{"operation":"document","citation":"CPF 420115004","title":"HARVEST MIDSTREAM COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-02-15","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.428(a), 195.436, 195.505(b), 195.573(a), 195.579(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420115004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420115004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420115004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420115004","body":"Notice of Probable Violation involving HARVEST MIDSTREAM COMPANY. PHMSA's enforcement data identifies the cited regulations as 195.428(a),  195.436,  195.505(b),  195.573(a),  195.579(a). The case was opened on 2011-02-15 and is reported as closed as of 2013-01-22. Proposed civil penalty: $72,400. Assessed civil penalty: $45,100. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420115004_Closure Letter_01222013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420115004/420115004_Closure%20Letter_01222013.pdf\n\n420115004_Final Order_06122012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420115004/420115004_Final%20Order_06122012.pdf\n\n420115004_Final Order_06122012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420115004/420115004_Final%20Order_06122012_text.pdf\n\n420115004_NOPV PCP PCO_02152011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420115004/420115004_NOPV%20PCP%20PCO_02152011.pdf\n\n420115004_NOPV PCP PCO_02152011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420115004/420115004_NOPV%20PCP%20PCO_02152011_text.pdf\n\n420115004_Operator Response to NOPV PCP PCO_03152011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420115004/420115004_Operator%20Response%20to%20NOPV%20PCP%20PCO_03152011.pdf\n\n420115004_NOPV PCP PCO_02152011_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nFebruary 15, 2011\nMr. Steve Jacobs\nPresident\nHarvest Pipeline Company\n1201 Louisiana, Suite 1400\nHouston, Texas 77002\nCPF 4-2011-5004\nDear Mr. Jacobs:\nDuring the months August thru October 2010, representatives of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code\ninspected your Southwest Pass 24 Oil Terminal facility located in Venice, LA. Records were\ninspected in Houston, TX. As a result of the inspection, it appears that you have committed\nprobable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations.\nThe items inspected and the probable violation(s) are:\n1. §195.428 Overpressure safety devices and overfill protection systems.\n(a) Except as provided in paragraph (b) of this section, each operator shall, at\nintervals not exceeding 15 months, but at least once each calendar year, or in\nthe case of pipelines used to carry highly volatile liquids, at intervals not to\nexceed 7½ months, but at least twice each calendar year, inspect and test each\npressure limiting device, relief valve, pressure regulator, or other item of\npressure control equipment to determine that it is functioning properly, is in\ngood mechanical condition, and is adequate from the standpoint of capacity\nand reliability of operation for the service in which it is used.\nHarvest failed to inspect and test three pressure limiting devices each calendar year, specifically\n2009. During the inspection, Harvest provided PHMSA records of the tests that were\n\n\n\nperformed. These records were reviewed during the inspections and there was no\ndocumentation provided at the time to demonstrate that three overpressure protection devices\non SW Pass 24 Terminal were performed for calendar year 2009. The available documentation\nindicated that these devices were inspected on September 23, 2008. All Overpressure\nProtection devices were inspected for calendar year 2010.\nThe following Overpressure Protection devices were missed in 2009:\nLocation ID# Type Manufacture\nEPL Delivery line PR103 Pressure Relief Grove 83\nProver TR106/SWP-2 Thermal Relief Anderson Greenwood 8364\nStation Suction TR108/SWP-1 Thermal Relief Anderson Greenwood G1PMCY6-4\nThe evidence demonstrates that the operator violated § 195.428(a) by failing to inspect and test\nthese overpressure protection devices at the required interval. In the event that such\ninspections were, in fact, performed, the evidence demonstrates the operator violated\n§195.404(c)(3) by failing to maintain a record of each inspection and test required by this\nsubpart for at least 2 years or until the next inspection or test is performed, whichever is longer.\n2. §195.436 Security of facilities.\nEach operator shall provide protection for each pumping station and breakout\ntank area and other exposed facility (such as scraper traps) from vandalism and\nunauthorized entry.\nDuring the field inspection, the PHMSA inspector found that Harvest did not provide protection\nat the SW Pass 24 Oil Terminal Facility in order to prevent vandalism and unauthorized entry as\nrequired by §195.436. Additionally, Harvest’s “Breakout Tank In-service Visual Inspection\nReport” which provides monthly inspection information (provided by the operator at the time of\nthe inspection) indicates that the facility is not secure.