{"operation":"document","citation":"CPF 42021018NOPV","title":"EXXONMOBIL PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2021-04-30","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.307(c), 195.505(b), 195.505(i), 195.555, 195.583(b), 195.589(c), 195.59(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021018nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021018nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021018nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42021018NOPV","body":"Notice of Probable Violation involving EXXONMOBIL PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.307(c),  195.505(b),  195.505(i),  195.555,  195.583(b),  195.589(c),  195.59(a). The case was opened on 2021-04-30 and is reported as closed as of 2022-06-10. Proposed civil penalty: $93,200. Assessed civil penalty: $93,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42021018NOPV_Closure Letter_06102022_(20-172158).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_Closure%20Letter_06102022_(20-172158).pdf\n\n42021018NOPV_Closure Letter_06102022_(20-172158)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_Closure%20Letter_06102022_(20-172158)_text.pdf\n\n42021018NOPV_Final Order_03072022_(20-172158).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_Final%20Order_03072022_(20-172158).pdf\n\n42021018NOPV_Final Order_03072022_(20-172158)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_Final%20Order_03072022_(20-172158)_text.pdf\n\n42021018NOPV_Operator Hearing Request Withdrawn (PHC-Hearing Scheduled Canceled)_09092021_(20-172158).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_Operator%20Hearing%20Request%20Withdrawn%20(PHC-Hearing%20Scheduled%20Canceled)_09092021_(20-172158).pdf\n\n42021018NOPV_Operator Pre-Hearing Submission_09072021_(20-172158).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_Operator%20Pre-Hearing%20Submission_09072021_(20-172158).pdf\n\n42021018NOPV_Operator Response to Notice and Request for Hearing and Statement of Issues_07142021_(20-172158).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing%20and%20Statement%20of%20Issues_07142021_(20-172158).pdf\n\n42021018NOPV_PCO PCP_04302021_(20-172158).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_PCO%20PCP_04302021_(20-172158).pdf\n\n42021018NOPV_PCO PCP_04302021_(20-172158)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_PCO%20PCP_04302021_(20-172158)_text.pdf\n\n42021018NOPV_PHC Hearing Scheduled_07272021_(20-172158).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_PHC%20Hearing%20Scheduled_07272021_(20-172158).pdf\n\n42021018NOPV_PHC Hearing Scheduled_07272021_(20-172158)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021018NOPV/42021018NOPV_PHC%20Hearing%20Scheduled_07272021_(20-172158)_text.pdf\n\n42021018NOPV_Final Order_03072022_(20-172158)_text.pdf\n\nMarch 7, 2022\nVIA ELECTRONIC MAIL TO: steven.a.yatauro@exxonmobil.com\nMr. Steve Yatauro\nPresident\nExxonMobil Pipeline Company\n22777 Springwoods Village Parkway\nSpring, Texas 77389\nRe: CPF No. 4-2021-018-NOPV\nDear Mr. Yatauro:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $93,200 and specifies actions that need to be taken by\nExxonMobil Pipeline Company to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Southwest Region, this\nenforcement action will be closed. Service of the Final Order by e-mail is effective upon the\ndate of transmission and acknowledgement of receipt as provided 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 L. McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMs. Rebekah R. Bennett, General Counsel, ExxonMobil Pipeline Company,\nrebekah.r.bennett@exxonmobil.com\nMs. Caroline B. Henderson, SSHE Manager, ExxonMobil Pipeline Company,\ncaroline.b.henderson@exxonmobil.com\nMs. Roina Baker, Counsel, Murchison Law Firm, PLLC, roina.baker@pipelinelegal.com\nMr. Vince Murchison, Counsel, Murchison Law Firm, PLLC,\nvince.murchison@pipelinelegal.com\nCONFIRMATION OF 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. 4-2021-018-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom September 14, 2020 through October 30, 2020, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted a pipeline safety inspection of the records and procedures of\nExxonMobil Pipeline Company (EMPCo or Respondent) for its hazardous liquid pipeline\nsystems located in Texas, Louisiana, and the Gulf of Mexico.