# ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 520055023
- **title:** ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2005-07-19
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.306(a), 195.308, 195.310(b)(9), 195.404(a)(1)(vii), 195.406(b), 195.412(a), 195.430, 195.55, 195.555, 195.573(a)(1), 195.573(c), 195.575(e), 195.579(a), 195.589(c).
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- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520055023
**body:**

Notice of Probable Violation involving ALYESKA PIPELINE SERVICE CO. PHMSA's enforcement data identifies the cited regulations as 195.306(a),  195.308,  195.310(b)(9),  195.404(a)(1)(vii),  195.406(b),  195.412(a),  195.430,  195.55,  195.555,  195.573(a)(1),  195.573(c),  195.575(e),  195.579(a),  195.589(c). The case was opened on 2005-07-19 and is reported as closed as of 2010-01-14. Proposed civil penalty: $84,000. Assessed civil penalty: $27,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520055023_Decision on the Petition for Reconsideration_12162009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520055023/520055023_Decision%20on%20the%20Petition%20for%20Reconsideration_12162009.pdf

520055023_Decision on the Petition for Reconsideration_12162009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520055023/520055023_Decision%20on%20the%20Petition%20for%20Reconsideration_12162009_text.pdf

520055023_FinalOrder_07282009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520055023/520055023_FinalOrder_07282009.pdf

520055023_FinalOrder_07282009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520055023/520055023_FinalOrder_07282009_text.pdf

520055023_Operator Petition for Reconsideration_08242009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520055023/520055023_Operator%20Petition%20for%20Reconsideration_08242009.pdf

520055023_FinalOrder_07282009_text.pdf

JUL 28 2009
Mr. Mike Joyner
Senior Vice President
Pipeline and Oil Movements
Alyeska Pipeline Service Company
900 E. Benson Blvd.
P.O. Box 196660
Anchorage, AK 99519-6660
Re: CPF No. 5-2005-5023
Dear Mr. Joyner:
Enclosed is the Final Order issued in the above-referenced case. It makes findings of violation
and assesses a civil penalty of $84,000. The Final Order also specifies actions to be taken by
Alyeska to comply with the pipeline safety regulations and the revision of certain operating and
maintenance procedures. 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 and amendment of procedures
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 Administrator
for Pipeline Safety
Enclosure
cc: Mr. Chris Hoidal, Director, Western Region, PHMSA
CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5630]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
_______________________________
)
In the Matter of )
)
Alyeska Pipeline Service Company, ) CPF No. 5-2005-5023
)
Respondent. )
_______________________________)
FINAL ORDER
On September 13-16 and 27-30, 2004, pursuant to 49 U.S.C. § 60117, a representative of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site pipeline safety inspection of Respondent’s facilities, manuals and
records in Alaska. Alyeska Pipeline Service Company (Alyeska or Respondent) operates the
Trans Alaska Pipeline System (TAPS), an 800-mile pipeline that transports crude oil from the
North Slope of Alaska to the Valdez Marine Terminal. As a result of the inspection, the
Director, Western Region, OPS (Director), issued to Respondent, by letter dated July 19, 2005, 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 had committed certain violations of 49 C.F.R. Part 195, proposed assessing civil
penalties of $84,000 for the alleged violations, and proposed ordering Respondent to take certain
measures to correct the alleged violations. The Notice also proposed, in accordance with 49
C.F.R. § 190.237, that Respondent amend its written procedures for Operations, Maintenance
and Emergencies.
Respondent requested an extension of the deadline to respond to the Notice by letter dated
August 12, 2005. The Director granted the request and extended the deadline to October 24,
2005. Respondent requested a second extension by email dated October 4, 2005. The Director
also granted this request and extended the deadline to December 2, 2005. Respondent explained
that both of its extension requests were based on a need to gather additional information and
develop amended procedures to respond to the Notice.
Respondent responded to the Notice by letter dated December 2, 2005 (Response). The
company contested all of the allegations of violation and many of the allegations that its
procedures were inadequate, and requested a hearing. A hearing was held on March 28, 2006, in
Lakewood, Colorado, with an attorney from the Office of Chief Counsel, PHMSA, presiding.
Respondent was represented by counsel at the hearing. After the hearing, Respondent provided a
closing response (Closing) by letter dated May 26, 2006.



