{"operation":"document","citation":"CPF 520045030","title":"BELLE FOURCHE PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2004-09-30","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(c)(2), 195.452(d)(1), 195.452(d)(3)(ii), 195.452(e)(2), 195.452(f)(1), 195.452(f)(4), 195.452(f)(7), 195.452(f)(8), 195.452(g)(3), 195.452(i), 195.452(j)(5)(iii).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520045030.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520045030.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520045030","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520045030","body":"Notice of Probable Violation involving BELLE FOURCHE PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195,  195.452(c)(2),  195.452(d)(1),  195.452(d)(3)(ii),  195.452(e)(2),  195.452(f)(1),  195.452(f)(4),  195.452(f)(7),  195.452(f)(8),  195.452(g)(3),  195.452(i),  195.452(j)(5)(iii). The case was opened on 2004-09-30 and is reported as closed as of 2009-08-21. Proposed civil penalty: $50,000. Assessed civil penalty: $50,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520045030_Decision on Petition_12052008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_Decision%20on%20Petition_12052008.pdf\n\n520045030_decision on petition_12052008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_decision%20on%20petition_12052008_text.pdf\n\n520045030_Final Order_07102006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_Final%20Order_07102006.pdf\n\n520045030_Petition for Reconsideration_07282006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_Petition%20for%20Reconsideration_07282006.pdf\n\nCPF_NO_5-2004-5030.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/CPF_NO_5-2004-5030.pdf\n\n520045030_Final Order_07102006.pdf\n\nU.S. Department\nof Transportation\nPipeline and\nHazardous Materidls Safety\nAdministration\n400 Seventh Street, S.W.\nWashington, D.C. 20590\nJUL 1 0 : ' b w , i\nMr. Hank A. True I11\nPresident\nBelle Fourche Pipeline Company\n895 W. River Cross Road\nCasper, WY 82602\nRe: CPF No. 5-2004-5030\nDear Mr. True:\nEnclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in\nthe above-referenced case. It makes findings of violation and assesses a civil penalty of\n$50,000. The Final Order also specifies actions to be taken to comply with the pipeline safety\nregulations and requires the revision of certain of your operating and maintenance procedures.\nThe penalty payment terms are set forth in the Final Order. When the pivil penalty is paid and\nthe terms of the Compliance Order and Amendment of Procedures are completed, as\ndetermined by the Director, Western Region, this enforcement action *ill be closed. Your\nreceipt of the Final Order constitutes service under 49 C.F.R. § 190.5.\nSincerely,\n'U\nJames Reynolds\nPipeline Compliance Registry\nOffice of Pipeline Safety\nEnclosure\nCERTIFIED MAIL -RETURN RECEIPT REQUESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION ~\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\n)\nIn the Matter of 1\nBelle Fourche Pipeline Company,\nRespondent\n) 1\n) 1 CPF NO. 4-2004-5030\nFINAL ORDER\nBetween May 17 and 19,2004, pursuant to 49 U.S.C. § 601 17, representatives of the Pipeline\nand Hazardous Materials Safety Administration's (PHMSA's) Office of Pipeline Safety\nconducted an on-site pipeline safety inspection of Respondent's integrity management program\n(IMP) in Casper, Wyoming. As a result of the inspection, the Director, Western Region,\nPHMSA issued to Respondent, by letter dated September 30,2004, a Notice of Probable\nViolation, Proposed Civil Penalty, Proposed Compliance Order, and Notice of Amendment\n(Notice).' In accordance with 49 C.F.R. 190.207, the Notice proposed finding that Respondent\ncommitted violations of 49 C.F.R. Part 195, proposed assessing a civil penalty of $50,000 for\none of the alleged violations, and proposed that Respondent take certain measures to correct\nanother of the alleged violations. The Notice also alleged inadequacies ip Respondent's IMP and\nproposed to require amendment of Respondent's procedures to comply with the requirements of\n49 C.F.R. 195.452.\nRespondent failed to respond within 30 days after it had received the Notice. Under\n49 C.F.R. tj 190.209(c), Respondent's failure to respond constitutes a waiver of Respondent's\nright to contest the allegations in the Notice and authorizes the entry of this Final Order.\nFINDINGS OF VIOLATION\nRespondent did not contest the alleged violations in the Notice. Accordingly, I find that\nRespondent violated the following sections of 49 C.F.R. Part 195 as more fully described in the\nNotice:\n' Effective February 20,2005, the Pipeline and Hazardous Materials Safety Administration (PHMSA) succeeded\nResearch and Special Programs Administration as the agency responsible for regulating safety in pipeline\ntransportation and hazardous materials transportation. See, section 108 of the Norman Y. Mineta Research and\nSpecial Programs Improvement Act (Public Law 108-426, 118 Stat. 2423-2429 (November 30,2004)). See also, 70\nFed. Reg. 8299 (February 18, 2005) redelegating the pipeline safety authorities and functions to the PHMSA\nAdministrator.