{"operation":"document","citation":"CPF 42023005NOPV","title":"LINDE — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2023-02-22","effective_on":null,"summary":"CLOSED notice of probable violation citing 191.22(c)(1)(ii), 192.459, 192.937(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023005nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023005nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023005nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42023005NOPV","body":"Notice of Probable Violation involving LINDE. PHMSA's enforcement data identifies the cited regulations as 191.22(c)(1)(ii),  192.459,  192.937(b). The case was opened on 2023-02-22 and is reported as closed as of 2024-01-30. Proposed civil penalty: $20,400. Assessed civil penalty: $20,400. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42023005NOPV_Final Order_01092024_(22-237261).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023005NOPV/42023005NOPV_Final%20Order_01092024_(22-237261).pdf\n\n42023005NOPV_Final Order_01092024_(22-237261)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023005NOPV/42023005NOPV_Final%20Order_01092024_(22-237261)_text.pdf\n\n42023005NOPV_Operator Response to Notice_05052023_(22-237261).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023005NOPV/42023005NOPV_Operator%20Response%20to%20Notice_05052023_(22-237261).pdf\n\n42023005NOPV_PCO PCP_02222023_(22-237261).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023005NOPV/42023005NOPV_PCO%20PCP_02222023_(22-237261).pdf\n\n42023005NOPV_PCO PCP_02222023_(22-237261)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023005NOPV/42023005NOPV_PCO%20PCP_02222023_(22-237261)_text.pdf\n\n42023005NOPV_Final Order_01092024_(22-237261)_text.pdf\n\nJanuary 9, 2024\nVIA ELECTRONIC MAIL TO: todd.dunn@linde.com\nTodd Dunn\nVice President of Operations – HyCO\nLinde Inc.\n1585 Saw Dust Road, Suite 300\nThe Woodlands, Texas 77300\nRe: CPF No. 4-2023-005-NOPV\nDear Mr. Dunn:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws one of the\nallegations of violation, makes another finding of violation, and assesses a civil penalty of $20,400.\nThe penalty payment terms are set forth in the Final Order. This enforcement action closes\nautomatically upon receipt of payment. 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: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. John Maitino, National Regulated Pipeline Compliance Manager, Linde Inc.,\njohn.maitino@linde.com\nMr. Shannon Hensarling, Pipeline Manager, Linde Inc., shannon.hensarling@linde.com\nMr. James Willis, Director, Maintenance & Reliability, Linde Inc., james.willis@linde.com\nMr. Sean Bingham, Pipeline Regulatory Specialist, Linde Inc., sean.bingham@linde.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 )\n)\n)\nLinde Inc., )\nRespondent. )\n____________________________________)\n) CPF No. 4-2023-005-NOPV\nFINAL ORDER\nFrom March 30, 2022, through September 6, 2022, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Linde Inc.’s\n(Linde or Respondent) hydrogen pipeline system in Louisiana and Texas.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent,\nby letter dated February 22, 2023, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that Linde had violated 49 C.F.R. Parts 191 and 192, proposed assessing a civil\npenalty of $20,400 for the alleged violations, and proposed ordering Respondent to take certain\nmeasures to correct the alleged violations. The Notice also included an additional warning item\npursuant to 49 C.F.R. § 190.205, which warned the operator to correct the probable violation or face\npossible future enforcement action.\nLinde responded to the Notice by letter dated May 5, 2023 (Response). Linde contested one of the\nallegations, offered additional information in response to the Notice, and requested that the\nproposed civil penalty be eliminated. Respondent did not request a hearing and therefore has\nwaived its right to one.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Parts 191 and 192, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 191.22, which states:\n§ 191.22 National Registry of Operators.\n(a) …\n(c) Changes. Each operator of a gas pipeline, gas pipeline facility, UNGSF,\nLNG plant, or LNG facility must notify PHMSA electronically through the\n\n\n\nNational Registry of Operators at https://portal.phmsa.dot.gov of certain\nevents.\n(1) An operator must notify PHMSA of any of the following events not\nlater than 60 days before the event occurs:\n(i) …\n(ii) Construction of 10 or more miles of new pipeline;\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.22(c)(1)(ii) by failing to notify\nPHMSA of the construction of 10 or more miles of new pipeline 60 days prior to the construction.