{"operation":"document","citation":"CPF 420131001","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":"2013-01-02","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.303, 192.461(e).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420131001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420131001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420131001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420131001","body":"Notice of Probable Violation involving AIR PRODUCTS & CHEMICALS INC. PHMSA's enforcement data identifies the cited regulations as 192.303,  192.461(e). The case was opened on 2013-01-02 and is reported as closed as of 2015-08-10. Proposed civil penalty: $80,000. Assessed civil penalty: $0. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420131001_Final Order_08102015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131001/420131001_Final%20Order_08102015.pdf\n\n420131001_Final Order_08102015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131001/420131001_Final%20Order_08102015_text.pdf\n\n420131001_NOPV PCP PCO_01022013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131001/420131001_NOPV%20PCP%20PCO_01022013.pdf\n\n420131001_NOPV PCP PCO_01022013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131001/420131001_NOPV%20PCP%20PCO_01022013_text.pdf\n\n420131001_Operator Response and Request for Hearing and Preliminary Statement of Issues_02212013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131001/420131001_Operator%20Response%20and%20Request%20for%20Hearing%20and%20Preliminary%20Statement%20of%20Issues_02212013.pdf\n\n420131001_Operator_Response_05162013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131001/420131001_Operator_Response_05162013.pdf\n\n420131001_Final Order_08102015_text.pdf\n\nAugust 10, 2015\nMr. Seifi Ghasemi\nChairman, President, and Chief Executive Officer\nAir Products and Chemicals, Inc.\n7201 Hamilton Blvd.\nAllentown, PA 18195-1501\nRe: CPF No. 4-2013-1001\nDear Mr. Ghasemi:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws both\nallegations of violation and the proposed civil penalty. Therefore, this case is now closed.\nService of the Final Order by certified mail is deemed effective upon the date of mailing, or as\notherwise 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. Rodrick M. Seeley, Director, Southwest Region, OPS\nMr. James B. Curry, Esq., Van Ness Feldman, LLP, 1050 Thomas Jefferson St. N.W.,\n7th Floor, Washington, D.C., 20007, Counsel for Respondent\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)\nAir Products and Chemicals, Inc., ) CPF No. 4-2013-1001\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom June – September 2012, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted a new-construction pipeline safety inspection of the facilities and records of Air\nProducts and Chemicals, Inc. (Air Products or Respondent), in Lake Charles and Plaquemine,\nLouisiana. The company’s 184-mile Gulf Coast Connection Project (GCCP) connects Air\nProducts’ hydrogen pipeline systems in Louisiana and Texas.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated January 2, 2013, 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 Air Products violated 49 C.F.R. §§ 192.461 and 192.303 and\nassessing a civil penalty of $80,000 for the alleged violations. The Notice also proposed\nordering Respondent to take certain measures to correct the alleged violations.\nRespondent requested the case file by letter dated January 14, 2013, and requested a 30-day\nextension based on its receipt of the case file. OPS forwarded the case file and extended the\nresponse deadline to February 22, 2013. Respondent submitted a timely Request for Hearing and\nOPS Preliminary Statement of Issues by letter dated February 21, 2013, and on March 15, 2013,\nthe Presiding Official scheduled a hearing for May 16, 2013. On April 17, 2013, Respondent\nwithdrew its hearing request and asked that its final response deadline be extended to May 17,\n2013, a request granted by the Presiding Official.\nAir Products responded to the Notice by letter dated May 16, 2013 (Response). The Respondent\ncontested the allegations, presented information seeking elimination of the proposed penalty, and\nrequested a hearing. By letter dated April 17, 2013, Respondent withdrew its request for a\nhearing and thereby authorized the entry of this Final Order without further notice. On\nMarch 28, 2014, Air Products submitted a written response to the Regional Director’s December\n9, 2013 Recommendation and requested that it be included in the case file.\n\n\n\nCPF No. 4-2013-1001\nPage 2\nWITHDRAWAL OF ALLEGATIONS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192., as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.461(e), which states:\n§ 192.461 External corrosion control: Protective coating.