\n\n\n\nItem 2(a)-49 C.F.R. 9 195.452(c)-failing to establish a baseline integrity assessment\nschedule prioritizing its pipeline segments based on all risk factors that reflect the risk\nconditions on each segment; and\nItem 2(b)-49 C.F.R. § 195.452(c)-failing to include a seam failure susceptibility\nanalysis on all pipeline segments containing low frequency electric resistance welded\npipe (ERW) and lap welded pipe to determine which segments are susceptible to seam\nfailure prior to selecting baseline integrity assessment methods for applicable segments.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60 122, Respondent is subject to a civil penalty not to exceed $100,000 per\nviolation for each day of the violation up to a maximum of $1,000,000 for any related series of\nviolations.\n49 U.S.C. 5 60122 and 49 C.F.R. 9 190.225 require that, in determining the amount of the civil\npenalty, I consider the following criteria: nature, circumstances, and gravity of the violation,\ndegree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability\nto pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on\nRespondent's ability to continue in business, and such other matters as justice may require.\nItem 2(a) of the Notice proposed a civil penalty of $50,000.00 for violation of\n49 C.F.R. $ 195.452(c). Respondent violated 49 C.F.R. § 195.452(c) in that it did not develop a\nBAP that uses risk factors in establishing the base line assessment methads and schedule.\nPrioritizing pipeline segments for integrity assessments by risk is a key step in managing pipeline\nintegrity. Respondent did not provide information that would warrant a reduction in the civil\npenalty amount proposed in the Notice.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a total civil penalty of $50,000 for violation of 49 C.F.R. $ 195.452(c). Respondent\nhas the ability to pay this penalty without adversely affecting its ability tio continue in business.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. 8 89.21(b)(3)) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-300), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73 125; (405) 954-8893.\nFailure to pay the $50,000 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717,31 C.F.R. 9 901.9 and 49 C.F.R. 8 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\n\n\n\npayment is not made within 1 10 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriatq action in a United\nStates District Court.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 2(b) in the Notice. Under 49\nU.S.C. 5 601 18(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. Pursuant to the authority of 49 U.S.C. $601 18(b) and 49 C.F.R.\n8 190.21 7, Respondent is ordered to take the following actions to ensure compliance with the\npipeline safety regulations applicable to its operations:\n1. With respect to Item 2(b) of the Notice, perform a seam failure susceptibility analysis\non all pipeline segments containing low-frequency (ERW) and lap welded pipe to\ndetermine which segments are susceptible to seam failure. This analysis must\nconclude which assessment methods are capable of addressing their specific seam\nissues;\n2. Document the costs associated with fblfilling this Compliance Order and submit the\ndocumentation to the Director, Western Region, Office of Pipeline Safety, Pipeline\nand Hazardous Materials Safety Administration, 12300 West Dakota Ave, #110,\nLakewood, Colorado 80228. Please refer to CPF No. 5-2004-5030 on all\ncorrespondence; and\n3. Complete the above items within 60 days of receipt of this Final Order and submit the\nrequired documentation and procedures to the Director, Western Region, Office of\nPipeline Safety.\nThe Director, Western Region, may grant an extension of time to comply with any of the\nrequired items upon a written request timely submitted by Respondent demonstrating good cause\nfor an extension.\nFailure to comply with this Order may result in the assessment of civil penalties of not more than\n$100,000 per day and in referral to the Attorney General for appropriate relief in a United States\nDistrict Court.\nAMENDMENT OF PROCEDURES\nItems l(a-d), 2(c-d), 3(b), 4,5(a-b), 6,7(a-d), 8(a-f), 9(a-d), lO(a-b), and 1 1 of the Notice alleged\ninadequacies in Respondent's IMP and proposed to require amendment of Respondent's\nprocedures to comply with the requirements of 49 C.F.R. 195.452.\nRespondent did not contest the Notice of Amendment. Accordingly, I find that Respondent's\nprocedures as described in the Notice are inadequate to ensure safe operation of its pipeline\n\n\n\nsystem. Pursuant to 49 U.S.C. 5 60 108(a) and 49 C.F.R. 5 1 90.237, Resp~ndent is ordered to\nmake the following revisions to its procedures:\n1. 