{"operation":"document","citation":"CPF 520065018","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":"2006-04-19","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(h)(2), 195.452(h)(4)(i)(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520065018.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520065018.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520065018","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520065018","body":"Notice of Probable Violation involving ALYESKA PIPELINE SERVICE CO. PHMSA's enforcement data identifies the cited regulations as 195.452(h)(2),  195.452(h)(4)(i)(c). The case was opened on 2006-04-19 and is reported as closed as of 2011-11-16. Proposed civil penalty: $350,000. Assessed civil penalty: $263,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520065018_ Petition for Reconsideration_02082010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_%20Petition%20for%20Reconsideration_02082010.pdf\n\n520065018_Compromise Agreement and Order_11162011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Compromise%20Agreement%20and%20Order_11162011.pdf\n\n520065018_Compromise Agreement and Order_11162011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Compromise%20Agreement%20and%20Order_11162011_text.pdf\n\n520065018_Decision on Petition for Reconsideration_03012010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Decision%20on%20Petition%20for%20Reconsideration_03012010.pdf\n\n520065018_Decision on Petition for Reconsideration_03012010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Decision%20on%20Petition%20for%20Reconsideration_03012010_text.pdf\n\n520065018_Final Order_01132010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Final%20Order_01132010.pdf\n\n520065018_Final Order_01132010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Final%20Order_01132010_text.pdf\n\n520065018_Decision on Petition for Reconsideration_03012010_text.pdf\n\nMAR 1 2010\nMr. Mike Joynor\nSenior Vice President\nOil Movements, Engineering and Pipeline\nAlyeska Pipeline Service Company\n900 E. Benson Blvd.\nP.O. Box 196660\nAnchorage, AK 99519\nRe: CPF No. 5-2006-5018\nDear Mr. Joynor:\nEnclosed is the Decision on the Petition for Reconsideration filed by Alyeska Pipeline Service\nCompany in the above-referenced case. The decision denies your petition in all respects except\nthat Requirement 3 in the Compliance Order has been stricken. The remaining terms of the Final\nOrder are in effect, including the assessment of a civil penalty in the amount of $263,000, and\nthe actions specified therein to comply with the pipeline safety regulations. When the civil\npenalty has been paid and the terms of the compliance order completed, as determined by the\nDirector, Western Region, this enforcement action will be closed. Service of this document is in\naccordance with 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Chris Hoidal, Director, Western Region, PHMSA\nSheila Doody Bishop, Counsel, Alyeska Pipeline Service Co.\n900 E. Benson Blvd., P.O. Box 196660, Anchorage, AK 99519\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2472 5057]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nAlyeska Pipeline Service Company, ) CPF No. 5-2006-5018\n)\n)\n)\nPetitioner. )\n____________________________________)\nDECISION ON PETITION FOR RECONSIDERATION\nOn January 13, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued a Final Order in this case finding that Alyeska Pipeline Service Company (Alyeska or\nPetitioner) had committed two violations of the hazardous liquid pipeline safety regulations. In\nItem 1 of the Final Order, Alyeska was found to have violated 49 C.F.R. § 195.452(h)(2) by\nfailing to promptly obtain, within 180 days after an integrity assessment, sufficient information\nabout anomalous conditions on the pipeline to determine if they present a potential threat to\nintegrity. In Item 2, Alyeska was found to have violated § 195.452(h)(3) and (h)(4)(i)(C) by\nfailing to complete remediation of an anomalous condition according to a schedule for\nimmediate repair, and by failing to temporarily reduce operating pressure or shut down the\npipeline until completing the repair. The Final Order assessed a total civil penalty of $263,000\nfor the violations, reduced from the proposed amount of $350,000. The Final Order also\nspecified actions to be taken by the company to comply with the pipeline safety regulations\n(Compliance Order).\nAlyeska responded to the Final Order as permitted under § 190.215 by submitting a Petition for\nReconsideration dated February 8, 2010 (Petition). In its Petition, Alyeska requested\nreconsideration of the civil penalty and the associated compliance terms for Item 1.