{"operation":"document","citation":"CPF 42023049NOPV","title":"DIXIE PIPELINE COMPANY LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"current","official":true,"published_on":"2023-08-14","effective_on":null,"summary":"OPEN notice of probable violation citing 195.583(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023049nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023049nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023049nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42023049NOPV","body":"Notice of Probable Violation involving DIXIE PIPELINE COMPANY LLC. PHMSA's enforcement data identifies the cited regulation as 195.583(a). The case was opened on 2023-08-14 and is reported as open. Proposed civil penalty: $19,600. Assessed civil penalty: $19,300. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42023049NOPV_Decision on Petition for Reconsideration_05292026_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Decision%20on%20Petition%20for%20Reconsideration_05292026_(22-232767).pdf\n\n42023049NOPV_Decision on Petition for Reconsideration_05292026_(22-232767)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Decision%20on%20Petition%20for%20Reconsideration_05292026_(22-232767)_text.pdf\n\n42023049NOPV_Final Order_08292025_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Final%20Order_08292025_(22-232767).pdf\n\n42023049NOPV_Final Order_08292025_(22-232767)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Final%20Order_08292025_(22-232767)_text.pdf\n\n42023049NOPV_Op Rsp to Ntc Rq for Hearing Stmt Issues_09132023_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Op%20Rsp%20to%20Ntc%20Rq%20for%20Hearing%20Stmt%20Issues_09132023_(22-232767).pdf\n\n42023049NOPV_Operator Petition for Reconsideration_09182025_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Operator%20Petition%20for%20Reconsideration_09182025_(22-232767).pdf\n\n42023049NOPV_Operator Post-Hearing Brief_05202024_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Operator%20Post-Hearing%20Brief_05202024_(22-232767).pdf\n\n42023049NOPV_Operator Pre-Hearing Submission_04082024_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Operator%20Pre-Hearing%20Submission_04082024_(22-232767).pdf\n\n42023049NOPV_Operator Response to Decision on Petition_06222026_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_Operator%20Response%20to%20Decision%20on%20Petition_06222026_(22-232767).pdf\n\n42023049NOPV_PCP_08142023_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_PCP_08142023_(22-232767).pdf\n\n42023049NOPV_PCP_08142023_(22-232767)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_PCP_08142023_(22-232767)_text.pdf\n\n42023049NOPV_PHC Hearing Rescheduled_03042024_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_PHC%20Hearing%20Rescheduled_03042024_(22-232767).pdf\n\n42023049NOPV_PHC Hearing Rescheduled_03042024_(22-232767)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_PHC%20Hearing%20Rescheduled_03042024_(22-232767)_text.pdf\n\n42023049NOPV_PHC Hearing Scheduled_09272023_(22-232767).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_PHC%20Hearing%20Scheduled_09272023_(22-232767).pdf\n\n42023049NOPV_PHC Hearing Scheduled_09272023_(22-232767)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023049NOPV/42023049NOPV_PHC%20Hearing%20Scheduled_09272023_(22-232767)_text.pdf\n\n42023049NOPV_Final Order_08292025_(22-232767)_text.pdf\n\nAugust 29, 2025\nVIA ELECTRONIC MAIL TO: gbacon@eprod.com\nGraham W. Bacon\nExecutive Vice President & Chief Operating Officer\nDixie Pipeline Company LLC\n1100 Louisiana Street\nHouston Texas 77002\nRe: CPF No. 4-2023-049-NOPV\nDear Mr. Bacon:\nEnclosed please find the Final Order issued in the above-referenced case to Dixie Pipeline\nCompany LLC. It makes a finding of violation and assesses a civil penalty of $19,300. The\npenalty 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\nthe date of transmission and acknowledgement of receipt as provided under 49 CFR § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nLinda Daugherty\nActing Associate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Zachary Craft, Esq., Counsel for Dixie Pipeline Company LLC, zlcraft@eprod.com\nMs. Brianne Kurdock, Esq., Babst Calland, Counsel to Dixie Pipeline Company LLC,\nbkurdock@babstcalland.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 )\nDixie Pipeline Company, LLC, ) CPF No. 4-2023-049-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom February 7, 2022 through January 30, 2023, 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 Dixie Pipeline Company\nLLC’s (Dixie or Respondent) facilities, records, and procedures in Apex, North Carolina; Milner,\nGeorgia; and Mont Belvieu, Texas. Dixie operates an interstate hazardous liquid pipeline facility\nin the Southeast United States.