2. 3. 4. 5 . 6. 7. 8. 9. Amend its IMP to include an evaluation of each individual pipeline facility to\ndetermine whether a release incident could affect a High Consequence Area (HCA).\nThis analysis must include potential facility release volumes;\nAmend its IMP to properly define the boundaries of those segments that could affect\na HCA. A properly defined pipeline segment could affect a EICA at any location\nbetween its end points;\nAmend its IMP to include technical justification showing that their use of the one\nmile area of impact for on-land spills is conservative;\nAmend their IMP to include technical justification for the assumption that any\nsegment of pipeline that crosses a stream with a HCA is considered to affect that\nHCA;\nAmend its IMP BAP so that it consolidates all portions of Respondent's system and\nincludes: 1) the required assessment schedule; 2) an explanatlion of assessment\nmethods selected and; 3) the risk analysis results used to establish the schedule;\nAmend its IMP BAP to include a process for revising the BAP and appropriately\ndocumenting those revisions;\nAmend its IMP baseline assessment schedule to ensure that 50% of Category 2 pipe\nare assessed by the applicable regulatory deadline;\nAmend its IMP to include a process for the incorporation of changes that may cause\nnew segments of its pipeline to affect a HCA;\nAmend its IMP to include training and qualification requirements for personnel\nperforming key integrity management functions (e.g., review of assessment results,\nrisk analysis);\n10. Amend its IMP to include criteria for: 1) vendor in-line-inspection (ILI) tool\ntolerances; 2) vendor reporting requirements; 3) operatorlvendor process for\nresolution of variances and problems; 4) vendor ILI assessment personnel\nqualifications. One possible solution is to develop vendor specifications;\n1 1. Amend its IMP to include a process to correlate ILI indications with other data such\nas cathodic protection (CP) monitoring, one-call records, etc;\n12. Amend its IMP to include processes for validating assessment results and for making\ntool tolerance adjustments resulting from validation activities;\n\n\n\nAmend its IMP to include a method for determining the amount of immediate repair\npressure reduction, or provide guidance to use an alternate 20% pressure reduction,\nwhen ASMEJANSI B3 1.4 45 1.7 does not apply;\nAmend its IMP to include a process for the prioritization and scheduling of\nremediation activities resulting from assessment activities [Ref. 5192.452(h)(3)];\nAmend its IMP to include procedures to notify PHMSA if the remediation schedule\ncan not be met and safety can not be provided through a temporary reduction in\npressure;\nAmend its IMP risk analysis process to ensure risk factors reflect the risk conditions\non the pipeline segment. The factors an operator must consider include, but are not\nlimited to all of the risk factors listed under 5 195.452(e)(l);\nAmend its IMP risk analysis process to ensure that the domiylant causes of risk are\nreadily identifiable;\nAmend its IMP risk analysis process to ensure that probability of failure (POF)\ncategories are not weighted equally, but instead properly reflect system-specific and\nindustry threat history;\nAmend its IMP risk analysis process to ensure that consequence of failure (COF)\ncategories weight public safety and environmental considersqtions appropriately and\nthat do not over emphasize non-safety considerations such a$ business impacts;\nAmend its IMP risk analysis process to ensure that the application of the risk\nanalysis process is to pipeline segments that could affect a HCA and not to pipeline\nsections that have in their length one or more pipeline segmqnt(s) that could affect\nHCAs;\nAmend its IMP risk analysis process to include the application of the risk analysis\nprocess to all pipeline facilities;\nAmend its IMP preventative and mitigative measures to incllude a determination of\nthe likelihood of a pipeline release occurring and how such a release could affect a\nHCA. At a minimum the following risk factors shall be considered; terrain\nsurrounding the pipeline segment, including drainage systems such as small streams\nand other smaller waterways that could act as a conduit to the HCA, elevation\nprofile, characteristics of the product transported, amount of product that could be\nreleased, possibility of a spillage in a farm field following the drain tile into a\nwaterway, ditches along side a roadway the pipeline crosses, physical support of the\npipeline segment such as by a cable suspension bridge, exposure of the pipeline to\noperating pressure exceeding established maximum operating pressure;\n\n\n\n23. Amend its IMP to include an evaluation of potential preventhive and mitigative\nmeasures to prevent or minimize the likelihood of a pipeline release. The\npreventative and mitigative measures may include, but are nat limited to;\nimplementing