# BELLE FOURCHE PIPELINE CO — Notice of Probable Violation

- **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:** Not available
- **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).
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**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.

Official case documents:

520045030_Decision on Petition_12052008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_Decision%20on%20Petition_12052008.pdf

520045030_decision on petition_12052008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_decision%20on%20petition_12052008_text.pdf

520045030_Final Order_07102006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_Final%20Order_07102006.pdf

520045030_Petition for Reconsideration_07282006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/520045030_Petition%20for%20Reconsideration_07282006.pdf

CPF_NO_5-2004-5030.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045030/CPF_NO_5-2004-5030.pdf

520045030_Final Order_07102006.pdf

U.S. Department
of Transportation
Pipeline and
Hazardous Materidls Safety
Administration
400 Seventh Street, S.W.
Washington, D.C. 20590
JUL 1 0 : ' b w , i
Mr. Hank A. True I11
President
Belle Fourche Pipeline Company
895 W. River Cross Road
Casper, WY 82602
Re: CPF No. 5-2004-5030
Dear Mr. True:
Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in
the above-referenced case. It makes findings of violation and assesses a civil penalty of
$50,000. The Final Order also specifies actions to be taken to comply with the pipeline safety
regulations and requires the revision of certain of your operating and maintenance procedures.
The penalty payment terms are set forth in the Final Order. When the pivil penalty is paid and
the terms of the Compliance Order and Amendment of Procedures are completed, as
determined by the Director, Western Region, this enforcement action *ill be closed. Your
receipt of the Final Order constitutes service under 49 C.F.R. § 190.5.
Sincerely,
'U
James Reynolds
Pipeline Compliance Registry
Office of Pipeline Safety
Enclosure
CERTIFIED MAIL -RETURN RECEIPT REQUESTED



DEPARTMENT OF TRANSPORTATION ~
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, DC 20590
)
In the Matter of 1
Belle Fourche Pipeline Company,
Respondent
) 1
) 1 CPF NO. 4-2004-5030
FINAL ORDER
Between May 17 and 19,2004, pursuant to 49 U.S.C. § 601 17, representatives of the Pipeline
and Hazardous Materials Safety Administration's (PHMSA's) Office of Pipeline Safety
conducted an on-site pipeline safety inspection of Respondent's integrity management program
(IMP) in Casper, Wyoming. As a result of the inspection, the Director, Western Region,
PHMSA issued to Respondent, by letter dated September 30,2004, a Notice of Probable
Violation, Proposed Civil Penalty, Proposed Compliance Order, and Notice of Amendment
(Notice).' In accordance with 49 C.F.R. 190.207, the Notice proposed finding that Respondent
committed violations of 49 C.F.R. Part 195, proposed assessing a civil penalty of $50,000 for
one of the alleged violations, and proposed that Respondent take certain measures to correct
another of the alleged violations. The Notice also alleged inadequacies ip Respondent's IMP and
proposed to require amendment of Respondent's procedures to comply with the requirements of
49 C.F.R. 195.452.
Respondent failed to respond within 30 days after it had received the Notice. Under
49 C.F.R. tj 190.209(c), Respondent's failure to respond constitutes a waiver of Respondent's
right to contest the allegations in the Notice and authorizes the entry of this Final Order.
FINDINGS OF VIOLATION
Respondent did not contest the alleged violations in the Notice. Accordingly, I find that
Respondent violated the following sections of 49 C.F.R. Part 195 as more fully described in the
Notice:
' Effective February 20,2005, the Pipeline and Hazardous Materials Safety Administration (PHMSA) succeeded
Research and Special Programs Administration as the agency responsible for regulating safety in pipeline
transportation and hazardous materials transportation. See, section 108 of the Norman Y. Mineta Research and
Special Programs Improvement Act (Public Law 108-426, 118 Stat. 2423-2429 (November 30,2004)). See also, 70
Fed. Reg. 8299 (February 18, 2005) redelegating the pipeline safety authorities and functions to the PHMSA
Administrator.



