{"operation":"document","citation":"CPF 42023034NOPV","title":"MID - VALLEY PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2023-05-08","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.412(a), 195.420(a), 195.432(b), 195.505(i), 195.52(a)(3), 195.581(a), 195.583(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023034nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023034nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023034nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42023034NOPV","body":"Notice of Probable Violation involving MID - VALLEY PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.412(a),  195.420(a),  195.432(b),  195.505(i),  195.52(a)(3),  195.581(a),  195.583(a). The case was opened on 2023-05-08 and is reported as closed as of 2025-05-15. Proposed civil penalty: $119,000. Assessed civil penalty: $118,300. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42023034NOPV_Closure Letter_05152025_(22-232741).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023034NOPV/42023034NOPV_Closure%20Letter_05152025_(22-232741).pdf\n\n42023034NOPV_Closure Letter_05152025_(22-232741)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023034NOPV/42023034NOPV_Closure%20Letter_05152025_(22-232741)_text.pdf\n\n42023034NOPV_Final Order_09112024_(22-232741).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023034NOPV/42023034NOPV_Final%20Order_09112024_(22-232741).pdf\n\n42023034NOPV_Final Order_09112024_(22-232741)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023034NOPV/42023034NOPV_Final%20Order_09112024_(22-232741)_text.pdf\n\n42023034NOPV_Operator Response to Notice_06152023_(22-232741).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023034NOPV/42023034NOPV_Operator%20Response%20to%20Notice_06152023_(22-232741).pdf\n\n42023034NOPV_PCO PCP_05082023_(22-232741).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023034NOPV/42023034NOPV_PCO%20PCP_05082023_(22-232741).pdf\n\n42023034NOPV_PCO PCP_05082023_(22-232741)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023034NOPV/42023034NOPV_PCO%20PCP_05082023_(22-232741)_text.pdf\n\n42023034NOPV_Final Order_09112024_(22-232741)_text.pdf\n\nSeptember 11, 2024\nVIA ELECTRONIC MAIL TO: tom.long@energytransfer.com\nThomas Long\nChief Executive Officer\nEnergy Transfer, LP\n1300 Main Street\nHouston, Texas 77002\nRe: CPF No. 4-2023-034-NOPV\nDear Mr. Long:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws one of\nthe allegations of violation, makes other findings of violation, assesses an adjusted civil penalty\nof $118,300, and specifies actions that need to be taken by Mid Valley Pipeline Company LLC, a\nsubsidiary of Energy Transfer, LP, 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: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Gregory McIlwain, Executive Vice President of Operations, Energy Transfer, LP,\ngregory.mcilwain@energytransfer.com\n\n\n\nMr. Eric Amundsen, Senior Vice President of Operations, Energy Transfer, LP,\neric.amundsen@energytransfer.com\nMr. Todd Stamm, Senior Vice President of Operations, Energy Transfer, LP,\ntodd.stamm@energytransfer.com\nMs. Jennifer Street, Senior Vice President of Operations, Energy Transfer, LP.,\njennifer.street@energytransfer.com\nMr. Matthew Stork, Vice President of Technical Services, Energy Transfer, LP,\nmatthew.stork@energytransfer.com\nMr. Todd Nardozzi, Director of Regulatory Compliance, Energy Transfer, LP,\ntodd.nardozzi@energytransfer.com\nMs. Susie Sjulin, Director of DOT Compliance, Energy Transfer, LP,\nsusie.sjulin@energytransfer.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)\nMid Valley Pipeline Company LLC, )\na subsidiary of Energy Transfer, LP, )\nRespondent. )\n____________________________________)\n) CPF No. 4-2023-034-NOPV\nFINAL ORDER\nFrom June 6 through December 1, 2022, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline 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 Mid Valley\nPipeline Company LLC’s (MVPL or Respondent) Mid-Valley Pipeline in Michigan, Ohio,\nKentucky, Tennessee, Mississippi, Louisiana, Arkansas, and Texas. Mid Valley Pipeline\nCompany LLC is a subsidiary of Energy Transfer, LP. The Mid-Valley Pipeline is\napproximately 1,040 miles long, originating in Longview, Texas, and terminating in Samaria,\nMichigan.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated May 8, 2023, 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 MVPL had committed five violations of 49 C.F.R. Part 195,\nproposed assessing a civil penalty of $119,000 for the alleged violations, and proposed ordering\nRespondent to take certain measures to correct the alleged violations. The Notice also included\nan additional two warning items pursuant to 49 C.F.R. § 190.205, which warned the operator to\ncorrect the probable violations or face possible future enforcement action.\nAfter requesting and receiving an extension of time to respond, MVPL responded to the Notice\nby letter dated June 15, 2023 (Response). Respondent contested several of the allegations,\noffered additional information in response to the Notice, requested that the proposed civil penalty\n(PCP) be reduced and or eliminated, and requested that the proposed compliance order (PCO)\nterms be modified. Respondent did not request a hearing and therefore has waived its right to\none.