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated April 30, 2021, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that EMPCo had committed four violations of 49 C.F.R. Part 195,\nproposed assessing a civil penalty of $93,200 for the alleged violations, and proposed ordering\nRespondent to take certain measures to correct the alleged violations. The Notice also included\nthree additional warning items pursuant to 49 C.F.R. § 190.205, which required no further action,\nbut warned the operator to correct the probable violations or face possible future enforcement\naction.\nAfter requesting and receiving an extension of time to respond, EMPCo responded to the Notice\nby letter dated July 14, 2021 (Response). EMPCo contested several of the allegations and\nrequested a hearing. By letter dated September 9, 2021, Respondent withdrew its request for a\nhearing (Withdrawal) and thereby authorized the entry of this Final Order without further notice.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.59(a), which states:\n§ 195.59 Abandonment or deactivation of facilities.\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 2\nFor each abandoned offshore pipeline facility or each abandoned\nonshore pipeline facility that crosses over, under or through a commercially\nnavigable waterway, the last operator of that facility must file a report upon\nabandonment of that facility.\n(a) The preferred method to submit data on pipeline facilities\nabandoned after October 10, 2000 is to the National Pipeline Mapping\nSystem (NPMS) in accordance with the NPMS “Standards for Pipeline and\nLiquefied Natural Gas Operator Submissions.”\n…\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.59(a) by failing to file a report\nupon abandonment for each abandoned offshore pipeline facility or each abandoned onshore\npipeline facility that crosses over, under, or through a commercially navigable waterway.\nSpecifically, the Notice alleged that EMPCo failed to file a report with the NPMS upon\nabandoning the LA-39 pipeline segment (ID 12640) that crossed Bayou Lafourche, a\ncommercially navigable waterway, several years ago.\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. § 195.59(a) by failing to file a report\nupon abandonment of its onshore pipeline facility that crossed a commercially navigable\nwaterway.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.307(c), which states:\n§ 195.307 Pressure testing aboveground breakout tanks.\n(a) …\n(c) For aboveground breakout tanks built to API Std 650 (incorporated\nby reference, see § 195.3) and first placed in service after October 2, 2000,\ntesting must be in accordance with sections 7.3.5 and 7.3.6 of API Standard\n650 (incorporated by reference, see § 195.3).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.307(c) by failing to test\naboveground breakout tanks built to API Std 650 and first placed into service after October 2,\n2000 in accordance with API Std 650 Sections 7.3.5 and 7.3.6.1 Specifically, the Notice alleged\nthat EMPCo failed to conduct a pressure test for aboveground Breakout Tank 45667, constructed\nto API Std 650 and placed into service in 2003, in accordance with API Std 650 Sections 7.3.5\nand 7.3.6. During the inspection, EMPCo did not provide test records for Breakout Tank 45667.\nIn its Response, EMPCo contested this allegation of violation and requested a hearing. The\ncompany contended that OPS “failed to meet its burden of proof that a violation occurred” and\n“failed to provide…a rational connection between the facts found and conclusions reached.”\nResponse at 2. Further, EMPCo argued that the alleged violation was not supported by evidence\nin the case file. Id. After informal discussions with OPS, EMPCo withdrew its hearing request,\nbut requested additional time to locate the pressure test records. Withdrawal at 2. After OPS\n1 API Std 650 Section 7.3.5 contains requirements for the testing of the shell, and Section 7.3.6 contains requirements\nfor hydrostatic testing.\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 3\ngranted EMPCo additional time to examine its files, the company was unable to locate records\nevidencing that aboveground Breakout Tank 45667 was tested in accordance with API Std 650\nSections 7.3.5 and 7.3.6.2\nPursuant to 49 C.F.R. § 195.310(a), operators are required to make a record of each pressure test\nrequired by Subpart E of Part 195, including pressure tests of breakout tanks under § 195.307(c).