\nSpecifically, the Notice alleged that Linde began construction on approximately 17.39 miles of a\nnew 14-inch hydrogen pipeline on March 15, 2020, but did not file a notification for the project as\nrequired until September 9, 2022, 968 days after the date notification was required.\nIn its Response, Linde stated that it did not contest this Item but requested that the allegation of\nviolation be reduced to a warning, or alternatively, that the proposed civil penalty be withdrawn.\nRespondent provided the following reasons: (1) pipeline safety was not significantly affected by its\ndelay in reporting, (2) this was the first instance in which Respondent failed to comply with this\npipeline safety regulation, (3) Respondent took swift corrective action after it became aware of the\nviolation, and (4) PHMSA brought a similar allegation as a warning in another case, specifically In\nthe Matter of Tristate NLA, LLC, Final Order 4-2020-006-NOPV, 2021 WL 4055261 (August 9,\n2021).\nConsidering each of Linde’s arguments and whether they warrant withdrawing the violation or\nreducing it to a warning, I first evaluate the argument that its failure to report timely did not\nsignificantly affect pipeline safety. While the safety impact of a violation is relevant when deciding\nan appropriate civil penalty,1 when determining whether a violation of the pipeline safety\nregulations occurred in the first place, I must rely on the facts before me. In this instance, there is\nno question that Respondent began construction on March 15, 2020, but did not file the required\nnotification until over two years later on September 9, 2022. This evidence proves that a violation\noccurred. Therefore, Respondent’s argument that the violation did not affect pipeline safety is not a\nreason to withdraw or reduce this allegation to a warning. Similarly, the argument that this was the\nfirst time Linde violated this regulation does not negate that a violation occurred. Likewise, Linde’s\ncontention that it took swift correction action upon learning of the violation also does not warrant\nwithdrawing the violation or reducing it to a warning.\nLastly, I consider whether the case Linde cites to is a basis to withdraw or reduce this allegation to a\nwarning. In the enforcement action In the Matter of Tristate NLA, LLC, the Final Order includes a\nwarning item for failing to notify PHMSA in accordance with § 191.22(c)(2)(iv).2 In that case, the\noperator notified PHMSA 196 days after the required notification date that it had acquired 100.47\nmiles of gas transmission pipeline.3 The circumstances in that case were different in comparison to\nthe present enforcement action. First, the notice of probable violation issued in that case brought\nthe item as a warning in the first instance. The final order therefore repeated the warning that had\n1 § 190.225(a)(1).\n2 In the Matter of Tristate NLA, LLC, Final Order 4-2020-006-NOPV, 2021 WL 4055261, at 3 (August 9, 2021).\n3 Id.\n\n\n\nalready been issued. Issuance of a warning is a permissible enforcement option under § 190.205\nand does not imply that violations of the same or similar regulations in the future will also be\nwarnings.4 In addition, the warning In the Matter of Tristate NLA, LLC, alleged a probable\nviolation of a different pipeline safety regulation that required reporting the acquisition of pipelines\nalready subject to part 192. In the present case, Respondent failed to notify PHMSA of the\nconstruction of new pipe, which could have impacted PHMSA’s ability to perform inspections\nbefore and during construction of the pipeline. Therefore, I decline to find In the Matter of Tristate\nNLA, LLC, is a basis to reduce this allegation to a warning.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 191.22(c)(1)(ii) by failing to notify PHMSA 60 days prior to beginning construction on the 14-\ninch hydrogen pipeline discussed above.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.937, which states:\n§ 192.937 What is a continual process of evaluation and assessment to\nmaintain a pipeline’s integrity?\n(a) …\n(b) Evaluation. An operator must conduct a periodic evaluation as\nfrequently as needed to assure the integrity of each covered segment. The\nperiodic evaluation must be based on a data integration and risk assessment of\nthe entire pipeline as specified in § 192.917. For plastic transmission pipelines,\nthe periodic evaluation is based the threat analysis specified in [§] 192.917(d).