damage prevention best practices, better monitoring of CP where\ncorrosion is a concern, establishing shorter inspection intervals, installing emergency\nflow restriction devices (EFRDs) on the pipeline segment, modifying the systems\nthat monitor pressure and detect leaks, providing additional training to personnel on\nresponse procedures, conducting drills with local emergency responders and\nadopting other management controls;\n24. Amend its IMP preventative and mitigative measures to include a process to evaluate\nthe capability of leak detection on their system and a process to modify their leak\ndetection capability, as necessary, to protect HCAs. The evaluation process must, at\nleast, consider, the following factors-length and size of the pipeline, type of\nproduct carried, the pipeline's proximity to the HCA, the swiftness of leak detection,\nlocation of nearest response personnel, leak history, and risk assessment results;\n25. Amend its IMP preventative and mitigative measures to include an analytical\nprocess for determining if an EFRD is needed on a pipeline siegment to protect a\nHCA in the event of a hazardous liquid pipeline release. At a minimum this analysis\nshall consider the following factors-the swiftness of leak detection and pipeline\nshutdown capabilities, the type of commodity carried, the rate of potential leakage,\nthe volume that can be released, topography or pipeline profile, the potential for\nignition, proximity to power sources, location of nearest response personnel, specific\nterrain between the pipeline segment and the HCA, and benefits expected by\nreducing the spill size;\n26. Amend its IMP to include processes for the technical justificqtion of the\nreassessment interval for each assessment section. Five years is not a default\nreassessment interval. The reassessment interval must be justified;\n27. Amend its IMP to include provisions for notifications to PHMSA for: 1)\nreassessment variances and 2) the use of other technology, as needed;\n28. Amend its IMP to include a monitoring and evaluation process for determining the\nprogram's effectiveness in assessing and evaluating the integrity of each pipeline\nsegment in protecting the HCAs; and\n29. In complying with each of these items in this Amendment of Procedures section,\nensure that the required processes and procedures have the fsur characteristics\nidentified as (a) through (d) below. The items all relate to the need for Respondent\nto improve its IMP documentation. PHMSA recognizes that a number of program\nelements are still in the development stage, and that documentation will continue to\nevolve as methods are fully developed and defined. However, these procedures as\nwell as the management and analytical process guidance used to implement the\nprogram must be of sufficient detail and specificity to:\n\n\n\na. Clearly articulate the necessary steps to perform each grogram element and\nensure repeatability,\nb. Describe the key input information sources,\nc. Define the process output products, their documentation (including the\njustification for decisions), and document retention requirements, and\nd. Specify organizational responsibilities for performing key process steps.\n30. Submit the amended procedures and technical justifications tq the Director, Western\nRegion, PHMSA within 30 days following receipt of this Ordbr Directing\nAmendment.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by Respondent demonstrating good cause for an extension.\nFailure to comply with this Order Directing Amendment may result in the assessment of civil\npenalties of up to $100,000 per violation per day, or in the referral of the case for judicial\nenforcement.\nWARNING ITEM\nThe Notice did not propose a civil penalty or corrective action for Item 3(&). Therefore, this is\nconsidered to be a warning item. Respondent is warned that if it does not take appropriate action\nto correct this item, enforcement will be taken if a subsequent inspection r~veals a violation.\nUnder 49 C.F.R. 5 190.215, Respondent has a right to submit a petition for reconsideration of\nthis Final Order. The petition must be received within 20 days of Respondent's receipt of this\nFinal Order and must contain a brief statement of the issue(s). The filing of the petition\nautomatically stays the payment of any civil penalty assessed. All other terms of the order,\nincluding any required corrective action and amendment of procedures, remain in full effect\nunless the Associate Administrator, upon request, grants a stay. The terms and conditions of this\nFinal Order are effective on receipt.