\n3. §195.505 Qualification program.\nEach operator shall have and follow a written qualification program. The program\nshall include provisions to:\n(b) Ensure through evaluation that individuals performing covered tasks are\nqualified;\nWhile reviewing inspection records, PHMSA inspectors found that individuals had performed\ncovered tasks prior to being qualified. Harvest provided forms entitled “Operator Qualification\nSolutions Group” for several individuals as qualification records. These records indicate the\nearliest time an individual is qualified to perform a covered task. PHMSA reviewed these forms\nduring the inspection and found that an individual (GDB) performed covered task “CT03 Inspect\nCathodic Protection Rectifiers” twice on March 27, 2009 and twice on July 31, 2009. However,\nthe individual was not initially qualified to perform this covered task until October 11, 2009.\nAnother individual (GRJ) performed covered task “CT03” twice on May 8, 2009 and was not\nqualified until June 28, 2009. Neither individual was observed by a qualified individual while\nperforming these tasks.\n\n\n\nIn addition, an individual (LRG) performed covered task “CT24 Inspect, Test and Calibrate\nRelief Valves” on August 6, 2010 on three relief valves. However, this individual was not initially\nqualified to perform this covered task until October 12, 2010. He was not observed by a\nqualified individual.\n4. §195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine whether cathodic\nprotection required by this subpart complies with Sec. 195.571:\n(1) Conduct tests on the protected pipeline at least once each calendar year, but\nwith intervals not exceeding 15 months. However, if tests at those intervals are\nimpractical for separately protected short sections of bare or ineffectively coated\npipelines, testing may be done at least once every 3 calendar years, but with\nintervals not exceeding 39 months.\nHarvest failed to conduct tests of the cathodic protection system for the terminal piping and\nbreakout tanks #103 & 104 for each calendar year, specifically 2009. During the inspection,\nHarvest provided PHMSA records of the tests that were performed. These records were\nreviewed during the inspections and there was no documentation provided at the time to\ndemonstrate that the cathodic protection system for the terminal piping and breakout tanks #103\n& 104 were performed for calendar year 2009. The available documentation indicated that\nthese test were performed on August 21, 2008 and again on April 16, 2010.\nThe evidence demonstrates that the operator violated § 195.573 by failing to test the cathodic\nprotection system at the required interval. In the event that such inspections were, in fact,\nperformed, the evidence demonstrates the operator violated §195.589(c) by failing to maintain a\nrecord of each test required by this subpart as long as the pipeline remains in service.\n5. §195.579 What must I do to mitigate internal corrosion?\n(a) General. If you transport any hazardous liquid or carbon dioxide that would\ncorrode the pipeline, you must investigate the corrosive effect of the hazardous\nliquid or carbon dioxide on the pipeline and take adequate steps to mitigate\ninternal corrosion.\nHarvest failed to investigate the corrosive effect of the product transported by its pipeline to\ndetermine if it would corrode the pipeline. Harvest utilizes the procedure entitled “Hilcorp\nEnergy Company Pipeline Assets Corrosion Control Program” (Corrosion Procedure) last\nrevised 11-19-2007 as their corrosion control program procedures and to comply with 195.579.\nDuring the procedures review, PHMSA inspectors found that Harvest did not follow “Section C\nInternal Corrosion” of the Corrosion Procedure or take any other action to investigate the\ncorrosive effect of the product. Paragraph 1.a. of the procedure states:\n“Corrosive gas or liquids will not be transported by pipeline unless the corrosive\neffect of the liquid on the pipeline has been investigated and steps have been\ntaken to minimize internal corrosion (inhibitor and /or monitoring equipment). An\nanalysis of fluids and gases will be conducted to identify corrosive materials”.\nDuring the inspection, PHMSA inspectors asked Harvest to demonstrate that they had\ninvestigated the corrosive effect of the hazardous liquid. Harvest did not provide any\n\n\n\nexplanation nor documentation that showed they had performed the required investigation. In\naddition, at the time of the inspection, Harvest was not using inhibitors to mitigate internal\ncorrosion and did not have a coupon corrosion monitoring program to determine corrosive\neffects\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(s) and has\nrecommended that you be preliminarily assessed a civil penalty of $72,400 as follows:\nItem number PENALTY\nItem 1 $14,100\nItem 3 $42,500\nItem 4 $15,800\nProposed Compliance Order\nWith respect to items 2 and 5 pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to Harvest\nPipeline Company. Please refer to the Proposed Compliance Order, which is enclosed and\nmade 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.