\n1 Energy Transfer, LP website, available at https://www.energytransfer.com/crude-oil/ (last accessed August 20,\n2024).\n\n\n\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. § 195.52(a)(3), which states:\n§ 195.52 Immediate notice of certain accidents.\n(a) Notice requirements. At the earliest practicable moment following\ndiscovery, of a release of the hazardous liquid or carbon dioxide transported\nresulting in an event described in § 195.50, but no later than one hour after\nconfirmed discovery, the operator of the system must give notice, in\naccordance with paragraph (b) of this section of any failure that:\n(1)….\n(3) Caused estimated property damage, including cost of cleanup and\nrecovery, value of lost product, and damage to the property of the operator\nor others, or both, exceeding $50,000.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.52(a)(3) by failing to give notice, at\nthe earliest practicable moment but no later than one hour after confirmed discovery, following\ndiscovery of a release of a hazardous liquid resulting in an event where estimated property\ndamage, including cost of cleanup and recovery, value of lost product, and damage to property of\nthe operator or others, or both, exceeded $50,000. Specifically, the Notice alleged that there\nwere three occasions in 2021 and 2022 when MVPL experienced reportable accidents but failed\nto give notice within the required time frame to the National Response Center (NRC). Those\noccasions were on February 22, 2021, June 10, 2021, and June 29, 2022.\nIn its Response, MVPL did not contest the allegation of violation with respect to the June 29,\n2022, occasion. However, it contested the allegation of violation with respect to the February\n22, 2021, and June 10, 2021 occasions.\nWith respect to the first contested occasion, the Notice alleged that an accident resulting in\nestimated property damage of $81,512 occurred on February 22, 2021, but Respondent did not\nnotify the NRC until March 12, 2021. In its Response, MVPL stated that the February 22, 2021\naccident involved a release of 15 barrels of crude oil, which was “totally contained on Company\nproperty.” Respondent stated that of the $81,512 of estimated property damage, $63,170 was\nrelated to environmental remediation. MVPL further stated that at the time of release, it did not\nexpect the total environmental costs related to a 15-barrel release would drive the total costs of\nthe event beyond the $50,000 threshold for immediate notification required by §195.52(a)(3).\nRespondent asserted that when it determined this threshold would be exceeded on March 12,\n2021, it promptly notified the NRC.\nWith respect to the second contested occasion, the Notice alleged that an accident resulting in\nestimated property damage of $79,229 occurred on June 10, 2021, but Respondent did not notify\nthe NRC until June 11, 2021. In its Response, MVPL stated that the June 10, 2021 accident\ninvolved a release of 16.70 barrels of cruel oil, which was “totally contained on Company\nproperty.” Respondent stated that of the $79,229 of estimated property damage, $60,000 was\n\n\n\nrelated to repair costs. MVPL further stated that these repair costs were elevated due to\ndifficulties experienced during excavation of the failure point overnight, and that, at the time of\ndiscovery of the release, it did not immediately expect that the total repair costs would drive the\ntotal costs for the event beyond the $50,000 threshold for immediate notification required by\n§195.52(a)(3). Respondent asserted that when it determined this threshold would be exceeded\non the morning of June 11, 2021, it promptly notified the NRC.\nPursuant to 49 C.F.R. § 195.52(a), an operator must provide notice of certain accidents2 “[a]t the\nearliest practicable moment following discovery…but no later than one hour after confirmed\ndiscovery.” “Confirmed discovery” means “when it can be reasonably determined, based on\ninformation available to the operator at the time a reportable event has occurred, even if only\nbased on a preliminary evaluation.”3 Read together, § 195.52(a) requires operators to report\naccidents at the earliest practicable moment, but no later than one hour after it can be reasonably\ndetermined, based on the information available, that a reportable event has occurred, even if only\nbased on a preliminary evaluation.\nThis reporting requirement was adopted in 2017 at the direction of Congress. In the Pipeline\nSafety, Regulatory Certainty, and Job Creation Act of 2011 (Public Law 112-90), Congress\ndirected PHMSA to “establish time limits for telephonic or electronic notification of an accident\nor incident to require such notification at the earliest practicable moment following confirmed\ndiscovery of an accident or incident and not later than 1 hour following the time of such\nconfirmed discovery.”