\nDate Issued\niate Administrator\nPipeline Safety\n\n520045030_decision on petition_12052008_text.pdf\n\nU S Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety\nAdministration\n1200 New Jersey Aire S E\nWashington DC 20590\nDEC 5 @OS\nVIA CERTIFIED MAIL — RETURN RECEIPT RE UESTED\nMr. Hank A. True III\nPresident\nBelle Fourche Pipeline Company\n895 W. River Cross Road\nCasper, WY 82602\nRe: CPF No. 5-2004-5030\nDear Mr. True:\nEnclosed is this agency's decision on the petition for reconsideration filed by Belle Fourche\nPipeline Company in the above-referenced case. For the reasons specified therein, the petition is\ndenied. Payment of the $50, 000 civil penalty is due within 20 days of service. The Compliance\nOrder and the Amendment Items remain unaltered and stand as stated in the Final Order. Please\nbe advised that appropriate corrective action regarding the remainder of the Compliance Order\nand all Amendment Items must be taken if such action has not already been completed.\nWhen the civil penalty has been paid and the terms of the Compliance Order and Amendments of\nProcedures have been completed, as determined by the Director, Western Region, this\nenforcement action will be closed. Your receipt of this decision constitutes service under 49\nC. F. R. $ 190. 5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Chris Hoidal, Director, Western Region\n\n\n\nU. S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\nIn the Matter of\nBelle Fourche Pipeline Company,\nPetitioner.\n)\n)\n)\n)\n)\n)\n) CPF No. 5-2004-5030\nDECISION ON PETITION FOR RECONSIDERATION\nOn July 10, 2006, pursuant to 49 U. S. C. $( 60118 and 60122 and 49 C. F. R. $ 190. 213, the\nAssociate Administrator for Pipeline Safety (Associate Administrator) of the Pipeline and\nHazardous Materials Safety Administration (PHMSA) issued a Final Order in this proceeding\nagainst Belle Fourche Pipeline Company (Belle Fourche or Petitioner), finding that Petitioner\nhad committed certain violations of 49 C. F. R. $ 195. 452(c) with respect to its integrity\nmanagement program (IMP). The Final Order found that Petitioner had: (1) failed to establish a\nbaseline assessment plan (BAP) schedule that prioritized pipeline segments based on identified\nrisk conditions for each such segment; and (2) failed to include a seam failure susceptibility\nanalysis on all pipeline segments containing low frequency electric resistance welded (ERW) and\nlap welded pipe in order to determine which segments were susceptible to seam failure and to\nselect appropriate baseline assessment methods for each such segment.\nAs for the first violation, the Final Order assessed a civil penalty in the amount of $50, 000. As\nfor the second violation, it ordered Petitioner to perform a seam failure susceptibility analysis for\nall pipeline segments containing low frequency ERW and lap welded pipe and to determine\nwhich assessment methods were appropriate for each segment. The order also instructed\nPetitioner, pursuant to 49 U. S. C. $ 60108 and 49 C. F. R. $ 190. 237, to make various other\namendments to its IMP plans and procedures.\nOn July 31, 2006, Petitioner filed a petition for reconsideration pursuant to 49 C. F. R. $ 190. 215\n(Petition). In its Petition, Belle Fourche sought reconsideration of the entire Final Order,\nincluding the findings of violation, the civil penalty assessed, the terms of the compliance order,\nand the order directing amendment of Petitioner's IMP plans and procedures. Petitioner sets\nforth several grounds for reconsideration. First, Petitioner contends that the Final Order is based\nupon the incorrect assumption that Petitioner did not respond to the Notice of Probable Violation\n(Notice). Second, Petitioner contends that it did not commit the violations of $ 195. 452(c)\nalleged in the Notice and therefore should not be assessed a civil penalty or ordered to take\ncorrective action.\n\n\n\nAlternatively, Petitioner contends that the order of amendment should be withdrawn to the extent\nthat it applies to pipeline facilities not owned nor operated by Belle Fourche or to an IMP that\nwas developed for one of Petitioner's related companies. This Decision addresses each of\nPetitioner's contentions in turn.\nI. Timel Res onse to Notice of Probable Violation\nThe Final Order found that Petitioner failed to file a timely response to the Notice, thereby\nwaiving Belle Foiuche's right to contest the allegations in the Notice and authorizing entry\nof the Final Order without further notice. Pursuant to 49 C. F. R. $ 190. 209(c), if an\noperator fails to respond \"within 30 days of receipt of a [N]otice, \" the Associate\nAdministrator is authorized to find the facts as alleged in the Notice and to issue a Final\nOrder without further notice to the respondent. PHMSA issued the Notice in this case on\nSeptember 30, 2004. Petitioner has not shown and the record does not reflect the date on\nwhich Belle Fourche actually received the Notice. Petitioner has acknowledged, however,\nthat it did receive the Notice and claimed that its counsel, Mr. Manuel A. Lojo, filed a\nwritten response on November 4, 2004 (November Letter). Petition, Attachment to\nExhibit C.