\nFor all other transmission pipelines, the evaluation must consider the past and\npresent integrity assessment results, data integration and risk assessment\ninformation (§ 192.917), and decisions about remediation (§ 192.933) and\nadditional preventative and mitigative actions (§ 192.935). An operator must\nuse the results of this evaluation to identify the threats specific to each covered\nsegment and the risk represented by these threats.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.937(b) by failing to conduct a periodic\nevaluation as frequently as needed to assure the integrity of each covered segment as required.\nSpecifically, the Notice alleged Linde had failed to conduct a risk analysis of its pipeline to identify\nadditional preventative and mitigative actions after constructing 17 miles of covered segments.\nAdditionally, the Notice alleged Linde had not conducted a risk analysis since 2010 and failed to\ninclude a requirement to conduct a risk analysis in its procedures.\nIn its Response, Linde disputed the allegations in the Notice, arguing that the 17 miles of pipeline\nreferenced in the Notice did not contain any covered segments that required a risk assessment as the\npipeline segments referenced were not located in a high consequence area. Respondent further\nmaintained that it did conduct frequent risk assessments on pipeline located within high consequence\nareas as required and provided documentation of its latest risk assessments, conducted in January\n2022. Linde also asserted that it had made voluntary updates to its procedures regarding periodic\n4 Pursuant to § 190.205, a Regional Director may issue a written warning notifying an operator of a probable violation.\n\n\n\nevaluations of new covered segments.\nIn a recommendation for final action submitted pursuant to § 190.209(b)(7), the Director\nrecommended withdrawing the alleged violation of § 192.937(b).\nAccordingly, after considering all of the evidence, I hereby order that Item 3 and the corresponding\nproposed compliance order be withdrawn.\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 related\nseries of violations.5\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 of\nRespondent’s prior offenses; any effect that the penalty may have on its ability to continue doing\nbusiness; the good faith of Respondent in attempting to comply with the pipeline safety regulations;\nand self-disclosure or actions to correct a violation prior to discovery by PHMSA. In addition, I\nmay consider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $20,400 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $20,400 for Respondent’s violation of 49 C.F.R.\n§ 191.22(c)(1)(ii), for failing to notify PHMSA 60 days prior to beginning construction of over 17\nmiles of pipeline, as required. In its Response, Linde averred that the proposed civil penalty for this\nItem should be withdrawn for the same four reasons discussed above. First, Linde argued that it\nshould be withdrawn because its failure to comply did not significantly affect pipeline safety.\nSecond, it argued that this instance was its first time it had failed to provide the required notice.\nThird, it argued it had updated its existing procedures to assure future compliance by incorporating\nthe 60-day notice requirement. Finally, Respondent contended that while the facts were different,\nits violation of the procedures were similar to the enforcement action, In the Matter of Tristate NLA,\nLLC, CPF No. 4-2020-006-NOPV, where PHMSA did not pursue a civil penalty for failure to\ncomply with the 60-day notice requirement.\nAs stated above, when determining the amount of a civil penalty, I must take into consideration\nseveral specific factors. In its Response, Linde makes an argument for the withdrawal of the\nproposed civil penalty based on two of these factors: gravity and history of Respondent’s prior\noffenses, as well as additional arguments regarding a prior case and changes to its procedures.\nHowever, upon reviewing the case file, I note that the proposed civil penalty amount already\nincluded in the calculation consideration that Linde had no prior history of this violation, and that\npipeline safety was minimally affected by Linde’s failure to timely file a notification.6 Given these\n5 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n6 See Violation Report\n\n\n\nconsiderations are already factored into the proposed penalty amount, neither of these reasons are a\nbasis for a reduction or withdrawal of the proposed penalty.