\nOn January 23, 2017, PHMSA published the rule “Pipeline Safety: Operator Qualifications, Cost\nRecovery, Accident and Incident Notification, and Other Pipeline Safety Changes.”4 In the rule,\nPHMSA explained that the purpose of the revised notification requirement is to alert local, state,\nand federal agencies at the earliest practicable moment so that emergency personnel or\ninvestigators can be dispatched quickly. Without this requirement, and under alternatives\nproposed by commenters, each operator could have a different methodology that would\npotentially take hours or days before an operator completed its evaluation and determined that an\naccident or incident had in fact occurred. PHMSA noted that if an operator were allowed to wait\nfor a definitive confirmation, even where the operator already has sufficient evidence, the intent\nof the Congressional mandate would be defeated. Accordingly, PHMSA explained that it was\nadopting this reporting requirement, including the one-hour time limit and the definition of\n“confirmed discovery,” to abide by the Congressional mandate requiring operators to report\nincidents and accidents despite not having a complete assessment.\nIn this case, the Notice alleged that MVPL violated § 195.52(a)(3) by not reporting the February\n22, 2021, June 10, 2021, and June 29, 2022 accidents within the required timeframe when the\n2 As it pertains to the facts of this case, a reportable “accident” means a pipeline failure in which there is a release of\nhazardous liquid resulting in estimated property damage, including cost of clean-up and recovery, value of lost\nproduct, and damage to the property of the operator or others, or both, exceeding $50,000. See 49 C.F.R.\n§ 195.50(e).\n3 49 C.F.R. § 195.2.\n4 82 FR 7972.\n\n\n\nestimated property damage was $81,512, $79,229, and $4,651,397, respectively. In its\nResponse, MVPL stated that given the small amount of product released on its own property, it\ndid not immediately expect that the environmental costs for the February 22, 2021 accident and\ntotal repair costs for the June 10, 2021 accident would drive the total costs for the events beyond\nthe $50,000 threshold for immediate notification required by §195.52(a)(3). Respondent did not\ncontest the violation with respect to the June 29, 2022 accident.\nI reviewed whether the Notice and the evidence in the record form a sufficient evidentiary basis\nto support the allegation that Respondent should have determined, at an earlier date or time, that\na reportable event had occurred, based on the information available, even if only based on a\npreliminary evaluation. I find that they did not. First, the Notice did not indicate when MVPL\nshould have determined, based on the information available, that a reportable event occurred and\nwhen it should have notified the NRC. Second, the Notice did not indicate what evidence shows\nMVPL should have determined that the estimated property damage would exceed $50,000 at an\nearlier date or time.5 Rather, the Notice merely lists the later-determined estimated property\ndamage and indicates that Respondent should have known it earlier. In other words, the Notice\nfailed to articulate a sufficient evidentiary basis to support the allegation of violation for these\ntwo instances.\nThe evidence cited also does not set out a sufficient evidentiary basis to support the allegation as\ndescribed in the Notice. The PHMSA Form 7000-1 completed for the February 22, 2021\naccident, was submitted on March 22, 2021. The form lists February 22, 2021, 08:30 AM, as the\ndate and time an accident-reporting criteria was met. This is the same date and time that the\noperator listed for identification of the failure. The time of confirmed discovery was blank, and\nMarch 12, 2021, was identified as the date of the initial report to the NRC. In the narrative\nsection of the form, Respondent described that following the accident a clean-up crew was\nbrought in. Respondent explained that on March 12, 2021, it determined that the criteria for\nimmediate telephonic notification were met. This explanation is in-line with the argument\nadvanced by Respondent in its Response.\nSimilarly, the PHMSA Form 7000-1 completed for the June 10, 2021 accident, was submitted on\nJuly 7, 2021. The form lists June 10, 2021, 12:30 PM, as the date and time an accident-reporting\ncriteria was met. This is the same date and time that the operator listed for identification of the\nfailure. The time of confirmed discovery was left blank, and June 11, 2021, was identified as the\ndate of the initial report to the NRC. In the narrative section of the form, Respondent described\nthat following the accident a clean-up crew was brought in. Respondent explained that on June\n11, 2021, it determined that the criteria for immediate NRC notification were met. This\nexplanation is in-line with the argument advanced by Respondent in its Response.