# ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.452(h)(2), 195.452(h)(4)(i)(c).
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520065018.md
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- **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.

Official case documents:

520065018_ Petition for Reconsideration_02082010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_%20Petition%20for%20Reconsideration_02082010.pdf

520065018_Compromise Agreement and Order_11162011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Compromise%20Agreement%20and%20Order_11162011.pdf

520065018_Compromise Agreement and Order_11162011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Compromise%20Agreement%20and%20Order_11162011_text.pdf

520065018_Decision on Petition for Reconsideration_03012010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Decision%20on%20Petition%20for%20Reconsideration_03012010.pdf

520065018_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

520065018_Final Order_01132010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Final%20Order_01132010.pdf

520065018_Final Order_01132010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065018/520065018_Final%20Order_01132010_text.pdf

520065018_Decision on Petition for Reconsideration_03012010_text.pdf

MAR 1 2010
Mr. Mike Joynor
Senior Vice President
Oil Movements, Engineering and Pipeline
Alyeska Pipeline Service Company
900 E. Benson Blvd.
P.O. Box 196660
Anchorage, AK 99519
Re: CPF No. 5-2006-5018
Dear Mr. Joynor:
Enclosed is the Decision on the Petition for Reconsideration filed by Alyeska Pipeline Service
Company in the above-referenced case. The decision denies your petition in all respects except
that Requirement 3 in the Compliance Order has been stricken. The remaining terms of the Final
Order are in effect, including the assessment of a civil penalty in the amount of $263,000, and
the actions specified therein to comply with the pipeline safety regulations. When the civil
penalty has been paid and the terms of the compliance order completed, as determined by the
Director, Western Region, this enforcement action will be closed. Service of this document is in
accordance with 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
Sheila Doody Bishop, Counsel, Alyeska Pipeline Service Co.
900 E. Benson Blvd., P.O. Box 196660, Anchorage, AK 99519
CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2472 5057]



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. 5-2006-5018
)
)
)
Petitioner. )
____________________________________)
DECISION ON PETITION FOR RECONSIDERATION
On January 13, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued a Final Order in this case finding that Alyeska Pipeline Service Company (Alyeska or
Petitioner) had committed two violations of the hazardous liquid pipeline safety regulations. In
Item 1 of the Final Order, Alyeska was found to have violated 49 C.F.R. § 195.452(h)(2) by
failing to promptly obtain, within 180 days after an integrity assessment, sufficient information
about anomalous conditions on the pipeline to determine if they present a potential threat to
integrity. In Item 2, Alyeska was found to have violated § 195.452(h)(3) and (h)(4)(i)(C) by
failing to complete remediation of an anomalous condition according to a schedule for
immediate repair, and by failing to temporarily reduce operating pressure or shut down the
pipeline until completing the repair. The Final Order assessed a total civil penalty of $263,000
for the violations, reduced from the proposed amount of $350,000. The Final Order also
specified actions to be taken by the company to comply with the pipeline safety regulations
(Compliance Order).
Alyeska responded to the Final Order as permitted under § 190.215 by submitting a Petition for
Reconsideration dated February 8, 2010 (Petition). In its Petition, Alyeska requested
reconsideration of the civil penalty and the associated compliance terms for Item 1.
1
Section 190.215 provides that a respondent may petition the Associate Administrator for
reconsideration of a final order. The Associate Administrator does not consider repetitious
information, arguments, or petitions, but may consider additional facts or arguments, provided
that the respondent submits a valid reason why such information was not presented prior to
issuance of the final order. The Associate Administrator may grant or deny, in whole or in part,
a petition for reconsideration without further proceedings, but may request additional
information, data, and comment as deemed appropriate. This rule allows a respondent to present
information or arguments that were unavailable or unknown prior to issuance of the final order,
and gives PHMSA an opportunity to correct any errors. Section 190.215 further provides that a
petition must be received by PHMSA no later than 20 days after service of the final order.
1 Alyeska also requested a stay of the compliance order pending PHMSA’s issuance of a decision on its petition, but
that request is rendered moot by this decision.