Item 2(a)-49 C.F.R. 9 195.452(c)-failing to establish a baseline integrity assessment
schedule prioritizing its pipeline segments based on all risk factors that reflect the risk
conditions on each segment; and
Item 2(b)-49 C.F.R. § 195.452(c)-failing to include a seam failure susceptibility
analysis on all pipeline segments containing low frequency electric resistance welded
pipe (ERW) and lap welded pipe to determine which segments are susceptible to seam
failure prior to selecting baseline integrity assessment methods for applicable segments.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60 122, Respondent is subject to a civil penalty not to exceed $100,000 per
violation for each day of the violation up to a maximum of $1,000,000 for any related series of
violations.
49 U.S.C. 5 60122 and 49 C.F.R. 9 190.225 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 the penalty, 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.
Item 2(a) of the Notice proposed a civil penalty of $50,000.00 for violation of
49 C.F.R. $ 195.452(c). Respondent violated 49 C.F.R. § 195.452(c) in that it did not develop a
BAP that uses risk factors in establishing the base line assessment methads and schedule.
Prioritizing pipeline segments for integrity assessments by risk is a key step in managing pipeline
integrity. Respondent did not provide information that would warrant a reduction in the civil
penalty amount proposed in the Notice.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a total civil penalty of $50,000 for violation of 49 C.F.R. $ 195.452(c). Respondent
has the ability to pay this penalty without adversely affecting its ability tio continue in business.
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. 8 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. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMZ-300), Federal Aviation Administration, Mike
Monroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73 125; (405) 954-8893.
Failure to pay the $50,000 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. 9 901.9 and 49 C.F.R. 8 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 1 10 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriatq action in a United
States District Court.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Item 2(b) in the Notice. Under 49
U.S.C. 5 601 18(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. $601 18(b) and 49 C.F.R.
8 190.21 7, Respondent is ordered to take the following actions to ensure compliance with the
pipeline safety regulations applicable to its operations:
1. With respect to Item 2(b) of the Notice, perform a seam failure susceptibility analysis
on all pipeline segments containing low-frequency (ERW) and lap welded pipe to
determine which segments are susceptible to seam failure. This analysis must
conclude which assessment methods are capable of addressing their specific seam
issues;
2. Document the costs associated with fblfilling this Compliance Order and submit the
documentation to the Director, Western Region, Office of Pipeline Safety, Pipeline
and Hazardous Materials Safety Administration, 12300 West Dakota Ave, #110,
Lakewood, Colorado 80228. Please refer to CPF No. 5-2004-5030 on all
correspondence; and
3. Complete the above items within 60 days of receipt of this Final Order and submit the
required documentation and procedures to the Director, Western Region, Office of
Pipeline Safety.
The Director, Western Region, may grant an extension of time to comply with any of the
required items upon a written request timely submitted by Respondent demonstrating good cause
for an extension.
Failure to comply with this Order may result in the assessment of civil penalties of not more than
$100,000 per day and in referral to the Attorney General for appropriate relief in a United States
District Court.
AMENDMENT OF PROCEDURES
Items 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
inadequacies in Respondent's IMP and proposed to require amendment of Respondent's
procedures to comply with the requirements of 49 C.F.R. 195.452.
Respondent did not contest the Notice of Amendment. Accordingly, I find that Respondent's
procedures as described in the Notice are inadequate to ensure safe operation of its pipeline