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FINDINGS OF VIOLATION
Items 5(b) and 5(c):
Items 5(b) and 5(c) of the Notice alleged that Respondent violated 49 C.F.R. § 195.404(a), which
states:
§ 195.404 Maps and records.
(a) Each operator shall maintain current maps and records of its pipeline
systems that include at least the following information:
(1) Location and identification of the following pipeline facilities:
(i) Breakout tanks;
(ii) Pump stations;
(iii) Scraper and sphere facilities;
(iv) Pipeline valves;
(v) Facilities to which § 195.402(c)(9) applies;
(vi) Rights-of-way; and
(vii) Safety devices to which § 195.428 applies
Items 5(b) and 5(c) alleged similar violations and are therefore discussed together. Item 5(b)
alleged that Respondent’s “G-100” alignment drawings did not accurately reflect the current
location and identification of certain facilities at the TAPS Pump Station 8 (PS8) and the North
Pole Metering Facility. Specifically, Item 5(b) alleged that Alyeska’s drawings did not reflect
that the PS8 piping was blinded off at the TAPS mainline in 1996, and did not reflect that 6-inch
and 8-inch supply and return lines from TAPS to the North Pole Metering Facility had been
replaced with two 16-inch lines. In its Response and at the hearing, Respondent argued that the
G-100 drawings were in fact accurate because the connections to the mainline still existed, even
though Respondent admitted they were blinded off in 1996. This argument is unpersuasive.
Pump Station 8 is no longer in service. The G-100 drawings reviewed by the OPS inspector
incorrectly indicated that the PS8 pumps remained connected to the mainline and did not reflect
the out-of-service status of PS8.
Item 5(c) also alleged that Respondent’s G-100 drawings did not accurately reflect that the pig
launcher and receiver, reducing flanges, and associated pipeline components had been removed
from Pump Station 10 (PS10) in 1997. In its Response and at the hearing, Respondent indicated
that it had other sets of records that correctly reflected the piping configuration at PS8, PS10, and
the North Pole Metering Facility. Respondent argued that the G-100 drawings for these facilities
are for reference purposes only and are not maintained as “as-built” records. Respondent
indicated it would mark the drawings to indicate that they are “intended for general pipeline and
facility location purposes only,” and are not the most current detailed information on the pipeline
system. In each instance, Respondent argued that it had different records, available to its
employees, that were more current than the G-100 drawings and that therefore it was in
compliance with § 195.404(a).



3
Regarding both Items, Respondent provided OPS with one set of drawings at the inspection but
later indicated that other drawings were the current records required by § 195.404. When
Respondent maintains inconsistent maps and records, Respondent’s employees, emergency
responders, regulators and others viewing the drawings could be left with an incorrect
understanding of the configuration of the pipeline. One purpose of maintaining current maps and
records is to ensure that Respondent’s employees and others have accurate and consistent
documents upon which they can rely when conducting normal operations and maintenance,
responding to emergencies, and in other circumstances. Inconsistent records therefore pose a
threat to pipeline safety.
After considering all of the evidence and issues presented, I find that Respondent violated §
195.404(a) as alleged in Items 5(b) and 5(c) when it failed to keep its G-100 drawings updated to
accurately reflect the current configuration of TAPS at PS8, PS10 and the North Pole Metering
Facility.
Item 6(c):
Item 6(c) of the Notice alleged that Respondent violated 49 C.F.R. § 195.406(b), which states:
§ 195.406 Maximum operating pressure.
(a) ….
(b) No operator may permit the pressure in a pipeline during surges or
other variations from normal operations to exceed 110 percent of the
operating pressure limit established under paragraph (a) of this section.
Each operator must provide adequate controls and protective equipment to
control the pressure within this limit.
Background
Item 6(c) alleged that Respondent did not provide adequate controls and protective equipment to
control the pressure on the discharge side of the TAPS Pump Station 9 (PS9) of TAPS within the
limits prescribed in §195.406(a). Specifically, the Notice alleged that from November 30, 2002,
to October 21, 2003, both of the pressure safety valves (PSVs) on the discharge side of PS9 (i.e.,
39-PICV-905A and 39-PICV-905B) were out of service and therefore could not provide pressure
control for the pump station.
PSVs (also called discharge relief valves) are important safety devices that are used to prevent
the overpressure of TAPS. The purpose of a PSV is to relieve pressure inside the pipeline before
the pressure reaches an unsafe level. When pipeline pressure reaches a predetermined set point,
the PSV is designed to open and allow oil to flow into a relief system so that the pipeline
pressure can be reduced to a safe level.
An OPS inspector observed that records provided during the inspection for PSV 39-PICV-905A
(Valve A) indicated that Valve A was blocked in and taken out of service on January 18, 2002,
and returned to service on April 25, 2004. Respondent does not dispute that Valve A was out of
service during this period. The OPS inspector also observed that the records for PSV 39-PICV-