\n1\nSection 190.215 provides that a respondent may petition the Associate Administrator for\nreconsideration of a final order. The Associate Administrator does not consider repetitious\ninformation, arguments, or petitions, but may consider additional facts or arguments, provided\nthat the respondent submits a valid reason why such information was not presented prior to\nissuance of the final order. The Associate Administrator may grant or deny, in whole or in part,\na petition for reconsideration without further proceedings, but may request additional\ninformation, data, and comment as deemed appropriate. This rule allows a respondent to present\ninformation or arguments that were unavailable or unknown prior to issuance of the final order,\nand gives PHMSA an opportunity to correct any errors. Section 190.215 further provides that a\npetition must be received by PHMSA no later than 20 days after service of the final order.\n1 Alyeska also requested a stay of the compliance order pending PHMSA’s issuance of a decision on its petition, but\nthat request is rendered moot by this decision.\n\n\n\n2\nAt the outset, Alyeska noted that PHMSA’s regulation provides that service of a final order by\ncertified mail “is complete upon mailing.\nprecise date of mailing, and therefore could not calculate 20 days from the date of service to\ndetermine the deadline for filing its Petition. For this reason, the company requested that\nPHMSA accept its Petition as timely filed. I find nothing in the record demonstrating the precise\ndate PHMSA mailed the Final Order. Therefore I find no reason to deny that Alyeska’s petition\nis timely.\n”2 Alyeska maintained that it could not determine the\nI. Civil Penalty for Item 1\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of the respondent’s culpability; the\nhistory of the respondent’s prior offenses; the respondent’s ability to pay the penalty and any\neffect that the penalty may have on its ability to continue doing business; and the good faith of\nthe respondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require.\nItem 1 in the Final Order assessed a civil penalty of $173,000 for the violation of\n§ 195.452(h)(2). This penalty was reduced from the proposed amount of $260,000. The\nreduction and final assessment of the penalty in the Final Order were based on the above-\nreferenced assessment criteria. In particular, I found the nature and circumstances of Petitioner’s\nfailure to obtain complete and accurate information about anomalous conditions on its pipeline\nfor more than five months beyond the regulatory deadline justified the assessment of the full\nproposed penalty amount. On the other hand, I found Petitioner had received some preliminary\ninformation that permitted the company to determine, at least initially, that there were no\nconditions that necessitated immediate repair—supporting my conclusion that the gravity of the\nviolation warranted some reduction to the proposed amount.\nI further determined that Alyeska was culpable for the violations, and that the company’s history\nof prior offenses supported the penalty. I also found Alyeska was able to pay the penalty without\nadversely affecting its ability to continue in business. Finally, I considered the extent to which\nthe company had taken good faith steps to comply with the regulations, but in light of the other\nassessment criteria, I found such efforts did not warrant further reduction to the already-reduced\npenalty.\nIn its Petition, Alyeska argued that PHMSA failed in several respects to properly consider the\nassessment criteria and to meet its burden of persuasion by providing sufficient evidence to\nsupport the assessment of the civil penalty.\nA. Culpability\nFirst, Alyeska contended the Final Order erroneously considered culpability. Petitioner argued\nthat PHMSA equated culpability with “responsibility,” contrary to the definition of culpability in\nBlack’s Law Dictionary and in two administrative decisions from the Environmental Protection\n2 § 190.5.\n\n\n\n3\nAgency, which defined culpability to mean purposely, knowingly, recklessly, negligently, or in\nwanton or reckless disregard for consequences. Alyeska argued further that the Final Order did\nnot support the proposition that Alyeska acted with culpability as there is no evidence of\nculpability in the record. For this reason, Petitioner contended that PHMSA’s finding of\nculpability is arbitrary and capricious, and must be withdrawn.\nA standard dictionary definition of culpability is “[d]eserving of blame or censure as being\nwhether the company deserves the blame for the violation that occurred. The Final Order found\nthat Alyeska operated the subject pipeline during the time in question, and therefore was\nresponsible for compliance with the applicable pipeline safety regulations. This fact is well-\nsupported in the record. Moreover, Alyeska neither contended that another entity was\nwrong, evil, improper, or injurious.”3 When evaluating an operator’s culpability, I determine\nresponsible for compliance nor that another entity deserves the blame for the violations that\noccurred. For these reasons, the Final Order found that Alyeska was culpable, that is, the\ncompany deserves the blame for the violations that occurred on the pipeline system during the\ntime in question. I find nothing in Alyeska’s Petition that warrants altering this determination.