system. Pursuant to 49 U.S.C. 5 60 108(a) and 49 C.F.R. 5 1 90.237, Resp~ndent is ordered to
make the following revisions to its procedures:
1. 2. 3. 4. 5 . 6. 7. 8. 9. Amend its IMP to include an evaluation of each individual pipeline facility to
determine whether a release incident could affect a High Consequence Area (HCA).
This analysis must include potential facility release volumes;
Amend its IMP to properly define the boundaries of those segments that could affect
a HCA. A properly defined pipeline segment could affect a EICA at any location
between its end points;
Amend its IMP to include technical justification showing that their use of the one
mile area of impact for on-land spills is conservative;
Amend their IMP to include technical justification for the assumption that any
segment of pipeline that crosses a stream with a HCA is considered to affect that
HCA;
Amend its IMP BAP so that it consolidates all portions of Respondent's system and
includes: 1) the required assessment schedule; 2) an explanatlion of assessment
methods selected and; 3) the risk analysis results used to establish the schedule;
Amend its IMP BAP to include a process for revising the BAP and appropriately
documenting those revisions;
Amend its IMP baseline assessment schedule to ensure that 50% of Category 2 pipe
are assessed by the applicable regulatory deadline;
Amend its IMP to include a process for the incorporation of changes that may cause
new segments of its pipeline to affect a HCA;
Amend its IMP to include training and qualification requirements for personnel
performing key integrity management functions (e.g., review of assessment results,
risk analysis);
10. Amend its IMP to include criteria for: 1) vendor in-line-inspection (ILI) tool
tolerances; 2) vendor reporting requirements; 3) operatorlvendor process for
resolution of variances and problems; 4) vendor ILI assessment personnel
qualifications. One possible solution is to develop vendor specifications;
1 1. Amend its IMP to include a process to correlate ILI indications with other data such
as cathodic protection (CP) monitoring, one-call records, etc;
12. Amend its IMP to include processes for validating assessment results and for making
tool tolerance adjustments resulting from validation activities;



Amend its IMP to include a method for determining the amount of immediate repair
pressure reduction, or provide guidance to use an alternate 20% pressure reduction,
when ASMEJANSI B3 1.4 45 1.7 does not apply;
Amend its IMP to include a process for the prioritization and scheduling of
remediation activities resulting from assessment activities [Ref. 5192.452(h)(3)];
Amend its IMP to include procedures to notify PHMSA if the remediation schedule
can not be met and safety can not be provided through a temporary reduction in
pressure;
Amend its IMP risk analysis process to ensure risk factors reflect the risk conditions
on the pipeline segment. The factors an operator must consider include, but are not
limited to all of the risk factors listed under 5 195.452(e)(l);
Amend its IMP risk analysis process to ensure that the domiylant causes of risk are
readily identifiable;
Amend its IMP risk analysis process to ensure that probability of failure (POF)
categories are not weighted equally, but instead properly reflect system-specific and
industry threat history;
Amend its IMP risk analysis process to ensure that consequence of failure (COF)
categories weight public safety and environmental considersqtions appropriately and
that do not over emphasize non-safety considerations such a$ business impacts;
Amend its IMP risk analysis process to ensure that the application of the risk
analysis process is to pipeline segments that could affect a HCA and not to pipeline
sections that have in their length one or more pipeline segmqnt(s) that could affect
HCAs;
Amend its IMP risk analysis process to include the application of the risk analysis
process to all pipeline facilities;
Amend its IMP preventative and mitigative measures to incllude a determination of
the likelihood of a pipeline release occurring and how such a release could affect a
HCA. At a minimum the following risk factors shall be considered; terrain
surrounding the pipeline segment, including drainage systems such as small streams
and other smaller waterways that could act as a conduit to the HCA, elevation
profile, characteristics of the product transported, amount of product that could be
released, possibility of a spillage in a farm field following the drain tile into a
waterway, ditches along side a roadway the pipeline crosses, physical support of the
pipeline segment such as by a cable suspension bridge, exposure of the pipeline to
operating pressure exceeding established maximum operating pressure;