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated August 14, 2023, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice). In accordance with 49 CFR § 190.207, the Notice proposed finding that\nRespondent had committed one violation of 49 CFR Part 195 and proposed assessing a civil\npenalty of $21,200 for the alleged violation.\nEnterprise Products Operating LLC responded to the Notice on behalf of Dixie by letter dated\nSeptember 13, 2024 (Response).1 Respondent contested the allegation of violation and the\nproposed civil penalty. Dixie and the Director both submitted additional written material on\nApril 8, 2024 (Pre-hearing submissions). A hearing was subsequently held on April 18,\n2024 in Houston, Texas, before a Presiding Official from the Office of Chief Counsel,\nPHMSA. At the hearing, Respondent was represented by counsel. After the hearing,\nRespondent provided additional written material for the record by letter dated May 20, 2024\n(Post-hearing submission). The Director provided a recommendation for final order on June 20,\n2024 (Recommendation), and Dixie submitted a reply to the Recommendation on July 19, 2024\n(Reply).\nOn June 2, 2025, the Director issued a revised recommendation reducing the proposed penalty to\n$19,600 pursuant to the May 20, 2025, PHMSA “Policy for Calculating Proposed Civil Penalties\n1 Dixie is a wholly owned subsidiary of Enterprise Products Operating LLC.\n\n\n\nin Pipeline Safety Enforcement Proceedings.” Dixie responded to the revised civil penalty\nrecommendation on June 17, 2025.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 CFR Part 195, as follows:\nItem 1. The Notice alleged that Respondent violated 49 CFR § 195.583(a), which states:\n§ 195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed\nto the atmosphere for evidence of atmospheric corrosion, as follows:\nIf the pipeline is\nlocated:\nThen the frequency of inspection is:\nOnshore\nAt least once every 3 calendar years, but with intervals not\nexceeding 39 months\nOffshore\nAt least once each calendar year, but with intervals not\nexceeding 15 months\nThe Notice alleged that Respondent violated § 195.583(a) when it failed to inspect portions of its\nonshore pipeline system that are exposed to the atmosphere for evidence of atmospheric\ncorrosion at least once every 3 calendar years, but with intervals not exceeding 39 months.\nSpecifically, Dixie failed to inspect the exposed pipe at the required intervals at three locations:\n• Location 124.7008 (Location 124): Dixie did not conduct an atmospheric corrosion inspection\nbetween April 7, 2015 and May 17, 2022;\n• Location 125.0193 (Location 125): Dixie had not completed an atmospheric corrosion\ninspection since June 25, 2018; and,\n• Location 133.0786 (Location 133): Dixie had not completed an atmospheric corrosion\ninspection since May 6, 2015.\nIn its written submissions and at the hearing, Dixie contested Item 1. Respondent first argued\nOPS has not met its burden of proof because it has not provided any evidence that the locations\ncited in the Notice were exposed to the atmosphere. Respondent asserted the “. . . only evidence\nthat OPS presented concerning atmosphere exposure were photographs of two of the pipeline\nsegments taken on May 17, 2022. These photographs do not contradict the information provided\nin the atmospheric corrosion control records or establish that either of these segments were\nexposed to the atmosphere for the previous 3 years or any other length of time.”2 Dixie also\nargued that it lacked fair notice that the allegations in the Notice constituted violations of §\n2 Dixie Post-hearing submission at 5.\n\n\n\n195.583(a).3 Dixie’s argument relates to its assertions in the record that the three locations\ndescribed in the notice are submerged in water or buried and therefore not constantly exposed to\nthe atmosphere during the 39-month inspection intervals specified by § 195.583(a).4 Dixie\nargued § 195.583(a) does not provide operators with notice of any standard for performing\ninspections of pipelines that transition between being submerged or buried, and exposed to the\natmosphere.5 In advancing that argument, Respondent posited that § 195.583(a) does not\naddress submerged pipelines at all, instructing that only those pipelines which are exposed to the\natmosphere must be inspected for atmospheric corrosion.6 Dixie’s Reply also argued that the\nDirector’s Recommendation raised positions regarding the applicability of § 195.583(a) to the\nthree locations described in the Notice that were not discussed at the hearing, and therefore the\nDirector waived or forfeited its ability to advance those discussions in its Recommendation.7 As\naddressed in detail further below, Respondent also contested the proposed civil penalty for the\nalleged violation.8\nThe