2
At the outset, Alyeska noted that PHMSA’s regulation provides that service of a final order by
certified mail “is complete upon mailing.
precise date of mailing, and therefore could not calculate 20 days from the date of service to
determine the deadline for filing its Petition. For this reason, the company requested that
PHMSA accept its Petition as timely filed. I find nothing in the record demonstrating the precise
date PHMSA mailed the Final Order. Therefore I find no reason to deny that Alyeska’s petition
is timely.
”2 Alyeska maintained that it could not determine the
I. Civil Penalty for Item 1
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of the respondent’s culpability; the
history of the 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
the 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.
Item 1 in the Final Order assessed a civil penalty of $173,000 for the violation of
§ 195.452(h)(2). This penalty was reduced from the proposed amount of $260,000. The
reduction and final assessment of the penalty in the Final Order were based on the above-
referenced assessment criteria. In particular, I found the nature and circumstances of Petitioner’s
failure to obtain complete and accurate information about anomalous conditions on its pipeline
for more than five months beyond the regulatory deadline justified the assessment of the full
proposed penalty amount. On the other hand, I found Petitioner had received some preliminary
information that permitted the company to determine, at least initially, that there were no
conditions that necessitated immediate repair—supporting my conclusion that the gravity of the
violation warranted some reduction to the proposed amount.
I further determined that Alyeska was culpable for the violations, and that the company’s history
of prior offenses supported the penalty. I also found Alyeska was able to pay the penalty without
adversely affecting its ability to continue in business. Finally, I considered the extent to which
the company had taken good faith steps to comply with the regulations, but in light of the other
assessment criteria, I found such efforts did not warrant further reduction to the already-reduced
penalty.
In its Petition, Alyeska argued that PHMSA failed in several respects to properly consider the
assessment criteria and to meet its burden of persuasion by providing sufficient evidence to
support the assessment of the civil penalty.
A. Culpability
First, Alyeska contended the Final Order erroneously considered culpability. Petitioner argued
that PHMSA equated culpability with “responsibility,” contrary to the definition of culpability in
Black’s Law Dictionary and in two administrative decisions from the Environmental Protection
2 § 190.5.



3
Agency, which defined culpability to mean purposely, knowingly, recklessly, negligently, or in
wanton or reckless disregard for consequences. Alyeska argued further that the Final Order did
not support the proposition that Alyeska acted with culpability as there is no evidence of
culpability in the record. For this reason, Petitioner contended that PHMSA’s finding of
culpability is arbitrary and capricious, and must be withdrawn.
A standard dictionary definition of culpability is “[d]eserving of blame or censure as being
whether the company deserves the blame for the violation that occurred. The Final Order found
that Alyeska operated the subject pipeline during the time in question, and therefore was
responsible for compliance with the applicable pipeline safety regulations. This fact is well-
supported in the record. Moreover, Alyeska neither contended that another entity was
wrong, evil, improper, or injurious.”3 When evaluating an operator’s culpability, I determine
responsible for compliance nor that another entity deserves the blame for the violations that
occurred. For these reasons, the Final Order found that Alyeska was culpable, that is, the
company deserves the blame for the violations that occurred on the pipeline system during the
time in question. I find nothing in Alyeska’s Petition that warrants altering this determination.
B. History of Prior Offenses
Second, Alyeska contended that the Final Order erroneously considered the company’s history of
prior offenses. Petitioner argued that PHMSA had improperly considered previous enforcement
cases in which Alyeska had not violated the same regulation at issue in this case (§ 195.452),
improperly considered cases that had not yet reached final resolution at the time the Notice was
issued, and generally failed to account for petitions for reconsideration and consent agreements
that reduced penalties, withdrew findings, and eliminated compliance orders.
While a repeat violation of the exact same regulatory section is certainly the most acute example
of a prior offense, I am not precluded from considering Alyeska’s overall compliance history,
including all previous violations of the pipeline safety regulations regardless of regulatory
section number.
consider not only instances of past violations of the same regulation, but also the company’s
history of other offenses, such as prior violations of other regulations, the extent to which such
violations resulted in civil penalties, and whether corrective action was necessary.
4 Accordingly, when evaluating Alyeska’s history of prior offenses, I may
With respect to the finality of prior offenses, I affirm that my consideration of Alyeska’s history
of prior offenses included the consideration of only final determinations, that is, only decisions
on reconsideration in cases where a petition for reconsideration had been filed, and only final
orders and orders directing amendment in cases where a petition had not been filed. I may
consider such prior offenses even if the final determinations in those cases post-date the Notice
in this case, because the prior offenses and violations were committed by Alyeska prior to the
Notice in this case.
3 The American Heritage Dictionary of the English Language 442 (4th ed. 2000).
4 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
other matters as justice may require in determining the amount of a civil penalty.