\n\n\n\nIn your correspondence on this matter, please refer to CPF 4-2011-5004 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\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 Harvest Pipeline Company (Harvest) a\nCompliance Order incorporating the following remedial requirement to ensure the compliance of\nHarvest Pipeline Company with the pipeline safety regulations:\n1. In regards to Item Number 2 of the Notice pertaining to failure to provide protection\nfor breakout tank area; from vandalism and unauthorized entry, Harvest Pipeline\nCompany must provide security from vandalism and entry by unauthorized persons.\nHarvest must provide this office its plans, procedures and records that demonstrate\nthat a process has been implemented or that barriers have been installed that\ndemonstrate compliance with 49 CFR §195.436.\n2. In regards to Item Number 5 of the Notice pertaining to the failure to investigate the\ncorrosive effect of the hazardous liquid on the pipeline, Harvest must investigate the\ncorrosive effect of hazardous liquids on its pipelines, including on “dead legs,” low-\nflow lines, and infrequently used pump station lines. Harvest must review all relevant\nprocedures and amend them as necessary. Harvest must survey all applicable\nsegments of its pipeline facility and ensure that they are protected from corrosion\nand are subject to internal corrosion inspection, testing, and monitoring that meet\napplicable requirements. Based on this review and survey, Respondent must\ndevelop a plan for conducting internal corrosion surveys in a manner consistent with\n§ 195.579(a).\n3. Aforementioned to be accomplished within 30 days following receipt of the Final\nOrder.\n4. It is requested (not mandated) that Harvest maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the\ntotal to R. M. Seeley, Director, Southwest Region, Pipeline and Hazardous Materials\nSafety Administration. It is requested that these costs be reported in two categories:\n1) total cost associated with preparation/revision of plans, procedures, studies and\nanalyses, and 2) total cost associated with replacements, additions and other\nchanges to pipeline infrastructure.\n\n420115004_Final Order_06122012_text.pdf\n\nJUNE 12, 2012\nMr. Steve Jacobs\nPresident\nHarvest Pipeline Company\n1201 Louisiana, Suite 1400\nHouston, TX 77002\nRe: CPF No. 4-2011-5004\nDear Mr. Jacobs:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $45,100, and specifies actions that need to be taken\nby Harvest Pipeline Company to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Southwest Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided 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. Rod M. Seeley, Director, Southwest Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\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)\nHarvest Pipeline Company, ) CPF No. 4-2011-5004\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom August to October, 2010, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the Southwest Pass 24 Oil Terminal facility of\nHarvest Pipeline Company (Harvest or Respondent) in Venice, Louisiana, and of its records in\nHouston, Texas. Southwest Pass 24 Oil Terminal is a pump station with two breakout tanks and\ninterconnected piping located on an island at the mouth of the Mississippi River.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated February 15, 2011, 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 Harvest had committed various violations of 49 C.F.R. Part 195 and\nproposed assessing a civil penalty of $72,400 for the alleged violations. The Notice also\nproposed ordering Respondent to take certain measures to correct the alleged violations.\nHarvest responded to the Notice by letter dated March 15, 2011 (Response). The company\nprovided an explanation of its actions and requested that the proposed civil penalty be reduced.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:\n§ 195.428 Overpressure safety devices and overfill protection systems.\n(a) Except as provided in paragraph (b) of this section, each operator\n\n\n\n2\nshall, at intervals not exceeding 15 months, but at least once each calendar\nyear, or in the case of pipelines used to carry highly volatile liquids, at\nintervals not to exceed 7½ months, but at least twice each calendar year,\ninspect and test each pressure limiting device, relief valve, pressure\nregulator, or other item of pressure control equipment to determine that it\nis functioning properly, is in good mechanical condition, and is adequate\nfrom the standpoint of capacity and reliability of operation for the service\nin which it is used.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and test\neach pressure limiting device each calendar year. Specifically, the Notice alleged that three\npressure limiting devices had not been inspected and tested in 2009, or that, if such inspections\nwere in fact performed, that Respondent violated § 195.404(c)(3) by failing to maintain a record\nof each inspection and test required by Subpart F of 49 C.F.R. Part 195 for at least 2 years or\nuntil the next inspection or test is performed, whichever is longer.