{"operation":"document","citation":"CPF 520065034","title":"OLYMPIC PIPE LINE COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2006-09-08","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520065034.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520065034.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520065034","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520065034","body":"Notice of Probable Violation involving OLYMPIC PIPE LINE COMPANY. PHMSA's enforcement data identifies the cited regulation as 195.432(b). The case was opened on 2006-09-08 and is reported as closed as of 2010-01-20. Proposed civil penalty: $23,000. Assessed civil penalty: $23,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520065034_Decision on the Petition for Reconsideration_11232009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065034/520065034_Decision%20on%20the%20Petition%20for%20Reconsideration_11232009.pdf\n\n520065034_Decision on the Petition for Reconsideration_11232009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065034/520065034_Decision%20on%20the%20Petition%20for%20Reconsideration_11232009_text.pdf\n\n520065034_FinalOrder_09012009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065034/520065034_FinalOrder_09012009.pdf\n\n520065034_FinalOrder_09012009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520065034/520065034_FinalOrder_09012009_text.pdf\n\n520065034_FinalOrder_09012009_text.pdf\n\nSEP 01 2009\nMr. Jim Lamanna\nPresident\nBP Pipelines (North America) Inc.\nOlympic Pipe Line Company\n28100 Torch Parkway\nWarrenville, IL 60555\nRe: CPF No. 5-2006-5034\nDear Mr. Lamanna:\nEnclosed is the Final Order issued in the above-referenced case. It makes a finding of violation\nand assesses a civil penalty of $23,000. It further finds that you have completed the actions\nspecified in the Notice required to comply with the pipeline safety regulations. When the civil\npenalty is paid, this enforcement action will be closed. Your receipt of the Final Order\nconstitutes service of that document under 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\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [ 7005 0390 0005 6162 5791]\n\n\n\n) CPF No. 5-2006-5034\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\n____________________________________\nIn the Matter of )\n)\n)\nBP Pipelines (North America), Inc., )\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom February 27 to March 2, 2006, pursuant to 49 U.S.C. § 60117, a representative of\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of\nPipeline Safety (OPS), inspected a 15-mile portion of BP Pipelines (North America),\nInc.’s (Respondent’s or BP’s) Olympic Pipeline and related facilities near Portland,\nOregon, as well as Respondent’s operation and maintenance records at its Renton,\nrelevant portion of the Olympic Pipeline originates at the Washington-Oregon border\nnear the Columbia River and transports petroleum products to delivery facilities and\nterminals along the Williamette River.\nWashington office. Located entirely within a High Consequence Area (HCA),1 the\nAs a result of the inspection, the Director, Western Region, PHMSA, issued to\nRespondent, by letter dated September 8, 2006, a Notice of Probable Violation, Proposed\nCivil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R.\n§ 190.207, the Notice proposed finding that Respondent had violated 49 C.F.R.\n§ 195.432(b), assessing a civil penalty of $23,000, and ordering Respondent to take\ncertain measures to correct the alleged violation.\nBP responded to the Notice by letters dated October 16 and November 9, 2006\n(Response). Respondent did not contest the allegation of violation, but provided\ninformation concerning the corrective actions it had taken and requested that the civil\npenalty be reduced or eliminated. Respondent also waived its right to an informal\nhearing.\n1 An HCA is defined for purposes of Part 195 as a “commercially navigable waterway, . . . [a] high\npopulation area, . . . [a]n other populated area, . . . [or] [a]n unusually sensitive area . . .” 49 C.F.R.\n§ 195.450. A commercially navigable waterway is “a waterway where a substantial likelihood of\ncommercial navigation exists;” a high population area is “an urbanized area, as defined and delineated by\nthe Census Bureau, that contains 50,000 or more people and has a population density of at least 1,000\npeople per square mile;” an other populated area is “a place, as defined by the Census Bureau, that contains\na concentrated population, such as an incorporated or unincorporated city, town, village, or other\ndesignated residential or commercial area.” Id; and, an unusually sensitive area is “a drinking water or\necological resource area that is unusually sensitive to environmental damage from a hazardous liquid\npipeline release.” 49 C.F.R. § 195.6.\n\n\n\n2\nFINDING OF VIOLATION\nItem 1 of the Notice alleged that BP violated 49 C.F.R. Part 195, which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) …\n(b) Each operator shall inspect the physical integrity of in-\nservice atmospheric and low-pressure steel above-ground breakout\ntanks according to section 4 of API Standard 653….\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to\nproperly inspect the physical integrity of two in-service atmospheric and low-pressure\nsteel above-ground breakout tanks according to section 4 of API Standard 653. BP has\nnot disputed the allegation. Accordingly, I find that Respondent violated § 195.432(b) by\nfailing to properly inspect the physical integrity of two in-service atmospheric and low-\npressure steel above-ground breakout tanks according to section 4 of API Standard 653.