\n(a) …\n(e) If coated pipe is installed by boring, driving, or other similar\nmethod, precautions must be taken to minimize damage to the coating\nduring installation.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.461(e) by failing to take\nprecautions to minimize damage to coated pipe installed by boring, driving, or other similar\nmethod. Specifically, the Notice alleged that Air Products failed to take precautions when\ninstalling 22-mils Fusion Bonded Epoxy coating (FBE) pipe to minimize damage to the coating\nat bored and horizontal directional-drilled (HDD) crossings. According to PHMSA, the\ncompany’s own construction specifications called for coating thicknesses to be 22 mils nominal\nif only an FBE coating were being applied. In cases where the company was performing\n“directional drills in geographic locations where soil or rock formations may be abrasive to the\nexternal coating,” then “Abrasion Resistant Overlays (ARO) should be considered….”\nPHMSA alleged that Air Products personnel had acknowledged using only FBE coating in its\nHDD locations, rather than adding AROs on top of the FBE coating. According to the Notice,\nAir Products’ staff further stated that extra precautions such as AROs were not needed on the\nGCCP due to the company’s operating experience and long history with native soils (primarily\nclay and sand) along the Gulf Coast. PHMSA noted that despite several requests, Air Products\nhad been unable to provide PHMSA with documentation from the manufacturer of the 22-mils\nFBE coating that it was adequate and resistant to damage from bored and HDD installations.\nIn its Response, Air Products contested the allegation of violation and presented several reasons\nwhy the company believed it had taken adequate precautions to minimize damage to pipe coating\nduring HDD installations on the GCCP. First, it challenged the statement in PHMSA’s Violation\nReport that “3M FBE 6233 (without abrasion resistant overlays) is not designed for HDD\napplications, bores and river crossings.”1 According to Respondent, the manufacturer’s brochure\ndid not make any such statement, nor did PHMSA produce any evidence showing that the 3M\nFBE 6233 coating was inappropriate for HDD installations.2\nSecond, Air Products asserted that it had taken precautions for its bored and HDD installations\nby selecting a thicker application of FBE coating that it normally used. According to the\nResponse:\nAir Products’ engineering specification provides for 14-16 mils of\n1 Pipeline Safety Violation Report (Violation Report), (January 2, 2013) (on file with PHMSA), at 4.\n2 Response, at 5.\n\n\n\nCPF No. 4-2013-1001\nPage 3\nFBE coating (section 4.1.1.2) in trenched underground piping\ninstallation, and provides for the use of thicker, 22 mil FBE\napplications (section 4.1.1.4) for directional drills. This thicker FBE\ncoating provides additional protection to ensure the integrity of the\ncoating is maintained during the HDD installation.3\nIn addition, the company provided evidence to support its argument that the thicker, 22-mils FBE\ncoating was a recognized and acceptable method of protecting pipe used in bored and directional\ndrills. Specifically, it cited a National Association of Corrosion Engineers (NACE) paper that\nsupported the use of either increased-thickness FBE coatings or an additional layer of ARO\ncoating.4 It also cited NACE Recommended Practice RP0394, section 6.1.5.2, as support for its\ncontention that a higher minimum-thickness FBE coating may be needed where the pipe “is\nplaced through a drilled crossing” or where “rocky or high-impact backfill” is used.5\nThird, Air Products argued that the precautions it had taken to minimize damage to coated pipe\nin HDD installations were adequate because the company’s experience with local soil conditions\nindicated there was no need to use the extra step of applying AROs. The company\nacknowledged that under its own specifications, it was required to “consider” AROs “for\ndirectional drills in geographic locations where soil or rock formation may be abrasive to the\nexternal coating.”6 According to Air Products, even though it was not required to consider ARO\nbecause of its experience in the Gulf Coast region, it still considered, but rejected, the additional\nstep of using AROs on the GCCP.7\nFourth, the company submitted a recent hydrogeologist’s report that had reviewed the core\nborings performed on the GCCP and other available data on the company’s Gulf Coast right-of-\nway. The report concluded that “at the vast majority of the [project’s] HDDs and all of