{"operation":"document","citation":"CPF 420145022","title":"SHELL PIPELINE CO., L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2014-09-15","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.442(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420145022.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420145022.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420145022","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420145022","body":"Notice of Probable Violation involving SHELL PIPELINE CO., L.P.. PHMSA's enforcement data identifies the cited regulation as 195.442(a). The case was opened on 2014-09-15 and is reported as closed as of 2015-06-03. Proposed civil penalty: $144,000. Assessed civil penalty: $144,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420145022_Closure_06032015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Closure_06032015.pdf\n\n420145022_Closure_06032015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Closure_06032015_text.pdf\n\n420145022_Final Order_01082015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Final%20Order_01082015.pdf\n\n420145022_Final Order_01082015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Final%20Order_01082015_text.pdf\n\n420145022_NOPV PCP PCO_09152014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_NOPV%20PCP%20PCO_09152014.pdf\n\n420145022_NOPV PCP PCO_09152014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_NOPV%20PCP%20PCO_09152014_text.pdf\n\n420145022_Operator Response to Notice_10142014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Operator%20Response%20to%20Notice_10142014.pdf\n\n420145022_Closure_06032015_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED AND VIA E-MAIL\nJune 3, 2015\nMrs. Deborah Price\nIntegrity & Regulatory Services Manager\nShell Pipeline Company, LP\nTwo Shell Plaza\n777 Walker Street\nHouston, Texas, 77002\nRe: CPF 4-2014-5022, Closure\nDear Mrs. Price:\nIn reference to the Compliance Order for the subject case, Shell Pipeline Company, L. P. (Shell)\nsubmitted its revised damaged prevention procedures in a letter dated April 1, 2015. PHMSA\napproved the revised procedures in a letter dated April 2, 2015. Shell submitted a statement of\ncompletion of the required training on the revised procedures on May 28, 2015.\nThis letter is to inform you no further action is necessary and this case is now closed. Thank you\nfor your cooperation.\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n\n420145022_Final Order_01082015_text.pdf\n\nJANUARY 8, 2015\nMr. Greg Smith\nPresident\nShell Pipeline Company, LP\nTwo Shell Plaza\n777 Walker Street\nHouston, Texas 77002\nRe: CPF No. 4-2014-5022\nDear Mr. Smith:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation, specifies actions that need to be taken by Shell Pipeline Company, LP, to comply with\nthe pipeline safety regulations, and assesses a civil penalty of $144,000. This is to acknowledge\nreceipt of your payment of the full penalty amount, by wire transfer, dated October 27, 2014.\nWhen the terms of the compliance order have been completed, as determined by the Director,\nSouthwest Region, this enforcement action will be closed. Service of the Final Order by\ncertified mail is deemed effective upon the date of mailing, or as otherwise provided under\n49 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. R. M. Seeley, Director, Southwest Region, OPS\nMs. Deborah Price, Integrity & Regulatory Services Manager, Shell Pipeline Company\nLP - Two Shell Plaza, 777 Walker Street, Houston, Texas 77002\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)\nShell Pipeline Company, LP, ) CPF No. 4-2014-5022\na subsidiary of Royal Dutch Shell, plc, )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn March 7, 2014, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an investigation of a pipeline accident near Port Neches, Texas, involving the\nHouston-to-Houma pipeline operated by Shell Pipeline Company, LP (Shell or Respondent).\nShell, a subsidiary of Royal Dutch Shell, plc,1 owns and operates seven tank farms across the\nUnited States, and annually transports more than 1.5 billion barrels of crude oil and refined\nproducts through 3,800 miles of pipelines across the Gulf of Mexico and five states.\n2 The\nHouston-to-Houma pipeline is comprised of more than 350 miles of 20-inch and 22-inch-\ndiameter pipe running from Houston, Texas, to Houma, Louisiana.3\nThe investigation arose out of an accident occurring on March 6, 2014, when a contractor\nworking for Shell damaged the Houston-to-Houma pipeline when preparing to perform a\nhorizontal directional drill (HDD) installation (Accident). An anchor for the HDD equipment\nwas lowered into the ground directly above the pipeline, rupturing the line and releasing\napproximately 364 barrels of crude oil into the environment.\nAs a result of the PHMSA investigation, the Director, Southwest Region, OPS (Director), issued\nto Respondent, by letter dated September 15, 2014, a Notice of Probable Violation, Proposed\nCivil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R.\n§ 190.207, the Notice proposed finding that Shell had violated 49 C.F.R. § 195.442(a), assessing\na civil penalty of $144,000 for the alleged violation, and ordering Respondent to take certain\nmeasures to correct the alleged violation.\n1 About Shell – Who We Are – Shell at a glance, http://www.shell.us/aboutshell/who-we-are-2013/at-a-glance.html\n(last visited November 7, 2014).\n2 About Shell – About Shell Pipeline Company, L.P., http://www.shell.us/products-services/solutions-for-\nbusinesses/pipeline/about-shell-pipeline html (last visited November 7, 2014).\n3 Pipeline Safety Violation Report (Violation Report), (September 15, 2015) (on file with PHMSA), at 1.