\nThis finding of violation will be considered a prior offense in any subsequent\nenforcement action taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to a civil penalty not to exceed $100,000\nper violation for each day of the violation up to a maximum $1,000,000 for any related\nseries of violations.\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of the\ncivil penalty, I consider the following criteria: the nature, circumstances, and gravity of\nthe violation, including adverse impact on the environment; the degree of Respondent’s\nculpability; the history of Respondent’s prior offenses; Respondent’s ability to pay the\npenalty and any effect that the penalty may have on its ability to continue doing business;\nand the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation\nwithout any reduction because of subsequent damages, and such other matters as justice\nmay require.\nThe Notice proposed a total civil penalty of $23,000 for violation of 49 C.F.R.\n§ 195.432(b). Respondent argues that the proposed civil penalty should be reduced or\neliminated. In particular, BP states that its consultant completed an analysis of the two\nbreakout tanks at issue after the OPS inspection, and that the contractor’s analysis\nshowed that neither of those tanks posed “an imminent threat to public safety . . .”2\nBP\nalso contends that these post-inspection actions show that it “continues to act within the\nspirit of the regulations, which are designed to foster continuous improvement of safety\n2 Response at 2.\n\n\n\n3\nprograms.”3 For these reasons, BP argues that a compliance order is not necessary and\nthat a reduction or elimination of the proposed civil penalty is warranted.\nRespondent’s arguments are not persuasive. First, BP knew that it had to conduct an\nengineering evaluation of these two breakout tanks several years prior to the 2006 OPS\ninspection. Specifically, Respondent’s 2001 inspection records note that the out-of-\nplane-edge settlement of these tanks did not comply with API’s guidelines, and that an\nengineering analysis of the tanks was required.\nBP did not conduct the recommended engineering analysis for the next five years and\nonly did so when prompted by the OPS inspection. Contrary to Respondent’s assertions,\nsuch inaction and delay clearly undermined public safety. While the results of its belated\nengineering analysis ultimately showed that the nature of the threat was not serious, the\nfact that Respondent failed to act promptly potentially placed the health and welfare of\nthe public in jeopardy. Respondent’s conduct was not consistent with the text or spirit of\nthe pipeline regulations.\nWith regard to the statutory factors, the unusual length of time from discovery to\nremediation aggravates the gravity of this particular offense. It is also true, as BP states,\nthat PHMSA considers the “good faith” of an operator in calculating and assessing civil\npenalties. However, such good faith is ordinarily limited to only those actions that an\noperator took in a reasonable attempt to achieve compliance before an inspection or\nenforcement action. Indeed, once a violation is discovered, PHMSA expects any prudent\noperator to cooperate in remediating and preventing a reoccurrence of that condition.\nRespondent also has the ability to pay this penalty without adversely affecting its ability\nto continue in business.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a total civil penalty of $23,000 for failing to perform the necessary\nengineering analysis or properly evidencing why an analysis was not required at the time\nof inspection.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the\nFederal Reserve Communications System (Fedwire), to the account of the U.S. Treasury.\nDetailed instructions are contained in the enclosure. Questions concerning wire transfers\nshould be directed to: Financial Operations Division (AMZ-341), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, P.O. Box 25082, Oklahoma City,\nOK 73125; (405) 954-8893.\nCOMPLIANCE ORDER\nThe Notice proposed a Compliance Order with respect to Item 1 in the Notice for\nviolation of 49 C.F.R. Part 195.\n3 Id.\n\n\n\n4\nUnder 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or\nwho owns or operates a pipeline facility is required to comply with the applicable safety\nstandards established under chapter 601. The Director has indicated that Respondent has\nsatisfactorily completed the following actions specified in the Proposed Compliance\nOrder:\n1. 49 C.F.R. § 195.432(b) -- With regard to the violation described in Item 1 of the\nNotice, in its Responses BP included the final reports for the engineering analysis of\nbreakout tanks 105 and 106 that were undertaken after the PHMSA inspection to\nensure the out-of-plane settlements were within the specified API 653 limits. The\nDirector, Western Region, PHMSA has reviewed this information and indicated it\nsatisfies the terms of the proposed Compliance Order.\nAccordingly, since compliance has been achieved with respect to this violation, the\ncompliance terms are not included in this Order.