record does not reflect a material dispute over the facts as described in the Notice. Both\nparties agree the pipeline segments at issue in this proceeding are sometimes exposed.9 Dixie’s\nrecords indicate it performed atmospheric corrosion inspections at Locations 124 and 125 in\nApril 2015, and at Location 133 in May 2015.10 The atmospheric inspection history for all three\nlocations, since the 2015 inspections were performed, is as follows:\n• Location 124 - Dixie attempted an atmospheric corrosion inspection at Location 124 in\nJune 2018, but did not perform the inspection as its records state the segment was\n“sumerged [sic] in water”.11 Dixie again attempted to conduct atmospheric corrosion\ninspections in July and September 2021, respectively, but did not perform those inspections\ndue to “high vegitation [sic]”.12 Dixie attempted another atmospheric corrosion inspection\n3 Id. at 7-9.\n4 Id. Buried or an underwater (submerged) pipeline are not subject to the atmospheric corrosion inspection\nrequirements of § 195.583(a). Rather, buried or submerged pipelines are subject to other corrosion control\nprovisions in Subpart H of Part 195.\n5 Id. at 7.\n6 Id.\n7 Dixie Reply at 6-10.\n8 See Dixie Post-hearing submission at 9; Dixie Reply at 11-12.\n9 Hearing transcript (Transcript) at 75:9-12. Southwest Region Recommendation (Recommendation) at 3.\n10 Notice at Exhibit (Exh.) B-1.\n11 Notice at Exh. B-2. The spelling of submerged is corrected in the remaining references to such in this Final Order.\n12 Notice at Exh. B-3. The spelling of vegetation is corrected in the remaining references to such in this Final Order.\nThere was discussion during the hearing of the pipeline segments being “silted in” when Dixie attempted to perform\n\n\n\nin October 2021, but the inspection was not performed because the location was\n“submerged in water”.13 Finally, at the time of PHMSA’s inspection in May 2022,\nRespondent performed an atmospheric corrosion inspection and indicated no corrosion was\nfound.14 Dixie did not perform an atmospheric corrosion inspection at Location 124\nbetween April 2015 and May 2022.\n• Location 125 - Dixie performed an atmospheric corrosion inspection at Location 125 in\nJune 2018, during which no corrosion was found.15 Dixie again attempted to conduct\natmospheric corrosion inspections at Location 125 in July and September 2021,\nrespectively, but did not perform those inspections due to “high vegetation”.16 Dixie\nattempted another atmospheric corrosion inspection in October 2021, but the inspection\nwas not performed because Location 125 was “submerged in water”.17 Finally, at the time\nof PHMSA’s inspection in May 2022, Respondent performed an atmospheric corrosion\ninspection and indicated no corrosion was found.18 Dixie did not perform an atmospheric\ncorrosion inspection at Location 125 between June 2018 and May 2022.\n• Location 133 - Dixie attempted an atmospheric corrosion inspection at Location 133 in\nJune 2018, but did not perform such as its records state the segment was “submerged in\nwater”.19 Dixie again attempted an atmospheric corrosion inspection at Location 133 in\nAugust 2021, but its records state the segment was again “submerged in water” and so no\ninspection was performed.20 Dixie next attempted an atmospheric corrosion inspection at\ninspections at the three locations cited in the Notice. See Transcript at 38: 5; 52: 3-8. It appears “silted in” is\nanother manner to refer to a buried pipeline. However, Dixie’s own records only reflect that “high vegetation” was\nfound by the employee attempting to perform the atmospheric corrosion inspections. Notice at Exh. B-3. None of\nthe Dixie representatives that appeared at the hearing conducted those 2021 inspections that were recorded as having\n“high vegetation” conditions (Dixie inspection records reflect the inspections were performed by Daniel Maddox).\nDixie’s own inspection records relevant to Locations 124 and 125 make no reference to those segments being\n“’silted in”. The most relevant and direct evidence in the record indicates numerous inspections were not performed\ndue to reason of “high vegetation”. A Dixie representative that appeared at the hearing stated “. . . . the vegetation\nwas such that the location was acceptable, but not acceptable for purposes of performing the inspection.” Transcript\nat 35: 18-22.\n13 Notice at Exh. B-3.\n14 Dixie Pre-hearing submission, Attachment 2 (at 8).\n15 Notice at Exh. B-2.\n16 Id. at Exh. B-3.\n17 Id.\n18 Dixie Pre-hearing submission, Attachment 2 (at 8).\n19 Notice at Exh. B-2.\n20 Id. at Exh. B-3.\n\n\n\nLocation 133 in in May 2022, or around the time of PHMSA’s inspection described in the\nNotice.