\nI have reviewed the record and remain unconvinced that Belle Fourche actually filed a\ntimely response. Petitioner has presented no documentary evidence (e, g. ,\na certified mail\nreturn receipt) showing that counsel mailed or otherwise transmitted the November Letter\non November 4, 2004. Instead, Belle Fourche submitted Mr. Lojo's affidavit, dated July 20,\n2006, in which he stated:\nBecause OPS has not responded to this matter for nearly two years, I do not\nhave a specific recollection about how I directed that this particular\ncommunication (the Response Letter) be sent to the OPS, However, it was\nmy customary practice then and still is today to send any communications to\nregulatory agencies such as the OPS by expedited means, either by facsimile\nor overnight mail. I believe that I transmitted the Response Letter to OPS\nby expedited means on November 4, 2004.\nWhile Mr. Lojo may believe that he filed a response with the Office of Pipelme Safety\n(OPS) on November 4, 2004, PHMSA has no record of having received the November\nLetter until it was included with the Petition filed on July 28, 2006, and received by OPS\non July 31, 2006. An affidavit made nearly two years after the events in question is\ninsufficient proof that Petitioner responded to the Notice within 30 days of its actual\nreceipt. Upon a careful review of the entire record, I can find no reason to alter the finding\nin the Final Order that Petitioner failed to file a response within 30 days after receipt of the\nNotice and that Belle Fourche therefore waived its right to contest the allegations in the\nNotice and authorized entry of a Final Order under 49 C. F R. ) 190. 209(c).\nNotwithstanding the foregoing, I have fully reviewed and reconsidered the entire record in\nthis proceeding and all of the substantive issues raised by Petitioner in its November Letter\nand the Petition. Belle Fourche's arguments relating to Item 2(a) in the Notice, regarding\n\n\n\nthe company's alleged failure to establish a proper BAP schedule based upon the risk\nconditions on each pipeline segment, are discussed in Section II below Its arguments\nrelating to Item 2(b), regarding the company's alleged failure to include a seam failure\nsusceptibility analysis for all pipe segments containing low frequency ERW and lap welded\npipe to determine which segments are susceptible to seam failure, are discussed in Section\nIII. Its arguments relating to the civil penalty, the compliance order, and the order directing\namendments, are discussed in Sections IV, V, and VI, respectively.\nThe Final Order found that Petitioner violated 49 C. F. R. ) 195. 452(c), as set forth in Item\n2(a) of the Notice. That Section states, in relevant part:\n$ 195. 452 Pipeline integrity management in high consequence areas.\n(c) What must be tn the baseline assessment plan~ (1) An operator\nmust include each of the following elements in its written baseline\nassessment plan:\n(i) The methods selected to assess the integrity of the line pipe. An\noperator must assess the integrity of the line pipe by any of the following\nmethods. The methods an operator selects to assess low frequency electric\nresistance welded pipe or lap welded pipe susceptible to longitudinal seam\nfailure must be capable of assessing seam integrity and of detecting\ncorrosion and deformation anomalies. . . .\n(ii) A schedule for completing the integrity assessment; [and]\n(iii) An explanation of the assessment methods selected and evaluation\nof risk factors considered in establishing the assessment schedule. . . .\nThe Notice alleged that as of the date of the inspection, Belle Fourche had not completed\nan analysis of the risk conditions on each segment of its pipeline system that \"could affect\"\nHigh Consequence Areas (HCAs). Therefore, Petitioner's BAP schedule was not properly\nbased upon an evaluation of the specific risk factors identified for each pipeline segment,\nSuch schedule should prioritize the pipeline segments for assessment based upon risk. '\nIn its November Letter and Petition, Belle Fourche contends that it had completed the risk\nanalysis process required under $ 195. 452(c)(1), as of the May 2004 inspection date, for all\n49 C. F R $ 195. 452(e) states, m relevant part'\n(e) What are the nsk factors for establishing an assessment schedule (for both the\nbaseline and continual integrity assessments) z (I) An operator must establish an mtegrity\nassessment schedule that prioritizes pipelme segments for assessment . An operator\nmust base the assessment schedule on all risk factors that reflect the nsk conditions on the\npipeline segment .\n' In its Petition, Belle Fourche reiterated this claim by submitting the affidavit of Mr Robert Stamp, a Belle\nFourche employee, who stated that \"At the time of the inspections, [Belle Fourche] had completed the requnements\nof 29 CFR $ 195. 