\nB. History of Prior Offenses\nSecond, Alyeska contended that the Final Order erroneously considered the company’s history of\nprior offenses. Petitioner argued that PHMSA had improperly considered previous enforcement\ncases in which Alyeska had not violated the same regulation at issue in this case (§ 195.452),\nimproperly considered cases that had not yet reached final resolution at the time the Notice was\nissued, and generally failed to account for petitions for reconsideration and consent agreements\nthat reduced penalties, withdrew findings, and eliminated compliance orders.\nWhile a repeat violation of the exact same regulatory section is certainly the most acute example\nof a prior offense, I am not precluded from considering Alyeska’s overall compliance history,\nincluding all previous violations of the pipeline safety regulations regardless of regulatory\nsection number.\nconsider not only instances of past violations of the same regulation, but also the company’s\nhistory of other offenses, such as prior violations of other regulations, the extent to which such\nviolations resulted in civil penalties, and whether corrective action was necessary.\n4 Accordingly, when evaluating Alyeska’s history of prior offenses, I may\nWith respect to the finality of prior offenses, I affirm that my consideration of Alyeska’s history\nof prior offenses included the consideration of only final determinations, that is, only decisions\non reconsideration in cases where a petition for reconsideration had been filed, and only final\norders and orders directing amendment in cases where a petition had not been filed. I may\nconsider such prior offenses even if the final determinations in those cases post-date the Notice\nin this case, because the prior offenses and violations were committed by Alyeska prior to the\nNotice in this case.\n3 The American Heritage Dictionary of the English Language 442 (4th ed. 2000).\n4 See also 49 U.S.C. § 60122(b)(2)(B) and 49 C.F.R. § 190.225(b)(2), which authorizes PHMSA to consider such\nother matters as justice may require in determining the amount of a civil penalty.\n\n\n\n4\nApproximately eight of the ten prior cases referred to in the Final Order resulted in findings that\nAlyeska violated the pipeline safety regulations.\n5 Six of the ten cases involved a final\nassessment of civil penalties for violations, and nine of the ten cases involved the completion of\ncompliance terms by Alyeska or amendment of its procedures.6 These are just the cases initiated\nagainst Alyeska in the six years prior to issuance of the Notice in this case.\nThe Final Order found the significance of the enforcement history against Alyeska supported\nassessment of the penalty amount. After considering Alyeska’s Petition, I find no reason to alter\nthe determination in the Final Order.\nC. Good Faith in Attempting to Achieve Compliance\nFinally, Alyeska contended that the Final Order improperly considered the company’s good faith\nin attempting to achieve compliance. As stated in the Final Order, I “considered the extent to\nwhich Respondent was cognizant of the relevant requirements and took good faith steps to\ncomply with the regulations,” but found that its efforts did not warrant further reduction to the\ncapricious to not further reduce the civil penalty, because the Final Order did not reference any\npenalty “[i]n light of the other assessment criteria.”7 Alyeska contended that it was arbitrary and\nevidence that Alyeska’s good faith was insufficient to justify reducing the penalty further.\nThe Final Order discussed in detail the evidence of the violation, including the nature,\ncircumstances, and gravity of the violation. The Final Order determined that such evidence and\nassessment criteria considerations outweighed any reason to reduce the civil penalty further for\nAlyeska’s attempt to achieve compliance. After further review, I affirm that this determination is\nsupported by the evidence. I find no reason to alter the decision set forth in the Final Order.\nFor all of the reasons discussed above, I deny Alyeska’s request to modify the assessment of the\ncivil penalty for Item 1.\nPayment of the civil penalty must be made within 20 days of service of this Decision. The\npayment instructions are set forth in detail in the Final Order. Failure to pay the $263,000 civil\npenalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C.