\n21 Again no inspection was performed in May 2022 because the segment was\n“submerged in water”.22 Dixie attempted two more atmospheric corrosion inspections in\nOctober 2022, but did not perform them, first due to a listed reason of “high vegetation,\nunable to access,” and next because the segment was again “submerged in water”.23\nTherefore, Dixie did not perform an atmospheric corrosion inspection at Location 133 after\nMay 2015.\nSection 195.583(a) requires that any hazardous liquid pipeline or portion of pipeline that “. . . is\nexposed to the atmosphere . . . ” must be inspected for evidence of atmospheric corrosion every\nthree years, not to exceed 39 months between such inspections. For Locations 124 and 125,\nthere is substantial evidence in the record indicating that those two pipeline segments were\nexposed to the atmosphere during the relevant time period implicated by the Notice, and\ntherefore were subject to atmospheric corrosion inspection requirements in § 195.583(a).\nFirst, OPS physically viewed Location 124 during its May 2022 inspection and took photographs\nof the pipeline segment, showing the pipeline was exposed (the bottom portion of the pipe is\npartially sitting in what appears to be standing water or a creek- or ditch-bed).24 Further, Dixie’s\nown records indicate that in 2021, the pipeline was also not submerged or buried.25 Rather, the\ninspections records presented by both the Director and Dixie in this matter reflect that Dixie did\nnot perform two attempted inspections in 2021 due to the presence “high vegetation.”26 There is\nno exception described in § 195.583 to performing the required atmospheric corrosion\ninspections on an exposed pipeline due to the presence of “high vegetation.” Both in 2015 and\n2022, Respondent was able to successfully perform the required atmospheric corrosion\ninspections at Locations 124 and 125 which also indicates the pipeline is exposed.27 Dixie’s own\nconduct in this matter also gives weight to the assertion that Location 124 is an exposed pipeline\n(versus being buried or submerged segments), as evidenced by its atmospheric corrosion\ninspection records and its attempts to conduct such inspections at the required three-year\nintervals (and its successful performance of such inspections on different occasions).28\n21 Dixie pre-hearing submission, Attachment 2 (at 8).\n22 Id.\n23 Id.\n24 Southwest Region Pre-hearing submission at Exh. B-4. See also Transcript at 15: 5-9\n25 Notice at Exh. B-3.\n26 Id.\n27 Notice at Exh.’s B-1, B-3; Dixie pre-hearing submission, Attachment 2 (at 8).\n28 See Dixie Pre-hearing submission at 4; Transcript at 14: 13-22; 19: 10-17; 65: 9-16; Notice at Exh.’s B-1 through\nB-3; Dixie pre-hearing submission, Attachment 2.\n\n\n\nNext, similar to Location 124, PHMSA also viewed Location 125 during its May 2022\ninspection and took photographs of the pipeline segment that are in the record in this matter,\nshowing the pipe was exposed (top of the pipe visible amidst what appears to be mowed down\nvegetation).29 Further, Dixie’s own records indicate that in 2021 on two occasions when it\nattempted to perform the inspections but ultimately did not, that the pipeline was not submerged\nor buried.30 Rather, the inspections records reflect that Dixie did not perform two attempted\n2021 inspections due to “high vegetation.”31 There is no exception in § 195.583 to performing\nthe required atmospheric corrosion inspections on an exposed pipeline due to the presence of\n“high vegetation.” In 2015, 2018, and 2022, respectively, Respondent was able to successfully\nperform the required atmospheric corrosion inspections, evidencing that the pipeline was\nexposed.32 Dixie’s own conduct also indicates it considered Location 125 to be exposed to the\natmosphere (versus being buried or submerged segments), as evidenced by its atmospheric\ncorrosion inspection records and its attempts to conduct such inspections at the required three-\nyear intervals.33\nHowever, there is a lack of evidence in the record indicating that Location 133 is still an exposed\npipeline. Unlike for locations 124 and 125, no photographs of the location evidencing its status\nas an exposed pipeline were presented by OPS, and it is not clear from the record in this matter\nwhether any PHMSA inspection staff physically visited Location 133 and observed that it was\nindeed an exposed pipeline.34 Also in contrast with Locations 124 and 125, Dixie’s own records\nindicate that at the time of the attempted 2018, 2021, and May 2022 inspections, the pipeline at\nLocation 133 was submerged.35 The only point after Dixie’s May 2015 inspection in which\nthere is any evidence to show the pipeline was an exposed was during an October 2022\nattempted inspection that reflects “high vegetation” was present.36 However, that inspection was\nconducted after the May 2022 inspection timeframe for the allegation of violation described in\nthe Notice. That October 2022 inspection was also not reflected in the exhibits accompanying\nthe Notice.