\nNeither form provides an evidentiary basis to conclude that Respondent should have determined\nat an earlier date and time that a reportable event had occurred, based on the information\navailable, even if only based on a preliminary evaluation. The evidence does show that a clean-\nup crew was called, but it does not provide a sufficient evidentiary foundation to conclude that\n5 See In Re Bell Fourche Pipeline Company, CPF 5-1992-2514 (April 28, 1998) (noting that the Notice failed to\nprovide an evidentiary basis that the respondent could have reasonably obtained information about the spill and its\nconsequences any earlier).\n\n\n\nthe operator should have known the estimated property damage, including cost of cleanup and\nrecovery, value of lost product, and damage to property of the operator or others, or both, would\nexceed $50,000 at an earlier point in time.\nWith this in mind, I withdraw the two instances of violation for the February 22, 2021 and June\n10, 2021 releases. This decision is specific to the facts of this case and the allegation of violation\nas set out in the Notice. Unlike here, there have been situations where sufficient evidence is\npresented to support a conclusion that an operator had enough information at the time of the\nrelease for it to reasonably determine that the estimated property damage would exceed\n$50,000.6 In those situations, the text of the regulation confirms the operator would be required\nto report such an accident as soon as practicable but no later than one hour after it can be\nreasonably determined that a reportable event has occurred.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.52(a)(3) by failing to give notice, at the earliest practicable moment but no later than one\nhour after confirmed discovery of an accident that occurred on June 29, 2022. The remaining\ntwo alleged instances of violation are withdrawn.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.420(a), which states:\n§ 195.420 Valve maintenance.\n(a) Each operator shall maintain each valve that is necessary of the safe\noperation of its pipeline system in good working order at all times.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.420(a) by failing to maintain each\nvalve that is necessary for the safe operation of its pipeline systems in good working order at all\ntimes. Specifically, the Notice alleged that PHMSA found two leaking valves and a remote\noperated valve (ROV) that did not respond to open or closed signals from the control room.\nIn its Response, MVPL did not contest the allegation of violation. Instead, it provided additional\ninformation regarding the valves and requested modification of the PCO terms for this item.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.420(a) by failing to maintain each valve that is necessary for the safe operation of its\npipeline systems in good working order at all times.\nMVPL’s request for modification of the PCO terms is addressed below in the Compliance Order\nsection below.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n6 See In Re Centurion Pipeline, LP, CPF 4-2011-5013 (April 30, 2012) (wherein it was determined that a release of\napproximately 10,000 barrels of crude oil caused estimated clean-up costs of $64,130); In Re Texas Eastern\nTransmission Corporation, CPF 4-2001-1003 (May 5, 2005) (noting that the evidence showed the respondent was\ncapable of estimating that the incident would likely need to be reported shortly after the incident – the respondent\nwas able to estimate the amount of gas released and the cost of gas at the time).\n\n\n\n§ 195.432 Inspection of in-service breakout tanks.\n(a) ….\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3). The risk-based internal inspection procedures in\nAPI Std 653, section 6.4.3 cannot be used to determine the internal\ninspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of its in-service atmospheric breakout tanks pursuant to the regulation and its\nmanual of written procedures for conducting normal operations and maintenance activities.\nSpecifically, the Notice alleged that MVPL failed to conduct monthly in-service visual\ninspections on several breakout tanks in the Hebron and Oxford areas as required by API Std 653\nand Respondent’s procedure HLT.05.\nIn its Response, Respondent did not contest the allegation of violation. Rather, it requested a\nreduction of the civil penalty associated with this item.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.432(b) by failing to inspect the physical integrity of its in-service atmospheric breakout\ntanks pursuant to the regulation and its manual of written procedures for conducting normal\noperations and maintenance activities.\nMVPL’s request for a reduction of the civil penalty associated with this item is addressed below\nin the Civil Penalty section below.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(i), 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(i) After December 16, 2004, notify the Administrator or a state agency\nparticipating under 49 U.S.C. Chapter 601 if the operator significantly\nmodifies the program after the administrator or state agency has verified\nthat it complies with this section. Notifications to PHMSA may be\nsubmitted by electronic mail to InformationResourcesManager@dot.gov,\nor by mail to ATTN: Information Resources Manager DOT/PHMSA/OPS,\nEast Building, 2nd Floor, E22-321, New Jersey Avenue SE., Washington,\nDC 20590.