\n§ 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late\npenalty charge of six percent (6%) per annum will be charged if payment is not made within 110\ndays of service. Furthermore, failure to pay the civil penalty may result in referral of the matter\nto the Attorney General for appropriate action in a United States District Court.\nII. Compliance Order for Item 1\nIn accordance with 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, PHMSA may issue an order\ndirecting compliance with the pipeline safety regulations. The Final Order included a\nCompliance Order that set forth corrective actions required to be taken by Alyeska to comply\n5 The other two had not alleged violations, but rather inadequate procedures, resulting in the issuance of orders\ndirecting amendment under § 190.237.\n6 These figures already take into consideration the consent agreement.\n7 Final Order at 9.\n\n\n\n5\nwith the pipeline safety regulations. In the Final Order, I acknowledged that Alyeska had argued\nthat such actions were unnecessary because they had already been completed. I found, however,\nthat the record lacked adequate documentation demonstrating the details of those efforts. In\nparticular, I determined that Alyeska had not submitted documentation demonstrating the\ncompletion of the compliance terms.\nIn its Petition, Alyeska contended that PHMSA ignored the facts in the record regarding the\nwork already completed by the company. Petitioner argued that it had provided details of its\nactions to PHMSA in its initial response to the Notice and again at the hearing. Alyeska again\nproceeded to explain in its Petition the actions it has taken.\nUnder § 190.215, I do not consider repetitious arguments that were made prior to issuance of the\nFinal Order. I have already determined that the information provided by Alyeska to PHMSA as\nof the date of the Final Order did not demonstrate compliance with the terms of the Compliance\nOrder, and Alyeska has not offered any additional documentation in its Petition demonstrating\ncompliance that would enable me to verify that the actions taken satisfy the compliance terms.\nAccordingly, I do not alter the finding in the Final Order that the record does not demonstrate the\ncompliance terms have been satisfied.\nAlyeska must therefore complete the actions specified in the Compliance Order within the\noriginal deadlines specified therein, except as provided below under Section III.\n8\nIII. Documentation of Safety Improvement Costs\nAmong the requirements in the Compliance Order, Requirement 3 specified that Alyeska must\nmaintain documentation of the safety improvement costs associated with fulfilling the\nCompliance Order and report the total costs. With regard to this requirement, Petitioner\ncontended, among other things, that PHMSA failed to base the provision on a pipeline safety\nregulation that explicitly requires operators to maintain and submit documentation of compliance\ncosts.\nAfter reconsidering this requirement in light of Alyeska’s argument, I find the provision does not\ndirect compliance with the pipeline safety regulations because there is not a pipeline safety\nregulation that requires pipeline operators to maintain and submit safety improvement costs.\nFurthermore, I do not find the provision directs compliance with 49 U.S.C. chapter 601. While\nPHMSA has valid reasons to collect this information, I see no basis to order this conduct when\nan operator has objected to providing such information. Accordingly, Requirement 3 in the\nCompliance Order is stricken from the Final Order.\nIV. Timeliness of the Final Order\nAlyeska further argued in its Petition that the issuance of the Final Order after “substantial\ndelay” violated § 190.213(e), which Petitioner argued requires PHMSA to issue a final order\n8 The filing of a petition for reconsideration does not stay required corrective action in a final order, unless otherwise\nprovided by the Associate Administrator. § 190.215(d).\n\n\n\n6\nMarch 16, 2007, upon submission of Alyeska’s Closing Statement to the hearing officer.\nwithin 45 days of receipt of the case file.9 Alyeska contended the case file was complete on\nPetitioner also argued that PHMSA failed to notify Alyeska of the delay or expected issuance\ndate as required in § 190.213(e), warranting withdrawal of the compliance order.\nSection 190.213(e) does not specify that a final order should be issued within 45 days, but\ninstead provides that “[i]t is the policy of the Associate Administrator, OPS to issue a final order\nunder this section expeditiously . . . .\n”10 Furthermore, PHMSA has held that issuing a Final\nOrder in a timely manner under § 190.213(e) is a policy, not a requirement, and a failure to do so\ndoes not operate as a bar to PHMSA’s issuance of a Final Order in furtherance of its pipeline\nsafety mission.11 Accordingly, I find no reason to withdraw the compliance order under\n§ 190.213(e).