{"operation":"document","citation":"CPF 420135027","title":"MOBIL  PIPE  LINE COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2013-11-06","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(b)(5), 195.452(e)(1), 195.452(h)(1), 195.452(h)(2), 195.452(j)(3).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135027.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135027.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135027","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420135027","body":"Notice of Probable Violation involving MOBIL  PIPE  LINE COMPANY. PHMSA's enforcement data identifies the cited regulations as 195.452(b)(5),  195.452(e)(1),  195.452(h)(1),  195.452(h)(2),  195.452(j)(3). The case was opened on 2013-11-06 and is reported as closed as of 2019-08-29. Proposed civil penalty: $2,659,200. Assessed civil penalty: $274,900. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420135027_Closure Letter_08292019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Closure%20Letter_08292019.pdf\n\n420135027_Closure Letter_08292019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Closure%20Letter_08292019_text.pdf\n\n420135027_Decision on the Petition for Reconsideration_04012016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Decision%20on%20the%20Petition%20for%20Reconsideration_04012016.pdf\n\n420135027_Decision on the Petition for Reconsideration_04012016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Decision%20on%20the%20Petition%20for%20Reconsideration_04012016_text.pdf\n\n420135027_Final Order_10012015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Final%20Order_10012015.pdf\n\n420135027_Final Order_10012015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Final%20Order_10012015_text.pdf\n\n420135027_HQ Grants Extended Stay of Compliance Order_02042016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_HQ%20Grants%20Extended%20Stay%20of%20Compliance%20Order_02042016.pdf\n\n420135027_HQ Grants Extended Stay of Compliance Order_02042016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_HQ%20Grants%20Extended%20Stay%20of%20Compliance%20Order_02042016_text.pdf\n\n420135027_HQ Stay of Compliance Order_11042015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_HQ%20Stay%20of%20Compliance%20Order_11042015.pdf\n\n420135027_HQ Stay of Compliance Order_11042015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_HQ%20Stay%20of%20Compliance%20Order_11042015_text.pdf\n\n420135027_NOPV PCP PCO_11062013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_NOPV%20PCP%20PCO_11062013.pdf\n\n420135027_NOPV PCP PCO_11062013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_NOPV%20PCP%20PCO_11062013_text.pdf\n\n420135027_Operator Petition for Reconsideration Replaces the Original Affidavit at Tab 82 with new Supplemental Affidavit_10272015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Operator%20Petition%20for%20Reconsideration%20Replaces%20the%20Original%20Affidavit%20at%20Tab%2082%20with%20new%20Supplemental%20Affidavit_10272015.pdf\n\n420135027_Operator Petition for Reconsideration_10212015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Operator%20Petition%20for%20Reconsideration_10212015.pdf\n\n420135027_Operator_Response_and_Request_for_Hearing_12052013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Operator_Response_and_Request_for_Hearing_12052013.pdf\n\n420135027_Order on Remand_08072018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Order%20on%20Remand_08072018.pdf\n\n420135027_Order on Remand_08072018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135027/420135027_Order%20on%20Remand_08072018_text.pdf\n\n420135027_HQ Stay of Compliance Order_11042015_text.pdf\n\nRobert Hogfoss, Esq.\nHunton & Williams LLP\nBank of America Plaza, Ste 4100\n600 Peachtree St. NE\nAtlanta, GA 30308\nRe: ExxonMobil Pipeline Company\nCPF No. 4-2013-5027\nDear Mr. Hogfoss:\nI am in receipt of the Petition for Reconsideration filed by ExxonMobil Pipeline Company\n(EMPCo) on October 21, 2015. Pursuant to 49 C.F.R. § 190.243, EMPCo has exercised its right\nto request that PHMSA reconsider the Final Order that was issued on October 1, 2015. As you\nare aware, the Final Order found nine violations in connection with the 2013 pipeline accident\nnear Mayflower, Arkansas. The Agency assessed a civil penalty of $2,630,400, and ordered\ncorrective action set forth in a Compliance Order.\nPHMSA is currently reviewing the Petition and intends to issue a decision after considering your\nposition on the matter. In the meantime, the filing of the Petition automatically stays payment of\nthe civil penalty pursuant to § 190.243(c). You have also requested that PHMSA stay the terms\nof the Compliance Order until a decision is rendered on the Petition.