\n1 Respondent did not contest\nthis allegation of violation, and indicated that it had taken steps to ensure that pressure limiting\ndevices were tested at the required frequency in the future.\nof all of the evidence, I find that Respondent violated 49 C.F.R. § 195.428(a) by failing to\ninspect and test each pressure limiting device in calendar year 2009.\n2 Accordingly, based upon a review\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.436, which states:\n§ 195.436 Security of facilities.\nEach operator shall provide protection for each pumping station and\nbreakout tank area and other exposed facility (such as scraper traps) from\nvandalism and unauthorized entry.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.436 by failing to protect the\nSouthwest Pass 24 Oil Terminal Facility from vandalism and unauthorized entry. Evidence in\nthe record included Harvest’s “Breakout Tank In-service Visual Inspection Report,” which listed\nthe facility as not secured.\n3\nIn its Response, Harvest made note of the “remote location of the island on which the terminal is\nlocated,” and stated that it had believed that the terminal was exempt from PHMSA’s security\nrequirements because it is exempt from US Coast Guard (USCG) security requirements.\n4\nHarvest’s facility and operations must comply with all applicable federal regulations. The\nremote location of the facility and its exemption from certain USCG requirements do not exempt\nthe facility from the Pipeline Safety Regulations.\nHarvest stated that its “security-related activities have been reviewed” and stated that it “believes\n1 Notice at 1.\n2 Response at 2.\n3 Violation Report, Exhibit B.\n4 Response at 2.\n\n\n\n3\nthe existing and improved components provide the appropriate security for the current\nenvironment and conditions provided by the remote location of the facility and island.”5 Harvest\nfurther stated that additional security measures, such as gates, cameras, fences, lighting, or a 24-\nhour security guard, would not be cost-effective or provide significant additional security.\nHarvest’s list of security-related components provided in its Response does not satisfy the\nrequirements of this regulation. Harvest stated that the terminal is manned 24 hours a day, 7 days\na week, and that it is patrolled twice daily by Harvest personnel, but provided no evidence of\nthis. Harvest stated that aerial surveillance is conducted twice weekly, but this frequency of\npatrolling does not protect the facility from vandalism and unauthorized entry. Harvest\ndiscussed the patrolling activities of EPL, another company that operates a facility on the same\nisland, and the USCG, and stated that “the USCG contacts EPL with any concerns, who in turn\ncontacts Harvest,” but did not provide any evidence of these monitoring activities or of any\nformal arrangement with these entities. 6 Harvest also gave no evidence to support its claim of\nsignificant cost.\nprovide the facility with adequate protection from vandalism and unauthorized entry.\n7 In short, the improved security measures described in the Response do not\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.436 by failing to protect the Southwest Pass 24 Oil Terminal Facility from\nvandalism and unauthorized entry.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) …\n(b) Ensure through evaluation that individuals performing covered\ntasks are qualified….\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure through\nevaluation that individuals performing covered tasks were qualified. Specifically, the Notice\nalleged that Harvest’s records showed that three individuals had performed covered tasks prior to\nbeing qualified for those tasks on nine occasions.\n8 Respondent did not contest this allegation of\nviolation, and stated that after the inspection it reviewed operator qualification to ensure that all\nemployees were up-to-date in their operator qualification.\n9\nAccordingly, based upon a review of\nall of the evidence, I find that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure\nthrough evaluation that individuals performing covered tasks were qualified.\n5 Response at 2.\n6 Response at 3.\n7 Response at 4-5.\n8 Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice) at 2-3.\n9 Response to the Notice (Response) at 5.\n\n\n\n4\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a), which states in\nrelevant part:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with\n§ 195.571:\n(1) Conduct tests on the protected pipeline at least once each calendar\nyear, but with intervals not exceeding 15 months. However, if tests at\nthose intervals are impractical for separately protected short sections of\nbare or ineffectively coated pipelines, testing may be done at least once\nevery 3 calendar years, but with intervals not exceeding 39 months….