\nConclusion\n190.215(e) provides that the Associate Administrator may issue a decision on a petition for\nreconsideration without further proceedings, but may also request additional information, data,\nIn closing, Alyeska requested that it be given “90 days to fully brief these issues.”12 Section\nand comment as deemed appropriate. I find no reason to grant Alyeska’s request for an\nadditional 90 days to brief the issues addressed above. Accordingly, I issue this decision without\nfurther proceedings.\nAs set forth in the Decision, the findings of violation and civil penalties assessed in the Final\nOrder remain in effect. The terms of the Compliance Order also remain unchanged, except that\nRequirement 3 is stricken. All other terms of the Final Order remain in effect as set forth therein.\nThis Decision on Reconsideration is the final administrative action in this proceeding.\n___________________________________ __________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n9 Petition at 4.\n10 Section 190.213(e) was amended prior to issuance of the Notice by the Nomenclature Change and Technical\nAmendments, 70 Fed. Reg. 11,135, 11,137 (Mar. 8, 2005). The current regulation further states: “In cases where a\nsubstantial delay is expected, notice of that fact and the date by which it is expected that action will be taken is\nprovided to the respondent upon request and whenever practicable.” Alyeska never filed such a request.\n11 See In the Matter of Northern States Power Co., Decision on Reconsideration, CPF No. 36301, 2005 WL 5010130\n(Oct. 27, 2005); In the Matter of Texaco Exploration and Production, Inc., Decision on Reconsideration, CPF No.\n52010, 2004 WL 5150199 (Feb. 3, 2004).\n12 Petition at 5.\n\n520065018_Final Order_01132010_text.pdf\n\nJAN 13 2010\nMr. Mike Joynor\nSenior Vice President\nOil Movements, Engineering and Pipeline\nAlyeska Pipeline Service Company\n900 E. Benson Blvd.\nP.O. Box 196660\nAnchorage, AK 99519\nRe: CPF No. 5-2006-5018\nDear Mr. Joynor:\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation,\nassesses a reduced civil penalty of $263,000, and specifies actions to be taken by Alyeska to\ncomply with the pipeline safety regulations. The penalty payment terms are set forth in the Final\nOrder. When the civil penalty has been paid and the terms of the compliance order completed,\nas determined by the Director, Western Region, this enforcement action will be closed. Service\nof this document is in accordance with 49 C.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, PHMSA\nSheila Doody Bishop, Counsel, Alyeska Pipeline Service Co.\n900 E. Benson Blvd., P.O. Box 196660, Anchorage, AK 99519\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005.0390 0005 6162 5296]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nAlyeska Pipeline Service Company, ) CPF No. 5-2006-5018\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn August 15–18, 2005, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the integrity management program of Alyeska\nPipeline Service Company (Alyeska or Respondent) in Fairbanks, Alaska. Respondent operates\nthe 800-mile crude oil Trans-Alaska Pipeline System (TAPS) from the North Slope, Alaska, to\nValdez. As a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated April 19, 2006, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Respondent had committed violations of 49 C.F.R. Part 195 and\nproposed assessing a civil penalty of $350,000 for the alleged violations. The Notice also\nproposed ordering Respondent to take certain measures to comply with the pipeline safety\nregulations.\nAfter requesting and receiving an extension of time, Respondent responded to the Notice by\nletter dated July 18, 2006 (Response). Respondent contested the allegations and requested a\nhearing. In accordance with 49 C.F.R. § 190.211, a hearing was held on January 18, 2007, in\nLakewood, Colorado, with an attorney from the Office of Chief Counsel, PHMSA, presiding.\nAfter the hearing, Respondent provided a Closing Statement dated March 16, 2007.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent committed two violations of 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(2), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) Which pipelines are covered by this section? This section applies\nto each hazardous liquid pipeline and carbon dioxide pipeline that could\naffect a high consequence area . . . .\n\n\n\n2\n(h) What actions must an operator take to address integrity issues?—\n(1) General requirements. An operator must take prompt action to\naddress all anomalous conditions the operator discovers through the\nintegrity assessment or information analysis. In addressing all conditions,\nan operator must evaluate all anomalous conditions and remediate those\nthat could reduce a pipeline’s integrity . . . .