\nThe terms of the Compliance Order require EMPCo to modify its integrity management program\nand related processes, including those related to electric-resistance welded pipe, integrity\nassessment, and management of change. After reviewing the terms of the Compliance Order,\nPHMSA has determined that staying the conditions for 90 days while the Agency reviews your\nPetition will not compromise safety, particularly since the pipeline remains out of service.\nAccordingly, PHMSA is staying the Compliance Order until 90 days from the date of this letter.\nPlease note, this stay does not waive compliance with any applicable pipeline safety standards,\nnor does it affect any other administrative order that concerns facilities operated by EMPCo. In\nthe event your Petition for Reconsideration is denied, EMPCo will be required to comply with\nthe terms of the Compliance Order as set forth in the Final Order.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\n\n\n\ncc: Mr. Rod Seeley, Director, Southwest Region, PHMSA\nMs. Catherine Little, Hunton & Williams LLP\nBank of America Plaza, Ste 4100, 600 Peachtree St. NE, Atlanta, GA 30308\nVIA CERTIFIED MAIL – RETURN RECEIPT REQUESTED\n\n420135027_Closure Letter_08292019_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nAugust 29, 2019\nCaroline B. Henderson\nSafety, Security, Health and Environmental Manager\nExxonMobil Pipeline Company\n22777 Springwoods Village Parkway\nSpring, Texas 77389\nCPF 4-2013-5027\nDear Ms. Henderson:\nOn October 1, 2015, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to\nExxonMobil Pipeline Company (EMPCo) a Final Order in the above reference case. EMPCo challenged\nthe Final Order through a Petition for Reconsideration and a filing to the Fifth Circuit Court of Appeals.\nOn August 14, 2017, the Court issued its findings.\nThe Fifth Circuit ruling of the Court vacated alleged violations 1-4 and 7, and remanded violation 8. The\nremaining violations 5, 6, and 9, with the associated Compliance Order Items remained. In November\n2017, EMPCo met with representatives of the Southwest Region to discuss the actions taken to comply\nwith the remaining Compliance Order Items. The discussion included actions taken by EMPCo to resolve\nthe five remaining Compliance Order Items labeled as Items 3-7 in the original Final Order issued by\nPHMSA.\nPHMSA has reviewed the submissions by EMPCo and confirmed the payment of penalties as required.\nThis case is now closed.\nPHMSA emphasizes the importance of EMPCo establishing and maintaining appropriate procedures for\nperforming in-line assessments as well as procedures for processing and reacting to any condition identified\nduring and following the assessment. Thank you for your cooperation in this matter.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n\n420135027_Order on Remand_08072018_text.pdf\n\nAugust 7, 2018\nMr. Richard E. Byrne\nGeneral Counsel\nExxonMobil Pipeline Company\n22777 Springwoods Village Parkway\nEnergy 3, 5A.491\nSpring, Texas 77389\nRe: In the Matter of ExxonMobil Pipeline Company, CPF No. 4-2013-5027\nDear Mr. Byrne:\nEnclosed please find the Order on Remand issued in the above-referenced case. It assesses a\nreduced civil penalty of $61,900 for the violation in Item 8 of the Final Order that was originally\nissued by PHMSA on October 1, 2015, and remanded by the U.S. Court of Appeals for the Fifth\nCircuit on August 14, 2017. Pursuant to the terms of this order, and because the penalties for\nItems 1–4 and 7 of the Final Order were vacated by the court, PHMSA is refunding Exxon civil\npenalties of $2,355,500 that were already paid. When the remaining terms of the compliance\norder are completed, as determined by the Director, Southwest Region, this enforcement action\nwill be closed. Service of this order by certified mail is effective upon the date of mailing as\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Johnnie R. Randolph, Jr., Counsel, Exxon Mobil Corporation\nMr. Reagan Simpson, YetterColeman, LLP\nMr. Robert Hogfoss, Ms. Catherine Little, Ms. Annie Cook, Troutman Sanders, LLP\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___________________________________\nIn the Matter of )\nExxonMobil Pipeline Company, ) CPF No. 4-2013-5027\n)\n)\n)\nRespondent. )\n___________________________________ )\nORDER ON REMAND\nOn October 1, 2015, pursuant to 49 C.F.R. § 190.213, PHMSA issued a Final Order to\nExxonMobil Pipeline Company (Exxon) as a result of an investigation into the Pegasus Pipeline\nfailure that occurred near the town of Mayflower, Arkansas in March 2013 (Failure).1 The Final\nOrder found that Exxon had committed nine violations of the pipeline safety regulations in\nconnection with the Failure (Items 1–9), assessed a civil penalty of $2,630,400 for the violations,\nand ordered Exxon to complete certain corrective actions. In accordance with 49 C.F.R. §\n190.243, PHMSA affirmed the Final Order in a Decision on Petition for Reconsideration issued\nApril 1, 2016.2\nThereafter, Exxon filed a Petition for Review with the U.S. Court of Appeals for the Fifth\nCircuit, challenging the agency’s Final Order and Decision. On August 14, 2017, the court\nissued a decision vacating Items 1–4 and 7, affirming the violation in Item 8, and remanding that\nitem to PHMSA with instructions to reevaluate the basis for the penalty associated with Item 8.