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905B (Valve B) indicated that Valve B was out of service on November 30, 2002, through
October 21, 2003.
In its Response, at the hearing, and in its Closing, Respondent presented evidence and arguments
in defense of OPS’ allegation of violation regarding Valve B. Respondent requested withdrawal
of the allegation of violation in Item 6(c), and the associated proposed penalty and compliance
order.
Discussion
In its Response, Alyeska argued that Valve B was in service during the time in question. The
company explained that the records it provided to OPS during the inspection erroneously
indicated that Valve B was out of service.1 Alyeska further explained that the technician who
performed maintenance on Valve A, which Respondent acknowledged was out of service,
incorrectly associated his Valve A field notes with those for Valve B. Respondent stated that
these “maintenance record keeping errors in the field […] could lead to the conclusion that both
discharge relief valves were simultaneously out of service for the referenced time period.”2
In its Response, the company provided documents from its electronic work order system and
documents indicates, however, that they only refer to maintenance activities; the documents do
not indicate whether Valve B was actually in service. Therefore, I find that these documents do
not constitute sufficient evidence to prove that Valve B was actually in service.
argued that they showed Valve B was actually in service in 2002 and 2003.3 A review of the
During the hearing, Alyeska stated that it would supply additional records and explanation on
this issue in its Closing. In support of its position, Respondent provided an explanation of its
electronic work order system for inspection and maintenance tasks. Respondent explained that
this system automatically generates work orders for inspection and maintenance tasks for each
PSV and that each order contains instructions, called Safe Maintenance Procedures (SMPs), for
performing that specific task. Respondent explained that when its electronic system creates a
work order, an instrument technician takes the SMP form into the field to conduct the PSV test,
initialing each step on the form as the test is performed. Respondent provided the initialed and
signed SMP documents for 2002 and 2003 as evidence that Valve B was actually in service.4
Upon review of these 2002-2003 documents, I find that they do not support Respondent’s
contention that Valve B was actually in service during this time period. Alyeska’s 2002 SMP
contains 62 steps that an instrument technician must perform to complete the PSV function test
1 Response, Finding No. 6c at 2 (Dec. 2, 2005).
2 Id.
3 Id., Ex. 17 and 18. These exhibits include “Work Orders” and “Task Completion Processing” documents for
Valve B for 2002 and 2003.
4 Closing at 4 (May 26, 2006). See Ex. 67, SMP-I19-043, signed and dated 11/30/02, and Ex. 68, SMP-I19-043
signed and dated 10/21/03.