\nWithout test records to demonstrate that aboveground Breakout Tank 45667 was tested in\naccordance with API Std 650 Sections 7.3.5 and 7.3.6, I find that EMPCo violated the pressure\ntesting requirements for aboveground breakout tanks set forth in § 195.307(c).\nAs to Respondent’s remaining arguments, I find each of them to be unpersuasive. First, I find\nthat PHMSA has met its burden of proof in this case. Specifically, PHMSA has proved by a\npreponderance of the evidence that EMPCo violated § 195.307(c) by showing that the company,\nwhich was required to keep test records pursuant to § 195.310(a), could not produce records\ndemonstrating that it tested Breakout Tank 45667 pursuant to API Std 650 Sections 7.3.5 and\n7.3.6.3 Second, I find that there is a rational connection between the facts found and conclusions\nreached, as evidenced by the record in this case. Without the requisite records, which the\noperator was required to maintain, to demonstrate that the company tested Breakout Tank 45667,\nit is reasonable to conclude that the company did not perform the testing. See In re Centurion\nPipeline, LP, CPF No. 4-2014-5028, 2019 WL 4257142 (Jun. 27, 2019) (finding that PHMSA\nwas justified in relying upon a lack of records to show that an operator had not performed\nrequisite inspections). Without evidence to demonstrate compliance, PHMSA is properly relying\non a lack of records to show that EMPCo failed to perform the requisite testing.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 195.307(c) by failing to test its aboveground breakout tank built to API Std 650 and\nfirst placed into service after October 2, 2000, in accordance with API Std 650 Sections 7.3.5 and\n7.3.6.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) …\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to have and\nfollow a written qualification program that included provisions to ensure through evaluation that\n2 See Email Correspondence from EMPCo to OPS (Oct. 11, 2021) (on file with PHMSA) (affirming that the records\ncould not be located).\n3 See In re Golden Pass Pipeline, LLC, CPF No. 4-2008-1017, 2011 WL 1919517 (Mar. 22, 2011) (stating that\n“[a]lthough PHMSA’s enforcement proceedings under 49 C.F.R. Part 190 are not ‘formal adjudications’ under the\nAPA (5 U.S.C. §§ 554 and 556) the Supreme Court has found that the burden of proof in formal adjudications includes\nthe burden of persuasion and that the standard of proof is the preponderance-of-the-evidence standard”) (internal\ncitations omitted).\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 4\nindividuals performing covered tasks are qualified. Specifically, the Notice alleged that EMPCo\ncould not produce records during the inspection to demonstrate that an employee who performed\nrectifier inspections, a covered task, was qualified to perform them.\nIn its Response, EMPCo contested this allegation of violation and requested a hearing. The\ncompany contended that OPS “failed to meet its burden of proof that a violation occurred” and\n“failed to provide…a rational connection between the facts found and conclusions reached.”\nResponse at 2. Further, EMPCo argued that the alleged violation was not supported by evidence\nin the case file, or other relevant facts. Id. at 2-3. Finally, EMPCo argued that PHMSA failed to\nprovide fair notice of its interpretation of this regulation. Id. at 3. After informal discussions\nwith OPS, EMPCo withdrew its hearing request. In its Withdrawal, the company did not provide\nadditional information or records pertaining to this allegation of violation.\nAccording to § 195.505(b), operators must have and follow a written qualification program that\nincluded provisions to ensure through evaluation that individuals performing covered tasks are\nqualified. Operators must maintain records to demonstrate compliance with § 195.505(b)\npursuant to § 195.507. At a minimum, operators must maintain qualification records that include\nthe identification of qualified individuals and the covered task(s) he/she is qualified to perform,\nthe date(s) of current qualification and qualification methods. § 195.507(a)(1)-(4). These\nrecords must be maintained while the individual is performing the covered task(s). § 195.507(b).\nTherefore, EMPCo should have maintained records demonstrating that the individual performing\nthe rectifier readings was qualified to perform them.4 Despite this, EMPCo did not provide the\nrequisite records to PHMSA, and there is no evidence in the case file to demonstrate that EMPCo\ncomplied with this requirement.