4
Approximately eight of the ten prior cases referred to in the Final Order resulted in findings that
Alyeska violated the pipeline safety regulations.
5 Six of the ten cases involved a final
assessment of civil penalties for violations, and nine of the ten cases involved the completion of
compliance terms by Alyeska or amendment of its procedures.6 These are just the cases initiated
against Alyeska in the six years prior to issuance of the Notice in this case.
The Final Order found the significance of the enforcement history against Alyeska supported
assessment of the penalty amount. After considering Alyeska’s Petition, I find no reason to alter
the determination in the Final Order.
C. Good Faith in Attempting to Achieve Compliance
Finally, Alyeska contended that the Final Order improperly considered the company’s good faith
in attempting to achieve compliance. As stated in the Final Order, I “considered the extent to
which Respondent was cognizant of the relevant requirements and took good faith steps to
comply with the regulations,” but found that its efforts did not warrant further reduction to the
capricious to not further reduce the civil penalty, because the Final Order did not reference any
penalty “[i]n light of the other assessment criteria.”7 Alyeska contended that it was arbitrary and
evidence that Alyeska’s good faith was insufficient to justify reducing the penalty further.
The Final Order discussed in detail the evidence of the violation, including the nature,
circumstances, and gravity of the violation. The Final Order determined that such evidence and
assessment criteria considerations outweighed any reason to reduce the civil penalty further for
Alyeska’s attempt to achieve compliance. After further review, I affirm that this determination is
supported by the evidence. I find no reason to alter the decision set forth in the Final Order.
For all of the reasons discussed above, I deny Alyeska’s request to modify the assessment of the
civil penalty for Item 1.
Payment of the civil penalty must be made within 20 days of service of this Decision. The
payment instructions are set forth in detail in the Final Order. Failure to pay the $263,000 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.
II. Compliance Order for Item 1
In accordance with 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, PHMSA may issue an order
directing compliance with the pipeline safety regulations. The Final Order included a
Compliance Order that set forth corrective actions required to be taken by Alyeska to comply
5 The other two had not alleged violations, but rather inadequate procedures, resulting in the issuance of orders
directing amendment under § 190.237.
6 These figures already take into consideration the consent agreement.
7 Final Order at 9.