the\nborings, geological data demonstrates that no gravel or rock is present.” Finally, Respondent\nsubmitted a statement from one of its contract engineers that he did not recall encountering rock\nor gravel during the GCCP or observing any coating damage after HDD installations.8\nI have carefully reviewed all of the evidence in the record and considered the arguments made by\nboth parties. Several issues are clear. First, it is undisputed that Air Products did not use the\nAROs that PHMSA believes were necessary to minimize damage to coated pipe used for bored\nand HDD installations on the GCCP; instead, it used a thicker FBE coating than what Air\nProducts used in normal, trenched underground piping installations. Second, it is clear that\n3 Id. at 6.\n4 Id. at 7.\n5 Id. at Exhibit 2 (pp. 5-6).\n6 Id. at 10, quoting Exhibit 1 (page 4).\n7 Air Product’s Senior Project Manager stated by affidavit that due to the non-abrasive soil conditions found on the\nGulf Coast, “the final decision not to select ARO [was] . . . based on our experience completing directional drills in\nthe Gulf Coast during the last 20 years.” Id. at Exhibit 4 (page 4).\n8 Id. at 11, Exhibit 6.\n\n\n\nCPF No. 4-2013-1001\nPage 4\nPHMSA has not produced any evidence to support its position that AROs were necessary in this\ncase to minimize damage to the pipe. The parties obviously disagree on what constitutes\nadequate “precaution” to minimize damage to pipe during HDD installations. It is also clear,\nlegally, that PHMSA bears the burden of proving a violation of § 192.461(e) by a preponderance\nof the evidence. On balance, I do not believe that PHMSA has met its burden of proving that the\n22-mils FBE coating used by Air Products did not constitute a reasonable precaution, under the\ncircumstances of this particular case, or, conversely, that the additional step of applying ARO on\ntop of the 22-mils FBE coating was essential to minimize damage to the pipe.\nWhile Respondent’s actions may not have been the most conservative measures available or ones\nthat PHMSA would prefer for an operator to use on HDD crossings, I do not believe PHMSA\nhas substantiated a violation of the Pipeline Safety Regulations. Accordingly, I find, based on\nthe totality of the circumstances, that Air Products’ actions do not violate 49 C.F.R.\n§ 192.461(e). Based upon the foregoing, I hereby order that Item 1 be withdrawn.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.303, which states:\n§ 192.303 Compliance with specifications or standards.\nEach transmission line or main must be constructed in accordance with\ncomprehensive written specifications or standards that are consistent with\nthis part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.303 by failing to construct each\ntransmission line or main in accordance with comprehensive written specifications or standards\nthat are consistent with Part 192. Specifically, the Notice alleged that Air Products performed\nthe construction task of brazing without a qualified or approved brazing procedure. According to\nOPS, its inspector observed Air Products’ personnel installing 23 “decouplers”9 on its pipeline\nby brazing M8 pins on the carrier pipe. When asked by the inspector to provide a copy of its\nbrazing specification or standard, Air Products allegedly provided the vendor’s (BAC) brazing\nprocedure, but could not provide documentation that the procedure had been properly reviewed,\napproved or accepted by Air Products prior to commencement of the brazing work.\nThe Notice further alleged that Air Products failed to comply with its own construction\nprocedure, American Fabrication and Erection Specification, Pipelines – Installation, 670.810,\nSections 4.1 and 4.1.1 (Welding Specification), which required that the procedure developed by\nthe contractor and the qualification of the individual worker performing the work both be\nqualified in accordance with ASME BPVC, Section IX, and that such qualification be furnished\nto Air Products for approval, prior to commencement of the brazing work on the pipeline.\nAir Products contested the allegation, stating that its Welding Specification applied only to\nwelding, and not pin brazing. Given that pin brazing is not subject to its own Welding\nSpecification, Air Products argued that it was not required to document the review of the\nvendor’s pin-brazing procedure.\n9 Decouplers are devices installed on pipelines for the purpose of eliminating direct current voltages within range\nthat could harm the pipeline.