\nAs to Respondent’s remaining arguments, I find each of them to be unpersuasive. First, PHMSA\nhas proved by a preponderance of the evidence that EMPCo violated § 195.505(b) by showing\nthat the company, which was required to keep qualification records pursuant to § 195.507, could\nnot produce records or other evidence demonstrating that the individual performing a covered\ntask was qualified to perform it. Second, I find that there is a rational connection between the\nfacts found and conclusions reached, as evidenced by the record in this case. Without the\nrequisite records, which the operator was required to maintain, or other evidence in the record to\ndemonstrate that the company ensured through evaluation that the individual performing covered\ntasks was qualified to perform them, it is reasonable to conclude that the company did not adhere\nto this requirement. The case file includes all the relevant facts necessary to make this finding of\nviolation.\nFinally, Respondent and the regulated community had fair notice of PHMSA’s interpretation of\nthis regulation. In the administrative context, fair notice requires that an agency state with\n“ascertainable certainty what is meant by the standards it has promulgated.”5 If a regulated party\nacting in good faith can review the regulations and other public statements issued by the agency\nand identify with “ascertainable certainty” the standards with which the agency expects parties to\n4 See also PHMSA Operator Qualification (OQ) Frequently Asked Questions (FAQs), available at\nhttps://www.phmsa.dot.gov/pipeline/operator-qualifications/oq-frequently-asked-questions (last accessed Jan. 21,\n2022) (providing additional guidance to operators on operator qualification requirements).\n5 ExxonMobil Pipeline Co. v. U.S. Dep't of Transport., 867 F.3d 564, 578 (5th Cir. 2017).\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 5\nconform, then the agency has fairly notified a regulated party of its interpretation.6 Here, the\nregulatory text is clear and unambiguous, and sets forth clear compliance standards for operator\nqualification (OQ) of individuals performing covered tasks. The OQ subpart also includes a\ndefinitions section to explain what certain terms mean in the OQ context. § 195.503.\nFurther, other public statements made by PHMSA provide additional notice to regulated parties\nof PHMSA’s OQ compliance expectations. For example, PHMSA has published OQ guidance\nmaterials intended to help regulated entities and the public to understand PHMSA’s OQ\nregulations on its public-facing website.7 In addition, PHMSA has published prior enforcement\ndecisions, including Final Orders that have found an operator violated § 195.505(b) when it\nfailed to have documentation supporting the qualification of an employee performing covered\ntasks.8 Therefore, I find that PHMSA has given fair notice of its OQ compliance requirements to\nthe regulated community, including Respondent.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.505(b) by failing to have and follow a written qualification program that included\nprovisions to ensure through evaluation that individuals performing covered tasks are qualified.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.583(b), which states:\n§ 195.583 What must I do to monitor atmospheric corrosion control?\n(a)…\n(b) During inspections you must give particular attention to pipe at soil-\nto-air interfaces, under thermal insulation, under disbonded coatings, at pipe\nsupports, in splash zones, at deck penetrations, and in spans over water.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.583(b) by failing to give particular\nattention to pipe at soil-to-air interfaces, under thermal insulation, under disbonded coatings, at\npipe supports, in splash zones, at deck penetrations, and in spans over water, during atmospheric\ncorrosion inspections. Specifically, the Notice alleged that during atmospheric corrosion\ninspections in 2018, EMPCo failed to give particular attention to pipe at pipe supports for the\nBaytown Crude unit in Texas, the Offshore Hoops unit in the Gulf of Mexico, and the Brass\nRaceland unit in Louisiana. During the inspection, PHMSA reviewed atmospheric corrosion\ninspection records and found that several pipe support locations were not inspected for\natmospheric corrosion.9\nIn its Response, EMPCo contested the allegation of violation and requested a hearing. In its\nResponse, the company alleged that OPS “failed to meet its burden of proof that a violation\noccurred” and “the alleged violation is not supported by evidence in the case file.” Response at\n6 Id. (internal citation omitted).