\nThe court left undisturbed Items 5, 6, and 9.\nOn remand, PHMSA has reevaluated the civil penalty for Item 8 consistent with the court’s\nconclusion that the violation did not cause or contribute to the Failure. For the reasons set forth\nbelow, PHMSA is assessing a reduced civil penalty of $61,900 for Item 8.\n1 The pipeline failure occurred on March 29, 2013, in a residential area and resulted in the release of\napproximately 5,000 barrels of crude oil, the evacuation of 22 households, and estimated property damage\nover $57 million. ExxonMobil Pipeline Co., CPF No. 4-2013-5027, 2015 WL 7175715 (Oct. 1, 2015).\n2 ExxonMobil Pipeline Co., CPF No. 4-2013-5027, 2016 WL 2753318 (April 1, 2016). Enforcement\ndecisions can also be viewed on PHMSA’s website at http://www.phmsa.dot.gov/pipeline/enforcement\n(follow links for Enforcement Information for Specific Operators).\n\n\n\nCPF No. 4-2013-5027\nPage 3\nASSESSMENT OF REDUCED PENALTY\nIn determining the amount of a civil penalty, pursuant to 49 U.S.C. § 60122 and 49 C.F.R.\n§ 190.225, PHMSA must consider the following criteria: the nature, circumstances and gravity of\nthe violation, including adverse impact on the environment; the degree of Respondent’s\nculpability; the history of Respondent’s prior offenses; the good faith of Respondent in\nattempting to comply with the pipeline safety regulations; and the effect on Respondent’s ability\nto continue in business.\nItem 8 of the Final Order found that Exxon violated 49 C.F.R. § 195.452(b)(5) by failing to\nfollow its written procedures for implementing its integrity management program. The Final\nOrder assessed a civil penalty of $783,300 for the violation.\nWith regard to the nature, circumstances and gravity of the violation, the Final Order concluded\nthe highest level of gravity was implicated because the violation was a causal factor in the\nFailure. Specifically, Exxon’s procedures required the operator to follow certain procedures in\nimplementing its integrity management program that involved assessing risk by answering\nquestions about the condition of the Pegasus Pipeline. One of the questions asked whether or not\nan integrity assessment had been performed on the pipeline to evaluate seam integrity and to\nidentify conditions requiring repair. While using the program, Exxon answered “yes” to this\nquestion, even though the company had not performed an integrity assessment. Exxon had\nplanned to perform an integrity assessment in the near future and therefore answered this\nquestion incorrectly to reflect the future tool run. However, the tool run was not actually\nperformed when planned and eventually was postponed another several years.\nThe Failure that occurred in March 2013 resulted from a failure of the pipeline’s longitudinal\nseam—the very threat that the operator’s risk assessment was supposed to address. In the Final\nOrder, PHMSA found that the failure to follow the risk assessment program procedures had the\nhighest level of gravity because the violation was a causal factor in the Failure. The Fifth Circuit\nconcluded, however, that PHMSA erred in finding Item 8 had the highest level of gravity—\nfinding the violation was not a causal factor in the accident. The court reasoned that even though\nExxon answered “yes” and failed to run an inline inspection tool for several years, once the\ncompany ran the tool, it did not detect the anomaly that eventually failed. The court reasoned\nthat even if the tool had been timely run, the accident would not have been prevented. The court\nremanded to PHMSA to reevaluate what would be an appropriate penalty for Item 8 in light of\nthis determination.\nOn remand, PHMSA finds the highest levels of gravity are not appropriate for this violation in\nlight of the court’s determination. Having reviewed the record, PHMSA finds that the\nappropriate gravity level is that pipeline safety or integrity had been compromised in a high\nconsequence area (HCA). Exxon’s failure to follow procedures for assessing the integrity of its\npipeline created unnecessary risk to safety, even if an accident did not directly result from the\nerror. Misapplying the risk assessment program produced an inaccurate evaluation of the\npipeline’s safety condition and avoided documenting the need to perform additional integrity\nassessments. It also allowed unknown conditions on the pipeline to go unidentified or evaluated\nfor several years until an inline inspection was finally performed. Further, the violation occurred\n\n\n\nCPF No. 4-2013-5027\nPage 4\nin a residential area that meets the definition of an HCA. Because the violation compromised\nsafety in an HCA, but did not cause or contribute to the Failure, the civil penalty must be\nreduced.