\n\n\n\nCPF No. 4-2013-1001\nPage 5\nOPS acknowledged that Air Products’ Welding Specification, as cited in the Notice, did not\ncover brazing but argued, nevertheless, that Respondent was still responsible for having a\n“specification or standard” in place under § 192.303 to cover brazing and to ensure that its\nvendor’s “pin brazing procedure (BAC Corrosion Control Ltd) to [sic] be reviewed and approved\nas well as qualification record of the individual performing brazing, prior to the commencement\nof bracing.”10\nThe Region is correct that Air Products is required to have and approve comprehensive\nconstruction specifications and standards ensuring that any pin brazing work being performed in\npipeline construction is being carried out in a manner consistent with Part 192. However, the\nNotice specifically ties this responsibility to Respondent’s Welding Specification and alleges that\nAir Products failed to qualify its pin brazing procedure in accordance with the Welding\nSpecification. Since pin brazing is not covered under this particular specification, the Region has\nfailed to meet its burden on proving a violation of 49 C. F. R. § 192.303.\nAccordingly, after considering all of the evidence, I hereby order that this Item be withdrawn.\nASSESSMENT OF PENALTY\nAs discussed above, Items 1 and 2 have been withdrawn. Therefore, I also withdraw the\nproposed civil penalty for both Items.\nThe 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\n10 Region Recommendation, at 10.\n\n420131001_NOPV PCP PCO_01022013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 2, 2013\nMr. Richard Boocock\nVice President of Global Operations\nAir Products & Chemicals Inc.\n7201 Hamilton Blvd\nAllentown, PA 18195-4153\nCPF 4-2013-1001\nDear Mr. Boocock:\nDuring the month of June 2012, representatives of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS) conducted a new construction\ninspection of your 184 mile, hydrogen pipeline from Port Neches, Texas, to Plaquemine,\nLouisiana. This is a connection project between East and West Gulf Coast pipeline systems of\nAir Products & Chemicals (Air Products). The inspection consisted of both field and record\naudits related to the construction pursuant to Chapter 601 of 49 United States Code.\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 items inspected and the\nprobable violations are:\n1. §192.303 Compliance with specifications or standards.\nEach transmission line or main must be constructed in accordance with comprehensive\nwritten specifications or standards that are consistent with this part.\n\n\n\n§192.461 External corrosion control: Protective coating\n(e) If coated pipe is installed by boring, driving, or other similar method,\nprecautions must be taken to minimize damage to the coating during installation.\nAir Products failed to take precautions to minimize damage to the coating during installation of\nthe boring and/or Horizontal Directional Drills (HDDs) applications at highway, railroad,\nstreams, river crossings, and at other locations. During the inspection, PHMSA identified that\nAir Products used 22 mils Fusion Bonded Epoxy Coating (FBE) pipe without Abrasion Resistant\nOverlays (ARO) in the HDDs and bored locations. Air Products was asked to provide the\nconstruction specification of the pipe coating that was used at bored and HDDs locations along\nits right-of-way (ROW).\nAir Product’s construction specifications, 4APL-20001, Section 4.1.1.4 states:\n”the coating thickness shall be 560µm (22 mils) nominal if only the FBE coating is to be\napplied. Abrasion Resistant Overlays (ARO) should be considered for directional drills\nin geographic locations where soil or rock formation may be abrasive to the external\ncoating.”\nAccording to the operator, Air Products used 3M Scotchkote Fusion Bonded Epoxy Coating\n(FBE) 6233 in bored or HDDs locations. But according to the Vendor’s (3M) specification,\nFusion Bonded Epoxy Coating 6233 is “designed for corrosion protection of pipe” and not\ndesigned to protect from damage during pipeline directional drilling applications, bores, and\nriver crossings.\nAir Products could not demonstrate that they took precautions to minimize damage to the coating\nduring installation. Air Products stated that precautions are not required due to their operating\nexperience, long history with native soil (primarily clay and sand) found in the Gulf Coast. Air\nProducts was asked to provide supporting documentation and/or certification from 3M\nidentifying whether the 6233 FBE 22 mils coating is adequate and resistant from damage during\npipeline directional drilling applications, bores, and river crossings. To date, Air Products has\nnot provided any supporting documentation from the vendor.\n2. §192.303 Compliance with specifications or standards.\nEach transmission line or main must be constructed in accordance with comprehensive\nwritten specifications or standards that are consistent with this part.