5
and other related tests.5 Steps 1 through 34 involve testing of the PSV and include procedures
for testing preparation, pre-test, function testing and returning the valve to service. Steps 33 and
34 cover returning the PSV to service after testing.6 For the 2002 function test, nearly all steps,
but not steps 33 and 34, were initialed as having been completed.7 Therefore, the 2002 SMP
documentation shows that Valve B was apparently not placed into service after the function test
was performed. If anything, Alyeska’s own documentation supports the allegation that Valve B
was out of service in 2002.8
During the hearing, Alyeska invited the OPS inspector to PS9 to meet with company staff for
another review of Valve B-related documents. Although there may be situations in which it is
necessary for OPS personnel to make site visits to clarify issues regarding an alleged violation,
this is not one of them. The evidence relevant to this allegation is contained in Respondent’s
records, which it had ample opportunity to provide to OPS at the inspection and before, during
and after the hearing.
In its Response, Alyeska also argued that even if both PSVs were out of service, the company
still had adequate controls and protective equipment to prevent overpressure at PS 9.9
Respondent explained that it had an Operations Control Center procedure that, if triggered,
would require adjustment of pressure control equipment set points all along TAPS if that relief
equipment at any given pump station were out of service.10
I reject Respondent’s argument. Section 195.406(b) requires that Respondent have adequate
controls and protective equipment to control the pressure on the discharge side of PS 9 within the
limits established under § 195.406(a). While Respondent argued that it had procedures to keep
the pipeline safe even with both discharge PSVs out of service, it provided no evidence that such
procedures would have served as adequate controls. Furthermore, even if Respondent had
provided such evidence, the company still failed to have the necessary protective equipment
when both valves were out of service.
Summary Findings
PHMSA provided Alyeska several opportunities to submit evidence to refute OPS’ allegation
and evidence regarding this issue. However, none of the documents that Respondent provided
5 Response, Ex. 67.
6 Id. at 4.
7 Id. All steps leading up to those involved in returning the valve to service were initialed, except for step 22.
Though the Respondent did fill in blanks within step 22 with technical data.
8 The 2003 SMP documentation shows that after the October 21, 2003 Valve B test was conducted, the technician
put Valve B back into service. (Response, Ex. 68). This is consistent with the allegation in the Notice that Valve B
was out of service until October 21, 2003.
9 Response, Finding No. 6(c) at 2.
10 Id. and see Ex.19 “Department Operating Procedure Operations Control Center, OCC-3.01 Pressure Control Set
Points.”



6
constitute adequate proof that Valve B was actually in service during the time in question.
Accordingly, upon considering all of the evidence, I find that Valve A and Valve B were out of
service from November 30, 2002 to October 21, 2003 and that, as a result, Alyeska did not have
adequate controls and protective equipment during that period to control the pressure on the
discharge side of PS9 within the limits established according to § 195.406(a). I also find that
Respondent’s procedures and controls do not constitute an acceptable alternative or substitute for
providing adequate protective equipment.
Item 8:
Item 8 of the Notice alleged that Respondent violated 49 C.F.R. § 195.430, which states:
§ 195.430 Firefighting equipment.
Each operator shall maintain adequate firefighting equipment at each
pump station and breakout tank area. The equipment must be-
(a) In proper operating condition at all times;
(b) Plainly marked so that its identity as firefighting equipment is
clear; and,
(c) Located so that it is easily accessible during a fire.
Item 8 alleged that Alyeska violated § 195.430 by failing to maintain adequate firefighting
equipment at each pump station and breakout tank area. Specifically, the Notice alleged that the
company had removed all incipient firefighting equipment from the PS8 manifold building. The
Notice explained that the lack of such equipment would hinder Respondent’s ability to
extinguish fires within the manifold building. It also explained that the manifold building
housed a portion of the TAPS 48-inch mainline pipe, two 48-inch ball valves, and 42-inch and
36-inch blind flanges.
In its Response, Alyeska contested the allegation and argued that because the manifold building
was unheated, unoccupied, and did not contain combustible materials, fire extinguishers in the
building would be “superfluous.”11 exception for non-operational pump stations or unheated or unoccupied pump station buildings,
nor does compliance with the regulation turn on the presence of combustible materials. Section
195.430 requires Respondent to maintain adequate firefighting equipment at each pump station
and breakout tank area.
This argument is unconvincing. Section 195.430 contains no
At the hearing, the company indicated that it would comply with the proposed compliance order
associated with Item 8 by installing fire extinguishers in the enclosed manifold building at PS8
and in all other enclosed manifold buildings at non-operational pump stations. After the hearing,
OPS confirmed that fire extinguishers had been installed at PS8.
Accordingly, upon consideration of all of the evidence, I find that Respondent violated § 195.430
by failing to have fire extinguishers in the manifold building at PS8.
11 Response, Finding No. 8 at 2.