\n\n\n\nCPF No: 4-2014-5022\nPage 2\nShell responded to the Notice by letter dated October 14, 2014 (Response). Respondent did\nnot contest the allegation of violation but provided information concerning the corrective actions\nit had taken. As provided in 49 C.F.R. § 190.227, Shell paid the proposed civil penalty of\n$144,000 by wire transfer dated October 27, 2014. Payment of the penalty serves to close the\ncase with prejudice to Respondent as to those items for which a penalty was proposed.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDING OF VIOLATION\nIn its Response, Shell did not contest the allegation that it violated 49 C.F.R. Part 195, as\nfollows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.442(a), which states:\n§ 195.442 Damage prevention program.\n(a) Except as provided in paragraph (d) of this section, each operator\nof a buried pipeline must carry out, in accordance with this section, a\nwritten program to prevent damage to that pipeline from excavation\nactivities. For the purpose of this section, the term “excavation activities”\nincludes excavation, blasting, boring, tunneling, backfilling, the removal\nof above-ground structures by either explosive or mechanical means, and\nother earthmoving operations.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.442(a) by failing to carry out a\nsection of its own written damage prevention program. Specifically, the Notice alleged that\nShell failed to mark its Houston-to-Houma pipeline as specified in Section 3.23 of its procedure,\nPipeline Inspection & Maintenance Manual, Section 3.23 – Temporary Locating and Marking.\nThe Notice further alleged that as a result of Shell’s failure to properly locate and mark its own\nline, on March 6, 2014, a second-party contractor working for Shell damaged the pipeline when\npreparing to perform an HDD installation. As the pipeline had not been temporarily identified\nand marked by Shell personnel, as required by Section 3.23, an anchor for the HDD equipment\nwas lowered into the ground directly above the pipeline, rupturing the line and releasing\napproximately 364 barrels of crude oil into the environment.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.442(a) by failing to carry out a\nsection of its own written damage prevention program.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.\n\n\n\nCPF No: 4-2014-5022\nPage 3\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; and any effect that the penalty may have on its ability to continue\ndoing business; and the good faith of the Respondent in attempting to comply with the pipeline\nsafety regulations. In addition, I may consider the economic benefit gained from the violation\nwithout any reduction because of subsequent damages, and such other matters as justice may\nrequire. The Notice proposed a total civil penalty of $144,000 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $144,000 for Respondent’s violating 49 C.F.R.\n§ 195.442(a), by failing to carry out a section of its own written damage prevention program. As\ndiscussed above, I found that a Shell contractor failed to follow Section 3.23 of the company’s\nprocedure for locating and marking a section of its Houston-to-Houma pipeline, resulting in an\naccident and release of crude oil into the environment. The company paid the proposed penalty,\nwhich serves to close the case with prejudice to Respondent.\nAccordingly, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $144,000 for violating 49 C.F.R.\n§ 195.442(a), which amount has already been paid in full.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 1, for violating 49 C.F.R.\n§ 195.442(a). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of\nhazardous liquids or who owns or operates a pipeline facility is required to comply with the\napplicable safety standards established under Chapter 601.\nIn its Response, Shell did not contest the allegation of violation and stated its intent to address\nthe violation stated in the Notice.4 Pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance\nwith the pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.442(a), (Item 1), Respondent must revise its\ndamage prevention procedures in the following areas:\na. Revise or update the detailed work process for all project work that requires\ncoordination between Shell Right-of-Way Technicians and Shell Projects\nPersonnel to ensure clear roles and responsibilities for line locating and\ntemporary marking of pipeline facilities. Additionally, all roles and\nresponsibilities related to monitoring and/or observation activities shall be\nreviewed, and any necessary procedural revisions formalized, through a\nManagement of Change process; and\n4 In its Response, Shell took issue with a statement in the Violation Report that the PHMSA inspector had\ndiscovered the violation leading to the Accident. Respondent asserted this statement was incorrect, that the\ncompany had actually discovered the violation and reported it to PHMSA, and that the record should be corrected.\nSince the penalty has been paid and Respondent has not submitted any evidence to support its claim, I am not in a\nposition to modify the record as requested.\n\n\n\n2. 3. 4. 5. CPF No: 4-2014-5022\nPage 4\nb. Develop a requirement within the Comprehensive Horizontal Directional Drill\n(CHDD) Plan to provide to Shell contractors. The requirement shall ensure\ncoordination of activities associated with the CHDD Plan. Additionally,\nensure that the evaluation of equipment is considered during the project\nplanning phase and subsequent damage prevention activities.\nShell shall carry out training for all affected employees to cover the procedural\nrevisions resulting from Item 1 of this Compliance Order, and share the lessons\nlearned from the investigation within the Shell organization affected employees.\nShell shall complete Item 1 above no later than 90 days after the issuance of the\nFinal Order and submit the procedures for review and concurrence from PHMSA\nprior to carrying out the training required by Item 2.