\nAir Products performed a construction task (brazing) without a qualified and/or approved brazing\nprocedure. During the inspection of on Gulf Coast Connection Project, it was observed that Air\nProducts installed twenty three (23) “Decouplers” on the pipeline. The installation of the\n“Decouplers” was done by brazing M8 pins on the carrier pipe. PHMSA requested Air Products\nto provide the brazing procedure that was used while brazing on their pipeline system. Air\nProducts provided the vendor’s (BAC) brazing procedure. When questioned about the\n2\n\n\n\nqualification of the vendor’s brazing procedure, Air Products could not provide any\ndocumentation whether the vendor’s procedure had been reviewed, approved and/ or accepted\nprior to the commencement of the brazing works on the specified pipeline project.\nAccording to Air Products’ procedure, Pipelines - Installation, 670.810, Section 4.1 and 4.1.1, it\nstates that the procedure developed by the contractor and the qualification of the individual in\naccordance with ASME BPVC, Section IX, shall be furnished to Air Products Project\nEngineering or representative for approval before the start of any work. Air Products could not\nprovide any documentation that the brazing procedure had been approved by Air Products prior\nto the commencement of the construction of Gulf Coast Pipeline Project.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000\nper violation per day the violation persists up to a maximum of $2,000,000 for a related series of\nviolations. For violations occurring prior to January 3, 2012, the maximum penalty may not\nexceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for a\nrelated series of violations. The Compliance Officer has reviewed the circumstances and\nsupporting documentation involved in the above probable violations and has recommended that\nyou be preliminarily assessed a civil penalty of $80,000 as follows:\nItem number PENALTY\n1 $60,000\n2 $20,000\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 Air Products &\nChemicals Inc. Please refer to the Proposed Compliance Order, which is enclosed and made a\npart 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. All\nmaterial you submit in response to this enforcement action may be made publicly available. If\nyou believe that any portion of your responsive material qualifies for confidential treatment\nunder 5 U.S.C. 552(b), along with the complete original document you must provide a second\ncopy of the document with the portions you believe qualify for confidential treatment redacted\nand an explanation of why you believe the redacted information qualifies for confidential\ntreatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice,\nthis constitutes a waiver of your right to contest the allegations in this Notice and authorizes the\nAssociate Administrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order.\n3\n\n\n\nIn your correspondence on this matter, please refer to CPF 4-2013-1001 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 Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n4\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 Air Products & Chemicals Inc. (Air Products) a\nCompliance Order incorporating the following remedial requirements to ensure the compliance\nof Air Products with the pipeline safety regulations:\n1. In regard to Item Number 1 of the Notice pertaining to §192.461(e), Air Products\nfailed to take precautions to minimize damage to the coating during installation\nduring Horizontal Directional Drills (HDDs) applications at highway, railroad,\nstreams, river crossings, or other locations. Air Products must:\na. For the entire 184 miles of hydrogen pipeline there are 82 HDD locations, at\nhighway, railroad, streams, river crossings, or other locations along the right-\nof-way. Conduct an assessment of the crossings to verify the integrity of the\npipe coating in all HDD locations. This would include the loss of coating\nthickness, coating disbondment from the pipe, or coating gouges that might\ndamage the coating and pipe. Provide the qualification records of the\nindividuals performing the survey, whether these individuals are Air Products\nemployees or of a qualified vendor. This assessment must be completed\nwithin 60 days upon receipt of the Final Order.\nb. Submit the results of the assessment, including the disposition of issues\nidentified. This shall be completed within 120 days upon receipt of the Final\nOrder.\n2. It is requested (not mandated) that Air Products 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 changes\nto pipeline infrastructure.\n5","truncated":false,"body_characters":25336}