# SHELL PIPELINE CO., L.P. — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.442(a).
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- **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.

Official case documents:

420145022_Closure_06032015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Closure_06032015.pdf

420145022_Closure_06032015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Closure_06032015_text.pdf

420145022_Final Order_01082015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Final%20Order_01082015.pdf

420145022_Final Order_01082015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Final%20Order_01082015_text.pdf

420145022_NOPV PCP PCO_09152014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_NOPV%20PCP%20PCO_09152014.pdf

420145022_NOPV PCP PCO_09152014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_NOPV%20PCP%20PCO_09152014_text.pdf

420145022_Operator Response to Notice_10142014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420145022/420145022_Operator%20Response%20to%20Notice_10142014.pdf

420145022_Closure_06032015_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED AND VIA E-MAIL
June 3, 2015
Mrs. Deborah Price
Integrity & Regulatory Services Manager
Shell Pipeline Company, LP
Two Shell Plaza
777 Walker Street
Houston, Texas, 77002
Re: CPF 4-2014-5022, Closure
Dear Mrs. Price:
In reference to the Compliance Order for the subject case, Shell Pipeline Company, L. P. (Shell)
submitted its revised damaged prevention procedures in a letter dated April 1, 2015. PHMSA
approved the revised procedures in a letter dated April 2, 2015. Shell submitted a statement of
completion of the required training on the revised procedures on May 28, 2015.
This letter is to inform you no further action is necessary and this case is now closed. Thank you
for your cooperation.
Sincerely,
R. M. Seeley
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration

420145022_Final Order_01082015_text.pdf

JANUARY 8, 2015
Mr. Greg Smith
President
Shell Pipeline Company, LP
Two Shell Plaza
777 Walker Street
Houston, Texas 77002
Re: CPF No. 4-2014-5022
Dear Mr. Smith:
Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of
violation, specifies actions that need to be taken by Shell Pipeline Company, LP, to comply with
the pipeline safety regulations, and assesses a civil penalty of $144,000. This is to acknowledge
receipt of your payment of the full penalty amount, by wire transfer, dated October 27, 2014.
When the terms of the compliance order have been completed, as determined by the Director,
Southwest Region, this enforcement action will be closed. Service of the Final Order by
certified mail is deemed effective upon the date of mailing, or as otherwise provided under
49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. R. M. Seeley, Director, Southwest Region, OPS
Ms. Deborah Price, Integrity & Regulatory Services Manager, Shell Pipeline Company
LP - Two Shell Plaza, 777 Walker Street, Houston, Texas 77002
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
Shell Pipeline Company, LP, ) CPF No. 4-2014-5022
a subsidiary of Royal Dutch Shell, plc, )
)
Respondent. )
____________________________________)
FINAL ORDER
On March 7, 2014, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and
Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
conducted an investigation of a pipeline accident near Port Neches, Texas, involving the
Houston-to-Houma pipeline operated by Shell Pipeline Company, LP (Shell or Respondent).
Shell, a subsidiary of Royal Dutch Shell, plc,1 owns and operates seven tank farms across the
United States, and annually transports more than 1.5 billion barrels of crude oil and refined
products through 3,800 miles of pipelines across the Gulf of Mexico and five states.
2 The
Houston-to-Houma pipeline is comprised of more than 350 miles of 20-inch and 22-inch-
diameter pipe running from Houston, Texas, to Houma, Louisiana.3
The investigation arose out of an accident occurring on March 6, 2014, when a contractor
working for Shell damaged the Houston-to-Houma pipeline when preparing to perform a
horizontal directional drill (HDD) installation (Accident). An anchor for the HDD equipment
was lowered into the ground directly above the pipeline, rupturing the line and releasing
approximately 364 barrels of crude oil into the environment.
As a result of the PHMSA investigation, the Director, Southwest Region, OPS (Director), issued
to Respondent, by letter dated September 15, 2014, a Notice of Probable Violation, Proposed
Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R.
§ 190.207, the Notice proposed finding that Shell had violated 49 C.F.R. § 195.442(a), assessing
a civil penalty of $144,000 for the alleged violation, and ordering Respondent to take certain
measures to correct the alleged violation.
1 About Shell – Who We Are – Shell at a glance, http://www.shell.us/aboutshell/who-we-are-2013/at-a-glance.html
(last visited November 7, 2014).
2 About Shell – About Shell Pipeline Company, L.P., http://www.shell.us/products-services/solutions-for-
businesses/pipeline/about-shell-pipeline html (last visited November 7, 2014).
3 Pipeline Safety Violation Report (Violation Report), (September 15, 2015) (on file with PHMSA), at 1.