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Items 10(a) and 10(b):
Items 10(a) and 10(b) of the Notice alleged that Respondent violated 49 C.F.R. § 195.573(a),
which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine whether
cathodic protection required by this subpart complies with § 195.571:
(1) Conduct tests on the protected pipeline at least once each calendar
year, but with intervals not exceeding 15 months. However, if tests at those
intervals are impractical for separately protected short sections of bare or
ineffectively coated pipelines, testing may be done at least once every 3
calendar years, but with intervals not exceeding 39 months.
Background
Items 10(a) and 10(b) concern similar allegations and are therefore discussed together. Item
10(a) alleged that Respondent violated § 195.573(a)(1) by failing to conduct tests in 2003 of the
cathodic protection system on TAPS at cased road crossings at Mile Posts 449.46, 449.53,
455.33, 455.37, 460.24, 460.26, and 474.51. The Notice alleged that the last survey at these
locations was conducted on June 1, 2002, 29 months before the date of the inspection and
beyond the maximum 15-month testing interval set out in § 195.573(a)(1).
Item 10(b) alleged that Respondent violated § 195.573(a)(1) by failing to conduct tests in 2003
of the cathodic protection system on TAPS at cased road crossings at Mile Posts 573.81, 538.56,
541.33, 545.79, 545.83, 552.25, 561.86, 570.63, 579.48 and 606.19. The Notice alleged that the
last survey at these locations was conducted on June 4, 2002, 27 months before the date of the
inspection and beyond the maximum 15-month testing interval set out in § 195.573(a)(1).
As OPS and Respondent discussed at the hearing, both 10(a) and 10(b) alleged that Respondent
failed to conduct tests of road casings at the cited locations for electrical isolation from the TAPS
mainline. The Notice alleged that the omission of such tests constituted a failure to comply with
§ 195.573(a)(1). At the hearing, OPS took the position that § 195.573(a)(1) requires casing
isolation testing on the same annual frequency as that of testing of the cathodic protection levels
on the mainline pipe. At the hearing, in its Response and Closing, Alyeska took the position that
casing isolation tests are covered solely by § 195.575 and that, therefore, the annual interval set
out in § 195.573(a)(1) does not apply.
Casings are buried metal pipes through which the TAPS mainline passes beneath roads and other
obstacles. Alyeska installs casings so that they are electrically isolated from the TAPS mainline
pipe. There is good reason for this. The purpose of electrical isolation is to allow the cathodic
protection system on the mainline pipe to function effectively. If a casing is not electrically
isolated from the mainline pipe (i.e., if it is “shorted”) the mainline cathodic protection system
will supply current to the casing, rather than the mainline pipe as intended.