\n7 See, e.g., OQ FAQs, infra at fn 4.\n8 See, e.g., Energy XXI USA, Inc., CPF No. 4-2017-7001, 2018 WL 3703704 (Jun. 15, 2018).\n9 See PHMSA Pipeline Safety Violation Report (Violation Report) at Exhibit E-2 (Apr. 30, 2021) (demonstrating that\nEMPCo inspection records showed “Not Inspected” for pipe at pipe support locations for these units).\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 6\n3. EMPCo further alleged that the Notice “fails to adequately make factual findings or to\nexplain, discuss, or analyze the conclusion that Respondent is in violation of the subject\nregulation in the manner alleged” and that the Notice “fails to explain its conclusions in a manner\nthat is sufficient to allow Respondent a reasonable opportunity to prepare an adequate defense.”\nId. Finally, EMPCo argued that “[g]iven the manner in which the cited regulation is being\napplied in this alleged violation, PHMSA has failed to provide Respondent, or the regulated\ncommunity as a whole, fair notice of the agency’s interpretation of the subject regulation.” Id.\nAfter informal discussions with OPS, EMPCo withdrew its hearing request. In its Withdrawal,\nthe company did not provide additional information or records pertaining to this allegation of\nviolation.\nAccording to § 195.583(b), operators must give particular attention to pipe at pipe supports\nduring atmospheric corrosion inspections. The evidence in the record—atmospheric corrosion\ninspection reports completed by Respondent that state “not inspected” at these locations—clearly\ndemonstrates that EMPCo failed to inspect pipe at pipe supports.10 The company did not provide\nadditional materials to demonstrate that these inspections covered pipe at pipe supports.\nAs to Respondent’s remaining arguments, I find each of them to be unpersuasive. PHMSA\ndemonstrated by a preponderance of the evidence that EMPCo failed to give particular attention\nto pipe at pipe supports during atmospheric corrosion inspections by relying on the company’s\nrecords that noted these locations were “not inspected.” These records are attached to the\nViolation Report and therefore, included in the case file. By failing to inspect these locations,\nEMPCo failed to “give particular attention” to these locations in violation of the plain language\nof the cited regulation.\nFinally, I find that PHMSA has provided Respondent, and the regulated community, fair notice\nof its interpretation of § 195.583(b). First, the regulatory text is clear and unambiguous, setting\nforth specific locations that operators must pay particular attention to during atmospheric\ncorrosion inspections. One of these locations is pipe at pipe supports. Second, PHMSA has\nprovided other public statements to regulated parties regarding its compliance expectations for\nthis requirement. For example, PHMSA has published guidance materials intended to help\nregulated entities and the public to understand its corrosion control regulations on its public-\nfacing website.11 Therefore, I find that PHMSA has provided fair notice of its corrosion control\ncompliance requirements to the regulated community, including Respondent.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.583(b) by failing to give particular attention to pipe at pipe supports during atmospheric\ncorrosion inspections.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\n10 See fn 4.\n11 See, e.g., Part 195 Corrosion Control Enforcement Guidance, available at\nhttps://www.phmsa.dot.gov/pipeline/enforcement/corrosion-enforcement-guidance-part-195 (last accessed Jan. 21,\n2022).\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 7\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.12\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; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $93,200 for the violations cited above.\nItem 2: The Notice proposed a civil penalty of $46,600 for Respondent’s violation of 49 C.F.R.\n§ 195.307(c) for failing to test aboveground breakout tanks built to API Std 650 and first placed\ninto service after October 2, 2000, in accordance with API Std 650 Sections 7.3.5 and 7.3.6. In\nits Response, EMPCo listed several reasons why it believed the penalty should be eliminated.