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(i) by failing to notify the\n\n\n\nAdministrator after it made significant modifications to its Operator Qualification (OQ) Program,\npursuant to the regulation and its Standard Operating Procedure HLA.18 Operator Qualification\nPlan, dated 12/15/2021. Specifically, the Notice alleged that MVPL failed to timely notify\nPHMSA of three significant modifications to its OQ Program.\nIn its Response, MVPL did not contest the allegation of violation. Rather, it provided\ndocumentation of remediation and requested that the PCO associated with this item be deemed\nsatisfied.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.505(i) by failing to notify the Administrator after it made significant modifications to its\nOQ Program, pursuant to the regulation and its Standard Operating Procedure HLA.18 Operator\nQualification Plan, dated 12/15/2021.\nMVPL’s request regarding the PCO terms associated with this item is addressed below in the\nCompliance Order section below.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nWITHDRAWAL OF ALLEGATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.581(a), which states:\n§ 195.581 Which pipelines must I protect against atmospheric\ncorrosion and what coating material may I use?\n(a) You must clean and coat each pipeline or portion of pipeline that\nis exposed to the atmosphere, except pipelines under paragraph (c) of this\nsection.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.581(a) by failing to protect\naboveground pipe from atmospheric corrosion by cleaning and coating each pipeline or portion\nof pipeline that is exposed to the atmosphere. Specifically, the Notice alleged that PHMSA\nobserved three locations where coating material had deteriorated and showed bare pipe at the\nsoil-to-air interfaces: at the Toledo Terminal Station, the Denver Station, and Block Valve (BV)\n220.\nIn its Response, MVPL disagreed with the allegation of violation and the associated proposed\ncompliance order. MVPL stated the atmospheric corrosion control inspections for these\nlocations were conducted on October 15, 2021, September 7, 2021, and August 8, 2021,\nrespectively. MVPL respectively designated the corrosion condition at these locations as Case 1,\nCase 4, and Case 2.7 MVPL’s procedure SOP HLD.44, “Atmospheric Corrosion Inspection,”\n7 Respondent provided copies of the inspection reports with its Response. See Response Attachment C.\n\n\n\nstated that conditions up to Case 4 do not require remedial action because integrity or safety of\nthe metallic asset will not be affected before the next inspection.\n8 Remedial action is required\nfor Case 5 through Case 7. Per Respondent’s procedure SOP HLD.40, “Corrosion Control\nRemedial Action,” onshore atmospheric corrosion protection must be restored within three\ncalendar years following discovery, not to exceed 39 months from the date the deficiencies are\ndiscovered.9 Notwithstanding, MVPL, with its Response, provided documentation showing that\nall three locations have been remediated.\nIn a recommendation for final action submitted pursuant to § 190.209(b)(7), the Director\nrecommended withdrawing the alleged violation of § 195.581(a).\nAccordingly, based upon the foregoing, I hereby order that Item 6 be withdrawn. Respondent is\nreminded that pursuant to § 195.581(a), an operator must clean and coat each pipeline or portion\nof pipeline exposed to the atmosphere and while certain pipelines may be excepted from this\nrequirement under § 195.581(c), that exception is not applicable for portions of pipelines in\noffshore splash zones or soil-to-air interfaces.\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.10\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 $119,000 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $39,800 for Respondent’s violation of 49 C.F.R.\n§ 195.52(a)(3), for failing to give notice, at the earliest practicable moment but no later than one\nhour after confirmed discovery, following discovery of a release of a hazardous liquid resulting\nin an event where estimated property damage, including cost of cleanup and recovery, value of\nlost product, and damage to property of the operator or others, or both, exceeded $50,000. The\n$39,800 PCP was based upon three instances of violation. For the reasons set out above in the\n8 PHMSA Violation Report, Exhibit F-4.\n9 Operator Response, Attachment C.\n10 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n\n\n\nFindings of Violation section, I withdrew two instances of violation. Accordingly, an adjustment\nto the civil penalty is warranted. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess MVPL a reduced civil penalty of $39,100 for one instance of\nviolation of 49 C.F.R. § 195.52(a)(3).\nItem 4: The Notice proposed a civil penalty of $39,400 for Respondent’s violation of 49 C.F.R.