CPF No: 4-2014-5022
Page 2
Shell responded to the Notice by letter dated October 14, 2014 (Response). Respondent did
not contest the allegation of violation but provided information concerning the corrective actions
it had taken. As provided in 49 C.F.R. § 190.227, Shell paid the proposed civil penalty of
$144,000 by wire transfer dated October 27, 2014. Payment of the penalty serves to close the
case with prejudice to Respondent as to those items for which a penalty was proposed.
Respondent did not request a hearing and therefore has waived its right to one.
FINDING OF VIOLATION
In its Response, Shell did not contest the allegation that it violated 49 C.F.R. Part 195, as
follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.442(a), which states:
§ 195.442 Damage prevention program.
(a) Except as provided in paragraph (d) of this section, each operator
of a buried pipeline must carry out, in accordance with this section, a
written program to prevent damage to that pipeline from excavation
activities. For the purpose of this section, the term “excavation activities”
includes excavation, blasting, boring, tunneling, backfilling, the removal
of above-ground structures by either explosive or mechanical means, and
other earthmoving operations.
The Notice alleged that Respondent violated 49 C.F.R. § 195.442(a) by failing to carry out a
section of its own written damage prevention program. Specifically, the Notice alleged that
Shell failed to mark its Houston-to-Houma pipeline as specified in Section 3.23 of its procedure,
Pipeline Inspection & Maintenance Manual, Section 3.23 – Temporary Locating and Marking.
The Notice further alleged that as a result of Shell’s failure to properly locate and mark its own
line, on March 6, 2014, a second-party contractor working for Shell damaged the pipeline when
preparing to perform an HDD installation. As the pipeline had not been temporarily identified
and marked by Shell personnel, as required by Section 3.23, an anchor for the HDD equipment
was lowered into the ground directly above the pipeline, rupturing the line and releasing
approximately 364 barrels of crude oil into the environment.
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.442(a) by failing to carry out a
section of its own written damage prevention program.
This finding of violation will be considered a prior offense in any subsequent enforcement action
taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.



CPF No: 4-2014-5022
Page 3
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; and any effect that the penalty may have on its ability to continue
doing business; and the good faith of the Respondent in attempting to comply with the pipeline
safety regulations. In addition, I may consider the economic benefit gained from the violation
without any reduction because of subsequent damages, and such other matters as justice may
require. The Notice proposed a total civil penalty of $144,000 for the violation cited above.
Item 1: The Notice proposed a civil penalty of $144,000 for Respondent’s violating 49 C.F.R.
§ 195.442(a), by failing to carry out a section of its own written damage prevention program. As
discussed above, I found that a Shell contractor failed to follow Section 3.23 of the company’s
procedure for locating and marking a section of its Houston-to-Houma pipeline, resulting in an
accident and release of crude oil into the environment. The company paid the proposed penalty,
which serves to close the case with prejudice to Respondent.
Accordingly, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $144,000 for violating 49 C.F.R.
§ 195.442(a), which amount has already been paid in full.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Item 1, for violating 49 C.F.R.
§ 195.442(a). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of
hazardous liquids or who owns or operates a pipeline facility is required to comply with the
applicable safety standards established under Chapter 601.
In its Response, Shell did not contest the allegation of violation and stated its intent to address
the violation stated in the Notice.4 Pursuant to the authority of 49 U.S.C. § 60118(b) and
49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance
with the pipeline safety regulations applicable to its operations:
1. With respect to the violation of § 195.442(a), (Item 1), Respondent must revise its
damage prevention procedures in the following areas:
a. Revise or update the detailed work process for all project work that requires
coordination between Shell Right-of-Way Technicians and Shell Projects
Personnel to ensure clear roles and responsibilities for line locating and
temporary marking of pipeline facilities. Additionally, all roles and
responsibilities related to monitoring and/or observation activities shall be
reviewed, and any necessary procedural revisions formalized, through a
Management of Change process; and
4 In its Response, Shell took issue with a statement in the Violation Report that the PHMSA inspector had
discovered the violation leading to the Accident. Respondent asserted this statement was incorrect, that the
company had actually discovered the violation and reported it to PHMSA, and that the record should be corrected.
Since the penalty has been paid and Respondent has not submitted any evidence to support its claim, I am not in a
position to modify the record as requested.



2. 3. 4. 5. CPF No: 4-2014-5022
Page 4
b. Develop a requirement within the Comprehensive Horizontal Directional Drill
(CHDD) Plan to provide to Shell contractors. The requirement shall ensure
coordination of activities associated with the CHDD Plan. Additionally,
ensure that the evaluation of equipment is considered during the project
planning phase and subsequent damage prevention activities.
Shell shall carry out training for all affected employees to cover the procedural
revisions resulting from Item 1 of this Compliance Order, and share the lessons
learned from the investigation within the Shell organization affected employees.
Shell shall complete Item 1 above no later than 90 days after the issuance of the
Final Order and submit the procedures for review and concurrence from PHMSA
prior to carrying out the training required by Item 2.
Shell shall complete Item 2 above no later than 60 days after the PHMSA
approval of the procedures submitted under Item 1.
It is requested, not mandated, that Shell maintain documentation of the safety
improvement costs associated with fulfilling this Compliance Order and submit
the total to R.M. Seeley, Director, Southwest Region, Pipeline and Hazardous
Materials Safety Administration. It is requested that these costs be reported in
two categories: 1) total cost associated with preparation/revision of plans,
procedures, studies and analyses; and 2) total cost associated with replacements,
additions, and other changes to pipeline infrastructure.
The Director may grant an extension of time to comply with any of the required items upon a
written request timely submitted by the Respondent and demonstrating good cause for an
extension.
Failure to comply with this Final Order may result in administrative assessment of civil penalties
not to exceed $200,000 for each violation, for each day the violation continues, or in referral to
the Attorney General for appropriate relief in a district court of the United States.
The terms and conditions of this Final Order are effective upon service in accordance with
49 C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety

420145022_NOPV PCP PCO_09152014_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
September 15, 2014
Mr. Greg Smith
President
Shell Pipeline Company, L.P.
P.O. Box 2648
Houston, TX 77252
CPF 4-2014-5022
Dear Mr. Smith:
On March 6, 2014, Shell Pipeline Company, L.P. (Shell) experienced an excavated related
accident on its Houma Pipeline System 20-inch line near Port Neches, TX. As a result of this
accident, a representative of the Pipeline and Hazardous Materials Safety Administration
(PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code
conducted an accident investigation and performed an inspection of your related Damage
Prevention practices.
As a result of the investigation and inspection, it appears that you have committed a probable
violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The item
inspected and the probable violation is:



1. §195.442 Damage prevention program.
(a) Except as provided in paragraph (d) of this section, each operator of a
buried pipeline must carry out, in accordance with this section, a written
program to prevent damage to that pipeline from excavation activities.
Shell failed to mark its underground facilities in accordance with their damage prevention
program, Pipeline Inspection & Maintenance Manual Section 3.23 – Temporary Locating and
Marking, resulting in the damage to its Houston to Houma 20” pipeline. On March 6, 2014, a
second party contractor working for Shell damaged the pipeline while setting the anchors for
their equipment to perform a horizontal directional drill (HDD) installation.
Prior to the start of excavation, the pipeline’s location was not temporarily identified adequately
by Shell personnel, causing the pipeline to be damaged during the set-up for the excavation
activities being overseen by the operator. During set-up, an anchor for the HDD equipment was
lowered into the ground directly above the Shell pipeline, rupturing the line and releasing
approximately 364 barrels of crude oil into the environment.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000
per violation per day the violation persists up to a maximum of $2,000,000 for a related series of
violations. For violations occurring prior to January 4, 2012, the maximum penalty may not
exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for a
related series of violations. The Compliance Officer has reviewed the circumstances and
supporting documentation involved in the above probable violation(s) and has recommended that
you be preliminarily assessed a civil penalty of $[total amount] as follows:
Item number PENALTY
1 $144,000
Proposed Compliance Order
With respect to Item 1, pursuant to 49 United States Code § 60118, PHMSA proposes to issue a
Compliance Order to Shell. Please refer to the Proposed Compliance Order, which is enclosed
and made a part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators
in Compliance Proceedings. Please refer to this document and note the response options. All2



material you submit in response to this enforcement action may be made publicly available. If
you believe that any portion of your responsive material qualifies for confidential treatment
under 5 U.S.C. 552(b), along with the complete original document you must provide a second
copy of the document with the portions you believe qualify for confidential treatment redacted
and an explanation of why you believe the redacted information qualifies for confidential
treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice,
this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the
Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further
notice to you and to issue a Final Order.
In your correspondence on this matter, please refer to CPF 4-2014-5022 and for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
R. M. Seeley
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
3



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to Shell Pipeline Company, L.P. (Shell) a
Compliance Order incorporating the following remedial requirements to ensure the compliance
of Shell with the pipeline safety regulations:
1. 2. 3. 4. 5. In regard to Item Number 1 of the Notice pertaining to Shell’s Damage
Prevention processes; Shell shall revise its Damage Prevention Procedures in the
following areas:
a. Revise/update the detailed work process for all Project work that requires
coordination between Shell ROW Technicians and Shell Projects personnel to
ensure clear roles and responsibilities for line locating and temporary marking of
pipeline facilities. Additionally, all roles and responsibilities related to
monitoring and/or observation activities shall be reviewed and any necessary
procedural revisions shall be formalized through a Management of Change
(MOC) process.
b. Develop a requirement within the Comprehensive Horizontal Directional Drill
(HDD) Plan to provide to Shell contractors. The requirement shall ensure
coordination of activities associated with the HDD. Additionally, ensure the
evaluation of equipment is considered during the project planning phase and
subsequent damage prevention activities.
Shell shall carry out training for all affected employees to cover the procedural
revisions resulting from Item 1 of this Order, and share the lessons learned from
the investigation within the Shell organization affected employees.
Shell shall complete Item 1 no later than 90 days after the issuance of the Final
Order and submit the procedures for review and concurrence from PHMSA prior
to carrying out the training required by Item 2.
Shell shall complete Item 2 no later than 60 days after the PHMSA approval of
the procedures submitted under Item 1.
It is requested (not mandated) that Shell maintain documentation of the safety
improvement costs associated with fulfilling this Compliance Order and submit
the total to R. M. Seeley, Director, Southwest Region, Pipeline and Hazardous
Materials Safety Administration. It is requested that these costs be reported in
two categories: 1) total cost associated with preparation/revision of plans,
procedures, studies and analyses, and 2) total cost associated with replacements,
additions and other changes to pipeline infrastructure.
4
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