# TRANSMONTAIGNE OPERATING COMPANY L.P. — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420195024
- **title:** TRANSMONTAIGNE OPERATING COMPANY L.P. — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2019-12-30
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.452(h)(4)(iii)(e), 195.452(j)(2).
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420195024.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420195024
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420195024
**body:**

Notice of Probable Violation involving TRANSMONTAIGNE OPERATING COMPANY L.P.. PHMSA's enforcement data identifies the cited regulations as 195.452(h)(4)(iii)(e),  195.452(j)(2). The case was opened on 2019-12-30 and is reported as closed as of 2020-10-05. Proposed civil penalty: $46,600. Assessed civil penalty: $46,600. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420195024_Closure Letter_10052020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195024/420195024_Closure%20Letter_10052020.pdf

420195024_Closure Letter_10052020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195024/420195024_Closure%20Letter_10052020_text.pdf

420195024_Final Order_07272020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195024/420195024_Final%20Order_07272020.pdf

420195024_Final Order_07272020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195024/420195024_Final%20Order_07272020_text.pdf

420195024_NOPV PCP PCO_12302019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195024/420195024_NOPV%20PCP%20PCO_12302019.pdf

420195024_NOPV PCP PCO_12302019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195024/420195024_NOPV%20PCP%20PCO_12302019_text.pdf

420195024_Operator Response to Notice_01302020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195024/420195024_Operator%20Response%20to%20Notice_01302020.pdf

420195024_Closure Letter_10052020_text.pdf

ELECTRONIC MAIL - RETURN RECEIPT REQUESTED
October 5, 2020
Mr. Fred Boutin
Chief Executive Officer
TransMontaigne Operating Company, L.P.
200 Mansell Court East, Suite 600
Roswell, Georgia 30076
CPF 4-2019-5024
Dear Mr. Boutin:
On July 27, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued
to TransMontaigne Operating Company a Final Order in the above-referenced case. This Order
included a Compliance Order and Civil Penalty assessment. Based on our review of the
documentation you provided and confirmation of payment of the civil penalty, it has been
determined that you have complied with the terms of this Order.
Accordingly, this case is now closed and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
Mary L. McDaniel, P.E.
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration

420195024_Final Order_07272020_text.pdf

July 27, 2020
VIA ELECTRONIC MAIL TO: fboutin@transmontaigne.com
Mr. Fred Boutin
Chief Executive Officer
TransMontaigne Operating Company, LP
200 Mansell Court East, Suite 600
Roswell, Georgia 30076
Re: CPF No. 4-2019-5024
Dear Mr. Boutin:
Enclosed please find the Final Order issued in the above-referenced case. It makes one finding
of violation and assesses a civil penalty of $46,600, and specifies actions that need to be taken by
TransMontaigne Operating Company, LP, to comply with the pipeline safety regulations. When
the civil penalty has been paid and the terms of the compliance order completed, as determined
by the Director, Southwest Region, this enforcement action will be closed. This enforcement
action closes automatically upon receipt of payment. Service of the Final Order by electronic
mail is effective upon the date of transmission as provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA
Mr. James F. Dugan, Executive Vice President, TransMontaigne Operating Company,
LP, jdugan@transmontaigne.com
Mr. Edward J. Luebke, Vice President of Pipeline Operations, TransMontaigne Operating
Company, LP, eluebke@transmontaigne.com
CONFIRMATION OF 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 )
TransMontaigne Operating Company, LP, ) CPF No. 4-2019-5024
)
)
)
Respondent. )
__________________________________________)
FINAL ORDER
From January 7 through June 21, 2019, pursuant to 49 U.S.C. § 60117, representatives of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site pipeline safety inspection TransMontaigne Operating Company,
LP’s (TransMontaigne or Respondent) Diamondback Pipeline system in Brownsville, Texas.
The Diamondback Pipeline system consists of 16.3 miles of 6-inch and 16.3 miles of 8-inch
pipeline running parallel to each other in Brownsville, Texas, from the Mexico-U.S. Border to
the Port of Brownsville.1
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated December 30, 2019, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to
49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that
TransMontaigne had violated 40 C.F.R. § 194.452(j)(2) and proposed assessing a civil penalty of
$46,600 for the alleged violation. The Notice also proposed ordering Respondent to take certain
measures to correct the alleged violation. The warning item required no further action, but
warned the operator to correct the probable violations or face possible future enforcement action.
TransMontaigne responded to the Notice by letter dated January 30, 2020 (Response). The
company did not contest the allegation of violation in Item 1, agreed to complete the proposed
compliance actions, and requested that the proposed civil penalty be reduced based on actions it
had taken and proposed to take in the future. The company also requested the removal of the
warning associated with Item 1. Respondent did not request a hearing and therefore has waived
its right to one.
FINDING OF VIOLATION
In its Response, TransMontaigne did not contest the allegation in the Notice that it violated 49
C.F.R. Part 195, as follows:
1 See Pipeline Safety Violation Report, dated December 30, 2019 (Violation Report), at 1 (on file with PHMSA).