\n37 In sum, I find that OPS has not satisfied its burden of prove that Location 133 was\n29 Southwest Region Pre-hearing submission at Exh. B-4. See also Transcript at 15: 5-9.\n30 Notice at Exh. B-3.\n31 Id.\n32 Notice at Exh.’s B-1, B-2; Dixie pre-hearing submission, Attachment 2.\n33 See Dixie Pre-hearing submission at 4; Transcript at 14: 13-22; 19: 10-17; 65: 9-16; Notice at Exh.’s B-1 through\nB-3; Dixie pre-hearing submission, Attachment 2.\n34 See Transcript at 15: 5-9. The Notice also does not specify that Location 133 was physically observed during\nPHMSA’s May 2022 inspection.\n35 Notice at Exh.’s B-2, B-3; Dixie pre-hearing submission, Attachment 2.\n36 Dixie pre-hearing submission, Attachment 2.\n37 See Notice at Exh.’s B-1 through B-3.\n\n\n\nan exposed pipeline subject to the required atmospheric corrosion inspections under § 195.583\nafter May 2015.\nAt the time of PHMSA’s May 2022 inspection, and as based on the date of its last atmospheric\ncorrosion inspections in 2015, Location 124 should have been inspected at least twice since\n2015 (e.g., no later than in July 2018 and October 2021) via the permissible 39-month maximum\ninterval.38 As based on the date of its June 2018 atmospheric corrosion inspection, Location 125\nshould have been inspected at least once more (no later than September 2021) via 39-month\nmaximum by the time of PHMSA’s 2022 inspection.\n39 Neither Location 124 nor 125 was buried\nor submerged at the time of certain attempted 2021 atmospheric corrosion inspections listed\nabove.40 Dixie’s records instead indicate there was only “high vegetation” at those two\nlocations.41 Therefore, the required atmospheric corrosion inspections of the exposed pipeline\nsegments at Locations 124 and 125 were not completed within the intervals required by §\n195.583 or by commencement of PHMSA’s 2022 inspection.\nDixie’s argument in relation to the applicability of § 195.583(a) to situations where a pipeline\nmay sometimes be submerged would add specificity or exception language to the regulation text\nthat does not exist (e.g., that the regulation only applies to pipeline segments that are always or\nconstantly exposed; are exposed during the entirety of a 39-month maximum atmospheric\ncorrosion inspection interval, etc.). Section 195.583(a) was adopted in a 2001 DOT final rule,\nand simply requires that any pipeline that “. . . is exposed . . . ” to the atmosphere is subject to the\natmospheric corrosion inspection requirements in that section.42 The regulation text contains no\nexceptions, nor adjusts the inspection intervals should a pipeline temporarily be submerged. The\nregulation also does not state that a pipeline must not be submerged at any point during the\nentirety of a 39-month interval in order that the atmospheric corrosion inspection requirement\napplies. In short, the language of § 195.583(a) is unambiguous.\nDixie’s argument regarding a pipeline that might sometimes be submerged and therefore also\nunable to be visually inspected is not persuasive to overcome the lack of performance of required\ninspections in this matter. Dixie’s own records indicate that the pipelines were not always\nsubmerged at the time of attempted atmospheric corrosion inspections, but rather were just\n38 49 CFR § 195.583(a).\n39 Id.\n40 Notice at Exh. B-3.\n41 Id.\n42 Controlling Corrosion on Hazardous Liquid and Carbon Dioxide Pipelines 66 Fed. Reg. 66,994, 67,001 (Dec. 27,\n2001).\n\n\n\nobscured by “high vegetation.”43 In other instances, the pipeline segments at Locations 124 and\n125 were indeed exposed and actually inspected as required.44 OPS also physically observed\nthat those two locations were exposed during its May 2022 inspection and had not been\ninspected within a previous 39-month period.\n45\nNext, § 195.583 contemplates situations relevant under the facts of this case. Paragraph (b) of\nthat section addresses that particular attention in the conduct of the required atmospheric\ninspections must be paid to pipelines at soil-to-air interfaces, in splash zones, and in spans over\nwater, among others. These situations contemplate potential submergence of exposed pipes at\nvarious junctures. The final rule adopting § 195.583 actually discussed the visual inspections of\n“\n. . . pipe spans over creeks and ravines . . .,” and did not reflect any exceptions to visual\ninspection requirements in such situations.\n46 Dixie was also not so limited to only the\nperformance of a visual inspection for atmospheric corrosion of the three segments cited in the\nNotice. The final rule promulgating § 195.583 stated that section does not exclusively require\nvisual inspections.47 DOT stated pipeline operators are not limited to using visual means of\ninspection, rather “. . . any means capable of detecting atmospheric corrosion . . .” may be\npermissible to satisfy the atmospheric corrosion inspection requirements of that section.