5
with the pipeline safety regulations. In the Final Order, I acknowledged that Alyeska had argued
that such actions were unnecessary because they had already been completed. I found, however,
that the record lacked adequate documentation demonstrating the details of those efforts. In
particular, I determined that Alyeska had not submitted documentation demonstrating the
completion of the compliance terms.
In its Petition, Alyeska contended that PHMSA ignored the facts in the record regarding the
work already completed by the company. Petitioner argued that it had provided details of its
actions to PHMSA in its initial response to the Notice and again at the hearing. Alyeska again
proceeded to explain in its Petition the actions it has taken.
Under § 190.215, I do not consider repetitious arguments that were made prior to issuance of the
Final Order. I have already determined that the information provided by Alyeska to PHMSA as
of the date of the Final Order did not demonstrate compliance with the terms of the Compliance
Order, and Alyeska has not offered any additional documentation in its Petition demonstrating
compliance that would enable me to verify that the actions taken satisfy the compliance terms.
Accordingly, I do not alter the finding in the Final Order that the record does not demonstrate the
compliance terms have been satisfied.
Alyeska must therefore complete the actions specified in the Compliance Order within the
original deadlines specified therein, except as provided below under Section III.
8
III. Documentation of Safety Improvement Costs
Among the requirements in the Compliance Order, Requirement 3 specified that Alyeska must
maintain documentation of the safety improvement costs associated with fulfilling the
Compliance Order and report the total costs. With regard to this requirement, Petitioner
contended, among other things, that PHMSA failed to base the provision on a pipeline safety
regulation that explicitly requires operators to maintain and submit documentation of compliance
costs.
After reconsidering this requirement in light of Alyeska’s argument, I find the provision does not
direct compliance with the pipeline safety regulations because there is not a pipeline safety
regulation that requires pipeline operators to maintain and submit safety improvement costs.
Furthermore, I do not find the provision directs compliance with 49 U.S.C. chapter 601. While
PHMSA has valid reasons to collect this information, I see no basis to order this conduct when
an operator has objected to providing such information. Accordingly, Requirement 3 in the
Compliance Order is stricken from the Final Order.
IV. Timeliness of the Final Order
Alyeska further argued in its Petition that the issuance of the Final Order after “substantial
delay” violated § 190.213(e), which Petitioner argued requires PHMSA to issue a final order
8 The filing of a petition for reconsideration does not stay required corrective action in a final order, unless otherwise
provided by the Associate Administrator. § 190.215(d).



6
March 16, 2007, upon submission of Alyeska’s Closing Statement to the hearing officer.
within 45 days of receipt of the case file.9 Alyeska contended the case file was complete on
Petitioner also argued that PHMSA failed to notify Alyeska of the delay or expected issuance
date as required in § 190.213(e), warranting withdrawal of the compliance order.
Section 190.213(e) does not specify that a final order should be issued within 45 days, but
instead provides that “[i]t is the policy of the Associate Administrator, OPS to issue a final order
under this section expeditiously . . . .
”10 Furthermore, PHMSA has held that issuing a Final
Order in a timely manner under § 190.213(e) is a policy, not a requirement, and a failure to do so
does not operate as a bar to PHMSA’s issuance of a Final Order in furtherance of its pipeline
safety mission.11 Accordingly, I find no reason to withdraw the compliance order under
§ 190.213(e).
Conclusion
190.215(e) provides that the Associate Administrator may issue a decision on a petition for
reconsideration without further proceedings, but may also request additional information, data,
In closing, Alyeska requested that it be given “90 days to fully brief these issues.”12 Section
and comment as deemed appropriate. I find no reason to grant Alyeska’s request for an
additional 90 days to brief the issues addressed above. Accordingly, I issue this decision without
further proceedings.
As set forth in the Decision, the findings of violation and civil penalties assessed in the Final
Order remain in effect. The terms of the Compliance Order also remain unchanged, except that
Requirement 3 is stricken. All other terms of the Final Order remain in effect as set forth therein.
This Decision on Reconsideration is the final administrative action in this proceeding.
___________________________________ __________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety
9 Petition at 4.
10 Section 190.213(e) was amended prior to issuance of the Notice by the Nomenclature Change and Technical
Amendments, 70 Fed. Reg. 11,135, 11,137 (Mar. 8, 2005). The current regulation further states: “In cases where a
substantial delay is expected, notice of that fact and the date by which it is expected that action will be taken is
provided to the respondent upon request and whenever practicable.” Alyeska never filed such a request.
11 See In the Matter of Northern States Power Co., Decision on Reconsideration, CPF No. 36301, 2005 WL 5010130
(Oct. 27, 2005); In the Matter of Texaco Exploration and Production, Inc., Decision on Reconsideration, CPF No.
52010, 2004 WL 5150199 (Feb. 3, 2004).
12 Petition at 5.