\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(a) by failing to conduct tests of\nthe cathodic protection on the pipeline at least once each calendar year. Specifically, the Notice\nalleged that Harvest failed to test the cathodic protection system on the terminal piping and\nbreakout tanks 103 and 104 for the year 2009, or that, if such inspections were in fact performed,\nthat Respondent violated § 195.589(c) by failing to maintain a record of each test required by\nSubpart H of 49 C.F.R. Part 195 for as long as the pipeline remained in service.\n10 Respondent\ndid not contest this allegation of violation, and stated that it had taken steps to ensure future\ncompliance.\nviolated 49 C.F.R. § 195.573(a) by failing to conduct tests of the cathodic protection on the\npipeline at least once in calendar year 2009.\n11 Accordingly, based upon a review of all of the evidence, I find that Respondent\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.579(a), which states:\n§ 195.579 What must I do to mitigate internal corrosion?\n(a) General. If you transport any hazardous liquid or carbon dioxide\nthat would corrode the pipeline, you must investigate the corrosive effect\nof the hazardous liquid or carbon dioxide on the pipeline and take\nadequate steps to mitigate internal corrosion.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.579(a) by failing to investigate the\ncorrosive effect of the hazardous liquid on the pipeline. Specifically, the Notice alleged that\nHarvest could not demonstrate that it had investigated the corrosive effects of the hazardous\nliquid as required by § 195.579 and its own procedures.\n12 In its Response, Harvest stated that it\nbelieved it had satisfied the regulatory requirement by relying on the producers of the hazardous\nliquid to analyze the product, take appropriate steps to address any corrosiveness in their\nproducts, and inform Harvest of any such action.13\nHarvest did not provide any evidence that it\n10 Notice at 3.\n11 Response at 5.\n12 Notice at 3.\n13 Response at 5.\n\n\n\n5\nhad a formal agreement with the producers of the individual product streams or that it had\nreceived reports from them about the corrosiveness of their product. Accordingly, based upon a\nreview of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.579(a) by failing to\ninvestigate the corrosive effect of the hazardous liquid on the pipeline.\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 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 49 U.S.C.\n§ 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 $72,400 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $14,100 for Respondent’s violation of\n49 C.F.R. § 195.428(a), for failing to inspect and test each pressure limiting device each calendar\nyear. In its Response, Harvest requested a reduced penalty and noted several factors to warrant\nthis reduction, including its good history of violations, good faith attempts to comply, and quick\ncorrective actions after being notified of violations. Harvest did take action to make sure all\n2010 inspections were in compliance, but corrective actions taken after the violation has been\ndiscovered do not warrant a reduction in penalty.14 Harvest’s lack of prior offenses and the fact\nthat this offense did not result in an accident were factored into the proposed penalty.\nproper functioning of pressure limiting devices is necessary to prevent a pipeline failure due to\noverpressure, which could have serious consequences for people and the environment.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $14,100 for violation of 49 C.F.R. § 195.428(a).\n15 The\nItem 3: The Notice proposed a civil penalty of $42,500 for Respondent’s violation of\n49 C.F.R. § 195.505(b), for failing to ensure through evaluation that individuals performing\ncovered tasks were qualified. In its Response, Harvest requested a reduced penalty and noted\nseveral factors to warrant this reduction, including its clean history of violations, good faith\nattempts to comply, and its quick corrective actions after being notified of violations. Corrective\n14 See, e.g., In the Matter of MidWestern Gas Transmission Co., Final Order, CPF 3-2010-1004, 2011 (August 11,\n2011) (available at www.phmsa.dot.gov/pipeline/enforcement).\n15 Pipeline Safety Violation Report CPF 4-2011-5004 (Violation Report) (on file with PHMSA) at 4, 27.\n\n\n\n6\nactions taken after the violation has been discovered, such as Harvest’s post-inspection review of\noperator qualification to ensure that all employees are now up-to-date in their operator\nqualification, do not warrant a reduction in penalty.\nUpon review of the record, I find the proposed penalty is not reflective of the low gravity of the\nviolation, which “had a minimal impact on pipeline integrity or safe operation of the pipeline and\ndid not pose a significant threat to public safety or the environment.”16\nI recognize, however,\nthat the multiple instances of violation warrant a higher penalty than a single instance of\nviolation would. Accordingly, having reviewed the record and considered the assessment\ncriteria, I assess Respondent a reduced civil penalty of $15,200 for violation of\n49 C.F.R. § 195.505(b).