\n(2) Discovery of condition. Discovery of a condition occurs when an\noperator has adequate information about the condition to determine that\nthe condition presents a potential threat to the integrity of the pipeline. An\noperator must promptly, but no later than 180 days after an integrity\nassessment, obtain sufficient information about a condition to make that\ndetermination, unless the operator can demonstrate that the 180-day period\nis impracticable.\nThe Notice alleged that Respondent violated § 195.452(h)(2) by failing to obtain, within 180\ndays of an integrity assessment, sufficient information about anomalous conditions on TAPS to\ndetermine if they presented a potential threat to the integrity of the pipeline. Specifically, the\nNotice alleged that Alyeska completed an inline inspection (ILI) integrity assessment on May 26,\n2004, but failed to obtain the ILI vendor’s report in its entirety until April 20, 2005,\napproximately 330 days after the assessment. The Notice further alleged that the final report\ncontained inadequate information to enable Respondent to determine if the conditions presented\na potential threat to integrity. Respondent allegedly could not demonstrate that it had adequate\ninformation about anomalous conditions on the pipeline until January 2006, approximately 600\ndays after the integrity assessment.1\nIn its written submissions and at the hearing, Respondent acknowledged that it had completed a\nmagnetic flux leakage (MFL) tool run on May 26, 2004. Alyeska also acknowledged that it had\nsent a letter to the Director on November 30, 2004, stating that the company could not meet the\n180-day deadline in § 195.452(h)(2) due to some “technical difficulties.”2\nDespite this apparent\nacknowledgement of non-compliance, Alyeska contended in its Response that “Alyeska had\npreliminary information from the vendor about potential integrity threats within the 180 day\nrequirement,” and requested that PHMSA “find that the pig vendor’s preliminary information\nenabled Alyeska to obtain sufficient and adequate information within 180 days . . . as required\nunder 49 CFR §195.452(h)(2).”\n3\n1 Item 1 in the Notice also alleged that Respondent did not take adequate steps to mitigate adverse operational\nconditions on TAPS, in order to ensure that the inspection data would be obtained in a timely manner. In its\nResponse, Alyeska acknowledged that certain operating conditions, including additional wax in the oil stream, had\nmade it more challenging to obtain complete and accurate data; however, the company contended that it had taken\nadequate steps to mitigate those challenges. This final order does not make a finding as to the adequacy of\nRespondent’s mitigation efforts because it is not essential to the finding of whether Respondent violated\n§ 195.452(h)(2) by failing to obtain adequate information within 180 days of the March 2004 assessment.\n2 Pipeline Safety Violation Report (Violation Report), dated Apr. 13, 2006, Item 1, Attachment 1. In the same\nletter, Alyeska stated that it believed “[t]he 180-day time period from the end of the last 2004 Magnetic Flux\nLeakage (MFL) pig run ended November 26, 2004.\n” As discussed below, the 180-day time period actually ended\nNovember 22, 2004.\n3 Response at 2 and 4.\n\n\n\n3\nAlyeska received this “preliminary information,” also referred to as a “top ten list,” from its\n(i.e., metal loss) anomalies and the ten most notable pressure (i.e., remaining strength) anomalies\non each of the four TAPS segments. Respondent explained in its Response that the company had\ncorrelated this data with existing information from Alyeska’s Engineering Data Management\nMFL tool vendor on November 29, 2004.4 The report identified the ten most notable penetration\n(EDM) System database, which consisted of information from previous ILI assessments, digs,\ninvestigations, close-interval surveys, coupons, rectifiers, and historical knowledge regarding the\ncondition of TAPS.\nBased on the company’s correlation of data from the preliminary report and its EDM System,\nAlyeska contended that it had determined the top anomalies identified by the vendor had either\nalready been addressed or did not meet the regulatory repair criteria. With regard to the pressure\nanomalies in particular, Respondent had performed two additional calculations to arrive at its\nconclusion. First, Respondent applied an “aggressive corrosion growth rate” by assuming the\npipeline corroded faster than it actually did.5 Second, the company applied a conservative\nforecast to determine when an anomaly would need to be physically examined. These two\ncalculations, according to Respondent, “added a 5% margin of safety” to the requirement for\nremediation of pressure anomalies.6\nAlyeska’s analysis of the preliminary ILI data, its EDM System information, and other\ncalculations led the company to determine there were no actionable anomalies on the pipeline.