{"operation":"document","citation":"CPF 420105014","title":"PLAINS MARKETING, L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2010-08-10","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.420(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420105014.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420105014.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420105014","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420105014","body":"Notice of Probable Violation involving PLAINS MARKETING, L.P.. PHMSA's enforcement data identifies the cited regulation as 195.420(b). The case was opened on 2010-08-10 and is reported as closed as of 2012-01-05. Proposed civil penalty: $29,000. Assessed civil penalty: $29,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420105014_ Final Order_12192011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105014/420105014_%20Final%20Order_12192011.pdf\n\n420105014_ Final Order_12192011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105014/420105014_%20Final%20Order_12192011_text.pdf\n\n420105014_NOPV PCP PCO_08102010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105014/420105014_NOPV%20PCP%20PCO_08102010.pdf\n\n420105014_NOPV PCP PCO_08102010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105014/420105014_NOPV%20PCP%20PCO_08102010_text.pdf\n\n420105014_Response to NOPV PCP PCO_10152010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105014/420105014_Response%20to%20NOPV%20PCP%20PCO_10152010.pdf\n\n420105014_NOPV PCP PCO_08102010_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nAugust 10, 2010\nTroy Valenzuela\nV.P. Environmental, Health and Safety\nPlains Marketing, L.P.\n333 Clay Street\nSuite 4648\nHouston, TX\nCPF 4-2010-5014\nDear Mr. Valenzuela:\nOn March 8-12, 2010, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your\nPlains Marketing, L.P. (Plains) pipeline and tank facilities in St. James, Louisiana.\nAs a result of the inspection, it appears that you have committed a probable violation of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The item inspected and the\nprobable violation is:\n1. §195.420 Valve maintenance.\n(b) Each operator shall, at intervals not exceeding 7½ months, but at least twice each\ncalendar year, inspect each mainline valve to determine that it is functioning properly.\nPlains failed to demonstrate that their mainline valves were functioning properly. Plains\nmaintenance personnel utilize the Plains Pipeline, L.P. “Valve Maintenance & Inspection”\nprocedure number O&M - 414 which includes all the various steps to be performed\nduring the required inspection. These steps include: Visual Inspection (VI), Mechanical\nOperation (MO), Local Motor Operation (LO), Remote motor Operation (RO) and\nRoutine Maintenance (RM). This procedure also requires that the results of the\ninspection be recorded on PPLP form No. 010. From the procedure it states “All valves\n\n\n\nwhich are required to shut-in and isolate the pipeline in the event of an oil spill or\nemergency are considered mainline valves.” During the inspection, PHMSA reviewed\nthe PPLP form No. 010 for years 2007 – 2009. It appears from this review that several\nvalves did not have all the required steps performed per the procedure (see table 1).\nPlains maintenance personnel only performed visual inspections of the valves and no\nfunctional inspection was performed.\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 violation 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 and has recommended\nthat you be preliminarily assessed a civil penalty of $29,000.\nProposed Compliance Order\nWith respect to item 1 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Plains Marketing L.P.\nPlease refer to the Proposed Compliance Order, which is enclosed and made a part of this\nNotice.\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 4-2010-5014 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 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Plains Marketing L.P. a Compliance Order\nincorporating the following remedial requirements to ensure the compliance of Plains Marketing\nL.P. with the pipeline safety regulations:\n1. In regards to the Notice pertaining to the inadequate mainline valve inspections,\nPlains Marketing L.P. must perform the inspections as required per their procedure\nand provide documentation that the valves noted on Table I of the Notice are in\ncompliance with 49 CFR §195.420(b).\n2. Additionally, Plains Marketing L.P. should review their procedures and must provide\ntraining to personnel who are responsible for carrying out this procedure to prevent\nrecurrence of this non-compliance issue. Amendments to procedures and\ndocumentation of training must be provided to this office.\n3. Plains must complete items 1 and 2 of the Compliance Order within 30 days\nfollowing receipt of the Final Order.