452(a) [sic] for its pipelme systems, as of December I, 2003 Specifically, BFP had identified\n'high consequence areas' and performed nsk assessments for those segments\"\n\n\n\nof its facilities. In the November Letter, Belle Fourche stated that its IMP \"was, in fact,\ncompleted in January 2003 for an operator with less than 500 miles. \"\nPetitioner's defense to this Item is based upon several incorrect assertions. First, Belle\nFourche contends that there was confusion about exactly which IMP was being reviewed\nduring the May 2004 inspection. In the November Letter, it stated that its 2003 IMP was\none of two plans that were reviewed by the PHMSA inspector. The other was a combined\nIMP for both Belle Fourche and Bridger Pipeline LLC, which Belle Fourche acquired in\nDecember 2003, According to Petitioner, this combined plan was still a work \"in progress\"\nat the time of the May 2004 inspection.\nThis contention is unfounded. First, the record does not indicate that Belle Fourche\nprovided more than one IMP document to the PHMSA inspector or that the agency\nreviewed more than one plan. The only IMP that Belle Fourche submitted to PHMSA at\nthe time of the inspection was identified on the cover page as follows:\nINTEGRITY MANAGEMENT PLAN\nUmted States Department of Transportation\n49 CFR Part 105\nBelle Fourche Pipeline Company\nAnd\nBridger Pipeline LLC\nNovember 2003\nRevised\nJanuary 2004\nThe cover page clearly indicates that the IMP was initially effective as of November 2003\nand then revised in January 2004, four months pnor to the inspection. It is this combined\nIMP (Plan) that is the subject of this proceeding.\nIt is also apparent that the Plan was used jointly for two separate pipeline operators, namely,\nBelle Fourche Pipeline Company, which is a party to this proceeding, and Bridger Pipeline, LLC,\nwhich is not. Petitioner contends in the November Letter that its risk analysis process had been\ncompleted for the Belle Fourche lines as of the date of the inspection, but not for the Bridger\nlines, which were acquired in January 2004. The November Letter states that \".\n. . the BFPL plan\nwas complete, for BFPL assets, as of January 2003 some 16 months prior to the inspection. \" For\npmposes of this Decision, I have reviewed the Plan as it existed on the date of the inspection and\nas it applied to the Belle Fourche facilities identified in the Plan.\nSecond, Belle Fourche asserts that it only had three pipeline segments that \"could affect\"\nHCAs and that those lines had been assessed as of the inspection date. On the contrary,\n' The November Letter states, \"In addttion, it is unclear to us exactly on to what plan the violation is being\nassessed. Item 2(a) states that BFPL 'had not completed their risk analysis. ' But the BFPL plan was complete,\nfor BFPL assets, as of January 2003 some 16 months prior to the inspection \" Petition, Attachment to\nExhibit C\n\n\n\nthe Plan identifies the following eight lines as \"could-affect\" segments\" operated by Belle\nFourche:\nBicentennial to Baker Segment 1\nBicentennial to Baker Segment 2\nDickinson Segment 1\nDickinson Segment 2\nDickinson Segment 3\nTwenty-mile to Guernsey Segment 2\nTwenty-mile to Guernsey Segment 3\nWright Segment 1.\nUpon a review of the Plan, it is clear that Belle Fourche operates the pipeline segments\nlisted above. There is no indication in the Plan that a risk analysis for these segments had\nbeen conducted as of the date of the inspection.\nThird, Belle Fourche asserts that it completed a risk analysis for its facilities as of\nDecember 2003 and that it met the requirements of 49 C. F. R. ) 452(c). However,\nit is clear from my review of the Plan that it does not include an adequate\nexplanation of the assessment methods selected or an evaluation of the risk factors\nconsidered in establishing an assessment schedule. In the November Letter,\nPetitioner acknowledges as much, stating:\n[T]he BFPL plan had very little in the way of risk analysis as stated in\nItem 2(a), but that was because there were only 3 \"could-affect\" line\nsegments for BFPL, The IM plan laid out a schedule of assessment for\nthe 3 segments based on easily identifiable risk characteristics in the\ntext of the plan. A more rigorous risk analysis process was not\nwarranted for these 3 segments.\nSection 195. 452(b) requires each operator to have an IMP that includes a plan to carry out\nbaseline assessments of all pipeline segments that could affect HCAs. In accordance with\n$ 195. 452(c) and (e), an evaluation of risk factors that reflects the conditions on each\ncovered pipeline segment must be included in a BAP in order to enable selection of the\nproper assessment method(s) and intervals, The Plan obtained from Petitioner during the\nMay 2004 inspection shows that although Belle Fourche had developed the outline of a risk\nanalysis process, the company had not completed a proper risk analysis of each pipeline\nsegment that \"could affect\" a HCA.