520065018_Final Order_01132010_text.pdf

JAN 13 2010
Mr. Mike Joynor
Senior Vice President
Oil Movements, Engineering and Pipeline
Alyeska Pipeline Service Company
900 E. Benson Blvd.
P.O. Box 196660
Anchorage, AK 99519
Re: CPF No. 5-2006-5018
Dear Mr. Joynor:
Enclosed is the Final Order issued in the above-referenced case. It makes findings of violation,
assesses a reduced civil penalty of $263,000, and specifies actions to be taken by Alyeska to
comply with the pipeline safety regulations. The penalty payment terms are set forth in the Final
Order. When the civil penalty has been paid and the terms of the compliance order completed,
as determined by the Director, Western Region, this enforcement action will be closed. Service
of this document is in accordance with 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, PHMSA
Sheila Doody Bishop, Counsel, Alyeska Pipeline Service Co.
900 E. Benson Blvd., P.O. Box 196660, Anchorage, AK 99519
CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005.0390 0005 6162 5296]



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. 5-2006-5018
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
On August 15–18, 2005, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and
Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
conducted an on-site pipeline safety inspection of the integrity management program of Alyeska
Pipeline Service Company (Alyeska or Respondent) in Fairbanks, Alaska. Respondent operates
the 800-mile crude oil Trans-Alaska Pipeline System (TAPS) from the North Slope, Alaska, to
Valdez. As a result of the inspection, the Director, Western Region, OPS (Director), issued to
Respondent, by letter dated April 19, 2006, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the
Notice proposed finding that Respondent had committed violations of 49 C.F.R. Part 195 and
proposed assessing a civil penalty of $350,000 for the alleged violations. The Notice also
proposed ordering Respondent to take certain measures to comply with the pipeline safety
regulations.
After requesting and receiving an extension of time, Respondent responded to the Notice by
letter dated July 18, 2006 (Response). Respondent contested the allegations and requested a
hearing. In accordance with 49 C.F.R. § 190.211, a hearing was held on January 18, 2007, in
Lakewood, Colorado, with an attorney from the Office of Chief Counsel, PHMSA, presiding.
After the hearing, Respondent provided a Closing Statement dated March 16, 2007.
FINDINGS OF VIOLATION
The Notice alleged that Respondent committed two violations of 49 C.F.R. Part 195, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(2), which states:
§ 195.452 Pipeline integrity management in high consequence areas.
(a) Which pipelines are covered by this section? This section applies
to each hazardous liquid pipeline and carbon dioxide pipeline that could
affect a high consequence area . . . .