\nAlyeska did not provide, nor could it document, a date certain by which it had made this\ndetermination; rather the company contended generally that adequate information had been\nthe ILI vendor’s final report, which Alyeska received on April 20, 2005, validated the company’s\nreceived and analyses performed “within the 180 day requirement.”7 According to Respondent,\ndeterminations with respect to the penetration and pressure anomalies.\nAt the hearing, Respondent acknowledged that the vendor’s final report contained inaccuracies\nabout maximum operator pressure (MOP) on TAPS, but downplayed its significance, claiming\nthat the error did not affect the company’s determination about conditions on the pipeline.\nWith regard to anomalies that might constitute immediate repair conditions under\n§ 195.452(h)(4)(i), Respondent indicated the company could have identified those conditions\ndespite the incorrect MOP reported by the vendor. With respect to anomalies that might be 180-\nday repair conditions under § 195.452(h)(4)(iii), Respondent explained that it had compensated\nfor the inaccurate MOP through the application of an aggressive corrosion growth-rate\ncalculation, also known as “years to dig.\n”8\nAfter reviewing all of the evidence in the record, I find that Respondent completed an MFL\nintegrity assessment of TAPS, a pipeline that could affect a high consequence area, on May 26,\n2004. In accordance with § 195.452(h)(2), Respondent was required to obtain sufficient\n4 Response Exhibit 2 at 1.\n5 Response at 3.\n6 Response at 3.\n7 E.g., Response at 2. At the hearing, the presiding official asked Alyeska representatives if the company could\ndocument actions that had been taken within the 180-day time period. Alyeska’s Closing Statement describes the\nactions taken, but, again, only states that the actions were taken “in November 2004.” Closing Statement at 1.\n8 Response at 3.\n\n\n\n4\ninformation from this assessment to determine if anomalous conditions discovered on the\npipeline presented a potential threat to its integrity. The information was required to be obtained\n29, 2004, seven days after the deadline, Respondent received the preliminary “top ten list”\nconditions from the vendor. Respondent compared this preliminary information with data it\nalready had about conditions on the pipeline to determine if any of the anomalies identified on\npromptly, but no later than 180 days from May 26, 2004, or November 22, 2004.9 On November\nthe preliminary list could threaten the line’s integrity. Respondent concluded, based on this\nreview, that no anomalies required repair. There is no date certain by which Respondent made\nthis determination.\nI further find that Respondent subsequently received the ILI vendor’s final report on April 20,\n2005, approximately five months after the deadline. The list of features in the final report was\npredicated on two important data inaccuracies. First, the list indicated a constant MOP of 850\npounds per square inch gauge (psig) everywhere on TAPS, even though sections of the pipeline\nhad a different MOP. Second, the features list indicated a constant specified minimum yield\nstrength (SMYS) of 65,000 psig everywhere on TAPS, even though the pipeline consisted of\npipe with varying SMYS.\nThese inaccuracies are material because MOP and SMYS play a key role in determining whether\nan identified anomaly constitutes a potential threat to integrity under § 195.452(h)(4). Pursuant\nto that regulation, Respondent had to calculate the remaining strength of the pipe at the point of\nthe anomaly. To determine the remaining strength, Respondent had to calculate burst pressure\nand maximum safe operating pressure at those particular locations.10 Inaccurate data concerning\nSMYS would have led to erroneous calculations of burst pressure and maximum safe operating\npressure.11 In turn, since immediate repair conditions and 180-day repair conditions are both\ndefined in terms of their relationship to MOP, inaccurate data concerning MOP would have\nfurther impacted the validity of Respondent’s overall determination as to whether conditions\nwere a threat to integrity.12 In fact, Respondent acknowledged in its Closing Statement that\n“[t]he pipeline condition reports may not have included anomalies that might have been reported\nif the correct maximum operating pressure for the section had been used.”13\nRespondent performed additional analyses after receiving the vendor’s final report to\ncompensate for these inaccuracies, as explained above, but § 195.452(h)(2) required that\nRespondent complete all necessary analyses to determine if conditions on the pipeline threatened\nintegrity no later than November 22, 2004. Even though § 195.452(h)(2) did not require\n9 Respondent did not contend in its written submissions or at the hearing that the 180-day period was impracticable.