\n48 The\nrecord does not indicate Dixie attempted any other atmospheric corrosion inspections when it\nchose not to conduct scheduled visual inspections at Locations 124 or 125 due to the presence of\n“high vegetation”.49 Nor does the record reflect that Dixie took any action to address the\npresence of the “high vegetation” to perform the visual inspections.50\nRespondent argues that it lacked fair notice of the requirements of § 195.583(a) as to a pipeline\nthat may sometimes be submerged.51 As discussed above, however, the plain language of §\n43 See, e.g., Notice at Exh. B-3\n44 See, e.g., Notice at Exh.’s B-1 and B-2.\n45 Southwest Region Pre-hearing submission at Exh. B-4. See also Transcript at 15: 5-9.\n46 66 Fed. Reg. at 67,001. The relevant discussion was in relation to a pipeline operator’s concern over bank\nerosion.\n47 Id.\n48 Id.\n49 See Notice at Exh.’s B-2 and B-3; Transcript at 35: 18-22.\n50 See In the Matter of ExxonMobil Pipeline Co., Final Order, CPF No. 1-2013-5008, 2016 WL 8315622 (Sept. 30,\n2016), where PHMSA found a violation of § 195.583(a) occurred when rocks obstructed a pipeline operator’s visual\ninspection of an exposed pipeline segment and were not removed during the conduct of such inspection.\n51 Respondent additionally asserts that at some point in time, every pipeline is exposed to the atmosphere, giving\nexamples of a pipe being uncovered to conduct a repair, or prior to a pipe’s installation. See Reply at 4-5. I disagree\nthat the inspection intervals § 195.583 apply to such situations, noting that pipeline construction requirements are\ngoverned by the requirements in Subpart D of Part 195, and repairs of buried pipeline segments are generally\n\n\n\n195.583 contains no exception to performing the required atmospheric corrosion inspections for\na pipeline segment that is exposed. The regulation text and the rulemaking documents\npromulgating the requirement to conduct atmospheric corrosion inspection address situations\nsuch as water crossings and splash zones. Respondent’s own conduct also undercuts its\nassertion, in that its records indicate its successful inspections of the relevant exposed segments\nfor atmospheric corrosion in the past, and indeed within the required three-year intervals\nspecified in § 195.583(a), and its regular attempts to do so at those intervals.52\nFurther, the record also reflects that past publicly available PHMSA enforcement matters where\nPHMSA had warned pipeline operators about their failure to conduct atmospheric inspections in\nsituations where pipelines may be temporarily submerged, analogous to this case.\n53 Both cases\ninvolved instances where exposed pipeline segments, which were submerged at the time of\ninspection by small streams, had not been inspected for atmospheric corrosion and were not\nincluded in the respective operators’ list of segments requiring such inspections.54 OPS’\nallegation in those matters for exposed pipeline segments were consistent with the plain language\nof § 195.583 and also with the facts of this matter. PHMSA’s past guidance on this point has\nalso been posted to the agency’s public website for many years and is cited by both parties in this\nmatter.\n55 That guidance mirrors the text of § 195.583, and it addresses exposed water crossing\nsituations as being subject to the requirements of that section, and that particular attention must\nbe paid to the conduct of atmospheric corrosion inspections in such situations.\n56\nRespondent also argues that OPS did not challenge evidence presented by Dixie at the hearing,\nand therefore on the basis of two past PHMSA enforcement cases OPS has not met its burden of\nproof and that the allegation in the Notice should be withdrawn.57 However, those matters are\ngoverned by the Operations and Maintenance and requirements found in Subpart F. Unlike in the particular matter\nat issue here, there is no evidence § 195.583 has ever applied, or was intended to apply, to such situations.\n52 See Dixie Pre-hearing submission at 4; Transcript at 14: 13-22; 19: 10-17; 65: 9-16; Notice at Exh.’s B-1 through\nB-3; Dixie pre-hearing submission, Attachment 2\n53 See In the Matter of Marathon Pipe Line, LLC, Final Order, CPF No. 3-2007-5024, 2008 WL 5264711 (Nov. 7,\n2008): https://primis.phmsa.dot.gov/enforcement-data/case/320075024; and, In the Matter of BP Pipelines (North\nAmerica), Inc., Final Order, CPF No. 3-2009-5009, 2011 WL 2937936 (June 14, 2011):\nhttps://primis.phmsa.dot.gov/enforcement-data/case/320095009.\n54 Id.