23. Amend its IMP to include an evaluation of potential preventhive and mitigative
measures to prevent or minimize the likelihood of a pipeline release. The
preventative and mitigative measures may include, but are nat limited to;
implementing damage prevention best practices, better monitoring of CP where
corrosion is a concern, establishing shorter inspection intervals, installing emergency
flow restriction devices (EFRDs) on the pipeline segment, modifying the systems
that monitor pressure and detect leaks, providing additional training to personnel on
response procedures, conducting drills with local emergency responders and
adopting other management controls;
24. Amend its IMP preventative and mitigative measures to include a process to evaluate
the capability of leak detection on their system and a process to modify their leak
detection capability, as necessary, to protect HCAs. The evaluation process must, at
least, consider, the following factors-length and size of the pipeline, type of
product carried, the pipeline's proximity to the HCA, the swiftness of leak detection,
location of nearest response personnel, leak history, and risk assessment results;
25. Amend its IMP preventative and mitigative measures to include an analytical
process for determining if an EFRD is needed on a pipeline siegment to protect a
HCA in the event of a hazardous liquid pipeline release. At a minimum this analysis
shall consider the following factors-the swiftness of leak detection and pipeline
shutdown capabilities, the type of commodity carried, the rate of potential leakage,
the volume that can be released, topography or pipeline profile, the potential for
ignition, proximity to power sources, location of nearest response personnel, specific
terrain between the pipeline segment and the HCA, and benefits expected by
reducing the spill size;
26. Amend its IMP to include processes for the technical justificqtion of the
reassessment interval for each assessment section. Five years is not a default
reassessment interval. The reassessment interval must be justified;
27. Amend its IMP to include provisions for notifications to PHMSA for: 1)
reassessment variances and 2) the use of other technology, as needed;
28. Amend its IMP to include a monitoring and evaluation process for determining the
program's effectiveness in assessing and evaluating the integrity of each pipeline
segment in protecting the HCAs; and
29. In complying with each of these items in this Amendment of Procedures section,
ensure that the required processes and procedures have the fsur characteristics
identified as (a) through (d) below. The items all relate to the need for Respondent
to improve its IMP documentation. PHMSA recognizes that a number of program
elements are still in the development stage, and that documentation will continue to
evolve as methods are fully developed and defined. However, these procedures as
well as the management and analytical process guidance used to implement the
program must be of sufficient detail and specificity to:



a. Clearly articulate the necessary steps to perform each grogram element and
ensure repeatability,
b. Describe the key input information sources,
c. Define the process output products, their documentation (including the
justification for decisions), and document retention requirements, and
d. Specify organizational responsibilities for performing key process steps.
30. Submit the amended procedures and technical justifications tq the Director, Western
Region, PHMSA within 30 days following receipt of this Ordbr Directing
Amendment.
The Director may grant an extension of time to comply with any of the required items upon a
written request timely submitted by Respondent demonstrating good cause for an extension.
Failure to comply with this Order Directing Amendment may result in the assessment of civil
penalties of up to $100,000 per violation per day, or in the referral of the case for judicial
enforcement.
WARNING ITEM
The Notice did not propose a civil penalty or corrective action for Item 3(&). Therefore, this is
considered to be a warning item. Respondent is warned that if it does not take appropriate action
to correct this item, enforcement will be taken if a subsequent inspection r~veals a violation.
Under 49 C.F.R. 5 190.215, 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 and amendment of procedures, remain in full effect
unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this
Final Order are effective on receipt.
Date Issued
iate Administrator
Pipeline Safety

520045030_decision on petition_12052008_text.pdf

U S Department
of Transportation
Pipeline and Hazardous
Materials Safety
Administration
1200 New Jersey Aire S E
Washington DC 20590
DEC 5 @OS
VIA CERTIFIED MAIL — RETURN RECEIPT RE UESTED
Mr. Hank A. True III
President
Belle Fourche Pipeline Company
895 W. River Cross Road
Casper, WY 82602
Re: CPF No. 5-2004-5030
Dear Mr. True:
Enclosed is this agency's decision on the petition for reconsideration filed by Belle Fourche
Pipeline Company in the above-referenced case. For the reasons specified therein, the petition is
denied. Payment of the $50, 000 civil penalty is due within 20 days of service. The Compliance
Order and the Amendment Items remain unaltered and stand as stated in the Final Order. Please
be advised that appropriate corrective action regarding the remainder of the Compliance Order
and all Amendment Items must be taken if such action has not already been completed.
When the civil penalty has been paid and the terms of the Compliance Order and Amendments of
Procedures have been completed, as determined by the Director, Western Region, this
enforcement action will be closed. Your receipt of this decision constitutes service under 49
C. F. R. $ 190. 5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Chris Hoidal, Director, Western Region