\n4. Submit the results of the Proposed Compliance Order items above to the\nRegional Director, Southwest Region, Office of Pipeline Safety, Pipeline and\nHazardous Materials Safety Administration, 8701 South Gessner, Suite 1110,\nHouston, Texas 77074. Costs shall be reported in two categories: 1) total cost\nassociated with preparation/revision of plans, procedures, studies and analyses,\nand 2) total cost associated with replacements, additions and other changes to\npipeline infrastructure.\n3\n\n420105014_ Final Order_12192011_text.pdf\n\nDEC 19 2011\nMr. Harry N. Pefanis\nPresident\nPlains Marketing, L.P.\n333 Clay St., Suite 1600\nHouston, TX 77002\nRe: CPF No. 4-2010-5014\nDear Mr. Pefanis:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and assesses a civil penalty of $29,000. It further finds that Plains Marketing, L.P.,\nhas completed 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. Service of the\nFinal Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided 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. Troy Valenzuela, Vice President Environmental, Health and Safety, Plains Pipeline\nMr. Rod M. Seeley, Director, Southwest Region, PHMSA\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline\nSafety, PHMSA\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [71791000164203000252]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nPlains Marketing, L.P., ) CPF No. 4-2010-5014\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn March 8-12, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the pipeline and tank facilities operated by\nPlains Marketing, L.P. (Plains or Respondent), in St. James, Louisiana. Plains is a subsidiary of\nPlains All American Pipeline, L.P., which transports, stores, terminals and markets crude oil,\nrefined products and liquefied petroleum gas. Plains’ system includes roughly 16,000 miles of\nactive crude and refined products pipelines and gathering systems.\n1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated August 10, 2010, 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 Plains had violated 49 C.F.R. § 195.420(b) and proposed assessing\na civil penalty of $29,000 for the alleged violation. The Notice also proposed ordering\nRespondent to take certain measures to correct the alleged violation.\ndated October 15, 2010 (Response). The company did not contest the allegation of violation but\nprovided an explanation of its actions and requested that the proposed civil penalty be reduced.\nAfter requesting2 and receiving an extension of time, Plains responded to the Notice by letter\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDING OF VIOLATION\nIn its Response, Plains did not contest the allegation in the Notice that it violated 49 C.F.R. Part\n195, as follows:\n1 http://www.paalp.com/ (last accessed 7/26/2011).\n2 Response dated September 17, 2010.\n\n\n\n2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.420(b), which states in\nrelevant part:\n§ 195.420 Valve maintenance.\n(a) . . . .\n(b) Each operator shall, at intervals not exceeding 7½ months, but at\nleast twice each calendar year, inspect each mainline valve to determine\nthat it is functioning properly.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.420(b) by failing to properly\ninspect each of its mainline valve at intervals not exceeding 7½ months, but at least twice each\ncalendar year. Specifically, the Notice alleged that Plains failed to operate several mainline\nvalves3 at its St. James Terminal during the company’s valve inspections, to determine if the\nvalves function properly. PHMSA asserted that a review of Respondent’s 2007-2009 Valve\nInspection Reports, PPLP Form No. 010, showed that the valves were only visually inspected.4\nRespondent acknowledged that there was no indication on the inspection reports of a functional\ncheck of the valves in question.\nRespondent violated 49 C.F.R. § 195.420(b) by failing to inspect numerous mainline valves at its\nSt. James Terminal to determine if they were functioning properly, at intervals not exceeding 7½\nmonths, but at least twice each calendar year.\n5 Accordingly, after considering all the evidence, I find\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. In determining the amount of a civil penalty under\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability 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\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $29,000 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $29,000 for Respondent’s violation of\n49 C.F.R. § 195.420(b), for failing to inspect its St. James Terminal mainline valves to ensure\nthat they operated properly. As noted above, Plains did not contest the allegation that it failed to\n3 See Notice, Attachment Table I, pages 1-3.\n4 Plains’ Operations & Maintenance Manual (O&M Manual), Valve Maintenance & Inspection Procedure, O&M-\n414, details the steps required for mainline valve inspections and requires that the results of each inspection be\nrecorded on PPLP Form No. 010. See PHMSA Violation Report, Exhibit C. The service performed on the valves in\nquestion was recorded on PPLP Form No. 010 as “visual inspection.” See PHMSA Violation Report, Exhibit B.\n5 Response, at 2.