\n55 PHMSA Corrosion Enforcement Guidance Part 195, at 93-98 (June 22, 2016),\nhttps://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/Corrosion_Enforcement_Guidance_Part195_6_22_2016.\npdf.\n56 Id.\n57 Dixie cites In the Matter of Rocky Mountain Pipeline System, Final Order, CPF No. 5-2003-5015, 2004 WL\n5150202, Final Order (Dec. 23, 2004): https://primis.phmsa.dot.gov/enforcement-data/case/520035015 and, In the\nMatter of ExxonMobil Pipeline Co., Final Order CPF No. 4-2017-5027, 2019 WL 6840343 (Apr. 3, 2019):\nhttps://primis.phmsa.dot.gov/enforcement-documents/420175027/420175027_Final%20Order_04032019_text.pdf.\n\n\n\nnot analogous to the situation here. As discussed above, the Director made an evidentiary\npresentation at the hearing proving the occurrence of the alleged violations described in the\nNotice. There also does not appear to be any dispute as to material fact in this present matter.58\nRather, there is a disagreement between the Director and Dixie as to the applicability § 195.583\nto Respondent’s exposed pipelines as based on those facts. I find that the Director has proved by\na preponderance of the evidence (via evidence accompanying the Notice and discussed at the\nhearing as described above) that Dixie violated the requirements of the unambiguous language in\n§ 195.583 when it failed to perform atmospheric corrosion inspections at the required intervals at\nLocations 124 and 125. The arguments presented by Dixie at the hearing and in its submissions\n(as related to other actions taken to address corrosion that are outside the requirements of §\n195.583 and as to its rationale in not performing the required inspections at Locations 124 and\n124 due to “high vegetation”), do not excuse the conduct of those required inspections, nor\novercome the substantial evidence the Director has entered into the record of the violation.\nI next address Respondent’s argument that discussions contained in the Director’s\nRecommendation are subject to the doctrine of waiver and forfeiture and should be rejected.59\nThe regulations governing this proceeding in Part 190 expressly permit the Director to make a\nrecommendation for final order, and the Recommendation is included as part of the Case File in\nthis matter.60 Further, hearings conducted under Part 190 are “. . . conducted informally without\nstrict adherence to rules of evidence.” Dixie had the opportunity to review the Recommendation\nand had the opportunity to respond to that document in writing on July 19, 2024 (Reply). The\nRecommendation also did not introduce any new facts, evidence, or allegations, but rather\nexplained the Director’s opinion that Dixie violated § 195.583 as alleged in the Notice and\nrecommended that I issue a final order in this matter. Some discussions that Dixie cites in the\nDirector’s Recommendation are recitations of the contents of the publicly available rulemaking\nand other documents addressing the applicability of § 195.583 as published in the Federal\nRegister or that have otherwise long been available on PHMSA’s website (and which Dixie also\ncites in its Post-hearing submission). I also disagree with Dixie’s assertion that “. . . OPS states\n(without citing to any legal authority) that ‘seasonal, situational, or periodic weather-related\nwater fluctuations that cause the pipeline to be intermittently covered with water do not excuse\nperformance of the required inspection’”61 somehow implicates waiver and forfeiture. The\nDirector appeared to directly address its position at the hearing that the applicable pipeline\nsegments were exposed and the justifications presented by Dixie did not excuse the performance\nof the required inspections.\n62\n58 The parties agree that the pipeline segments in question may have intermittently been exposed or submerged\nduring the relevant time periods implicated by PHMSA’s 2022 inspection. There is also no dispute that Dixie\nattempted, but did not actually perform, the atmospheric corrosion inspections contemplated by § 195.583 during the\nsame time period. Notice at Exh.’s B-1 through B-3; Transcript at 24: 12-25; 35: 1-21\n59 Reply at 6-10.\n60 49 CFR § 190.209(b)(7).\n61 Reply at 8.\n62 Transcript at 14: 11-25; 15: 1-9.\n\n\n\nNext, the same as Dixie cites case law and other legal resources to support its position in its two\nPost-hearing submissions, but which Dixie did not discuss at the hearing, the Director’s\nRecommendation also cites publicly available regulatory and legal resources in support of its\nown Recommendation in this matter. Further, the conduct of the hearing does not alone\nconstitute the entirety of the record in this case, as evidenced by Dixie’s two additional and\nsubstantive Post-hearing submissions, one of which was actually a response to the\nRecommendation. The Director’s position regarding the applicability § 195.583 to Respondent’s\npipeline system and the alleged violation as conveyed in the Notice and the Recommendation\nwere presented and considered as part of the record and the decision in this matter.