\nPHMSA also reviewed the record with regard to the other assessment factors and found no\nreason to depart from the findings in the Final Order. Accordingly, having reviewed the record\nand considered the assessment criteria, PHMSA assesses a reduced penalty of $61,900 for the\nviolation of § 195.452(b)(5) in Item 8.\nDisposition of penalties already paid. On April 21, 2016, twenty days following PHMSA’s\nDecision on Petition for Reconsideration, Exxon paid the total assessed civil penalty of\n$2,630,400 by wire transfer. Because the penalties for Items 1–4 and 7, totaling $1,634,100,\nwere vacated and the penalty for Item 8 is now reduced by $721,400, Exxon must be refunded\n$2,355,500. The penalties paid for Items 5, 6, and 9, totaling $213,000, are not affected.\nPHMSA will therefore initiate a refund of $2,355,500 upon issuance of this Order.\nDisposition of compliance order. The Final Order contained a Compliance Order that required\nExxon to complete certain corrective actions to address the violations in Items 1, 2, 5, 6, and 8.\nItems 1 and 2 have been vacated and therefore the terms of the compliance order associated with\nthose items are vacated. The remaining terms of the compliance order, including those\nassociated with Items 5, 6, and 8, are not otherwise affected by this Order and must be completed\nby Respondent.\nThis Order is issued pursuant to 49 C.F.R. § 190.213. Under § 190.243, Respondent may submit\na petition for reconsideration of this Order to the Associate Administrator for Pipeline Safety,\nPHMSA, 1200 New Jersey Avenue SE, East Building, 2nd Floor, Washington, D.C. 20590, no\nlater than 20 days after receipt of the Order by Respondent. A petition must contain a statement\nof the issue(s) and meet all other requirements of 49 C.F.R. § 190.243.\nThe terms and conditions of this Order are effective upon service in accordance with 49 C.F.R.\n§ 190.5.\nAugust 7, 2018\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420135027_HQ Grants Extended Stay of Compliance Order_02042016_text.pdf\n\nFebruary 04, 2016\nRobert E. Hogfoss, Esq.\nHunton & Williams LLP\nBank of America Plaza, Suite 4100\n600 Peachtree St. NE\nAtlanta, GA 30308\nRe: ExxonMobil Pipeline Company\nCPF No. 4-2013-5027\nDear Mr. Hogfoss:\nI am in receipt of the January 26, 2016, Motion to Extend Stay of Compliance Order filed by\nExxonMobil Pipeline Company (EMPCo), which concerns the Final Order in the above-\nreferenced case. The Final Order that was issued on October 1, 2015, found nine violations\nrelated to a 2013 pipeline accident near Mayflower, Arkansas, assessed a civil penalty of\n$2,630,400, and ordered corrective action set forth in a Compliance Order.\nEMPCo filed a Petition for Reconsideration on October 21, 2015. Pursuant to 49 C.F.R.\n§ 190.243, the filing of the Petition automatically stayed payment of the civil penalty. By letter\ndated November 4, 2015, PHMSA granted your request to stay the Compliance Order while the\nAgency reviewed the Petition. The stay will expire February 2, 2016.\nPHMSA has determined that extending the stay for an additional 60 days while the pipeline\nremains out of service will not compromise safety. Accordingly, in response to your request, the\nstay is extended for 60 days from the date of this letter, unless a final decision on the Petition is\nissued before then.\nThis stay does not waive compliance with any applicable pipeline safety standards, nor does it\naffect any other administrative proceeding that may concern facilities operated by EMPCo.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\ncc: Mr. Rod Seeley, Director, Southwest Region, PHMSA\nMs. Catherine Little, Hunton & Williams LLP\nBank of America Plaza, Ste 4100, 600 Peachtree St. NE, Atlanta, GA 30308\nVIA CERTIFIED MAIL – RETURN RECEIPT REQUESTED\n\n420135027_NOPV PCP PCO_11062013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nNovember 6, 2013\nMr. Gary W. Pruessing\nPresident\nExxonMobil Pipeline Company, LP\n800 Bell Street\nRoom 3180H\nHouston, TX 77002\nDear Mr. Pruessing: CPF No. 4-2013-5027\nOn March 29, 2013, the Pegasus Pipeline ruptured near the town of Mayflower, Arkansas\nreleasing an estimated 5,000 barrels of crude oil in a high consequence area (HCA)1. As a result\nof this accident and pursuant to Chapter 601 of 49 United States Code, representatives of the\nPipeline and Hazardous Materials Safety Administration (PHMSA) investigated the accident and\ninspected operation and maintenance records and procedures related to the Pegasus Pipeline,\nwhich is operated by ExxonMobil Pipeline Company (EMPCo)2\n. From this point, reference to\n“the operator” will refer to the assets involved in this release identified as Mobil Pipeline\noperated by ExxonMobil Pipeline Company.