\nUnder 49 C.F.R. § 190.215, Respondent has the right to submit a petition for\nreconsideration of this Final Order. Should Respondent elect to do so, the petition must\nbe received within 20 days of Respondent’s receipt of this Final Order and must contain a\nbrief statement of the issue(s). The filing of a petition automatically stays the payment of\nany civil penalty assessed. However if Respondent submits payment for the civil penalty,\nthe Final Order becomes the final administrative decision and the right to petition for\nreconsideration is waived. The terms and conditions of this Final Order shall be effective\nupon receipt\n___________________________________ __________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n520065034_Decision on the Petition for Reconsideration_11232009_text.pdf\n\nNOV 23 2009\nVIA CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2464 5775]\nMr. Steve Pankhurst\nPresident\nBP Pipelines (North America) Inc.\nU.S. Pipelines and Logistics\n28100 Torch Parkway\nWarrenville, IL 60555\nRe: CPF No. 5-2006-5034\nDear Mr. Pankhurst:\nEnclosed is this agency’s decision denying your company’s Petition for Reconsideration in this\ncase. The penalty payment terms are set forth in the Final Order. This enforcement action closes\nautomatically upon payment. Your receipt of this Decision constitutes service of that document\nunder 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, P.E., Director, Western Region, PHMSA\nMr. David O. Barnes, P.E.\nManager DOT & Integrity\nBP Pipelines (North America) Inc.\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 )\nBP Pipelines (North America) ) CPF No. 5-2006-5034\nInc., )\n)\n)\n)\nPetitioner. )\n______________________________)\nDECISION ON PETITION FOR RECONSIDERATION\nBP Pipelines (North America) Inc. (Petitioner or BP) is the operator of the Olympic Pipeline, a\nhazardous liquid pipeline system that transports petroleum products from the Washington-\nOregon border to facilities along the Williamette River. One of those facilities, located near\nPortland, Oregon (Portland Delivery Facility), contains a pair of 2,000-barrel breakout tanks.\nIn the spring of 2006, the Office of Pipeline Safety (OPS) inspected those tanks and the\ncompany’s associated records. Those records included a July 2001 expert report finding that the\nout-of-plane-edge settlement for both tanks was not compliant with Part 195 of the Pipeline\nSafety Regulations and recommending that BP perform an engineering analysis. There is no\ndispute that Petitioner had still not performed those analyses as of the date of the OPS inspection.\nThereafter, in letter dated September 8, 2006, the Director, Western Region, OPS, issued BP a\nNotice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice).\nThe Notice alleged that BP violated 49 C.F.R. § 195.432(b) by failing to properly inspect the\nphysical integrity of the breakout tanks at the Portland Delivery Facility. The Notice further\nproposed that Petitioner pay a $23,000 civil penalty and perform certain corrective actions for\ncommitting that violation. On September 1, 2009, after BP submitted two written responses to\nthe Notice, a Final Order issued finding that Petitioner had violated 49 C.F.R. § 195.432(b) and\nassessing the company a $23,000 civil penalty for that violation.\nOn September 24, 2009, BP filed this Petition for Reconsideration (Petition). In that Petition, BP\nproposes, without further explanation, to “bring” a series of “additional facts to light[.]”1\nFirst,\nthe company states that the condition affecting the breakout tanks at the Portland Delivery\nFacility did not require immediate remediation. Second, BP argues that section 4 of API\n1 Petition at 1.\n\n\n\n2\nStandard 653, a standard incorporated by reference into § 195.432(b), uses an “equation for non-\nplanar settlement” which “is overly conservative for [the] small diameter tanks” at issue in this\nproceeding.\n2 Third, Petitioner complains that regulatory ambiguity left the Portland Delivery\nFacility’s status as a high-consequence area (HCA) in doubt from 2001 through 2003. Fourth,\nPetitioner asserts that its primary focus in 2001 was on restarting the northern portion of the\nOlympic Pipeline and complying with the terms of a Corrective Action Order issued by this\nagency, not on the condition of the tanks at the Portland Delivery Facility. Finally, BP contends\nthat those tanks only perform certain limited functions and that neither “serve[s] the purpose of\nmainline breakout tank storage.”3\nI. Discussion\nBefore turning to the merits, I will address the procedural adequacy of this Petition. Under Part\n190 of the Pipeline Safety Regulations,\n“[i]f [a] respondent requests the consideration of\nadditional facts or arguments [in a petition for reconsideration], the respondent must submit the\nreasons they were not presented prior to the issuance of the final order.\n”4 In this case, Petitioner\nwishes to “bring[] additional facts to light” on reconsideration. However, none of the five issues\nraised in this Petition were mentioned in either of BP’s written responses to the Notice,\nPetitioner has not provided a statement of the reasons why those facts were not presented before\nthe issuance of the Final Order. Accordingly, I find that BP has not complied with the\nprocedural requirements for raising new facts and arguments on reconsideration. Moreover, as\nBP has not properly raised any other arguments in this Petition, I am denying reconsideration on\nthat basis alone and affirming the Final Order without modification.