# AIR PRODUCTS & CHEMICALS INC — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 192.937(b).
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- **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.

Official case documents:

420091008_FinalOrder_12012009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_FinalOrder_12012009.pdf

420091008_FinalOrder_12012009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_FinalOrder_12012009_text.pdf

420091008_NOPV PCP PCO_03132009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_NOPV%20PCP%20PCO_03132009.pdf

420091008_NOPV PCP PCO_03132009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_NOPV%20PCP%20PCO_03132009_text.pdf

420091008_Operator Response_04092009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420091008/420091008_Operator%20Response_04092009.pdf

420091008_FinalOrder_12012009_text.pdf

DEC 01 2009
Mr. Joseph M. Pietrantonio
Vice President, Global Operations
Air Products and Chemicals, Inc.
7201 Hamilton Blvd
Allentown, PA 18195
Re: CPF No. 4-2009-1008
Dear Mr. Pietrantonio:
Enclosed is the Final Order issued in the above-referenced case. It makes a finding of violation
and assesses a civil penalty of $20,000. It further finds that Air Products and Chemicals, Inc. has
completed the actions specified in the Notice to comply with the pipeline safety regulations.
When the civil penalty has been paid, this enforcement action will be closed. Your receipt of the
Final Order constitutes service of that document under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. R. M. Seeley, Director, Southwest Region, PHMSA
Mr. Kevin Kosh
Global Pipeline Operations Manager
Air Products and Chemicals, Inc.
7201 Hamilton Blvd
Allentown, PA 18195
CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5166]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Air Products and Chemicals, Inc., ) CPF No. 4-2009-1008
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
Between August 6-10 and August 13-16, 2007, pursuant to 49 U.S.C. § 60117, representatives of
the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site inspection of the Integrity Management Program of Air Products
and Chemicals, Inc., (Air Products or Respondent) in La Porte, Texas. Respondent operates
approximately 500 miles of gas pipelines in Texas, Louisiana, California, and Ohio.
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated March 13, 2009, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the
Notice proposed finding that Respondent had violated 49 C.F.R. § 192.937, and proposed
assessing a civil penalty of $20,000 for the alleged violation. The Notice also proposed ordering
Respondent to take certain measures to correct the alleged violation.
Respondent responded to the Notice by letters dated April 9 and August 7, 2009 (collectively,
Response). Air Products did not contest the allegation of violation but offered an explanation
and requested that the proposed civil penalty be reduced. The company also provided
documentation of the corrective actions it has taken. Air Products did not request a hearing and
therefore has waived its right to one.
FINDING OF VIOLATION
Item 1 in the Notice alleged that Respondent violated 49 C.F.R. § 192.937 which states:
§ 192.937 What is a continual process of evaluation and assessment
to maintain a pipeline’s integrity?
(a) General. After completing the baseline integrity assessment of a
covered segment, an operator must continue to assess the line pipe of that



2
segment at the intervals specified in § 192.939 and periodically evaluate
the integrity of each covered pipeline segment as provided in paragraph
(b) of this section. An operator must reassess a covered segment on which
a prior assessment is credited as a baseline under § 192.921(e) by no later
than December 17, 2009. An operator must reassess a covered segment on
which a baseline assessment is conducted during the baseline period
specified in § 192.921(d) by no later than seven years after the baseline
assessment of that covered segment unless the evaluation under paragraph
(b) of this section indicates earlier reassessment.
(b) Evaluation. An operator must conduct a periodic evaluation as
frequently as needed to assure the integrity of each covered segment. The
periodic evaluation must be based on a data integration and risk
assessment of the entire pipeline as specified in § 192.917. For plastic
transmission pipelines, the periodic evaluation is based on the threat
analysis specified in [§] 192.917(d). For all other transmission pipelines,
the evaluation must consider the past and present integrity assessment
results, data integration and risk assessment information (§ 192.917), and
decisions about remediation (§ 192.933) and additional preventive and
mitigative actions (§ 192.935). An operator must use the results from this
evaluation to identify the threats specific to each covered segment and the
risk represented by these threats.
The Notice alleged that Respondent violated 49 C.F.R. § 192.937(b) by failing to perform
periodic evaluations as frequently as needed to assure the integrity of each covered segment.1
Specifically, the Notice alleged Respondent could not provide any documentation during the
PHMSA inspection to demonstrate that the company had performed periodic evaluations. The
Notice alleged the violation included Respondent’s failure to confirm the adequacy of pipeline
data, verify the appropriate reassessment interval, and determine if changes to assessment
methods were needed since the inception of Respondent’s Integrity Management Program (IMP).
In its Response, Respondent did not contest the allegation. Accordingly, after considering all the
evidence, I find Respondent violated 49 C.F.R. § 192.937(b) by failing to perform periodic
evaluations to assure the integrity of each covered segment. This finding of violation will be
considered a prior offense in any subsequent enforcement action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any
related series of violations. The Notice proposed a civil penalty of $20,000 for Respondent’s
violation of 49 C.F.R. § 192.937(b).
1 A covered segment is defined in § 192.903 as a segment of gas transmission pipeline located in a high consequence
area.