\nSpecifically, the Plan states that the assessment methodologies were chosen by evaluating\nthe risk factors outlined in Appendix A, Section IV. The Appendix, in turn, included\ncertain worksheets designed to assist with and reflect the risk conditions on each particular\n' See Plan at Introduction, p. I, and Appendix C\n' Although the Wright System is not identified as a Belle Fourche asset m the introduction to the Plan, the System\ndescnption in Appendix C indicates that the hne is operated by Belle Fourche\nSee Plan at Introduction, p. 3.\n\n\n\npipe segment. These worksheets, however, were blank and apparently never used to\ncomplete an actual risk analysis.\nAccordingly, I find that the Plan reviewed during the May 2004 inspection did apply to\nfacilities operated by Belle Fourche, that it included eight pipeline segments that \"could\naffect\" HCAs, and that an adequate risk analysis was not reflected in the Plan for each of\nthese eights segments. Therefore, I find no basis to modify the finding in the Final Order\nthat Petitioner violated ) 195. 452(c) by failing to establish a baseline assessment schedule\nbased upon an evaluation of risk factors identified for each pipeline segment.\nIII. Notice Item 2 b\nItem 2(b) in the Final Order found that Petitioner violated 49 C. F. R. $ 195. 452(c), as stated\nabove, by failing to perform a seam failure susceptibility analysis on all pipeline segments that\ncontained low frequency electric resistance welded (ERW) and lap welded pipe to determine\nwhich segments were susceptible to seam failure, prior to selecting appropriate assessment\nmethods for each segment. Such an analysis is necessary because the assessment method chosen\nmust be based on the actual risk conditions of each pipeline segment and whether the selected\nmethod is capable of adequately assessing pipe integrity. In this case, a seam failure\nsusceptibility analysis is needed because Belle Fourche operates pipe segments that contain low\nfrequency ERW pipe and at least one of Belle Fourche's ERW pipelines, the Donkey Creek to\nGuernsey line, has experienced a pipeline release associated with longitudinal seam failure.\nIn its Petition, Belle Fourche raises three defenses to this allegation. First, it contends that one of\nthe cited releases was from a 10-inch portion of the Poplar Pipeline and one was &om a 16-inch\nportion of the Butte Pipeline, neither of which is owned or operated by Petitioner. Assuming\nthis is correct, the one failure that did occur on Petitioner's Donkey Creek to Guernsey line still\nestablishes the need for Belle Fourche to conduct a seam failure susceptiblity analysis for all\nthose segments constructed of similar pipe.\nSecond, the Petition states that Belle Fourche was not required under 49 C. F. R. ) 452(d) to\ncomplete an \"actual seam failure baseline assessment[s]. . . . until (as applicable to BFP)\n2005 (for at least 50 percent of the line) and 2009 for the remainder of the line. \" Petition at\n5. This is correct but not responsive to the violation cited in Item 2(a). Section 195. 452(c)\nrequires that Petitioner have had a completed plan at the time of the May 2004 inspection,\nnot a completed assessment, and that the plan include a seam failure susceptibility analysis\nto determine the extent to which pipeline segments containing low frequency ERW or lap\nwelded pipe were susceptible to seam failure. Because Belle Fourche operated segments\ncontaining low frequency ERW pipe, it was required to perform an analysis to determine\nwhich, if any, of them were susceptible to seam failure. If any segments were found to be\nsusceptible, then Petitioner was required to choose an assessment method capable of\nassessing seam integrity.\n' Accordmg to Petitioner, both the Poplar and Butte Pipehnes are owned and operated by Bridger Pipelme, LLC.\n' The Twenty-mile to Guernsey hne is constructed of low frequency ERW pipe, which is particularly susceptible to\nlongitudinal seam failure The Bicentenmal to Baker system, the Wright system, and the Dickinson system are also\nconstructed of low frequency ERW pipe Belle Fourche was required to analyze the susceptibihty of each of these\nERW pipe segments to longitudinal seam failure\n\n\n\nPetitioner's Plan states that its assessment methodologies were chosen \"by evaluating\nspecific risk factors\" and refers to Appendix A of the document. Appendix A states that\nAppendix C of the Plan lists the assessment method(s) selected for each segment of\npipeline, which was an in-line inspection device known as a standard magnetic flux leakage\ntool, However, the Plan acknowledged that seam evaluation analysis was not available\nwith in-line inspection tools for pipes with a diameter of less than 24 inches and that the\nassessments scheduled in its Plan would not be able to address seam integrity. Furthermore,\nPetitioner failed to provide any analysis to show that its low frequency ERW pipe was not\nsusceptible to longitudinal seam failure and therefore that a susceptibility analysis was not\nneeded.\nThird, the Petition contends,","truncated":true,"body_characters":50597}