\nResponse at 4. Specifically, EMPCo alleged that (1) PHMSA has failed to make available to the\npublic, as required by the Administrative Procedure Act (APA), the methods or procedures by\nwhich PHMSA determines the amount of proposed civil penalties and the amounts eventually\nassessed, and thus, the proposed civil penalty should be withdrawn in its entirety; (2) the Notice\nand Violation Report fail to establish a sufficient evidentiary basis for, or adequate discussion,\nexplanation or analysis of, the penalty assessment considerations of 49 C.F.R. § 190.225 in\nsupport of the proposed civil penalty, and thus Respondent has no reasonable opportunity to\nprepare an adequate defense to contest any of the proposed civil penalties; (3) the proposed\npenalty is unreasonable, disproportional to any of the penalty assessment considerations of §\n190.225, unsupported by sufficient evidence, or any analysis that applies the penalty assessment\nconsiderations, is arbitrary, capricious or otherwise not in accordance with law, and is an abuse\nof discretion; (4) PHMSA’s conclusion that Respondent “failed to conduct a pressure test”\nshould be excluded from consideration because the statement is not supported by evidence in the\ncase file, the alleged violation goes to the presence of a record, not to failure to perform the\nactivity, and the statement is irrelevant and prejudicial against Respondent; and (5) to the extent\nthat the alleged violation is not supported by substantial evidence, a rational connection between\nfacts found and conclusions drawn, regulation, or law, the penalty may not be imposed. Id.\nFurther, in its Withdrawal, EMPCo requested that the proposed civil penalty for Item 2 be\nrevised if it located the missing pressure test records. Withdrawal at 2. After an extension of\ntime to respond, however, Respondent did not submit any test records to demonstrate that it\ntested its aboveground breakout tank in accordance with API Std 650 Sections 7.3.5 and 7.3.6.\n12 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 8\nAfter reviewing the record in this case, I am unpersuaded by Respondent’s arguments set forth\nabove. First, I find that PHMSA has provided sufficient information to the public on how the\nagency calculates administrative civil penalties. PHMSA’s statute, and the regulations\npromulgated pursuant thereto, set forth the civil penalty assessment factors the agency utilizes in\nadministrative enforcement cases. See 49 U.S.C. § 60122 and 49 C.F.R. § 190.225. PHMSA\nhas also published additional information about civil penalties on its website, including a general\noverview to assist the public in understanding civil penalty calculations.13\nSecond, I find that the Violation Report sufficiently analyzes each civil penalty assessment factor\nand properly selects each factor based on the evidence in the case. To begin, the record in this\ncase adequately demonstrates that this was an activity violation because the company failed to\nconduct a pressure test. The Violation Report lists “tests” as an example of a failure to conduct\nor perform an activity. Violation Report at 8. In addition, the record shows that this violation\noccurred in the St. James Terminal, a high consequence area (HCA), and was discovered by\nPHMSA. Id. at 8-9. The Violation Report also accurately notes that Respondent failed to\ncomply with an applicable requirement and did not provide a reasonable justification for the\nnoncompliance. Id. at 9-10. Despite the company’s assertion that it completed the test, it\nprovided no such evidence to bolster this claim even though EMPCo is required to maintain\nrecords of these tests pursuant to § 195.310(a) and was given additional time to search its files to\nfind these documents.\nThird, I find that the proposed civil penalty amount is reasonable, supported by the evidence and\nis not otherwise in violation of the APA. The proposed civil penalty amount for this violation\nwas calculated based on the civil penalty assessment considerations as set forth in the Violation\nReport and does not exceed the statutory caps. 49 U.S.C. § 60122. Fourth, for the reasons set\nforth above, PHMSA’s conclusion that Respondent did not perform the test, based on a lack of\nrecords, is supported by the record in this case and relevant case law. Fifth and finally, for the\nsame reasons, I find that this violation is supported by the evidence in the case. Since EMPCo\ndid not submit pressure test records demonstrating compliance, there is nothing in the record to\nnegate the conclusion that EMPCo failed to comply with the requirements set forth in\n§ 195.307(c). Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $46,600 for violation of 49 C.F.R. § 195.307(c).\nItem 3: The Notice proposed a civil penalty of $46,600 for Respondent’s violation of 49 C.F.R.\n§ 195.505(b) for failing to have and follow a written qualification program that included\nprovisions to ensure through evaluation that individuals performing covered tasks are qualified.\nIn its Response, EMPCo listed several reasons why it believed the penalty should be eliminated.\nSpecifically, EMPCo alleged that (1) PHMSA has failed to make available to the public, as\nrequired by the APA, the methods or procedures by which PHMSA determines the amount of\nproposed civil penalties and the amounts eventually assessed, and thus, the proposed civil\npenalty should be withdrawn in its entirety; (2) the Notice and Violation Report fail to establish a\nsufficient evidentiary basis for, or adequate discussion, explanation or analysis of, the penalty\nassessment considerations of 49 C.F.R. § 190.225 in support of the proposed civil penalty, and\nthus Respondent has no reasonable opportunity to prepare an adequate defense to contest any of\n13 See, e.g., PHMSA Civil Penalty Summary, available at https://www.phmsa.dot.gov/pipeline/enforcement/civil-\npenalty-summary-0 (last accessed Jan. 18, 2022).\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 9\nthe proposed civil penalties; (3) the proposed penalty is unreasonable, disproportional to any of\nthe penalty assessment considerations of § 190.225, unsupported by sufficient evidence, or any\nanalysis that applies the penalty assessment considerations, is arbitrary, capricious or otherwise\nnot in accordance with law, and is an abuse of discretion; and (4) to the extent that the alleged\nviolation is not supported by substantial evidence, a rational connection between facts found and\nconclusions drawn, regulation, or law, the penalty may not be imposed. Id.\nAfter reviewing the record in this case, I am unpersuaded by Respondent’s arguments set forth\nabove. As I previously noted, PHMSA has provided sufficient information to the public on how\nthe agency calculates administrative civil penalties. See infra. Second, the Violation Report\nsufficiently analyzes each civil penalty assessment factor and properly selects each factor based\non the evidence in the case. The record in this case clearly demonstrates that this activity\nviolation—failure to ensure through qualification that an individual was qualified to perform\ncovered tasks—occurred in the Brass Racelands unit, an HCA, and was discovered by PHMSA.\nId. at 13-14. Further, Respondent failed to comply with an applicable requirement and did not\nprovide a reasonable justification for the noncompliance. Id. at 14-15. There is no evidence in\nthe record to suggest that the individual performing rectifier readings was qualified to perform\nthis covered task, despite the fact that EMPCo is required to maintain records of these\nqualifications pursuant to § 195.507.\nThird, I find the proposed civil penalty amount is reasonable, supported by the evidence and is\nnot otherwise in violation of the APA. The proposed civil penalty amount for this violation was\ncalculated based on the proper civil penalty assessment considerations as set forth in the\nViolation Report and does not exceed the statutory caps. 49 U.S.C. § 60122. Finally, for the\nreasons set forth above, I find that this violation is supported by the evidence in the case. Since\nEMPCo could not submit the requisite qualifications records, the record demonstrates that it\nfailed to comply with the requirements set forth in § 195.505(b). Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $46,600\nfor violation of 49 C.F.R. § 195.505(b).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $93,200.\nPayment of the civil penalty must be made within 20 days after receipt of the Final Order.\nFederal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer\nthrough the Federal Reserve Communications System (Fedwire), to the account of the U.S.\nTreasury. Detailed instructions are contained in the enclosure. Questions concerning wire\ntransfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,\nOklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $93,200 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 10\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, and 6 in the Notice for\nviolations of 49 C.F.R. §§ 195.59(a), 195.307(c), and 195.583(b) respectively. Under 49 U.S.C.