3
49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of a civil
penalty, I consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that
the penalty may have on its ability to continue doing business; and the good faith of Respondent
in attempting to comply with the pipeline safety regulations. In addition, I may consider the
economic benefit gained from the violation without any reduction because of subsequent
damages, and such other matters as justice may require.
In its Response, Air Products requested that the civil penalty for this violation be reduced based
upon mitigating circumstances. Respondent explained that in February 2007, prior to the
PHMSA inspection, the company had completed integrity management risk assessments for each
of the high consequence areas (HCAs) identified at the time of the inspection. The evaluations,
according to Respondent, included reviews of pipeline data, risk assessments, assessment
methodology relative to individual HCA segment threats, and appropriate preventative and
mitigative measures based upon the results of this evaluation. Respondent also contended that
since the PHMSA inspection, the company reviewed and revised its IMP procedures by
providing additional process description, and transitioned to an enhanced pipeline data
management application and an enhanced pipeline risk model in order to address the issues
presented in the Notice.
Air Products also stated that it has a new risk assessment process, which will assure its IMP
remains up to date as the company’s pipeline system grows and changes. The company
indicated that it has performed preliminary risk assessments for its regulated pipeline segments
and is presently reviewing the data to confirm the accuracy of the assessment and to adjust, if
necessary, its baseline assessment schedule.
Respondent’s efforts to implement an IMP in accordance with applicable safety regulations are
acknowledged. The efforts taken prior to the PHMSA inspection in August 2007 are noted, and
while they may achieve compliance with other requirements in the pipeline integrity
management regulations (49 C.F.R. §§ 192.901–192.951), the integrity assessments were not by
themselves an acceptable substitute for performing periodic evaluations as required by
§ 192.937(b). An operator’s failure to perform periodic evaluations after completing baseline
assessments presents a risk to high consequence areas, particularly where integrity reassessments
may not have been conducted at the proper intervals (based on the results of periodic
evaluations) necessary to assure public safety. Furthermore, the record demonstrates
Respondent’s IMP included provisions about performing periodic evaluations and specified a
frequency in which Respondent would conduct them, yet Respondent still failed to perform
periodic evaluations.
Respondent’s efforts to come into compliance following the company’s receipt of the Notice are
also acknowledged, but do not warrant reducing the civil penalty because the company has an
affirmative obligation to comply with the pipeline safety regulations applicable to its pipeline
system, particularly after PHMSA has already notified the operator of a deficiency. Therefore, I
do not find Respondent has submitted information that warrants a reduction in the civil penalty
proposed for the violation.



4
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $20,000 for the violation of 49 C.F.R. § 192.937(b).
Payment of the civil penalty must be made within 20 days of service. Federal regulations (49
C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike
Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-8893.
Failure to pay the $20,000 civil penalty will result in accrual of interest at the current annual rate
in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a United
States District Court.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49
C.F.R. § 192.937(b). Under 49 U.S.C. § 60118(a), each person who engages in the
transportation of gas, hazardous liquids, or who owns or operates a pipeline facility is required to
comply with the applicable safety standards established under chapter 601.
The Director has indicated that Respondent submitted documentation substantiating that it has
revised its IMP and that periodic evaluations are now being performed in accordance with
§ 192.937(b). Accordingly, since compliance has been achieved with respect to the violation, it
is not necessary to include compliance terms in this Order.
Under 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of
this Final Order. The petition must be received within 20 days of Respondent’s receipt of this
Final Order and must contain a brief statement of the issue(s). The filing of the petition
automatically stays the payment of any civil penalty assessed. However, if Respondent submits
payment for the civil penalty, the Final Order becomes the final administrative decision and the
right to petition for reconsideration is waived. The terms and conditions of this Final Order are
effective upon receipt.
___________________________________ _________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety

420091008_NOPV PCP PCO_03132009_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
March 13, 2009
Mr. Kevin Kosh
Pipeline Operations Manager
Air Products and Chemicals, Inc.
10207 Strang Road
La Porte, Texas 77571
CPF 4-2009-1008
Dear Mr. Kosh,
On August 6 – 10 and August 13 – 16, 2007, representatives of the Pipeline and Hazardous
Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code
inspected your integrity management program in La Porte, Texas.
As a result of the inspection, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The item inspected and the
probable violation is:
1. § 192.937(b) Evaluation. An operator must conduct a periodic evaluation as
frequently as needed to assure the integrity of each covered segment. The
periodic evaluation must be based on a data integration and risk assessment of
the entire pipeline as specified in § 192.917. For plastic transmission pipelines, the
periodic evaluation is based on the threat analysis specified in 192.917(d). For all
other transmission pipelines, the evaluation must consider the past and present
integrity assessment results, data integration and risk assessment information (§
192.917), and decisions about remediation (§ 192.933) and additional preventive
and mitigative actions (§ 192.935). An operator must use the results from this
evaluation to identify the threats specific to each covered segment and the risk
represented by these threats.



At the time of the inspection, there was no documentation provided to demonstrate that
periodic evaluations have been performed. Air Products has not performed periodic
evaluations to confirm the adequacy of pipeline data, to verify the appropriate
reassessment interval, or to determine if changes to assessment methods are needed
since IMP inception.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed
$100,000 for each violation for each day the violations persists up to a maximum of $1,000,000
for any related series of violations. The Compliance Officer has reviewed the circumstances
and supporting documentation involved in the above probable violation(s) and has
recommended that you be preliminarily assessed a civil penalty of $20,000 for the item above.
Proposed Compliance Order
With respect to item above pursuant to 49 United States Code § 60118, the Pipeline and
Hazardous Materials Safety Administration proposes to issue a Compliance Order to Air
Products and Chemicals, Inc. Please refer to the Proposed Compliance Order, which is
enclosed and made a part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators
in Compliance Proceedings. Please refer to this document and note the response options. Be
advised that all material you submit in response to this enforcement action is subject to being
made publicly available. If you believe that any portion of your responsive material qualifies for
confidential treatment under 5 U.S.C. 552(b), along with the complete original document you
must provide a second copy of the document with the portions you believe qualify for
confidential treatment redacted and an explanation of why you believe the redacted information
qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days
of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this
Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in
this Notice without further notice to you and to issue a Final Order.
In your correspondence on this matter, please refer to CPF 4-2009-1008 and for each document
you submit, please provide a copy in electronic format whenever possible
Sincerely,
R. M. Seeley
Director, Southwest Region
Pipeline and Hazardous
Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
2



PROPOSED COMPLIANCE ORDER
Pursuant to 49 U.S.C. § 60118, the Office of Pipeline Safety proposes to issue to Air Products
and Chemicals, Inc. a Compliance Order incorporating the following requirements to assure the
compliance of Air Products and Chemicals, Inc. with the pipeline safety regulations applicable to
its operations.
1. In regard to Item 1 in the Notice, Air Products and Chemicals, Inc. must review their
periodic evaluation procedures and insure they are incompliance with §192.937(b) and
provide this office the most current documentation that substantiates that periodic
evaluations are being performed. The documentation must show that periodic
evaluations confirm the adequacy of pipeline data, to verify the appropriate
reassessment interval, or to determine if changes to assessment methods are needed.
2. Submit the results of the Proposed Compliance Order items above to the Region
Director, Southwest Region, Office of Pipeline Safety, Pipeline and Hazardous Materials
Safety Administration, 8701 South Gessner, Suite 1110, Houston, Texas 77074. This is
to be accomplished within 30 days following receipt of the Final Order.
3. Air Products and Chemicals, Inc. shall maintain documentation of the safety
improvement costs associated with fulfilling this Compliance Order and submit the total
to R. M. Seeley Director, Southwest Region, Pipeline and Hazardous Materials Safety
Administration. Costs shall be reported in two categories: 1) total cost associated with
preparation/revision of plans, procedures, studies and analyses, and 2) total cost
associated with replacements, additions and other changes to pipeline infrastructure.
3
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