\nFurther, as stated above, In the Matter of Tristate NLA, LLC, regards a violation of a different\nregulation and involves circumstances that were substantially different in comparison to this\nenforcement action where I have found Linde in violation of the pipeline safety regulations for\nfailing to notify PHMSA until 968 days after the required notification date. Therefore, I decline to\nfind In the Matter of Tristate NLA, LLC, is a basis to withdrawal or reduce the proposed civil\npenalty in this case. Moreover, as stated in prior enforcement actions, “PHMSA sets penalties…on\na case-by-case basis. Given the unique facts of each offense...it is not uncommon for there to be\nsome variance in the penalties assessed for different operators’ violation of the same code section.”7\nFinally, while Respondent’s actions to strengthen its pipeline safety program by amending its\nprocedures to prevent future non-compliance is encouraged and applauded, that is also not a basis\nfor reduction or withdrawal of a proposed civil penalty.8 Accordingly, having reviewed the record\nand considered the assessment criteria, I assess Respondent a civil penalty of $20,400 for violation\nof 49 C.F.R. § 191.22(c)(1)(ii).\nPayment of the civil penalty must be made within 20 days after receipt of this Final Order. Payment\nmay be made by sending a certified check or money order (containing the CPF Number for this\ncase), made payable to “U.S. Department of Transportation,” to the Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, Financial Operations Division (AMK-325),\n6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. Federal regulations (49 C.F.R.\n§ 89.21(b)(3)) also permit payment to be made by wire transfer through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are\ncontained in the enclosure. Questions concerning wire transfers should be directed to: Financial\nOperations Division (AMK-325), Federal Aviation Administration, Mike Monroney Aeronautical\nCenter, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. The Financial Operations\nDivision telephone number is (405) 954-8845.\nFailure to pay the civil penalty will result in accrual of interest at the current annual rate in\naccordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those\nsame authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is\nnot made within 110 days of service. Furthermore, failure to pay the civil penalty may result in\nreferral of the matter to the Attorney General for appropriate action in a district court of the United\nStates.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 3 in the Notice for violation of 49\nC.F.R. § 192.937(b). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of\n7 In the Matter of Belle Fourche Pipeline Company, Final Order 5-2009-5042, 2011 WL 7006607 at 19 (November 21,\n2011).\n8 See In the Matter of Oasis Midstream Partners LP, a General Partner of Oasis Petroleum Inc., Final Order 3-2019-\n5020, 2020 WL 6870720, at 7 (August 19, 2020) (“While Oasis is to be commended for improving its internal processes\nto ensure compliance with the pipeline safety regulations, such post-inspection activities do not warrant the withdrawal\nof, or a reduction in, a proposed civil penalty.”)\n\n\n\ngas or who owns or operates a pipeline facility is required to comply with the applicable safety\nstandards established under chapter 601. As discussed above, Item 3 has been withdrawn.\nTherefore, the compliance term proposed in the Notice is also withdrawn.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of Part 192, but identified it as a\nwarning item pursuant to § 190.205. The warning was for:\n49 C.F.R. § 192.459 (Item 2) ─ Respondent’s alleged failure to examine two\nexposed portions of buried pipelines for evidence of external corrosion.\nLinde presented information in its Response showing that it had taken certain actions to address the\ncited item. If OPS finds a violation of this provision 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. The written petition must be received no later than 20\ndays after receipt of the Final Order by Respondent. Any petition submitted must contain a brief\nstatement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a\npetition automatically stays the payment of any civil penalty assessed. The other terms of the order,\nincluding any corrective action, remain in effect unless the Associate Administrator, upon request,\ngrants a stay. If Respondent submits payment of the civil penalty, the Final Order becomes the final\nadministrative decision and the right to petition for reconsideration is waived.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nJanuary 9, 2024\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":20340}