\n\n\n\n3\ninspect each valve to determine that it functioned properly. Instead, Respondent argued that the\nproposed penalty should be reduced.\nFirst, it contended that the valves were only inspected visually because the company was\naccustomed to frequently witnessing the satisfactory operation of the valves in the course of\nroutine terminal operations and that such operations would not occur if the valves were not\nfunctional.\n6 According to Plains, this was supported by the company’s records of normal valve\noperations, which showed that the valves functioned properly.7 Second, it argued that since the\nvalves did indeed work properly, the company’s “sole deficiency” was that it failed to properly\ndocument the inspections that it had conducted.8\nI am unconvinced by Respondent’s arguments. I find that conducting only visual inspections\nbecause the valves had been observed as being functional during normal operations is\ninconsistent with the regulation’s intent to ensure that all mainline valves are inspected at the\nrequired intervals. I also find that Plains’ failure to ensure the operability of numerous valves at\nits St. James Terminal violated its own O&M Manual, which required the actual operation of\nthat Respondent was well aware of this regulatory requirement but failed to comply, thus\nvalves during inspections to ensure that they were in good working order. 9 Therefore, it is clear\nindicating that Respondent is fully culpable for the violation.\nThe nature, circumstances, and gravity of the violation justify the proposed penalty.\nRespondent’s failure to properly inspect the mainline valves at its St. James Terminal placed the\nsafety of its pipelines at risk, as well as that of the public, property, and the environment in the\nvicinity of its pipelines. Fully functioning valves are extremely important to mitigate damage\nduring an emergency, as mainline valves can be closed to isolate part of a pipeline system and\nlimit the volume of product released in the event of a spill. One purpose of the mandatory valve\ninspection interval set forth in § 195.420(b) is to ensure that valve problems are identified and\ncorrected before they impact the safety of the pipeline system.\nRespondent has not produced any evidence or argument to justify a reduction in the proposed\npenalty amount. Accordingly, upon consideration of all of the evidence and the arguments\npresented, I hereby assess Respondent a total civil penalty of $29,000 for violation of\n49 C.F.R. § 195.420(b). Payment of the civil penalty must be made within 20 days of service.\nFederal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer\nthrough the Federal Reserve Communications System (Fedwire), to the account of the U.S.\nTreasury. Detailed instructions are contained in the enclosure. Questions concerning wire\n6 Respondent further maintained that some piping and valves at the St. James Terminal were installed for future\nanticipated business and were not yet operational, and that the company needed more time to verify the status of all\nthe valves listed in the Notice. See Response dated September 17, 2010.\n7 The company stated (but submitted no supporting documentation) that four of the valves in question were\noperated by two other operators and that those records are also archived. Plains also stated that its records for the\nentire 2007-2009 period were not submitted because it was “a laborious process to extract records more than 6\nmonths old.” Response dated October 15, 2010, page 2.\n8 Id.\n9 O&M Manual, Valve Maintenance & Inspection Procedure, O&M-414. See PHMSA Violation Report, Exhibit C.\n\n\n\n4\ntransfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City,\nOklahoma 73125. The Financial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $29,000 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 district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 1 in the Notice for violation of\n49 C.F.R. § 195.420(b). Under 49 U.S.C. § 60118(a), each person who engages in the\ntransportation of hazardous liquids or who owns or operates a pipeline facility is required to\ncomply with the applicable safety standards established under chapter 601. The Director\nindicates that Respondent has taken the following actions specified in the proposed compliance\norder:\n1. With respect to the violation of § 195.420(b) (Item 1), Respondent has properly\ninspected the mainline valves listed in Table I of the Notice. Respondent has also\nreviewed its valve maintenance and inspection procedures, amended its O&M\nManual to include the revised procedures, and trained its employees on the revised\nvalve inspection procedures.\nAccordingly, I find that compliance has been achieved with respect to this violation. Therefore,\nthe compliance terms proposed in the Notice are not included 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 sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of this Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all\nother terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":19642}