\nAs a result of the investigation and subsequent inspection, it appears that you have committed\nprobable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations.\nThe probable violation(s) are:\n1. § 195.452 Pipeline integrity management in high consequence areas.\n(e) What are the risk factors for establishing an assessment schedule (for both the\nbaseline and continual integrity assessments)?\n1 This estimate may increase when the pipeline is restarted and an actual measurement of the spill volume can be\ncalculated.\n2 The Pegasus Pipeline is owned by Mobil Pipeline Company and operated by EMPCO.\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\n(1) An operator must establish an integrity assessment schedule that prioritizes\npipeline segments for assessment (see paragraphs (d)(1) and (j)(3) of this\nsection). An operator must base the assessment schedule on all risk factors that\nreflect the risk conditions on the pipeline segment. The factors an operator must\nconsider include, but are not limited to:\n(i) Results of the previous integrity assessment, defect type and size that the\nassessment method can detect, and defect growth rate;\n(ii) Pipe size, material, manufacturing information, coating type and condition,\nand seam type;\n(iii) Leak history, repair history and cathodic protection history;\n(iv) Product transported;\n(v) Operating stress level;\n(vi) Existing or projected activities in the area;\n(vii) Local environmental factors that could affect the pipeline (e.g., corrosivity\nof soil, subsidence, climatic);\n(viii) geo-technical hazards; and\n(ix) Physical support of the segment such as by a cable suspension bridge.\nThe integrity assessment schedule established by the operator did not include consideration of\ncertain manufacturing information in their determination of risk factors as required. Specifically,\nthe operator failed to include the susceptibility of its Youngstown, pre-1970 low frequency\nelectric-resistance welded (ERW) pipe seam to failures as a risk factor for the Pegasus Pipeline\nSystem in the implementation of its integrity management program.\nThe operator experienced multiple hydrostatic test failures on the Pegasus Pipeline as a result of\nERW long seam failures in 1991 hydrotesting and subsequent 2005–2006 hydrotesting. The pipe\nmanufacturing information, fracture toughness, and hydrostatic testing failure history of the\nYoungstown pre-1970 low frequency ERW pipe in the Patoka to Corsicana segments of the\nPegasus Pipeline provided more than adequate information for the pipe to be considered\nsusceptible to seam failure. Further, the operator did not present an acceptable engineering\nanalysis to PHMSA to demonstrate that the pre-1970 ERW pipe in the Pegasus Pipeline was not\nsusceptible to seam failure.\n2. §195.452 Pipeline integrity management in high consequence areas.\n(j) What is a continual process of evaluation and assessment to maintain a\npipeline's integrity?\n(3) Assessment intervals. An operator must establish five-year intervals, not to\nexceed 68 months, for continually assessing the line pipe's integrity. An\noperator must base the assessment intervals on the risk the line pipe poses to\nthe high consequence area to determine the priority for assessing the pipeline\nsegments. An operator must establish the assessment intervals based on the\n2 | P a g e\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\nfactors specified in paragraph (e) of this section, the analysis of the results\nfrom the last integrity assessment, and the information analysis required by\nparagraph (g) of this section.\nThe operator failed to establish a five-year re-assessment interval for the Patoka to Corsicana\nsegment of the Pegasus Pipeline after the hydrostatic test of 2005 and 2006 identified a\nsusceptibility to seam failures. The operator failed to consider all risk factors for establishing an\nassessment schedule for continual integrity assessments when they did not consider the\npipeline’s manufacture and results of the previous integrity assessments to conclude that the\npipeline was susceptible to seam failures. The next assessment was performed in 2012 and 2013\nusing a TFI tool.\nThe operator performed an inspection using a TFI tool in a series of four tool runs that began in\nJuly 2012 and was completed on February 6, 2013, on the Conway to Corsicana portion of the\nsystem. The baseline assessments (hydrostatic tests) were performed in 2005 and 2006.