# UNION OIL COMPANY OF CALIFORNIA (UOCC) — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 520035023
- **title:** UNION OIL COMPANY OF CALIFORNIA (UOCC) — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2003-08-22
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.505(b), 195.507(b), 195.509(d).
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- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520035023
**body:**

Notice of Probable Violation involving UNION OIL COMPANY OF CALIFORNIA (UOCC). PHMSA's enforcement data identifies the cited regulations as 195.505(b),  195.507(b),  195.509(d). The case was opened on 2003-08-22 and is reported as closed as of 2009-08-17. Proposed civil penalty: $100,000. Assessed civil penalty: $75,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520035023_Final Order_06182008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520035023/520035023_Final%20Order_06182008.pdf

520035023_final order_06182008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520035023/520035023_final%20order_06182008_text.pdf

520035023_final order_06182008_text.pdf

O
U S Department
of Transportation
Pipeline and Hazardous
Materials Safety
Administration
1200 New Jersey Ave S E
Washington DC 20590
gUN 1 8 2008
Mr. John Zager
CJeneral Manager
Union Oil Company of California
909 West 9 Avenue
Anchorage, AK 99501
Re: CPF No. 5-2003-5023
Dear Mr. Zager:
Enclosed is the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a reduced civil penalty of $75, 000, and specifies actions to be taken to
comply with this agency's pipeline safety regulations. The penalty payment terms are set
forth in the Final Order. When the civil penalty has been paid and the terms of the
compliance order completed, as determined by the Director, Western Region, this
enforcement action will be closed. Your receipt of the Final Order constitutes service of that
document under 49 C. F. R, $ 190. 5
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Admimstrator
for Pipeline Safety
Enclosure
cc: Mr. Chris Hoidal, Director, Western Region, PHMSA
Mr. Mare D. Bond, Senior Counsel, Chevron North America Exploration and
Production Company
CERTIFIED MAIL — RETURN RECEIPT RE UESTED



U. S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D. C. 20590
)
In the Matter of
)
)
Union Oil Company of California, )
Respondent
)
)
CPF No. 5-2003-5023
FINAL ORDER
On June 16-17, 2003, pursuant to 49 U. S. C. $ 60117, representatives of the Research and
Special Programs Administration, ' Office of Pipeline Safety (OPS), conducted an on-site
pipeline safety inspection of the Operator Quahfication (OQ) records and procedures for
Unocal Alaska, a subsidiary of Union Oil Company of California (Union Oil or
Respondent) at Respondent's offices in Anchorage, Alaska. As a result of the
inspection, the Director, Western Region, PHMSA (Director), issued to Respondent, by
letter dated August 22, 2003, a Notice of Probable Violation, Proposed Civil Penalty,
Proposed Compliance Order, and Warning (Notice). In accordance with 49 C. F. R. (
190. 207, the Notice proposed finding that Respondent had violated 49 C. F. R. $$
195. 505(b), 195. 507(b) and 195. 509, proposed assessing a civil penalty of $100, 000 for
the alleged violations, and proposed ordering Respondent to take certain measures to
correct the alleged violations. The Notice also proposed finding that Respondent had
committed a probable violation of 49 C. F. R. Part 195 and warning Respondent to take
appropriate corrective action to address the probable violation or be subject to future
enforcement action.
' Effective February 20, 2005, the Pipeline and Hazardous Matenals Safety Admmistration (PHMSA)
succeeded the Research and Special Programs Admmistration (RSPA) as the agency responsible for
regulatmg pipehne safety. See Norman Y Mineta Research and Special Programs Improvement Act, Pub
L. No. 108-426, 118 Stat. 2423 See also 70 Fed Reg 8299, 8301-8302 (2005) (redelegating authority to
the Administrator of PHMSA).
' This action was originally brought against Unocal Alaska, a subsidiary of Umon Oil Company of
California In 2005, Umon Oil Company of Califorma merged with Chevron Corporation The pipelme
facihties subject to this Order are currently operated by Union Oil Company of Califorma as a subsidiary of
Chevron Corporation