8
Inadequate cathodic protection is a threat to pipeline safety because it increases the likelihood of
external corrosion. External corrosion threatens pipeline safety because, if it progresses
unchecked, it may cause the failure of the mainline pipe and increase the risk of harm to life,
property and the environment.
The allegations in the Notice and the discussions at the hearing raise the issue of what testing
interval applies, if any, to the testing of casings for electrical isolation.
Discussion
The Notice alleged that Respondent failed to comply with § 195.573(a)(1) when it failed to test
annually whether its road casings were electrically isolated from the TAPS mainline.
Respondent’s procedures in place at the time of the inspection required the company to test road
casings for isolation from the mainline pipe once each year but with intervals not to exceed
fifteen (15) months.12 Respondent agreed that it did not conduct annual casing isolation tests as
required by its own procedure.13 However Respondent argued that the one-year testing
procedure was based on Respondent’s “incorrect interpretation of the regulations.”14
Respondent argued that § 195.575, not § 195.573(a)(1), applies to the testing of casings for
isolation. Respondent argued that isolation testing is “separate and distinct from testing to assure
adequate levels of CP required by § 195.573(a)(1).”15 Respondent then asserted that it could
select the testing interval of its choice because § 195.575 does not specify an interval for casing
road casings on a triennial rather than annual basis. In its Closing, Respondent also argued that
no finding of violation is appropriate because it was not on notice of the annual isolation testing
requirement.
isolation tests.16 On that basis, Respondent indicated that it had changed its procedures to test
I reject Respondent’s legal argument regarding the regulatory requirements applicable to casings.
Section 195.573(a)(1) requires Respondent to test its pipeline for compliance with the cathodic
protection criteria requirements set forth in § 195.571 on an annual basis, but not to exceed 15
months. The main purpose of this annual testing requirement is to provide Respondent with
information about the effectiveness of its cathodic protection system such that it can correct
deficiencies within a reasonable time and prevent pipeline safety risks associated with external
corrosion.
If Alyeska fails to test annually the road casings to determine if they are isolated from the
mainline pipe, the company does not get an accurate picture of the effectiveness of its cathodic
protection system on the mainline pipe inside the casing. Annual cathodic protection testing on
the mainline may not reveal a shorted casing and could give the impression that the cathodic
12 Id.
13 Response, Finding No. 10(a) at 2.
14 Id.
15 Response, Finding No. 10(a) at 4.
16 Response, Finding No. 10(a) at 2.



9
protection on the mainline pipe meets the requirements of §195.571, when, in fact, protection
may not be adequate. For example, testing of the cathodic protection on the mainline pipe at
either end of a cased crossing may show adequate protection, but a short may be present inside
the casing. If the casing itself is not tested for isolation, a short could persist, resulting in
inadequate cathodic protection on the mainline pipe at the location of the short and increasing the
likelihood of external corrosion at that location. External corrosion could occur undetected,
particularly in years between Respondent’s periodic in-line inspection (ILI) runs.
The preamble to the 2001 amendments to the Part 195 corrosion control regulations explains
why the casing requirements in § 195.575 do not include an inspection frequency.17 The
discussion supports the position that the annual testing requirement in § 195.573(a)(1) was
intended to apply also to casing isolation tests. In the Final Rule preamble to the electrical
isolation regulations, PHMSA discussed a commenter’s suggestion that § 195.575 should include
a specified testing frequency for casing isolation.18 PHMSA explained that the purpose of the
inspection required by § 195.575 was to ensure that electrical isolation is adequate when the
isolation is first installed.19 PHMSA elaborated that “all post-installation inspections and tests of
test for casing isolation can undermine effectiveness of cathodic protection and the accuracy of
mainline cathodic protection test results, the preamble supports the inclusion of casing isolation
testing in the annual testing requirement.
cathodic protection facilities are covered by final § 195.573.”20 In light of the fact that failure to
In its Closing, Alyeska took the position that during the hearing OPS had agreed to convert Items
10(a) and 10(b) to Notice of Amendment (“NOA”) Items. There was discussion at the hearing
about Respondent having changed its procedures since the inspection from annual to triennial
testing. OPS had encouraged Respondent to change its procedures back to testing once every
calendar year but not to exceed 15 months. As discussed above, this change must be made to
comply with the regulations. Furthermore, OPS did not concede that a finding of violation and
civil penalty was not warranted for exceeding the maximum 15-month interval for conducting
isolation tests of the road casings as required by § 195.573(a)(1). However, based on
discussions at the hearing, the proposed compliance order associated with Items 10(a) and 10(b)
is hereby reduced to a Notice of Amendment and will be addressed in the Amendment of
Procedures section of this Final Order. In its Closing, Respondent committed to amending its
procedures in accordance with the proposed compliance order.21
Accordingly, based upon consideration of all of the evidence in the record and the legal issues
raised, I find that Respondent failed to comply with § 195.573(a)(1) when it failed to test
17 See Final Rule, Controlling Corrosion on Hazardous Liquid and Carbon Dioxide Pipelines, 66 FR 66994, Dec.
27, 2001.
18 Id. at 67000.
19 Id.
20 Id.
21 Closing at 5.