\nIn sum, § 195.583 applies to a pipeline segment that is exposed to the atmosphere. The text of\nthat section does not contain any limiting exclusions or specify any minimum time periods that a\npipeline must be exposed for inspections to be required. The record in this matter contains\nsubstantial evidence that Locations 124 and 125 are exposed to the atmosphere. While these\nsegments may sometimes be temporarily submerged due to the rise of water,\n63 the facts in\nevidence make clear those segments are indeed exposed to the atmosphere and are not\npermanently submerged. Their exposure is evidenced by Dixie’s own records showing actual\nperformance of required atmospheric corrosion inspections in 2015, 2018 and 2022, respectively,\nas well as other attempted atmospheric corrosion inspections within required intervals as\nrequired by § 195.583. In several instances listed above where the required atmospheric\ncorrosion inspections were attempted but not performed at Locations 124 and 125, the pipelines\nwere not submerged or buried in water. Rather, it was only presence of “high vegetation” that\nwas recorded as the reason for not performing the inspections. Section 195.583 contains no\nexception to the atmospheric corrosion inspection requirements for instances where high\nvegetation is present. Also evidencing the exposure of the pipeline segments at Locations 124\nand 125 are the photographs and in-person observations made during PHMSA’s May 2022\ninspection.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 CFR\n§ 195.583(a) by failing to inspect portions of its pipeline system that are exposed to the\natmosphere for evidence of atmospheric corrosion at least once every three calendar years, but\nwith intervals not exceeding 39 months.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\n63 At the hearing, Dixie presented satellite imagery in an attempt to show submerged pipeline segments at various\npoints in time. However, those photographs are not dispositive, and also are not of the quality or clarity to ascertain\nwhether the pipeline segments are submerged, or even whether a pipeline segment is even present in the locations\ndepicted. Further, as discussed above, there is no disagreement between the parties that Locations 124 and 125 were\nsometimes submerged during the relevant time periods implicated by the Notice during which atmospheric corrosion\ninspections should have been conducted. Therefore, these photographs are not relevant to resolving any factual\ndispute between the parties in this matter.\n\n\n\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.64\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 $21,200 for the violations cited above, however the June 2, 2025\nrevised recommendation reduced the proposed penalty to $19,600.\nItem 1: The Notice proposed a civil penalty of $21,200 (reduced to $19,600) for Respondent’s\nviolation of 49 C.F.R. § 195.583(a) for failing to inspect portions of its pipeline system that are\nexposed to the atmosphere for evidence of atmospheric corrosion at least once every 3 calendar\nyears, but with intervals not exceeding 39 months. Respondent contested the proposed civil\npenalty, stating it was unreasonable.65 Respondent explained it had developed a corrosion\ncontrol program that sought to address PHMSA requirements related to both atmospheric and\nexternal corrosion control for the three pipeline segments described in the Notice.66 Dixie stated\nit applied the provisions in two corrosion control programs relevant to the segments identified in\nthe Notice, and described cathodic protection- and pressure test-related actions it had taken for\nthose segments in the past.67 As such, Dixie asserts that, at a minimum, a good faith credit (ten\npoint reduction) was warranted on the civil penalty worksheet, and states the proposed civil\npenalty should have been $2,606.80.68\nAs discussed above, there is substantial evidence in the record that Respondent committed a\nviolation of § 195.583(a) when it failed to conduct atmospheric corrosion inspections of two\npipeline segments that are exposed to the atmosphere at least every three years but not more than\n39 months apart. The past pressure tests of, and cathodic protection provided to, the pipeline\nsegments at issue in this matter did not fulfill the specific inspection requirements of\n64 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n65 See Dixie Post-hearing submission at 9; Transcript at 19: 24-25; 20: 1-17; 70: 12-25; 71: 1-25; 72: 1-8. In its\nresponse to the revised recommendation, Dixie reiterated the argumen","truncated":true,"body_characters":58098}