2
(h) What actions must an operator take to address integrity issues?—
(1) General requirements. An operator must take prompt action to
address all anomalous conditions the operator discovers through the
integrity assessment or information analysis. In addressing all conditions,
an operator must evaluate all anomalous conditions and remediate those
that could reduce a pipeline’s integrity . . . .
(2) Discovery of condition. Discovery of a condition occurs when an
operator has adequate information about the condition to determine that
the condition presents a potential threat to the integrity of the pipeline. An
operator must promptly, but no later than 180 days after an integrity
assessment, obtain sufficient information about a condition to make that
determination, unless the operator can demonstrate that the 180-day period
is impracticable.
The Notice alleged that Respondent violated § 195.452(h)(2) by failing to obtain, within 180
days of an integrity assessment, sufficient information about anomalous conditions on TAPS to
determine if they presented a potential threat to the integrity of the pipeline. Specifically, the
Notice alleged that Alyeska completed an inline inspection (ILI) integrity assessment on May 26,
2004, but failed to obtain the ILI vendor’s report in its entirety until April 20, 2005,
approximately 330 days after the assessment. The Notice further alleged that the final report
contained inadequate information to enable Respondent to determine if the conditions presented
a potential threat to integrity. Respondent allegedly could not demonstrate that it had adequate
information about anomalous conditions on the pipeline until January 2006, approximately 600
days after the integrity assessment.1
In its written submissions and at the hearing, Respondent acknowledged that it had completed a
magnetic flux leakage (MFL) tool run on May 26, 2004. Alyeska also acknowledged that it had
sent a letter to the Director on November 30, 2004, stating that the company could not meet the
180-day deadline in § 195.452(h)(2) due to some “technical difficulties.”2
Despite this apparent
acknowledgement of non-compliance, Alyeska contended in its Response that “Alyeska had
preliminary information from the vendor about potential integrity threats within the 180 day
requirement,” and requested that PHMSA “find that the pig vendor’s preliminary information
enabled Alyeska to obtain sufficient and adequate information within 180 days . . . as required
under 49 CFR §195.452(h)(2).”
3
1 Item 1 in the Notice also alleged that Respondent did not take adequate steps to mitigate adverse operational
conditions on TAPS, in order to ensure that the inspection data would be obtained in a timely manner. In its
Response, Alyeska acknowledged that certain operating conditions, including additional wax in the oil stream, had
made it more challenging to obtain complete and accurate data; however, the company contended that it had taken
adequate steps to mitigate those challenges. This final order does not make a finding as to the adequacy of
Respondent’s mitigation efforts because it is not essential to the finding of whether Respondent violated
§ 195.452(h)(2) by failing to obtain adequate information within 180 days of the March 2004 assessment.
2 Pipeline Safety Violation Report (Violation Report), dated Apr. 13, 2006, Item 1, Attachment 1. In the same
letter, Alyeska stated that it believed “[t]he 180-day time period from the end of the last 2004 Magnetic Flux
Leakage (MFL) pig run ended November 26, 2004.
” As discussed below, the 180-day time period actually ended
November 22, 2004.
3 Response at 2 and 4.



3
Alyeska received this “preliminary information,” also referred to as a “top ten list,” from its
(i.e., metal loss) anomalies and the ten most notable pressure (i.e., remaining strength) anomalies
on each of the four TAPS segments. Respondent explained in its Response that the company had
correlated this data with existing information from Alyeska’s Engineering Data Management
MFL tool vendor on November 29, 2004.4 The report identified the ten most notable penetration
(EDM) System database, which consisted of information from previous ILI assessments, digs,
investigations, close-interval surveys, coupons, rectifiers, and historical knowledge regarding the
condition of TAPS.
Based on the company’s correlation of data from the preliminary report and its EDM System,
Alyeska contended that it had determined the top anomalies identified by the vendor had either
already been addressed or did not meet the regulatory repair criteria. With regard to the pressure
anomalies in particular, Respondent had performed two additional calculations to arrive at its
conclusion. First, Respondent applied an “aggressive corrosion growth rate” by assuming the
pipeline corroded faster than it actually did.5 Second, the company applied a conservative
forecast to determine when an anomaly would need to be physically examined. These two
calculations, according to Respondent, “added a 5% margin of safety” to the requirement for
remediation of pressure anomalies.6
Alyeska’s analysis of the preliminary ILI data, its EDM System information, and other
calculations led the company to determine there were no actionable anomalies on the pipeline.
Alyeska did not provide, nor could it document, a date certain by which it had made this
determination; rather the company contended generally that adequate information had been
the ILI vendor’s final report, which Alyeska received on April 20, 2005, validated the company’s
received and analyses performed “within the 180 day requirement.”7 According to Respondent,
determinations with respect to the penetration and pressure anomalies.
At the hearing, Respondent acknowledged that the vendor’s final report contained inaccuracies
about maximum operator pressure (MOP) on TAPS, but downplayed its significance, claiming
that the error did not affect the company’s determination about conditions on the pipeline.
With regard to anomalies that might constitute immediate repair conditions under
§ 195.452(h)(4)(i), Respondent indicated the company could have identified those conditions
despite the incorrect MOP reported by the vendor. With respect to anomalies that might be 180-
day repair conditions under § 195.452(h)(4)(iii), Respondent explained that it had compensated
for the inaccurate MOP through the application of an aggressive corrosion growth-rate
calculation, also known as “years to dig.
”8
After reviewing all of the evidence in the record, I find that Respondent completed an MFL
integrity assessment of TAPS, a pipeline that could affect a high consequence area, on May 26,
2004. In accordance with § 195.452(h)(2), Respondent was required to obtain sufficient
4 Response Exhibit 2 at 1.
5 Response at 3.
6 Response at 3.
7 E.g., Response at 2. At the hearing, the presiding official asked Alyeska representatives if the company could
document actions that had been taken within the 180-day time period. Alyeska’s Closing Statement describes the
actions taken, but, again, only states that the actions were taken “in November 2004.” Closing Statement at 1.
8 Response at 3.