\n§ 195.432(b), for failing to inspect the physical integrity of its in-service atmospheric breakout\ntanks pursuant to the regulation and its manual of written procedures for conducting normal\noperations and maintenance activities.\nIn its Response, MVPL requested that the civil penalty for Item 4 be recalculated and reduced on\nthe basis of “PHMSA erroneously utilizing a multiplier of ten (10) for the ‘History of Prior\nOffenses’ component in the calculation embedded in the Proposed Civil Penalty Worksheet.” A\nmultiplier of ten indicates six or more prior offenses within five years prior to issuance of the\nNotice. PHMSA listed a total of eight prior offenses, which included five findings of violation\nagainst Energy Transfer, LP (OPID 32099) when calculating the number of prior violations\nwithin the last five years. Respondent asserted that it was erroneous to include these findings of\nviolation because Respondent has a different OPID (12470) and is a separate operator from\nEnergy Transfer, LP. Respondent asserted that only prior findings of violation directly attributed\nto Mid-Valley Pipeline should have been included.\nHaving considered Respondent’s argument, I note PHMSA’s Enforcement Procedures, section\n4.1.3.1, state that multiple OPIDs may be used to determine the history of prior offenses “where\nappropriate.”11 In this case, it is appropriate to include the OPID for both Energy Transfer\nCompany (OPID 32099) – a subsidiary of Energy Transfer, LP – and Mid Valley Pipeline\nCompany LLC (OPID 12470) – a subsidiary of Energy Transfer, LP – because both share a\nSafety Program Relationship under Energy Transfer Company (OPID 32099). Furthermore,\nRespondent uses Energy Transfer’s procedures.\n12 In addition, Respondent responded to the\nNotice using “Energy Transfer” letterhead and copied only Energy Transfer personnel. Taken\ntogether, these facts indicate a close, if not indistinguishable, relationship between the parent\ncompany and subsidiary as it concerns its program for compliance with the federal pipeline\nsafety regulations. Therefore, in this case, it is appropriate to include prior offenses from both\nOPIDs in the history of prior offenses.\nRespondent did not provide any additional argument to justify a reduction of the civil penalty for\nthis Item. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess MVPL a civil penalty of $39,400 for violation of 49 C.F.R. § 195.432(b).\n11 PHMSA Enforcement Procedures, Section 4: Administrative Enforcement Processes, at 27 (December 9, 2022),\navailable at https://www.phmsa.dot.gov/regulatory-compliance/pipeline/enforcement/section-4-administrative-\nenforcement-processes.\n12 See, for example, PHMSA Violation Report, Exhibits A-5, B-5, B-6, C-4, D-3, F-4, G-3.\n\n\n\nItem 5: The Notice proposed a civil penalty of $39,800 for Respondent’s violation of 49 C.F.R.\n§ 195.505(i), for failing to notify the Administrator after it made significant modifications to its\nOQ Program, pursuant to the regulation and its Standard Operating Procedure HLA.18 Operator\nQualification Plan, dated 12/15/2021.\nIn its Response, MVPL requested that the civil penalty for Item 5 be recalculated and reduced.\nRespondent’s basis for this request was identical to the argument it advanced for Item 4, above.\nFor the reasons discussed above, I find that a reduction to the civil penalty for Item 5 is not\nwarranted. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess MVPL a civil penalty of $39,800 for violation of 49 C.F.R. § 195.505(i).\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 $118,300.\nPayment of the civil penalty must be made within 20 days after receipt of this 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 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\nis not made within 110 days of service. Furthermore, failure to pay the civil penalty may result\nin referral of the matter to the Attorney General for appropriate action in a district court of the\nUnited States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 3, 5, and 6 in the Notice for\nviolations of 49 C.F.R. §§ 195.420(a), 195.505(i), and 195.581(a), respectively. Under 49\nU.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\nestablished under chapter 601. As discussed above, Item 6 has been withdrawn. Therefore, the\ncompliance terms proposed in the Notice for that Item are not included in this Order.