U. S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, DC 20590
In the Matter of
Belle Fourche Pipeline Company,
Petitioner.
)
)
)
)
)
)
) CPF No. 5-2004-5030
DECISION ON PETITION FOR RECONSIDERATION
On July 10, 2006, pursuant to 49 U. S. C. $( 60118 and 60122 and 49 C. F. R. $ 190. 213, the
Associate Administrator for Pipeline Safety (Associate Administrator) of the Pipeline and
Hazardous Materials Safety Administration (PHMSA) issued a Final Order in this proceeding
against Belle Fourche Pipeline Company (Belle Fourche or Petitioner), finding that Petitioner
had committed certain violations of 49 C. F. R. $ 195. 452(c) with respect to its integrity
management program (IMP). The Final Order found that Petitioner had: (1) failed to establish a
baseline assessment plan (BAP) schedule that prioritized pipeline segments based on identified
risk conditions for each such segment; and (2) failed to include a seam failure susceptibility
analysis on all pipeline segments containing low frequency electric resistance welded (ERW) and
lap welded pipe in order to determine which segments were susceptible to seam failure and to
select appropriate baseline assessment methods for each such segment.
As for the first violation, the Final Order assessed a civil penalty in the amount of $50, 000. As
for the second violation, it ordered Petitioner to perform a seam failure susceptibility analysis for
all pipeline segments containing low frequency ERW and lap welded pipe and to determine
which assessment methods were appropriate for each segment. The order also instructed
Petitioner, pursuant to 49 U. S. C. $ 60108 and 49 C. F. R. $ 190. 237, to make various other
amendments to its IMP plans and procedures.
On July 31, 2006, Petitioner filed a petition for reconsideration pursuant to 49 C. F. R. $ 190. 215
(Petition). In its Petition, Belle Fourche sought reconsideration of the entire Final Order,
including the findings of violation, the civil penalty assessed, the terms of the compliance order,
and the order directing amendment of Petitioner's IMP plans and procedures. Petitioner sets
forth several grounds for reconsideration. First, Petitioner contends that the Final Order is based
upon the incorrect assumption that Petitioner did not respond to the Notice of Probable Violation
(Notice). Second, Petitioner contends that it did not commit the violations of $ 195. 452(c)
alleged in the Notice and therefore should not be assessed a civil penalty or ordered to take
corrective action.



Alternatively, Petitioner contends that the order of amendment should be withdrawn to the extent
that it applies to pipeline facilities not owned nor operated by Belle Fourche or to an IMP that
was developed for one of Petitioner's related companies. This Decision addresses each of
Petitioner's contentions in turn.
I. Timel Res onse to Notice of Probable Violation
The Final Order found that Petitioner failed to file a timely response to the Notice, thereby
waiving Belle Foiuche's right to contest the allegations in the Notice and authorizing entry
of the Final Order without further notice. Pursuant to 49 C. F. R. $ 190. 209(c), if an
operator fails to respond "within 30 days of receipt of a [N]otice, " the Associate
Administrator is authorized to find the facts as alleged in the Notice and to issue a Final
Order without further notice to the respondent. PHMSA issued the Notice in this case on
September 30, 2004. Petitioner has not shown and the record does not reflect the date on
which Belle Fourche actually received the Notice. Petitioner has acknowledged, however,
that it did receive the Notice and claimed that its counsel, Mr. Manuel A. Lojo, filed a
written response on November 4, 2004 (November Letter). Petition, Attachment to
Exhibit C.
I have reviewed the record and remain unconvinced that Belle Fourche actually filed a
timely response. Petitioner has presented no documentary evidence (e, g. ,
a certified mail
return receipt) showing that counsel mailed or otherwise transmitted the November Letter
on November 4, 2004. Instead, Belle Fourche submitted Mr. Lojo's affidavit, dated July 20,
2006, in which he stated:
Because OPS has not responded to this matter for nearly two years, I do not
have a specific recollection about how I directed that this particular
communication (the Response Letter) be sent to the OPS, However, it was
my customary practice then and still is today to send any communications to
regulatory agencies such as the OPS by expedited means, either by facsimile
or overnight mail. I believe that I transmitted the Response Letter to OPS
by expedited means on November 4, 2004.
While Mr. Lojo may believe that he filed a response with the Office of Pipelme Safety
(OPS) on November 4, 2004, PHMSA has no record of having received the November
Letter until it was included with the Petition filed on July 28, 2006, and received by OPS
on July 31, 2006. An affidavit made nearly two years after the events in question is
insufficient proof that Petitioner responded to the Notice within 30 days of its actual
receipt. Upon a careful review of the entire record, I can find no reason to alter the finding
in the Final Order that Petitioner failed to file a response within 30 days after receipt of the
Notice and that Belle Fourche therefore waived its right to contest the allegations in the
Notice and authorized entry of a Final Order under 49 C. F R. ) 190. 209(c).
Notwithstanding the foregoing, I have fully reviewed and reconsidered the entire record in
this proceeding and all of the substantive issues raised by Petitioner in its November Letter
and the Petition. Belle Fourche's arguments relating to Item 2(a) in the Notice, regarding



