter 601.\nThe Director has indicated that Respondent submitted documentation substantiating that it has\nrevised its IMP and that periodic evaluations are now being performed in accordance with\n§ 192.937(b). Accordingly, since compliance has been achieved with respect to the violation, it\nis not necessary to include compliance terms in this Order.\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 are\neffective upon receipt.\n___________________________________ _________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420091008_NOPV PCP PCO_03132009_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMarch 13, 2009\nMr. Kevin Kosh\nPipeline Operations Manager\nAir Products and Chemicals, Inc.\n10207 Strang Road\nLa Porte, Texas 77571\nCPF 4-2009-1008\nDear Mr. Kosh,\nOn August 6 – 10 and August 13 – 16, 2007, representatives of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code\ninspected your integrity management program in La Porte, Texas.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The item inspected and the\nprobable violation is:\n1. § 192.937(b) Evaluation. An operator must conduct a periodic evaluation as\nfrequently as needed to assure the integrity of each covered segment. The\nperiodic evaluation must be based on a data integration and risk assessment of\nthe entire pipeline as specified in § 192.917. For plastic transmission pipelines, the\nperiodic evaluation is based on the threat analysis specified in 192.917(d). For all\nother transmission pipelines, the evaluation must consider the past and present\nintegrity assessment results, data integration and risk assessment information (§\n192.917), and decisions about remediation (§ 192.933) and additional preventive\nand mitigative actions (§ 192.935). An operator must use the results from this\nevaluation to identify the threats specific to each covered segment and the risk\nrepresented by these threats.\n\n\n\nAt the time of the inspection, there was no documentation provided to demonstrate that\nperiodic evaluations have been performed. Air Products has not performed periodic\nevaluations to confirm the adequacy of pipeline data, to verify the appropriate\nreassessment interval, or to determine if changes to assessment methods are needed\nsince IMP inception.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$100,000 for each violation for each day the violations persists up to a maximum of $1,000,000\nfor any related series of violations. The Compliance Officer has reviewed the circumstances\nand supporting documentation involved in the above probable violation(s) and has\nrecommended that you be preliminarily assessed a civil penalty of $20,000 for the item above.\nProposed Compliance Order\nWith respect to item above pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to Air\nProducts and Chemicals, Inc. Please refer to the Proposed Compliance Order, which is\nenclosed and made a part of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators\nin Compliance Proceedings. Please refer to this document and note the response options. Be\nadvised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted information\nqualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days\nof receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this\nNotice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in\nthis Notice without further notice to you and to issue a Final Order.\nIn your correspondence on this matter, please refer to CPF 4-2009-1008 and for each document\nyou submit, please provide a copy in electronic format whenever possible\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous\nMaterials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n2\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 U.S.C. § 60118, the Office of Pipeline Safety proposes to issue to Air Products\nand Chemicals, Inc. a Compliance Order incorporating the following requirements to assure the\ncompliance of Air Products and Chemicals, Inc. with the pipeline safety regulations applicable to\nits operations.\n1. In regard to Item 1 in the Notice, Air Products and Chemicals, Inc. must review their\nperiodic evaluation procedures and insure they are incompliance with §192.937(b) and\nprovide this office the most current documentation that substantiates that periodic\nevaluations are being performed. The documentation must show that periodic\nevaluations confirm the adequacy of pipeline data, to verify the appropriate\nreassessment interval, or to determine if changes to assessment methods are needed.\n2. Submit the results of the Proposed Compliance Order items above to the Region\nDirector, Southwest Region, Office of Pipeline Safety, Pipeline and Hazardous Materials\nSafety Administration, 8701 South Gessner, Suite 1110, Houston, Texas 77074. This is\nto be accomplished within 30 days following receipt of the Final Order.\n3. Air Products and Chemicals, Inc. shall maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total\nto R. M. Seeley Director, Southwest Region, Pipeline and Hazardous Materials Safety\nAdministration. Costs shall be reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses, and 2) total cost\nassociated with replacements, additions and other changes to pipeline infrastructure.\n3","truncated":false,"body_characters":19291}