\n5 and\nIn the alternative, I find that Petitioner’s arguments on the merits do not warrant reconsideration.\nFirst, with regard to BP’s contention that the condition affecting the Portland Delivery Facility\nbreakout tanks did not require immediate remediation, the Pipeline Safety Regulations explicitly\nstate that “no operator may operate or maintain its pipeline system at a level of safety lower than\nthat required by” Subpart F of Part 195, including §195.432(b). In addition, the Pipeline Safety\nRegulations further state that “[w]henever an operator discovers any condition that could\n2 BP notes that the requirements in section 4 of API Standard 653 are now codified in section 6 of API Standard 653.\nPetition at 1-2. Petitioner is advised, however, that the standards incorporated by reference in the Pipeline Safety\nRegulations remain effective until amended in a final rule, and that Part 195 still incorporates the requirements of\nsection 4 of Standard 653 (3rd edition, including Addendum 1, 2003). 49 C.F.R. §§ 195.3, 195.432(b); but see\nDepartment of Transportation, Pipeline and Hazardous Materials Safety Administration, Pipeline Safety: Periodic\nUpdates of Regulatory References to Technical Standards and Miscellaneous Edits, 74 Fed. Reg. 36139, 36143 (Jul.\n22, 2009) (“PHMSA is proposing to revise paragraph (b) to eliminate the reference to section 4 in API Standard 653.\nAll sections in API Standard 653 relating to inspection of in-service atmospheric and low-pressure steel\naboveground breakout tanks are incorporated by reference.”).\n3 Petition at 2.\n4 49 C.F.R. § 190.215(b).\n5 In responding to the Notice, BP simply stated that condition affecting these two tanks did not pose “an imminent\nthreat to public safety” and that the company’s post-inspection actions, including its performance of the\nrecommended engineering analyses, were consistent with “the spirit of the regulations[.]” Petitioner did not request\nan informal hearing.\n\n\n\n3\nadversely affect the safe operation of its pipeline system, it shall correct it within a reasonable\ntime[,]” but “if the condition is of such a nature that it presents an immediate hazard to persons\nor property, the operator may not operate the affected part of the system until it has corrected the\nunsafe condition.”6\nIn this case, Petitioner’s own expert determined that the breakout tanks at the Portland Delivery\nFacility were not compliant with section 4 of API Standard 653—and by incorporation\n§ 195.432(b)—and recommended that each of those tanks undergo an engineering analysis.\nWhile his opinion did not specify a particular time period for compliance, there is no dispute that\nPetitioner did not act on his recommendation for the next 5 years. That constituted a violation of\nan operator’s duty to correct “any condition that could adversely affect the safe operation of its\npipeline system . . . within a reasonable time.”\nWith regard to BP’s second argument, the requirements of section 4 of API Standard 653 are\nincorporated by reference into § 195.432(b). If Petitioner wishes to change or seek relief from\none of those requirements, including the equation for non-planar settlement, the proper course of\naction is to file a petition for rulemaking,\n7 request a special permit,\n8 or contact the API standards\ncommittee.\n9 Regardless, a petition for reconsideration is not the appropriate forum for achieving\nthose objectives.\n10\nTurning to Petitioner’s third and fourth arguments, the status of the Portland Delivery Facility as\nan HCA is not relevant in this proceeding. Section 195.432(b) requires that the “physical\nintegrity of in-service atmospheric and low-pressure steel aboveground breakout tanks” be\ninspected in accordance with the requirements of section 4 of API Standard 653. No exception is\nmade for tanks located on the grounds of an HCA facility. Likewise, Petitioner’s desire to focus\non the other portions of the Olympic Pipeline does not excuse its failure to comply with the\nrequirements of Part 195 at the Portland Delivery Facility.\nFinally, BP acknowledges that the tanks in question “receive and store hazardous liquid\ntransported by a pipeline for reinjection and continued transportation by pipeline.\ntherefore, a “breakout tank” for purposes of the Pipeline Safety Regulations and subject to the\nrequirements of 49 C.F.R. § 195.432(b).\n”11 Each is,\n6 49 C.F.R. § 195.401(a)-(b).\n7 49 C.F.R. § 190.331.\n8 49 C.F.R. § 190.341.\n9 http://www.api.org/Standards/ (accessed on Nov. 5, 2009).\n10 It is also worth noting that BP did not question its expert’s finding of non-compliance, his recommendation for\ncorrective action, or his use of the formula in section 4 of API Standard 653 at any time prior to the filing of this\nPetition.\n11 Petition at 2.\n\n\n\n4\nFor these reasons, I find that all of Petitioner’s arguments in favor of reconsideration lack merit.\nAccordingly, I am denying this Petition on that alternative basis and affirming the Final Order\nwithout modification.\nII. Conclusion\nThis Petition is denied solely as a result of Petitioner’s failure to comply with the procedural\nrequirements for raising new facts and arguments on reconsideration. In the alternative, this\nPetition is also denied on the merits.\nThis decision on reconsideration is the final administrative action in this proceeding.\n_____________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":22351}