the company's alleged failure to establish a proper BAP schedule based upon the risk
conditions on each pipeline segment, are discussed in Section II below Its arguments
relating to Item 2(b), regarding the company's alleged failure to include a seam failure
susceptibility analysis for all pipe segments containing low frequency ERW and lap welded
pipe to determine which segments are susceptible to seam failure, are discussed in Section
III. Its arguments relating to the civil penalty, the compliance order, and the order directing
amendments, are discussed in Sections IV, V, and VI, respectively.
The Final Order found that Petitioner violated 49 C. F. R. ) 195. 452(c), as set forth in Item
2(a) of the Notice. That Section states, in relevant part:
$ 195. 452 Pipeline integrity management in high consequence areas.
(c) What must be tn the baseline assessment plan~ (1) An operator
must include each of the following elements in its written baseline
assessment plan:
(i) The methods selected to assess the integrity of the line pipe. An
operator must assess the integrity of the line pipe by any of the following
methods. The methods an operator selects to assess low frequency electric
resistance welded pipe or lap welded pipe susceptible to longitudinal seam
failure must be capable of assessing seam integrity and of detecting
corrosion and deformation anomalies. . . .
(ii) A schedule for completing the integrity assessment; [and]
(iii) An explanation of the assessment methods selected and evaluation
of risk factors considered in establishing the assessment schedule. . . .
The Notice alleged that as of the date of the inspection, Belle Fourche had not completed
an analysis of the risk conditions on each segment of its pipeline system that "could affect"
High Consequence Areas (HCAs). Therefore, Petitioner's BAP schedule was not properly
based upon an evaluation of the specific risk factors identified for each pipeline segment,
Such schedule should prioritize the pipeline segments for assessment based upon risk. '
In its November Letter and Petition, Belle Fourche contends that it had completed the risk
analysis process required under $ 195. 452(c)(1), as of the May 2004 inspection date, for all
49 C. F R $ 195. 452(e) states, m relevant part'
(e) What are the nsk factors for establishing an assessment schedule (for both the
baseline and continual integrity assessments) z (I) An operator must establish an mtegrity
assessment schedule that prioritizes pipelme segments for assessment . An operator
must base the assessment schedule on all risk factors that reflect the nsk conditions on the
pipeline segment .
' In its Petition, Belle Fourche reiterated this claim by submitting the affidavit of Mr Robert Stamp, a Belle
Fourche employee, who stated that "At the time of the inspections, [Belle Fourche] had completed the requnements
of 29 CFR $ 195. 452(a) [sic] for its pipelme systems, as of December I, 2003 Specifically, BFP had identified
'high consequence areas' and performed nsk assessments for those segments"