CPF No. 4-2019-5024
Page 2
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)(2), which states:
§ 195.452 Pipeline integrity management in high consequence areas.
(j) What is a continual process of evaluation and assessment to
maintain a pipeline's integrity?
(1) . . .
(2) Evaluation. An operator must conduct a periodic evaluation as
frequently as needed to assure pipeline integrity. An operator must base the
frequency of evaluation on risk factors specific to its pipeline, including the
factors specified in paragraph (e) of this section. The evaluation must
consider the results of the baseline and periodic integrity assessments,
information analysis (paragraph (g) of this section), and decisions about
remediation, and preventive and mitigative actions (paragraphs (h) and (i)
of this section).
The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)(2) by failing to conduct a
periodic evaluation as frequently as needed to ensure the integrity of each pipeline segment that
could affect a high consequence area (HCA). Specifically, the Notice alleged that
TransMontaigne failed to conduct its periodic Emergency Flow Restriction Device (EFRD)
studies in accordance with its own Pipeline Integrity Assessment and Management Manual,
Section 6.06: EFRD Need Evaluation Factors (Section 6.06). According to the Notice, Section
6.06 states that the company’s Integrity Manager will re-evaluate the need for additional EFRDs
on each pipeline segment at least every five years, beginning in 2011. TransMontaigne allegedly
failed to provide any records to show that the required EFRD evaluations were in fact performed
in 2011 and 2016, as required.
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. § 195.452(j)(2) by failing to conduct a
periodic evaluation as frequently as needed to ensure the integrity of each pipeline segment that
could affect an HCA.
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.2 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; any effect that
the penalty may have on its ability to continue doing business; and the good faith of Respondent
in attempting to comply with the pipeline safety regulations. In addition, I may consider the
2 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.



CPF No. 4-2019-5024
Page 3
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 $46,600 for the violation cited above.
Item 1: The Notice proposed a civil penalty of $46,600 for Respondent’s violation of 49 C.F.R.
§ 195.452(j)(2), for failing to conduct its EFRD studies in accordance with its Pipeline Integrity
Assessment and Management Manual, Section 6.06, as frequently as needed to ensure the
integrity of each covered segment.
In its Response, TransMontaigne did not contest the findings with regard to each assessment
criterion used to calculate the proposed civil penalty amount, but requested that the proposed
civil penalty be reduced or waived based on the company’s historical commitment to integrity
management and safe operations, as well as future process improvements. According to its
Response, TransMontaigne stated that it has taken the necessary actions to improve leak
detection and mitigation for the Diamondback Pipeline by installing a mainline block valve and
relocating another block valve to improve accessibility, thus automating the location.
TransMontaigne indicated that it has already conducted a High Consequence Area and EFRD
Analysis of the Diamondback system and will re-evaluate the need for additional EFRDs.
Notwithstanding the stated improvements to its approach to integrity management for the
Diamondback Pipeline system, which are commendable, there is no evidence in the record that
would support a reduction or elimination of the proposed civil penalty. Past history and
commitment to integrity management do not excuse failing to comply with federal regulatory
responsibilities in a timely manner. Likewise, potential future actions taken to come into
compliance are those that PHMSA would expect of any prudent operator and do not serve as the
basis for a penalty reduction.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $46,600 for violation of 49 C.F.R. § 195.452(j)(2).
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $46,600.
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.
The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the $46,600 civil penalty will result in accrual of interest at the current annual rate
in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a district
court of the United States.