4
information from this assessment to determine if anomalous conditions discovered on the
pipeline presented a potential threat to its integrity. The information was required to be obtained
29, 2004, seven days after the deadline, Respondent received the preliminary “top ten list”
conditions from the vendor. Respondent compared this preliminary information with data it
already had about conditions on the pipeline to determine if any of the anomalies identified on
promptly, but no later than 180 days from May 26, 2004, or November 22, 2004.9 On November
the preliminary list could threaten the line’s integrity. Respondent concluded, based on this
review, that no anomalies required repair. There is no date certain by which Respondent made
this determination.
I further find that Respondent subsequently received the ILI vendor’s final report on April 20,
2005, approximately five months after the deadline. The list of features in the final report was
predicated on two important data inaccuracies. First, the list indicated a constant MOP of 850
pounds per square inch gauge (psig) everywhere on TAPS, even though sections of the pipeline
had a different MOP. Second, the features list indicated a constant specified minimum yield
strength (SMYS) of 65,000 psig everywhere on TAPS, even though the pipeline consisted of
pipe with varying SMYS.
These inaccuracies are material because MOP and SMYS play a key role in determining whether
an identified anomaly constitutes a potential threat to integrity under § 195.452(h)(4). Pursuant
to that regulation, Respondent had to calculate the remaining strength of the pipe at the point of
the anomaly. To determine the remaining strength, Respondent had to calculate burst pressure
and maximum safe operating pressure at those particular locations.10 Inaccurate data concerning
SMYS would have led to erroneous calculations of burst pressure and maximum safe operating
pressure.11 In turn, since immediate repair conditions and 180-day repair conditions are both
defined in terms of their relationship to MOP, inaccurate data concerning MOP would have
further impacted the validity of Respondent’s overall determination as to whether conditions
were a threat to integrity.12 In fact, Respondent acknowledged in its Closing Statement that
“[t]he pipeline condition reports may not have included anomalies that might have been reported
if the correct maximum operating pressure for the section had been used.”13
Respondent performed additional analyses after receiving the vendor’s final report to
compensate for these inaccuracies, as explained above, but § 195.452(h)(2) required that
Respondent complete all necessary analyses to determine if conditions on the pipeline threatened
integrity no later than November 22, 2004. Even though § 195.452(h)(2) did not require
9 Respondent did not contend in its written submissions or at the hearing that the 180-day period was impracticable.
10 Section 195.452(h)(4)(i)(B) defines an “immediate repair condition” as a condition where a “calculation of the
remaining strength of the pipe shows a predicted burst pressure less than the established maximum operating
pressure at the location of the anomaly.” Section 195.452(h)(4)(iii)(D) defines a “180-day condition” as a condition
where a “calculation of the remaining strength of the pipe shows an operating pressure that is less than the current
established maximum operating pressure at the location of the anomaly.”
11 See also Frequently Asked Question (FAQ) 7.18, which states, “Burst pressure of corroded pipe is determined by
calculation, considering the flow stress and the dimensions of the metal loss (depth and length). For liquid pipelines,
the maximum safe operating pressure of corroded pipe is equivalent to 72% of the pipe’s calculated, predicted burst
pressure.” (Revised Jul. 9, 2002). PHMSA publishes answers to FAQs concerning compliance with the integrity
management regulations at: http://primis.phmsa.dot.gov/iim/faqs.htm.
12 See § 195.452(h)(4)(i)(B) and (h)(4)(iii)(D).
13 Closing Statement at 2.