Respondent responded to the Notice by letter dated September 26, 2003 (Response).
Respondent contested some of the allegations of violation and provided information
concerning the corrective actions it planned to take. Respondent did not request a
hearing and therefore has waived its right to one.
FINDINGS OF VIOLATION
In its Response, Respondent contested some of the allegations in the Notice and offered
information in explanation of others, as follows:
Item 1: The Notice alleged that Respondent violated 49 C. F. R. $ 195. 505(b), which
states:
49 C. F. R. g 195. 505 Qualification program.
Each operator shall have and follow a written qualification program. The
program shall include provisions to:
(a) Identify covered tasks:
(b) Ensure through evaluation that individuals performing covered tasks
are qualified; . . .
The Notice alleged that Respondent failed to provide procedures in its written OQ
program to ensure that contractor personnel performing covered tasks on Respondent's
pipeline facilities were qualified to perform those tasks. The Notice also alleged that
Respondent failed to provide any data that such contractor personnel were qualified.
Respondent did not dispute this allegation. In its Response, Respondent indicated that it
would qualify its contractor personnel. Accordingly, I find that Respondent violated 49
C. F. R. $ 195. 505(b) by failing to have and follow written procedures to ensure through
evaluation that contractors performing covered tasks on Respondent's pipeline facilities
were qualified.
Item 2: The Notice alleged that Respondent violated 49 C. F. R. ) 195. 505(b), as quoted
above, by failing to provide procedures to ensure that individuals performing covered
tasks were qualified. The term "qualified" is defined in ) 195. 503, which states:
49 C. F. R. g 195. 503 Definitions.
Qualified means that an individual has been evaluated and can:
(a) Perform assigned covered tasks and
(b) Recognize and react to abnormal operating conditions.
The term "abnormal operating condition" is also defined in $ 195. 503:
Abnormal operating condition means a condition identified by the
operator that may indicate a malfunction of a component or deviation from
normal operations that may:



(a) Indicate a condition exceeding design limits; or
(b) Result in a hazard(s) to persons, property, or the environment.
Specifically, the Notice alleged that Respondent failed to ensure that individuals were
properly qualified by not addressing abnormal operating conditions (AOCs) in its written
OQ program. In addition, the Notice alleged that Respondent's written OQ program did
not include a means to ensure that personnel performing covered tasks on Respondent's
pipeline facility could recognize and react to AOCs.
In its Response, Respondent asserted that PHMSA's allegation was "not entirely correct. "
It explained that each of its Pipeline Specific Operations Manuals contained a section that
listed some AOCs and how to respond to them. However, Respondent admitted that it
had not addressed AOCs for every covered task. The company indicated that it planned
to further develop AOCs and responses to AOCs in its written OQ program.
Accordingly, I find that Respondent violated 49 C. F. R. ( 195. 505(b) by failing to ensure
through evaluation that individuals performing covered tasks were properly "qualified, "
as that term is defined in ( 195. 503. This was because its written OQ program neither
included AOCs for every covered task nor the means to evaluate whether individuals
could recognize and react to such AOCs.
Item 3: The Notice alleged that Respondent violated 49 C. F. R. ($ 195. 505(b), as quoted
above, and 195. 509(c), and (d), which states:
49 C. F. R. g 195. 509 General.
(a) "
(c) Work performance history review may be used as a sole
evaluation method for individuals who were performing a covered task
prior to October 26, 1999,
(d) After October 28, 2002, work performance history may not be
used as a sole evaluation method.
The Notice alleged that Respondent failed to appropriately evaluate and qualify nine (9)
individuals who were hired after October 26, 1999, because the company used work
performance history review (WPHR) as the sole evaluation method for qualifying them.
The Notice also alleged that Respondent failed to appropriately evaluate and qualify one
(1) employee hired before October 26, 1999, because it allowed that employee to
evaluate himself. Respondent did not dispute this allegation, In its Response,
Respondent stated that it would review its qualification records and re-qualify individuals
who had been incorrectly qualified.
Accordingly, I find that Respondent violated 49 C, F, R, $$ 195. 505(b) and 195. 509 (c)
and (d) by failing to appropriately evaluate and qualify nine (9) individuals hired after
October 26, 1999, and one (1) individual hired before that date.
Item 4B: The Notice alleged that Respondent violated 49 C. F. R. $ 195. 507(b), which
states:



49 C. F. R. g 195. 507(b) Recordkeeping.
Each operator shall maintain records that demonstrate compliance with
this subpart.
(a) "~
(b) Records supporting an individual's current qualification shall
be maintained while the individual is performing the covered task.
Records of prior qualification and records of individuals no longer
performing covered tasks shall be retained for a period of five years,
Item 4B in the Notice alleged that Respondent failed to provide OQ records for two of its
personnel and that no records were available for contractor personnel performing covered
tasks. Respondent did not dispute this allegation. Accordingly, I find that Respondent
violated 49 C. F. R. $ 195. 507(b) by failing to maintain OQ records for two (2) of its
personnel and by failing to maintain records for contractor personnel hired by Union Oil
and performing covered tasks.
These findings of violation will be considered prior offenses in any subsequent
enforcement action taken against Respondent.
WARNING ITEM
With respect to Item 4A, the Notice alleged a probable violation of Part 195 but did not
propose a civil penalty or compliance order for this item. Therefore, the item is
considered to be a warning item. The warning was for:
49 C. F. R. g 195. 507(b) (Notice Item 4A) — Respondent's alleged failure to
properly maintain its OQ records demonstrating compliance with Subpart G of
Part 195. The Notice also indicated that records were not being maintained as
required by Respondent's own written OQ program requirements. At the time of
the inspection, Respondent's written OQ procedures specified that the OQ records
were maintained at Respondent's Kenai, Alaska, offices. During the inspection,
PHMSA inspectors observed that the Kenai office had been closed seven (7)
months earlier, that the OQ records had been moved to another location, and that
no Union Oil staff had maintained the records since the move.
I find, pursuant to 49 C. F. R. ) 190. 205, that a probable violation of 49 C. F. R. $
195. 507(b) (Notice Item 4A) has occurred and Respondent is hereby advised to correct
such condition. In the event that OPS finds a violation for this item in a subsequent
inspection, Respondent may be subject to future enforcement action.
ASSESSMENT OF PENALTY
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: the natine, circumstances, and gravity of
the violation, including adverse impact on the environment; the degree of Respondent's
culpability; the history of Respondent's prior offenses; the Respondent's ability to pay



the penalty and any effect that the penalty may have on its ability to continue doing
business; and the good faith of Respondent in attempting to comply with the pipeline
safety regulations. In addition, I may consider the economic benefit gained from the
violation without any reduction because of subsequent damages, and such other matters
as justice may require. The Notice proposed a total civil penalty of $100, 000 for the
violations.
The OQ regulations are intended to ensure that each pipeline operator take appropriate and
effective action to determine that its work force is qualified and thereby reduce the
probability and consequences of pipeline incidents caused by human error. Respondent's
failure to comply with various parts of the OQ regulations reduced the safety of its pipeline
system and reflected an insufficient effort by the company to design and implement an OQ
program that met the purpose and requirements of Subpart G,
With respect to Item 1 in the Notice, regarding Respondent's failure to have and follow
written procedures to ensure that contractor personnel were qualified, the Notice
proposed a civil penalty of $25, 000. Contractors must be as qualified to perform covered
tasks as Respondent's own employees; they both may face AOCs or other critical
situations and have to react appropriately to ensure pipeline safety. Respondent has
provided no information or arguments that would warrant a reduction in the proposed
civil penalty. Therefore, I assess a civil penalty of $25, 000 for Item 1.
With respect to Item 2 in the Notice, regarding Respondent's failure to address AOCs in
its written OQ plan, the Notice proposed a civil penalty of $50, 000. This violation
reduced pipeline safety because it increased the risk that an AOC would not be promptly
identified and safely addressed by qualified personnel.
The Director reviewed Respondent's Response to Item 2 and has indicated that, as of the
time of the inspection, Respondent had provided some AOC training for its personnel,
though not for all covered tasks as required by ) 195. 505(b). The fact that Respondent
had been providing some training on AOCs reduces the gravity of this violation and
indicates that Respondent was acting with a degree of good faith in attempting to comply
with the regulations. In light of this information and its impact on the application of the
assessment criteria, I find that grounds exist in this particular case for reduction of the
civil penalty for Item 2 from $50, 000 to $25, 000.
With respect to Item 3 in the Notice, regarding Respondent's failure to appropriately
evaluate and qualify certain individuals, the Notice proposed a civil penalty of $20, 000.
Respondent was found to have inappropriately used WPHR as the sole method of
evaluation for certain individuals who performed covered tasks on Respondent's pipeline
system. Respondent was also found to have inappropriately allowed an individual
performing covered tasks to qualify himself. As with other Items in the Notice, this
action reduced pipeline safety because unqualified individuals were permitted to perform
covered tasks. Respondent has provided no information or arguments that would warrant
a reduction in the civil penalty. Therefore, I assess a civil penalty of $20, 000 for Item 3.
With respect to Item 4B in the Notice, regarding Respondent's failure to provide OQ
records for two (2) of its personnel and for contractor personnel, the Notice proposed a