CPF No. 4-2019-5024
Page 4
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Item 1 in the Notice for violations of
49 C.F.R. § 195.452(j)(2). 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. 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 § 195.452(j)(2) (Item 1), Respondent must:
a. Re-evaluate the need for additional EFRDs for the Diamondback Pipeline
system by conducting a study on each pipeline segment to ensure the integrity
of each covered segment.
b. Within 60 days following receipt of this Final Order, TransMontaigne must
provide PHMSA Southwest Region with documentation that verifies
completion of the requirements of this compliance order.
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.
It is requested (not mandated) that Respondent maintain documentation of the safety
improvement costs associated with fulfilling this Compliance Order and submit the total to the
Director. 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.
Failure to comply with this Order may result in the administrative assessment of civil penalties
not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), 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.
WARNING ITEM
With respect to Item 1, the Notice alleged probable violation of Part 195, but identified it as a
warning item pursuant to § 190.205. The warning was for:
49 C.F.R. § 195.452(h)(4(iii)(E) (Item 1) ─ Respondent’s alleged failure to
schedule evaluation and remediation within 180 days of discovery of an area of
general corrosion with a predicted metal loss greater than 50 percent of nominal
wall.



CPF No. 4-2019-5024
Page 5
TransMontaigne requested withdrawal of Item 1 because the anomaly that was called out as
showing 43 percent external metal loss in 2011 and 59 percent metal loss in 2016, was
mischaracterized in the latter survey, which resulted in the grading of the condition in 2016 as a
180-day condition. Upon subsequent confirmation, TransMontaigne maintains that, upon
subsequent confirmation, the company determined that the anomaly had been conservatively
graded by the ILI service providers and did not meet the 180-day condition threshold for
remediation.
PHMSA appreciates the explanation provided by TransMontaigne in response to this warning
item. However, under § 190.205, PHMSA does not adjudicate warning items to determine
whether a probable violation occurred or not. If OPS finds a violation of this provision in a
subsequent inspection, Respondent may be subject to future enforcement action.
Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final
Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey
Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of
Chief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of the
Final Order by Respondent. Any petition submitted must contain a brief statement of the issue(s)
and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically
stays the payment of any civil penalty assessed. The other terms of the order, including any
corrective action, remain in effect unless the Associate Administrator, upon request, grants a
stay. If Respondent submits payment of the civil penalty, the Final Order becomes the final
administrative decision and the right to petition for reconsideration is waived.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
July 27, 2020
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

420195024_NOPV PCP PCO_12302019_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
December 30, 2019
Fred Boutin
Chief Executive Officer
TransMontaigne Operating Company
200 Mansell Ct East, Suite 600
Roswell, Georgia 30076
CPF 4-2019-5024
Dear Mr. Boutin:
From January 7 to June 21, 2019, representatives of the Pipeline and Hazardous Materials Safety
Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United
States Code (U.S.C.) inspected your Diamondback Pipeline in Brownsville, Texas.
As a result of the inspection, it is alleged that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected
and the probable violations are:
1. § 195.452 Pipeline integrity management in high consequence areas.
(h) What actions must an operator take to address integrity issues?
(4) Special Requirements for scheduling remediation