\nTherefore, this re-assessment was more than 68 months after the baseline assessments were\nperformed, and exceeded the maximum re-assessment intervals required by 195.452(j)(3).\n3. §195.452 Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline integrity?\nEach operator of a pipeline covered by this section must:\n(5) Implement and follow the program.\n(j) What is a continual process of evaluation and assessment to maintain a\npipeline’s integrity?\n(4) Variance from the 5-year intervals in limited situations-\n(i) Engineering basis. An operator may be able to justify an engineering\nbasis for a longer assessment interval on a segment of line pipe. The justification\nmust be supported by a reliable engineering evaluation combined with the use of\nother technology, such as external monitoring technology, that provides an\nunderstanding of the condition of the line pipe equivalent to that which can be\nobtained from the assessment methods allowed in paragraph (j)(5) of this section.\nAn operator must notify OPS 270 days before the end of the five-year (or less)\ninterval of the justification for a longer interval, and propose an alternative interval.\nAn operator must send the notice to the address specified in paragraph (m) of this\nsection.\nThe operator failed to follow its procedure 5.1 (4) (Continual Evaluation and Assessment\nProcess) for a variance from the five year interval to extend the time frame for conducting its\ncontinual assessment of the Conway to Corsicana segment of the Pegasus Pipeline and failed to\n3 | P a g e\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\nnotify PHMSA. The operator extended the inspection timing from “prior to 12/31/2011” to\n“prior to 12/31/2012,” and again from 12/31/2012 to 2/6/2013 without providing notice to\nPHMSA at least 270 days prior to the end of the five year period which expired in 2011, five-\nyears (NTE 68 months) from the date of the baseline hydrotest.\nThe operator’s procedures for Continual Evaluation and Assessment Process are included in the\nIMP. Section 5 of the procedures includes the rule requirements for establishing assessment\nintervals in accordance with §195.452(j)(3). The procedures included the requirements for a\nvariance from the 5-year intervals in limited situations. Variance from the five-year\nreassessment interval was allowed when the operator was able to justify an engineering basis for\na longer assessment interval on a segment of line pipe. The operator’s procedure required\nnotification to PHMSA 270 days before the end of the five-year (or less) interval of the\njustification for a longer interval and propose an alternative interval.\nPHMSA did not receive a notice, or a request for extension from the operator to extend the\ninterval beyond five years for the Conway to Corsicana segment of the Pegasus Pipeline\nassessment with a method capable of assessing seams in ERW pipe.\n4. §195.452 Pipeline integrity management in high consequence areas.\n(e) What are the risk factors for establishing an assessment schedule (for both the\nbaseline and continual integrity assessments)? (1) An operator must establish an\nintegrity assessment schedule that prioritizes pipeline segments for assessment\n(see paragraphs (d)(1) and (j)(3) of this section. An operator must base the\nassessment schedule on all risk factors that reflect the risk conditions on the\npipeline segment.\n(j) What is a continual process of evaluation and assessment to maintain a pipeline’s\nintegrity?\n(3) Assessment intervals. An operator must establish five-year intervals, not to exceed 68\nmonths, for continually assessing the line pipe’s integrity. An operator must base the\nassessment intervals on the risk the line pipe poses to the high consequence area to\ndetermine the priority for assessing the pipeline segments. An operator must establish the\nassessment intervals based on the factors specified in paragraph (e) of this section, the\nanalysis of the results from the last integrity assessment, and the information analysis\nrequired by paragraph (g) of this section.\nThe operator’s integrity assessment schedule failed to prioritize pipeline segments to re-assess\nthe pipe that posed the highest risk to the high consequence areas before re-assessing lower risk\nsegments. The operator failed to prioritize the Corsicana to Conway segment higher than the\nPatoka to Conway segment of the Pegasus Pipeline for reassessment related to manufacturing\nflaws, and seam failure susceptibility.\n4 | P a g e\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\nThe Corsicana to Conway segment had more hydrotest failures in 2006 than the Conway to\nPatoka segment, including the test failures that were at lower pressures than previous test levels.