5
Respondent to receive a final report within 180 days, it did require Respondent to obtain
“sufficient information,
” which means enough information to allow an operator to accurately and
reliably identify, locate, validate, and evaluate pipeline anomalies detected by the integrity
assessment and to properly classify them for repair, if necessary, under § 195.452(h).
Furthermore, I note that Respondent was required to obtain such information “promptly”—the
180-day deadline was merely the “upper limit.”14
Respondent’s receipt of even the preliminary “top ten list” was not received until November 29,
2004, seven days after the deadline. The report did not by itself provide sufficient information
about conditions on the pipeline because it was not comprehensive (it listed only a select number
of conditions) and because it required Respondent to correlate the data with its EDM System and
apply additional calculations, such as an “aggressive corrosion growth rate,” in order to
determine if conditions presented potential threats to the integrity of the pipeline. The final
report, which was received approximately five months after the deadline, also required additional
analyses to compensate for inaccuracies in the data. These facts demonstrate that Respondent
did not obtain sufficient information about the conditions on the pipeline as required by
§ 195.452(h)(2).
Accordingly, I find that Respondent violated § 195.452(h)(2) by failing to promptly obtain,
within 180 days after an integrity assessment, sufficient information about anomalous conditions
to determine if they present a potential threat to the integrity of the pipeline.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(3) and (h)(4)(i)(C),
which states:
§ 195.452 Pipeline integrity management in high consequence areas.
(a) . . . .
(h) What actions must an operator take to address integrity issues?—
(1) General requirements. An operator must take prompt action to
address all anomalous conditions the operator discovers through the
integrity assessment or information analysis. In addressing all conditions,
an operator must evaluate all anomalous conditions and remediate those
that could reduce a pipeline’s integrity . . . .
(3) Schedule for evaluation and remediation. An operator must
complete remediation of a condition according to a schedule prioritizing
the conditions for evaluation and remediation. If an operator cannot meet
the schedule for any condition, the operator must explain the reasons why
it cannot meet the schedule and how the changed schedule will not
jeopardize public safety or environmental protection.
(4) Special requirements for scheduling remediation—
(i) Immediate repair conditions. An operator’s evaluation and
remediation schedule must provide for immediate repair conditions. To
maintain safety, an operator must temporarily reduce operating pressure or
shut down the pipeline until the operator completes the repair of these
conditions. An operator must calculate the temporary reduction in
operating pressure using the formula in section 451.7 of ASME/ANSI
14 Pipeline Integrity Management in High Consequence Areas (Repair Criteria), 67 Fed. Reg. 1650, 1653 (Jan. 14,
2002).



6
B31.4 (incorporated by reference, see § 195.3). An operator must treat the
following conditions as immediate repair conditions:
(A) . . . .
(C) A dent located on the top of the pipeline (above the 4 and 8
o’clock positions) that has any indication of metal loss, cracking or a
stress riser . . . .
The Notice alleged that Respondent violated § 195.452(h)(3) and (h)(4)(i)(C) by failing to
complete remediation of an immediate repair condition according to a schedule for evaluation
and repair, and by failing to temporarily reduce op
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