2. (iii) 180-day conditions. Except for conditions listed in paragraph
(h)(4)(i) or (ii) of this section, an operator must schedule evaluation and
remediation of the following within 180 days of discovery of the
condition:
(E) An area of general corrosion with a predicted metal loss
greater than 50% of nominal wall.
TransMontaigne failed to schedule evaluation and remediation within 180 days of
discovery of an area of general corrosion with a predicted metal loss greater than 50% of
nominal wall. In April 2016, TransMontaigne conducted an assessment on its 8”
Diamondback pipeline. TransMontaigne is required to review and evaluate these
interpretations, categorize the anomalies per § 195.452(h)(4), and prepare a repair and
mitigation strategy no later than 180 days after the assessment. TransMontaigne failed to
review and evaluate the interpretations of the 2016 in-line inspection run, and did not
prepare a repair and mitigation strategy no later than 180 days after the assessment as
required by its Pipeline Integrity Assessment and Management Manual.
§ 195.452 Pipeline integrity management in high consequence areas.
(j) What is a continual process of evaluation and assessment to maintain a pipeline's
integrity?
(2) Evaluation. An operator must conduct a periodic evaluation as frequently
as needed to assure pipeline integrity. An operator must base the frequency of
evaluation on risk factors specific to its pipeline, including the factors specified
in paragraph (e) of this section. The evaluation must consider the results of the
baseline and periodic integrity assessments, information analysis (paragraph
(g) of this section), and decisions about remediation, and preventive and
mitigative actions (paragraphs (h) and (i) of this section).
TransMontaigne failed to conduct its Emergency Flow Restriction Device (EFRD) studies
in accordance with its Pipeline Integrity Assessment and Management Manual, Section
6.06: EFRD Need Evaluation Factors as needed to ensure pipeline integrity of each covered
segment. This section states that the Integrity Manager will re-evaluate the need for
additional EFRDs on each pipeline segment at least every five years beginning in 2011.
TransMontaigne provided no records to indicate they performed the required EFRD
evaluations in 2011 and 2016 as required.
Proposed Civil Penalty
Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed
$218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related
series of violations. For violation occurring on or after November 27, 2018 and before July 31,
2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum
penalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015 and before
November 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a
2



maximum penalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015,
the maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty
not to exceed $2,000,000 for a related series of violations. The Compliance Officer has reviewed
the circumstances and supporting documentation involved for the above probable violations and
has recommended that you be preliminarily assessed a civil penalty of $46,600 as follows:
Item number PENALTY
2 $46,600
Warning Item
With respect to item 1, we have reviewed the circumstances and supporting documents involved
in this case and have decided not to conduct additional enforcement action or penalty assessment
proceedings at this time. We advise you to promptly correct this item. Failure to do so may result
in additional enforcement action.
Proposed Compliance Order
With respect to item 2 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety
Administration proposes to issue a Compliance Order to TransMontaigne Operating Company,
L.P. 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
Enforcement Proceedings. Please refer to this document and note the response options. All
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).
Following the receipt of this Notice, you have 30 days to submit written comments, or request a
hearing under 49 CFR § 190.211. 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. If you are responding to this Notice, we propose that you
submit your correspondence to my office within 30 days from receipt of this Notice. This period
may be extended by written request for good cause.
3



In your correspondence on this matter, please refer to CPF 4-2019-5024 and, for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Mary L. McDaniel, P.E.
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
cc: Edward J. Luebke, Vice President of Pipeline Operations, TransMontaigne Operating
Company, 200 Mansell Ct East, Suite 600, Roswell, Georgia 30076
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Enforcement Proceedings
4



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code §60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to TransMontaigne Operating Company, a
Compliance Order incorporating the following remedial requirements to ensure the compliance of
TransMontaigne with the pipeline safety regulations:
1. 2. 3. In regard to Item Number 2 of the Notice pertaining to TransMontaigne’s failure to
conduct emergency flow restriction device (EFRD) studies as required by the
Operator’s Pipeline Integrity Assessment and Management Manual.
TransMontaigne must re-evaluate the need for additional EFRDs by conducting a
study on each pipeline segment to ensure pipeline integrity of each covered segment.
Within 60 days following receipt of a Final Order, TransMontaigne must provide
PHMSA Southwest Region with documentation that verifies completion of Item 1 of
this compliance order.
It is requested (not mandated) that TransMontaigne Operating Company, L.P.
maintain documentation of the safety improvement costs associated with fulfilling
this Compliance Order and submit the total to Mary L. McDaniel, 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.
5
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