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annually its road casings for isolation at the cited locations. I also find that the annual testing
requirement set out in § 195.573(a)(1) includes annual electrical isolation testing of all casings.
Item 10(c):
Item 10(c) of the Notice alleged that Respondent violated 49 C.F.R. § 195.573(c), which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) ….
(c) Rectifiers and other devices. You must electrically check for proper
performance each device in the first column at the frequency stated in the
second column.
Device Check Frequency
Rectifier At least six times each calendar year, but
with intervals not exceeding 2½ months.
Other interference bond At least once each calendar year, but with
intervals not exceeding 15 months.
Item 10(c) alleged that Respondent violated § 195.573(c) by failing to electrically check for
proper performance each rectifier on TAPS at least six times each calendar year, but with
intervals not exceeding 2½ months. Specifically, the Notice alleged that Alyeska failed to timely
inspect the 40-EEQ-86 cathodic protection rectifier for Tank 200 at PS10. In its Response and at
the hearing, Alyeska explained that because PS10, including Tank 200, was no longer
operational and had been cleaned and disconnected from TAPS in 1996, the 40-EEQ-86 rectifier
was no longer in use.22 In its Response and at the hearing, the company explained that it had no
intention of using Tank 200 in the future and that it would eventually be dismantled.
Because Tank 200 was cleaned, removed from service and disconnected from TAPS in 1996, I
find that, at the time of the inspection, the 40-EEQ-86 cathodic protection rectifier associated
with Tank 200 was not subject to the requirements of § 195.573(c). Accordingly, upon
consideration of all of the evidence, I order that the allegation of violation in Item 10(c) and the
associated proposed compliance order be withdrawn.
Respondent is reminded that if it chooses to place Tank 200 back into service in the future, it
must verify the integrity of the tank and the associated cathodic protection system and comply
with all other applicable provisions of the Pipeline Safety Laws and regulations.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative 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
22 Hearing Presentation, Item 10(c) at 5.



11
related series of violations.
49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of a civil
penalty, I consider the following criteria: the nature, 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 $84,000 for violations of §§ 195.404(a), 195.406(b),
195.430, and 195.573(a)(1).
Items 5(b) and 5(c) proposed penalties of $1,000, respectively, for two violations of
§195.404(a). Respondent requested that PHMSA eliminate the proposed civil penalties for these
Items on the basis of its argument that it did not violate the regulation. As discussed in the
findings of violation, I found that Alyeska violated § 195.404(a) when it failed to keep and
provide accurate maps of PS8, PS10, and the North Pole Metering Facility. Respondent
provided no information that would warrant reduction of the proposed penalties. Having
reviewed the record and considered the assessment criteria, I assess Respondent civil penalties of
$1,000 for Item 5(b) and $1,000 for Item 5(c).
Item 6(c) proposed a penalty of $55,000 for violation of § 195.406(b). Respondent requested
that PHMSA eliminate the proposed civil penalty for this Item on the basis of its argument that it
did not violate the regulation. The regulation requires Respondent to provide adequate controls
and protective equipment to control pressure within the limits established under § 195.406(a).
Respondent submitted numerous documents at the inspection and before, during and after the
hearing to show that it had adequate controls and protective equipment in place at the time of the
inspection. However, none of these documents were sufficient to prove Respondent’s argument.
As a result, I have found that Respondent failed to have adequate controls and protective
equipment to control pressure in TAPS. Compliance with this regulation is a key means of
preventing pipeline failures due to overpressure. Respondent has provided no information that
would warrant reduction or elimination of the penalty. Having reviewed the record and
considered the assessment criteria, I assess Respondent a civil penalty of $55,000 for Item 6(c).
Item 8 proposed a penalty of $1,000 for violation of § 195.430. Respondent requested that
PHMSA eliminate the proposed civil penalty for this Item on the basis of its argument that it did
not violate the regulation. The regulation requires Respondent to maintain adequate firefighting
equipment at each pump station and breakout tank area. Respondent did not have firefighting
equipment in the PS8 manifold building. Respondent has provided no information that would
warrant reduction or elimination of the penalty. Having reviewed the record and considered the
assessment criteria, I assess Respondent a civil penalty of $1,000 for Item 8.
Items 10(a) and 10(b) proposed penalties of $14,000 and $12,000, respectively, for violations of
§ 195.573(a)(1). Respondent requested that PHMSA withdraw the proposed civil penalties for