\n10 Section 195.452(h)(4)(i)(B) defines an “immediate repair condition” as a condition where a “calculation of the\nremaining strength of the pipe shows a predicted burst pressure less than the established maximum operating\npressure at the location of the anomaly.” Section 195.452(h)(4)(iii)(D) defines a “180-day condition” as a condition\nwhere a “calculation of the remaining strength of the pipe shows an operating pressure that is less than the current\nestablished maximum operating pressure at the location of the anomaly.”\n11 See also Frequently Asked Question (FAQ) 7.18, which states, “Burst pressure of corroded pipe is determined by\ncalculation, considering the flow stress and the dimensions of the metal loss (depth and length). For liquid pipelines,\nthe maximum safe operating pressure of corroded pipe is equivalent to 72% of the pipe’s calculated, predicted burst\npressure.” (Revised Jul. 9, 2002). PHMSA publishes answers to FAQs concerning compliance with the integrity\nmanagement regulations at: http://primis.phmsa.dot.gov/iim/faqs.htm.\n12 See § 195.452(h)(4)(i)(B) and (h)(4)(iii)(D).\n13 Closing Statement at 2.\n\n\n\n5\nRespondent to receive a final report within 180 days, it did require Respondent to obtain\n“sufficient information,\n” which means enough information to allow an operator to accurately and\nreliably identify, locate, validate, and evaluate pipeline anomalies detected by the integrity\nassessment and to properly classify them for repair, if necessary, under § 195.452(h).\nFurthermore, I note that Respondent was required to obtain such information “promptly”—the\n180-day deadline was merely the “upper limit.”14\nRespondent’s receipt of even the preliminary “top ten list” was not received until November 29,\n2004, seven days after the deadline. The report did not by itself provide sufficient information\nabout conditions on the pipeline because it was not comprehensive (it listed only a select number\nof conditions) and because it required Respondent to correlate the data with its EDM System and\napply additional calculations, such as an “aggressive corrosion growth rate,” in order to\ndetermine if conditions presented potential threats to the integrity of the pipeline. The final\nreport, which was received approximately five months after the deadline, also required additional\nanalyses to compensate for inaccuracies in the data. These facts demonstrate that Respondent\ndid not obtain sufficient information about the conditions on the pipeline as required by\n§ 195.452(h)(2).\nAccordingly, I find that Respondent violated § 195.452(h)(2) by failing to promptly obtain,\nwithin 180 days after an integrity assessment, sufficient information about anomalous conditions\nto determine if they present a potential threat to the integrity of the pipeline.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(3) and (h)(4)(i)(C),\nwhich states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(h) What actions must an operator take to address integrity issues?—\n(1) General requirements. An operator must take prompt action to\naddress all anomalous conditions the operator discovers through the\nintegrity assessment or information analysis. In addressing all conditions,\nan operator must evaluate all anomalous conditions and remediate those\nthat could reduce a pipeline’s integrity . . . .\n(3) Schedule for evaluation and remediation. An operator must\ncomplete remediation of a condition according to a schedule prioritizing\nthe conditions for evaluation and remediation. If an operator cannot meet\nthe schedule for any condition, the operator must explain the reasons why\nit cannot meet the schedule and how the changed schedule will not\njeopardize public safety or environmental protection.\n(4) Special requirements for scheduling remediation—\n(i) Immediate repair conditions. An operator’s evaluation and\nremediation schedule must provide for immediate repair conditions. To\nmaintain safety, an operator must temporarily reduce operating pressure or\nshut down the pipeline until the operator completes the repair of these\nconditions. An operator must calculate the temporary reduction in\noperating pressure using the formula in section 451.7 of ASME/ANSI\n14 Pipeline Integrity Management in High Consequence Areas (Repair Criteria), 67 Fed. Reg. 1650, 1653 (Jan. 14,\n2002).\n\n\n\n6\nB31.4 (incorporated by reference, see § 195.3). An operator must treat the\nfollowing conditions as immediate repair conditions:\n(A) . . . .\n(C) A dent located on the top of the pipeline (above the 4 and 8\no’clock positions) that has any indication of metal loss, cracking or a\nstress riser . . . .\nThe Notice alleged that Respondent violated § 195.452(h)(3) and (h)(4)(i)(C) by failing to\ncomplete remediation of an immediate repair condition according to a schedule for evaluation\nand repair, and by failing to temporarily reduce op","truncated":true,"body_characters":80998}