\n§ 60118(a), each person who engages in the transportation of hazardous liquids or who owns or\noperates a pipeline facility is required to comply with the applicable safety standards established\nunder chapter 601. The Director has indicated that Respondent has taken the following actions\nto address some of the cited violations:\nWith respect to the violation of § 195.59(a) (Item 1), on May 5, 2021, EMPCo filed a report of\nabandonment for its LA-39 pipeline segment (ID 12640) pursuant to the requirements set forth in\n§ 195.59(a). Accordingly, I find that compliance has been achieved with respect to this\nviolation. Therefore, the compliance terms proposed in the Notice for Item 1 are not included in\nthis Order.\nWith respect to the violation of § 195.307(c) (Item 2), EMPCo provided additional\ndocumentation regarding Tank 45667 to PHMSA for review. Specifically, Respondent\nsubmitted correspondence from the Louisiana Department of Environmental Quality regarding\nits proposal to hydrotest Tank 45667 and its Field-Erected Storage Tank Inspection Record for\nTank 45667. EMPCo also submitted documents regarding the operational history of Tank\n45667, noting no reportable leaks and a passing API Std. 653 inspection. Based on the\ndocumentation provided by EMPCo, including the operational history of this tank, and the\nrecommendation of the Director, I find that the compliance terms in the Notice for Item 2 are no\nlonger required and therefore not included in this Order.\nWith respect to the violation of § 195.583(b) (Item 6), EMPCo stated that it will, going forward,\nfollow its current, updated written procedures for conducting atmospheric corrosion inspections,\nand will complete inspections, paying particular attention to the pipe-to-pipe interfaces, for its\nremaining units by the end of the first quarter of 2022. Withdrawal at 1. Based on information\nprovided by EMPCo and the recommendation of the Director, I also find that the Brass Raceland\nunit should not be included in this Order.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.583(b) (Item 6), Respondent must provide\nrecords to show that it followed its updated procedure and conducted the atmospheric\ncorrosion inspections at the pipe and pipe support interface for the Baytown Crude\nunit in Texas and the Offshore Hoops unit in the Gulf of Mexico within 90 days of\nreceipt of the Final Order.\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.\n\n\n\nCPF No. 4-2021-018-NOPV\nPage 11\nPHMSA requests that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\nto exceed $200,000, as adjusted for inflation (see 49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nWARNING ITEMS\nWith respect to Items 4, 5, and 7, the Notice alleged probable violations of Part 195 but\nidentified them as warning items pursuant to § 190.205. The warnings were for:\n49 C.F.R. § 195.505(i) (Item 4) ─ Respondent’s alleged failure to have and\nfollow a written qualification program that includes provisions to notify PHMSA\nof a significant change to its written Operator Qualification Program;\n49 C.F.R. § 195.555 (Item 5) ─ Respondent’s alleged failure to require and verify\nthat supervisors maintain a thorough knowledge of that portion of the corrosion\ncontrol procedures established under § 195.402(c)(3) for which they are\nresponsible for ensuring compliance; and\n49 C.F.R. § 195.589(c) (Item 7) ─ Respondent’s alleged failure to maintain a\nrecord of each analysis, check, demonstration, examination, inspection,\ninvestigation, review, survey, and test required by Part 195, Subpart H in\nsufficient detail to demonstrate the adequacy of corrosion control measures or that\ncorrosion requiring control measures does not exist, and to retain those records for\nthe requisite time period.\nIf OPS finds a violation of any of these items in a subsequent inspection, Respondent may be\nsubject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of this Final\nOrder by Respondent. Any petition submitted must contain a statement of the issue(s) and meet\nall other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the\npayment of any civil penalty assessed. The other terms of the order, including cor","truncated":true,"body_characters":43500}