\nItem 4: The Notice proposed a civil penalty of $15,800 for Respondent’s violation of\n49 C.F.R. § 195.573(a), for failing to conduct tests of the cathodic protection on the pipeline at\nleast once each calendar year. In its Response, Harvest requested a reduced penalty and noted\nseveral factors to warrant this reduction, including its clean history of violations, good faith\nattempts to comply, and its quick corrective actions after being notified of violations. Harvest\nappears to have made a good faith attempt to ensure future compliance by updating its inspection\ncalendar to include all devices at Southwest Pass 24 Oil Terminal, but corrective actions taken\nafter the violation has been discovered do not warrant a reduction in penalty. Harvest’s lack of\nprior offenses and the fact that this offense did not result in an accident were factored into the\nproposed penalty.\npipeline and for preventing the pipeline failures that can result from corrosion. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $15,800 for violation of 49 C.F.R. § 195.573(a).\n17 Adequate cathodic protection is critical for controlling corrosion on a\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $45,100.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to 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, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $45,100 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.\n16 Violation Report at 18.\n17 Violation Report at 19, 27.\n\n\n\n7\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 2 and 5 in the Notice for\nviolations of 49 C.F.R. §§ 195.436 and 195.579(a) respectively. Under 49 U.S.C. § 60118(a),\neach person who engages in the transportation of hazardous liquids or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601.\nWith regard to the proposed compliance order associated with Item 2, Harvest contended in its\nResponse that it had already reviewed its security activities and determined that “the existing and\nimproved components provide the appropriate security,” considering the remote location of the\ndemonstrate that the facility is protected from vandalism and unauthorized entry.\nfacility.18 However, as discussed above, the security measures taken do not adequately\nWith regard to the proposed compliance order associated with Item 5, Harvest stated in its\nResponse that it had taken steps to monitor corrosion and was in the process of updating its\ncorrosion control program and procedures.\nan investigation of the corrosive effect of the product on its pipelines to the Director.\n19 However, Harvest has not provided the results of\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.436 (Item 2), Respondent must provide the\nSouthwest Pass 24 Oil Terminal with protection from vandalism and entry by\nunauthorized persons. Respondent must provide its plans, procedures, and records\ndemonstrating that a process has been implemented or that barriers have been\ninstalled to the Director within 30 days of receipt of this Final Order.\n2. With respect to the violation of § 195.579(a) (Item 5), Respondent must\ninvestigate the corrosive effect of the hazardous liquid on the pipeline, including on\n“dead legs,” low-flow lines, and infrequently used pump station lines. Respondent\nmust survey all applicable segments of its pipeline facility and ensure that they are\nsubject to inspection, testing, and monitoring for internal corrosion. Based on this\ninspection, review, and survey, Respondent must develop a plan for conducting\ninternal corrosion surveys in a manner consistent with § 195.579(a) and must take\nappropriate steps to mitigate internal corrosion. Respondent must review all relevant\nprocedures and amend them as needed. Respondent must demonstrate to the Director\nthat this has been accomplished within 30 days of receipt of this Final Order.\nThe Director may grant an extension of time to comply with any of the required items upon a\n18 Response at 2.\n19 Response at 5-6.\n\n\n\n8\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $100,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\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\n\n420115004_Closure Letter_01222013.pdf\n\nU.S. Department\n8701 South Gessner, Suite 1110\nof Transportation\nHouston, TX 77074\nPipeline and\nAdministration\nHazardous Materials Safety\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 22, 2013\nMr. Steve Jacobs\nPresident\nHarvest Pipeline Company\n1201 Louisiana Ste. 1400\nHouston, Texas 77002\nCPF 4-2011-5004\nDear Mr. Jacobs:\nOn February 15, 2011 the Pipeline and Hazardous Materials Safety Administration\nissued to Harvest Pipeline Company (Harvest), a Notice of Probable Violation,\nProposed Civil Penalty and Proposed Compliance Order. Based on our review of the\ndocumentation you provided, it has been determined that you have complied with the\nterms of this Notice.\nAccordingly, this case is now closed and no further action is contemplated with respect\nto the matters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous\nMaterials Safety Administration","truncated":false,"body_characters":37487}