\nShell shall complete Item 2 above no later than 60 days after the PHMSA\napproval of the procedures submitted under Item 1.\nIt is requested, not mandated, that Shell maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit\nthe total to R.M. Seeley, Director, Southwest Region, Pipeline and Hazardous\nMaterials Safety Administration. It is requested that these costs be reported in\ntwo categories: 1) total cost associated with preparation/revision of plans,\nprocedures, studies and analyses; and 2) total cost associated with replacements,\nadditions, and other changes to pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Final Order may result in administrative assessment of civil penalties\nnot to exceed $200,000 for each violation, for each day the violation continues, or in referral to\nthe Attorney General for appropriate relief in a district court of the United States.\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\n\n420145022_NOPV PCP PCO_09152014_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nSeptember 15, 2014\nMr. Greg Smith\nPresident\nShell Pipeline Company, L.P.\nP.O. Box 2648\nHouston, TX 77252\nCPF 4-2014-5022\nDear Mr. Smith:\nOn March 6, 2014, Shell Pipeline Company, L.P. (Shell) experienced an excavated related\naccident on its Houma Pipeline System 20-inch line near Port Neches, TX. As a result of this\naccident, a representative of the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code\nconducted an accident investigation and performed an inspection of your related Damage\nPrevention practices.\nAs a result of the investigation and inspection, it appears that you have committed a probable\nviolation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The item\ninspected and the probable violation is:\n\n\n\n1. §195.442 Damage prevention program.\n(a) Except as provided in paragraph (d) of this section, each operator of a\nburied pipeline must carry out, in accordance with this section, a written\nprogram to prevent damage to that pipeline from excavation activities.\nShell failed to mark its underground facilities in accordance with their damage prevention\nprogram, Pipeline Inspection & Maintenance Manual Section 3.23 – Temporary Locating and\nMarking, resulting in the damage to its Houston to Houma 20” pipeline. On March 6, 2014, a\nsecond party contractor working for Shell damaged the pipeline while setting the anchors for\ntheir equipment to perform a horizontal directional drill (HDD) installation.\nPrior to the start of excavation, the pipeline’s location was not temporarily identified adequately\nby Shell personnel, causing the pipeline to be damaged during the set-up for the excavation\nactivities being overseen by the operator. During set-up, an anchor for the HDD equipment was\nlowered into the ground directly above the Shell pipeline, rupturing the line and releasing\napproximately 364 barrels of crude oil into the environment.\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 4, 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 violation(s) and has recommended that\nyou be preliminarily assessed a civil penalty of $[total amount] as follows:\nItem number PENALTY\n1 $144,000\nProposed Compliance Order\nWith respect to Item 1, pursuant to 49 United States Code § 60118, PHMSA proposes to issue a\nCompliance Order to Shell. Please refer to the Proposed Compliance Order, which is enclosed\nand made 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. All2\n\n\n\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.\nIn your correspondence on this matter, please refer to CPF 4-2014-5022 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\n3\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 Shell Pipeline Company, L.P. (Shell) a\nCompliance Order incorporating the following remedial requirements to ensure the compliance\nof Shell with the pipeline safety regulations:\n1. 2. 3. 4. 5. In regard to Item Number 1 of the Notice pertaining to Shell’s Damage\nPrevention processes; Shell shall revise its Damage Prevention Procedures in the\nfollowing areas:\na. Revise/update the detailed work process for all Project work that requires\ncoordination between Shell ROW Technicians and Shell Projects personnel to\nensure clear roles and responsibilities for line locating and temporary marking of\npipeline facilities. Additionally, all roles and responsibilities related to\nmonitoring and/or observation activities shall be reviewed and any necessary\nprocedural revisions shall be formalized through a Management of Change\n(MOC) process.\nb. Develop a requirement within the Comprehensive Horizontal Directional Drill\n(HDD) Plan to provide to Shell contractors. The requirement shall ensure\ncoordination of activities associated with the HDD. Additionally, ensure the\nevaluation of equipment is considered during the project planning phase and\nsubsequent damage prevention activities.\nShell shall carry out training for all affected employees to cover the procedural\nrevisions resulting from Item 1 of this Order, and share the lessons learned from\nthe investigation within the Shell organization affected employees.\nShell shall complete Item 1 no later than 90 days after the issuance of the Final\nOrder and submit the procedures for review and concurrence from PHMSA prior\nto carrying out the training required by Item 2.\nShell shall complete Item 2 no later than 60 days after the PHMSA approval of\nthe procedures submitted under Item 1.\nIt is requested (not mandated) that Shell maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit\nthe total to R. M. Seeley, Director, Southwest Region, Pipeline and Hazardous\nMaterials Safety Administration. It is requested that these costs be reported in\ntwo categories: 1) total cost associated with preparation/revision of plans,\nprocedures, studies and analyses, and 2) total cost associated with replacements,\nadditions and other changes to pipeline infrastructure.\n4","truncated":false,"body_characters":21348}