of its facilities. In the November Letter, Belle Fourche stated that its IMP "was, in fact,
completed in January 2003 for an operator with less than 500 miles. "
Petitioner's defense to this Item is based upon several incorrect assertions. First, Belle
Fourche contends that there was confusion about exactly which IMP was being reviewed
during the May 2004 inspection. In the November Letter, it stated that its 2003 IMP was
one of two plans that were reviewed by the PHMSA inspector. The other was a combined
IMP for both Belle Fourche and Bridger Pipeline LLC, which Belle Fourche acquired in
December 2003, According to Petitioner, this combined plan was still a work "in progress"
at the time of the May 2004 inspection.
This contention is unfounded. First, the record does not indicate that Belle Fourche
provided more than one IMP document to the PHMSA inspector or that the agency
reviewed more than one plan. The only IMP that Belle Fourche submitted to PHMSA at
the time of the inspection was identified on the cover page as follows:
INTEGRITY MANAGEMENT PLAN
Umted States Department of Transportation
49 CFR Part 105
Belle Fourche Pipeline Company
And
Bridger Pipeline LLC
November 2003
Revised
January 2004
The cover page clearly indicates that the IMP was initially effective as of November 2003
and then revised in January 2004, four months pnor to the inspection. It is this combined
IMP (Plan) that is the subject of this proceeding.
It is also apparent that the Plan was used jointly for two separate pipeline operators, namely,
Belle Fourche Pipeline Company, which is a party to this proceeding, and Bridger Pipeline, LLC,
which is not. Petitioner contends in the November Letter that its risk analysis process had been
completed for the Belle Fourche lines as of the date of the inspection, but not for the Bridger
lines, which were acquired in January 2004. The November Letter states that ".
. . the BFPL plan
was complete, for BFPL assets, as of January 2003 some 16 months prior to the inspection. " For
pmposes of this Decision, I have reviewed the Plan as it existed on the date of the inspection and
as it applied to the Belle Fourche facilities identified in the Plan.
Second, Belle Fourche asserts that it only had three pipeline segments that "could affect"
HCAs and that those lines had been assessed as of the inspection date. On the contrary,
' The November Letter states, "In addttion, it is unclear to us exactly on to what plan the violation is being
assessed. Item 2(a) states that BFPL 'had not completed their risk analysis. ' But the BFPL plan was complete,
for BFPL assets, as of January 2003 some 16 months prior to the inspection " Petition, Attachment to
Exhibit C



the Plan identifies the following eight lines as "could-affect" segments" operated by Belle
Fourche:
Bicentennial to Baker Segment 1
Bicentennial to Baker Segment 2
Dickinson Segment 1
Dickinson Segment 2
Dickinson Segment 3
Twenty-mile to Guernsey Segment 2
Twenty-mile to Guernsey Segment 3
Wright Segment 1.
Upon a review of the Plan, it is clear that Belle Fourche operates the pipeline segments
listed above. There is no indication in the Plan that a risk analysis for these segments had
been conducted as of the date of the inspection.
Third, Belle Fourche asserts that it completed a risk analysis for its facilities as of
December 2003 and that it met the requirements of 49 C. F. R. ) 452(c). However,
it is clear from my review of the Plan that it does not include an adequate
explanation of the assessment methods selected or an evaluation of the risk factors
considered in establishing an assessment schedule. In the November Letter,
Petitioner acknowledges as much, stating:
[T]he BFPL plan had very little in the way of risk analysis as stated in
Item 2(a), but that was because there were only 3 "could-affect" line
segments for BFPL, The IM plan laid out a schedule of assessment for
the 3 segments based on easily identifiable risk characteristics in the
text of the plan. A more rigorous risk analysis process was not
warranted for these 3 segments.
Section 195. 452(b) requires each operator to have an IMP that includes a plan to carry out
baseline assessments of all pipeline segments that could affect HCAs. In accordance with
$ 195. 452(c) and (e), an evaluation of risk factors that reflects the conditions on each
covered pipeline segment must be included in a BAP in order to enable selection of the
proper assessment method(s) and intervals, The Plan obtained from Petitioner during the
May 2004 inspection shows that although Belle Fourche had developed the outline of a risk
analysis process, the company had not completed a proper risk analysis of each pipeline
segment that "could affect" a HCA.
Specifically, the Plan states that the assessment methodologies were chosen by evaluating
the risk factors outlined in Appendix A, Section IV. The Appendix, in turn, included
certain worksheets designed to assist with and reflect the risk conditions on each particular
' See Plan at Introduction, p. I, and Appendix C
' Although the Wright System is not identified as a Belle Fourche asset m the introduction to the Plan, the System
descnption in Appendix C indicates that the hne is operated by Belle Fourche
See Plan at Introduction, p. 3.