\nThis segment had all of the seam failures during the 1991 hydrotesting. This segment\nexperienced an in-service ERW seam leak, and had more miles of Youngstown ERW pipe. The\nConway to Foreman segment had the most actionable anomalies after the baseline assessment in\n1999. The operator’s fatigue analyses resulted in the shortest required reinspection interval on\nthe Conway to Corsicana segment at 7.4 years, and the shortest reinspection interval on the\nPatoka to Conway segment was more than 9 years.\nAdditionally, there were more sensitive receptors in the Corsicana to Conway segment of the\npipeline, including the Lake Maumelle Watershed. However, the operator’s decision to perform\nthe TFI Tool inspection on the Patoka to Conway segment first was not documented, and was not\nbased upon appropriate risk considerations that would indicate the TFI run should have been\nperformed on the Conway to Corsicana segment first.\n5. §195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues? (1) General\nrequirements. An operator must take prompt action to address all anomalous\nconditions the operator discovers through the integrity assessment or information\nanalysis. In addressing all conditions, an operator must evaluate all anomalous\nconditions and remediate those that could reduce a pipeline’s integrity. An operator\nmust be able to demonstrate that the remediation of the conditions will ensure the\ncondition is unlikely to pose a threat to the long-term integrity of the pipeline. An\noperator must comply with §195.422 when making a repair.\nThe operator failed to take prompt action to address all anomalous conditions on their pipeline.\nThe operator failed to declare discovery of immediate repair conditions from information\nreceived in preliminary reports from the in-line inspection (ILI) vendor, and as a result, the\noperator treated “Immediate Conditions” as “Validation Digs” or “Confirmation Digs” and did\nnot take appropriate actions for “Immediate Conditions.”\nTwo examples of this are MP 164.051 and MP 142.394. Both sites were identified as immediate\nrepairs from the preliminary report received from the vendor on August 9, 2010; however the\noperator did not identify them as immediate repairs until the sites were excavated and as a result,\nthe operator’s anomalous condition discovery process was carried out in a manner that was\ninconsistent with the regulatory requirement. For MP 164.051, the date of identification from the\noperator was identified 19 days after the vendor report on August 28, 2010, and for MP 142.394\nseveral months after the report on January 6, 2011.\n6. §195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues?\n5 | P a g e\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\n(2) Discovery of condition. Discovery of a condition occurs when an operator\nhas adequate information about the condition to determine that the condition\npresents a potential threat to the integrity of the pipeline. An operator must\npromptly, but no later than 180 days after an integrity assessment, obtain\nsufficient information about a condition to make that determination, unless\nthe operator can demonstrate that the 180-day period is impracticable.\nThe operator failed to declare discovery within 180 days in four separate instances on the\nPegasus Pipeline Patoka to Corsicana segments (2010, 2011, and 2013) despite the availability of\nadequate information in the vendor reports to make such determinations.\nThe following Table summarizes the relevant dates for the subject segments:\nPatoka to Conway (2 Testable Segments)\nDate of Actual\nAction Date 180 Day Deadline\nDiscovery\nMFL-Combo Run 6/10/2010 12/7/2010 3/4/2011\nTFI Tool Run 8/15/2010 2/11/2011 3/4/2011\nPreliminary Report 7/10/2010\nConway to Corsicana (2 Testable Segments)\nDate of Actual\nAction Date 180 Day Deadline\nDiscovery\nMFL-Combo Run 7/21/2010 1/17/2011 3/15/2011\nTFI Tool Run 2/6/2013 8/5/2013 8/30/2013\nPreliminary Report 8/23/2010\n7. §195.452 Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline integrity?\nEach operator of a pipeline covered by this section must:\n(5) Implement and follow the program.\n(j) What is a continual process of evaluation and assessment to maintain a pipeline’s\nintegrity?\n(1) General. After completing the baseline integrity assessment, an operator must\ncontinue to assess the line pipe at specified intervals and periodically evaluate the\nintegrity of each pipeline segment that could affect a high consequence area.\n(2) Evaluation. An operator must conduct a periodic evaluation as frequently as needed\nto assure pipeline integrity. An operator must base the frequency of evaluation on risk\nfactors specific to its pipeline, including the factors specified in paragraph (e) of this\n6 | P a g e\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\nsection. The evaluation must consider the results of the baseline and periodic integrity\nassessments, information analysis (paragraph (g) of this section), and decisions about\nremediation, and preventive and mitigative actions (paragraphs (h) and (i) of this section).