civil penalty of $5, 000. Respondent's failure to provide OQ records made it difficult, if
not impossible, to accmately determine whether individuals performing covered tasks on
its pipeline system were properly qualified. Respondent's recordkeeping failure created
the risk that an unqualified individual would perform a covered task on Respondent's
pipeline system. Respondent has provided no information or arguments that would
warrant a reduction in the civil penalty, Therefore, I assess a civil penalty of $5, 000 for
Item 4B.
Accordingly, having reviewed the record and considered the assessment criteria for each
Item, I assess Respondent a reduced total civil penalty of $75, 000.
Respondent has provided no information indicating that its payment of the penalty would
adversely affect its ability to continue in business.
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 be made by wire transfer, through the
Federal Reserve Communications System (Fedwire), to the account of the U. S, Treasiuy.
Detailed instructions are contained in the enclosure.
Questions concerning wire transfers should be directed to: Financial Operations Division
(AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P. O.
Box 25082, Oklahoma City, OK 73125; (405) 954-8893.
Failure to pay the $75, 000 civil penalty will result in accrual of interest at the current
annual rate in accordance with 31 U. S. 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 (610) 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,
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 1, 2, 3 and 4 in the Notice
for violations of 49 C. F. R. Part 195.
Under 49 U, S. C. $ 60118(a), each person who engages in the transportation of hazardous
liquids or who owns or operates a pipeline facility is required to comply with the
applicable safety standards established under chapter 601. Pursuant to the authority of 49
U. S. C. $ 60118(b) and 49 C. F. R. $ 190. 217, Respondent is ordered to take the following
actions to ensure compliance with the pipeline safety regulations applicable to its
operations,
Respondent shall-
1. With regard to Item 1 of the Notice pertaining to Respondent's OQ program,
develop written OQ program procedures to ensure that contractor personnel
performing covered tasks on Respondent's pipeline facilities are qualified.



Develop plans and a schedule for qualifying such contractor personnel,
Submit to the Director the procedures, plans and schedule within sixty (60) days
of receipt of the Final Order.
Evaluate and qualify all contractor personnel performing covered tasks on
Respondent's pipeline facilities within four (4) months of receipt of this Final
Order.
2. With regard to Item 2 of the Notice pertaining to Respondent's OQ program,
review each covered task applicable to Respondent's pipeline facilities and
determine and document the possible AOCs that could be encountered while
performing each covered task. Also determine those AOCs that are generically
found on Respondent's pipeline facilities. Submit to the Director the list of AOCs
determined and their relationship to specific covered tasks and to general
operations within sixty (60) days of receipt of the Final Order.
Submit to the Director written OQ program procedures to ensure that all
personnel performing covered tasks, as documented in Respondent's database, are
presented with the AOCs and that they can recognize and react to such AOCs.
Submit a schedule for implementing such procedure. The presentation of AOCs
to personnel performing covered tasks shall be completed and documentation of
such presentation shall be submitted within four (4) months of receipt of the Final
Order.
3. With regard to Item 3 of the Notice pertaining to the evaluation methods in
Respondent's OQ program, review the qualification records of each individual for
each covered task and determine which individuals hired after October 26, 1999,
were qualified solely by work performance history review. Review qualification
records to determine if any individual, hired at any time, served as his or her own
evaluator, using any evaluation method, for purposes of OQ. Develop a list of the
individuals which meet the criteria listed above. Develop OQ program
procedures that provide for proper evaluation and qualification of the individuals
on the list. Develop a schedule for such evaluation and qualification.
Submit the list, procedures and schedule to the Director within sixty (60) days of
receipt of the Final Order. Complete evaluation and qualification of listed
individuals within four (4) months of receipt of the Final Order.
4. With regard to Item 4B of the Notice pertaining to OQ program record keeping,
review the records of existing personnel to determine if any personnel who
perform covered tasks on Respondent's pipeline facilities are not qualified or not
included in Respondent's OQ database. Develop a list of those individuals whose
OQ records are missing or who are not included in the OQ database. Develop
plans and a schedule for the evaluation and qualification of the listed individuals.
Submit the list, plans and schedule to the Director within sixty (60) days of
receipt of the Final Order. Complete evaluation and qualification of listed
individuals within four (4) months of receipt of the Final Order.



5. With regard to the requirements set out in paragraphs 1-4 above, submit all
required records, and notice and documentation of the completion of required
actions to the Director, Western Region, PHMSA, 123000 W. Dakota Ave.
Suite
,
119, Lakewood, CO 80228.
The Director may grant an extension of time to comply with any of the required items
upon a written request timely submitted by the Respondent demonstrating good cause for
an extension.
Failure to comply with this Order may result in administrative assessment of civil
penalties not to exceed $100, 000 for each violation for each day the violation continues
or in referral to the Attorney General for appropriate relief in a district court of the United
States.
Under 49 C. F. R. $ 190. 215, Respondent has a right to submit a Petition for
Reconsideration of this Final Order. 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). The filing of the petition automatically stays the payment of any civil penalty
assessed. All other terms of the order, including any required corrective action, shall
remain in full force and effect unless the Associate Administrator, upon request, grants a
stay.
The terms and conditions of this Final Order shall be effective upon receipt.
gag & 8 2008
Date Issued
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
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