pipe segment. These worksheets, however, were blank and apparently never used to
complete an actual risk analysis.
Accordingly, I find that the Plan reviewed during the May 2004 inspection did apply to
facilities operated by Belle Fourche, that it included eight pipeline segments that "could
affect" HCAs, and that an adequate risk analysis was not reflected in the Plan for each of
these eights segments. Therefore, I find no basis to modify the finding in the Final Order
that Petitioner violated ) 195. 452(c) by failing to establish a baseline assessment schedule
based upon an evaluation of risk factors identified for each pipeline segment.
III. Notice Item 2 b
Item 2(b) in the Final Order found that Petitioner violated 49 C. F. R. $ 195. 452(c), as stated
above, by failing to perform a seam failure susceptibility analysis on all pipeline segments that
contained low frequency electric resistance welded (ERW) and lap welded pipe to determine
which segments were susceptible to seam failure, prior to selecting appropriate assessment
methods for each segment. Such an analysis is necessary because the assessment method chosen
must be based on the actual risk conditions of each pipeline segment and whether the selected
method is capable of adequately assessing pipe integrity. In this case, a seam failure
susceptibility analysis is needed because Belle Fourche operates pipe segments that contain low
frequency ERW pipe and at least one of Belle Fourche's ERW pipelines, the Donkey Creek to
Guernsey line, has experienced a pipeline release associated with longitudinal seam failure.
In its Petition, Belle Fourche raises three defenses to this allegation. First, it contends that one of
the cited releases was from a 10-inch portion of the Poplar Pipeline and one was &om a 16-inch
portion of the Butte Pipeline, neither of which is owned or operated by Petitioner. Assuming
this is correct, the one failure that did occur on Petitioner's Donkey Creek to Guernsey line still
establishes the need for Belle Fourche to conduct a seam failure susceptiblity analysis for all
those segments constructed of similar pipe.
Second, the Petition states that Belle Fourche was not required under 49 C. F. R. ) 452(d) to
complete an "actual seam failure baseline assessment[s]. . . . until (as applicable to BFP)
2005 (for at least 50 percent of the line) and 2009 for the remainder of the line. " Petition at
5. This is correct but not responsive to the violation cited in Item 2(a). Section 195. 452(c)
requires that Petitioner have had a completed plan at the time of the May 2004 inspection,
not a completed assessment, and that the plan include a seam failure susceptibility analysis
to determine the extent to which pipeline segments containing low frequency ERW or lap
welded pipe were susceptible to seam failure. Because Belle Fourche operated segments
containing low frequency ERW pipe, it was required to perform an analysis to determine
which, if any, of them were susceptible to seam failure. If any segments were found to be
susceptible, then Petitioner was required to choose an assessment method capable of
assessing seam integrity.
' Accordmg to Petitioner, both the Poplar and Butte Pipehnes are owned and operated by Bridger Pipelme, LLC.
' The Twenty-mile to Guernsey hne is constructed of low frequency ERW pipe, which is particularly susceptible to
longitudinal seam failure The Bicentenmal to Baker system, the Wright system, and the Dickinson system are also
constructed of low frequency ERW pipe Belle Fourche was required to analyze the susceptibihty of each of these
ERW pipe segments to longitudinal seam failure



Petitioner's Plan states that its assessment methodologies were chosen "by evaluating
specific risk factors" and refers to Appendix A of the document. Appendix A states that
Appendix C of the Plan lists the assessment method(s) selected for each segment of
pipeline, which was an in-line inspection device known as a standard magnetic flux leakage
tool, However, the Plan acknowledged that seam evaluation analysis was not available
with in-line inspection tools for pipes with a diameter of less than 24 inches and that the
assessments scheduled in its Plan would not be able to address seam integrity. Furthermore,
Petitioner failed to provide any analysis to show that its low frequency ERW pipe was not
susceptible to longitudinal seam failure and therefore that a susceptibility analysis was not
needed.
Third, the Petition contends,
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