\nThe operator failed to follow its procedure, IMP Section 5.4, which requires risk assessments to\nbe updated as changes occur, which includes potential threat changes. The operator did not\nfollow their procedure when they extended the inspection timing of the Conway to Corsicana\nsegment of the Pegasus Pipeline from “prior to 12/31/2011” to “prior to 12/31/2012,” and again\nfrom 12/31/2012 to 2/6/2013 without revising the risk analyses that relied upon the inspection\nhaving been performed in the Summer of 2011, even though the inspection was not performed\nuntil February 6, 2013.\nThe operator’s Operations Integrity Management Systems (OIMS) Element 2, Risk Assessment\n& Management requires in 2.4 that “Risk assessments are updated at specified intervals and as\nchanges occur.” Further, the operator’s Integrity Management Program Section 5.4 requires\nannual review to determine if an updated risk assessment is required. Items that must be\nconsidered in the review include potential threat changes.\nAs a result of not updating the risk assessment, there were no Identified Threats on the Conway\nto Foreman Segment, as demonstrated by the two analyses that were performed in March 2011.\nThe failure to identify an “Identified Threat” caused the integrity decisions to rely upon incorrect\nbases for the analyses that were carried out that rely upon identification of threats for EFRD\nanalyses, additional preventive and Mitigative measures, and other risk reduction activities that\nmay be deemed necessary to bring the risk to an acceptable level.\n8. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system\na manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies.\nThe operator failed to follow its Operations and Maintenance procedures by selectively using\nresults of its Threat Identification and Risk Assessment Manual (TIARA) process in 2011 which\nresulted in the failure to properly characterize the risk of a release to the Lake Maumelle\nWatershed, and other HCAs in the Conway to Foreman segment of the pipeline. This resulted in\nthe failure to determine an “Identified Threat” related to Manufacturing existed on the segment,\nand failed to elevate the threat as required by OIMS and the TIARA processes for appropriate\nrisk reduction activities in multiple integrity processes that rely upon the TIARA results as inputs\nto the processes for risk reduction activities.\n9. §195.452 Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline integrity?\nEach operator of a pipeline covered by this section must:\n(5) Implement and follow the program.\n7 | P a g e\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\n(i) What is a continual process of evaluation and assessment to maintain a pipeline's\nintegrity?\n(1) General. After completing the baseline integrity assessment, an operator must\ncontinue to assess the line pipe at specified intervals and periodically evaluate the\nintegrity of each pipeline segment that could affect a high consequence area.\nThe operator failed to follow its procedures for creating a Management of Change document for\nthe merging of testable segments for their Pegasus Pipeline. The operator combined the\npreviously identified four segments for the Patoka to Corsicana segment to two testable\nsegments.\nThe operator's procedures, OIMS Element 7.2 Corporate Expectation to perform an\nanalysis of Operations Integrity Implications, required a Management of Change document to be\ncreated for a significant change as completed in this case to ensure undervaluation of the\nconsequences of a change in its risk management program does not occur.\nAs a result of the change, the longer Testable Segments negatively impacted the TIARA risk\nassessments by masking higher threat intermediate segments (such as the Lake Maumelle\nWatershed and Mayflower populated areas) with the dilution of the risk scores that resulted from\nthe increased length of the Testable Segment.\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 $2,659,200 as follows:\nItem number\nPENALTY\n1\n$737,200\n2\n$737,200\n3\n$ 56,100\n4\n$ 47,500\n5\n$ 56,100\n6\n$102,200\n7\n$ 70,500\n8\n$783,300\n9\n$ 69,100\nProposed Compliance Order\n8| Page\n\n\n\nMr. Gary Pruessing\nMobil Pipe Line Company\nCPF 4-2013-5027\nWith respect to items 1, 2, 5, 6, and 8 pursuant to 49 United States Code § 60118, the Pipeline\nand Hazardous Materials Safety Administration proposes to issue a Compliance Order to the\noperator. Please refer to the Proposed Compliance Order, which is enclosed and made a part of\nthis Notice.\nResponse to this Not","truncated":true,"body_characters":235304}