\nWith regard to the violation of § 195.420(a) (Item 3), Respondent requested the compliance\nterms be modified. The proposed compliance order terms for this item would require MVPL to\ninspect all valves on the Mid-Valley Pipeline Stems and repair or replace any valves that are not\nin good working order, including testing communications with the control room for ROVs. In its\nResponse, MVPL provided additional information regarding the Toledo Terminal and Lima\nStation valves identified in the Notice. Respondent stated that the valves were not mainline\nvalves, were on a preventative maintenance schedule and inspected on July 29, 2021, and July\n\n\n\n14, 2021, respectively, and that neither was leaking or weeping to a degree that would constitute\nan immediate hazard at the time of the PHMSA inspection. MVPL also stated that BV 400 ROV\ncommunications link was exercised during the August 16, 2022 inspection and found to be in\ngood working order. It also provided documentation showing that it remediated the conditions\nassociated with the valves PHSMA identified in the Notice.13 Respondent requested that the\nterms of the PCO be modified to only require inspection of the three valves identified in the\nNotice, and that the modified PCO terms be deemed satisfied based on the remedial actions\ntaken.\nIn a recommendation for final action submitted pursuant to § 190.209(b)(7), the Director\nrecommended modification of the compliance order terms to allow for submission of the most\nrecent inspection records for all valves that are necessary for the safe operation of the Mid-\nValley Pipeline System, so that if they have already been retested they do not have to be re-tested\nto satisfy the compliance order.\nIn light of the preceding, I agree to modify the terms of the PCO for Item 3 so that the most\nrecent inspection records for all valves that are necessary for the safe operation of the Mid-\nValley Pipeline System can be provided to satisfy the Compliance Order. However, I do not\nadopt Respondent’s suggested modification to further limit the compliance order to just the three\nvalves identified in the Notice (i.e., the Toledo Terminal Station (valve #15), Lima Pump Station\n(Unit 4 discharge valve) and BV 400). Section 195.420(b) requires operators to inspect each\nvalve that is necessary for the safe operation of its pipeline systems at least twice each calendar\nyear, at intervals not to exceed 7.5 months. Thus, between the June 2022 inspection and now,\nMVPL should have performed at least two inspections of each valve that is necessary for the safe\noperation of its pipeline system and identified valves that are not in good working order.\nRegardless of whether a valve is leaking or weeping to a degree that constitutes an immediate\nhazard, they must be maintained in good working order at all times to comport with § 195.420.\nTherefore, I do not find the compliance term to provide documentation that all valves are in good\nworking order, which is required by the regulation, to be an overly broad or unwarranted\nremedial action for a violation of § 195.420(a), as argued by Respondent.\nConsequently, I do not find the terms of the compliance satisfied, despite MVPL’s submission of\nthe documentation accompanying its response for the three valves identified in the Notice.\nRather, MVPL must submit the required records to the Director for review, as detailed below.\nWith regard to the violation of § 195.505(i) (Item 5), Respondent argued the PCO terms should\nbe deemed satisfied based on its submission of documentation of its April 28, 2023, notification\nto the PHMSA Administrator of significant changes to its OQ Program. In a recommendation\nfor final action submitted pursuant to § 190.209(b)(7), the Director recommended finding the\nterms of the PCO satisfied. I agree with this recommendation. Accordingly, the terms of the\nPCO for this Item have been satisfied and the compliance terms proposed in the Notice for this\nItem are not included in this Order.\nFor the above reasons, the Compliance Order is modified as set forth below.\n13 Operator Response, Attachment A.\n\n\n\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 § 195.420(a) (Item 3), Respondent must provide\nthe most recent inspection records for all valves that are necessary for the safe\noperation of its Mid-Valley Pipeline System and provide work order documentation\nto repair or replace any valves that are not in good working order, including testing\ncommunications with the control room for ROVs, and provide the detailed associated\ninspection records and work order to the Director, Southwest Region, within 180 days\nof issuance 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.\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 the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (see 49 C.F.R. § 190.223 for adjusted amounts),\nfor each violation for each day the violation continues or in referral to the Attorney General for\nappropriate relief in a district court of the United States.\nWARNING ITEMS\nWith respect to Items 2 and 7, the Notice alleged probable violations of Part 195, but identified\nthem as warning items pursuant to § 190.205. The warnings were for:\n49 C.F.R. § 195.412(a) (Item 2) ─ Respondent’s alleged failure to inspect the\nsurface conditions on or adjacent to each pipeline right-of-way using an\nappropriate method of inspection; and\n49 C.F.R. § 195.583(a) (Item 7) ─ Respondent’s alleged failure to inspect each\npipeline or portion of its pipeline that is exposed to the atmosphere for evidence\nof atmospheric corrosion at least once every three calendar years, but with\nintervals not exceeding 39 months.","truncated":true,"body_characters":42951}