12
these Items. First, Respondent argued that it committed no violation of the regulation. As
discussed in the Findings of Violation, 49 C.F.R. § 195.573(a)(1) requires Respondent to conduct
annual tests of the adequacy of its cathodic protection system, including tests to determine
whether pipeline casings are electrically isolated from the mainline pipe. Electrically shorted
casings may interfere with cathodic protection and result in inadequate protection. An operator
does not have a full and accurate picture of the adequacy of its cathodic protection unless it
conducts annual casing isolation tests. Respondent’s failure to annually test casing isolation
could result in significant threats to pipeline safety.
Second, Respondent argued that the penalty for this Item should be withdrawn for procedural
reasons. It argued that because OPS decided to treat these Items as more appropriate for
resolution through an NOA rather than a compliance order, then no penalties should be imposed.
Respondent indicated that the regulations “do not include proposed civil penalties in conjunction
with NOAs.”23 The Final Order makes findings that Respondent violated § 195.573(a)(1) for
failing to test annually the electrical isolation of road casings at the cited locations. Civil
penalties may also be imposed on the basis of such findings of violation.24 The Final Order also
treats the proposed compliance order proposing to require Respondent to amend its procedures
for compliance with § 195.573(a)(1) as an NOA. The regulations permit the use of an NOA in
addition to, and in conjunction with, the appropriate enforcement actions in 49 C.F.R. Part 190,
Subpart B.25
Third, Respondent argued that it should not be subject to a penalty because the “plain language
of 49 C.F.R. § 195.575 does not require isolation testing on a one-year interval.”26 Respondent
argued that it was not on notice that annual isolation testing was required. As discussed in the
findings of violation, Respondent was on notice of the annual casing isolation testing
requirement. Notice was provided in the 2001 amendments to the Part 195 corrosion control
regulations, which explained the lack of a specific testing interval in § 195.575 and the
applicability of the annual testing interval in § 195.573 to all “post-installation testing of
cathodic protection facilities.”27
Finally, Respondent argued that a civil penalty “arguably violates procedural due process”
presumably because of a lack of notice that PHMSA interpreted § 195.575 as requiring annual
testing.28
Beyond this statement, Respondent has stated no legal or factual basis for its
23 Closing at 4.
24 49 C.F.R. § 190.223(a).
25 49 C.F.R. § 190.237(b) states: “The amendment of an operator’s plans or procedures prescribed in paragraph (a)
of this section is in addition to, and may be used in conjunction with, the appropriate enforcement actions prescribed
in this subpart.”
26 Closing at 5.
27 Supra note 19, at 67000.
28 Closing at 5.



13
“arguable” procedural due process claim and none is apparent from a thorough review of the
record.
Respondent provided no information that would warrant reduction of the proposed penalty.
Having reviewed the record and considered the assessment criteria, I assess Respondent civil
penalties of $14,000 for Item 10(a) and $12,000 for Item 10(b).
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a total civil penalty of $84,000.
Respondent has provided no information that indicates payment of this 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. Treasury. 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 269039, Oklahoma City, OK 73125; (405) 954-8893.
Failure to pay the $84,000 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 (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a United
States District Court.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 5(b), 5(c), 6(c), 8, 10(a), 10(b),
allegation of violation was withdrawn. Therefore, the proposed compliance order for Item 10(c)
is no longer necessary. With respect to Items 10(a) and 10(b), on the basis of discussions
between OPS and Respondent at the hearing, the proposed compliance order related to these
Items will be treated as a Notice of Amendment, addressed in the Amendment of Procedures
and 10(c) in the Notice for violations of 49 C.F.R. Part 195.29 With respect to Item 10(c), the
section of this Final Order. The Director has indicated that Respondent has taken the actions
specified in the proposed compliance order to address Item 8. Accordingly, since compliance
has been achieved with respect to this violation, the compliance terms are not included in this
Orde
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