LINN WESTERN OPERATING, INC — Notice of Probable Violation

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520020004_Final Order_02052003.pdf, page 2• DEPARTMENT OF TRANSPORTATION RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, DC 20590 In the Matter of Nuevo Energy Company, CPF No. 5-2002-0004 Respondent. FINAL. ORDER On February 26-28. 2002, pursuant to 49 U.S.C. § 60117. a representative of the Office of Pipeline Safety (OPS) conducted an on-site pipeline safety inspection of Respondent's facilities and records in Brea, California. As a result of the inspection. the Director, Western Region. OPS. issued to Respondent, by letter dated May 20. 2002 . a Notice of Probable Violation and Proposcd Civil Penalty (Notice). In accordance with 40 C.F.R. § 190.207, the Notice proposed finding that Respondent had violated 49 C.F.R. $$ 192.705 (Item 1) and 192.745 (Item 2 ) and proposed assessing a civil penalty of $15.000 for the alleged violation in Item 2. Respondent responded to the Notice by letter dated June 28, 2002 (Response) and requested a hearing. A hearing was held via telephone conference on October 2, 2002. Respondent did not contest the allegations of violation and presented information in mitigation of the proposed penalty FINDING OF VIOLATION At the hearing. Respondent did not contest the alleged violations in the Notice. Accordingly. Hind that Respondent violated the following section of 49 C.F.R. Part 192, as more fully described in the Notice 49 C.F.R. $ 192.745 - failure to inspect transmission line valvo operation at threc separate locations within the required intervals. This finding of violation will be considered a prior offense in any subscquent enforcement action taken against Respondent.#

520020004_Final Order_02052003.pdf, page 3ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122. Respondent is subject to a civil penalty not to exceed $25.000 per violation for cach day of the violation up to a maximum of $500.000 for any related series of violations. 49 U.S.C. $ 60122 and 49 C.F.R. § 190.225 require that. in determining the amount of the civil penalty: I consider the following criteria: nature. circumstances, and gravity of the violation. degree of Respondent's culpability history of Respondent's prior offenses. Respondent's ability to pay tho penally, good faith by Respondent in attempting to achieve compliance. the effect on Respondent's ability to continue in business, and such other matters as justice may require. As for the violation of 49 C.F.R. § 192.745 (Item 2). failing to inspect the operation of certain transmission line valves within the required intervals. a civil penalty of $15.000 was proposed in the Notice. At the hearing. Respondent acknowledged that the valve inspections were missed and explained that in August 1999. responsibility for operations and maintenance of the subject facilities was transferred fromthe Coast District to the Bakersfield District, which lacked a D.O.T. compliance foreman, resulting in the lapses. Respondent further explained that since the time of occurrence. it had transferred operations and maintenance responsibility for these facilities back to the Coast District and had made diligent efforts towards 100 percent compliance. Transmission line valves serve the critical function of stopping the flow of product when necessary during relcase incidents. emergencies. and pipeline repairs. Pipeline operators are required to inspect and partially operate their transmission line valves at intervals not exceeding 15 months. but at least once cach calendar year to ensure their proper operation. Failure to properly maintain transmission line valves can put the public safety at increased risk. Although Respondent has taken prompt remedial measures. including ensuring that its personnel rigorously verify the accuracy and completeness ofits automated inspection process, during the time frame at issue. Respondent failed to follow its own procedures. In fact. the inspection delay for each of the three subjeet valves exceeded the required 15-month intervai by several months for cach valve. Respondent has not presented information that warrants mitigation of the civil penalty. Accordingly. having reviewed the record and considered the assessment criteria, L assess Respondent a civil penalty of $15,000 for failure to comply with the requirements of 49 C.F.R. § 192.745. A determination has been made that Respondent has the ability to pay this penalty without impairing its ability to continue in basines» Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. $ 89.21(b)(3)) require this payment he made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (A.MZ-120). Federal Aviation Administration. Mike Monroncy Acronautical Center. P.O. Box 25770. Oklahema City: OK 73125: (405) 954-4719.#

520020004_Final Order_02052003.pdf, page 43 Failure to pay the $15,000 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 LS.C. $ 3717,31 C.F.R. § 901.9 and 49 C.F.R. $ 89.23. Pursuant to those same authorities. a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore. failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a United States District Court. WARNING ITEM The Notice did not propose a civil penalty or corrective action for the following Item, but warned Respondent that it should take appropriate corrective action. Respondent presented information at the hearing showing that it is addressing the cited item: 49 C.F.R. § 192.705 (Item 1) - failing to conduct adequate patrolling of the Richfield Gas transmission line within the required interval. Respondent is again warned that if OPS finds a violation in a subsequent inspection, enforcement action will be taken. Under 49 C.F.R. $ 190.215. Respondent has a right to petition for reconsideration of this finai Order. However. if the civil ponalty is paid. the case closes automatically and Respondent waives the right to petition for reconsideration. The filing of a petition automatically stays the payment of any civil penalty assessed. The petition must be received within 20 days of Respondent's receipt of this Final Order and must contain a brief statement of the issue(s). Failure to comply with this Final Order may result in the assessment of civil penalties of up to $25.000 per violation per day, or in the referral of the case for judicial enforcement. The terms and conditions of this Final Order are effective on receipt. James KO an FEB - 5 2003 Stacey Gerard Date Issued to Associate Administrator for Pipeline Safety#