{"operation":"document","citation":"CPF 520075008","title":"BUTTE PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2007-02-08","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402, 195.402(c)(12), 195.403, 195.422, 195.428(a), 195.440, 195.583.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075008.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075008.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075008","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520075008","body":"Notice of Probable Violation involving BUTTE PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.402,  195.402(c)(12),  195.403,  195.422,  195.428(a),  195.440,  195.583. The case was opened on 2007-02-08 and is reported as closed as of 2011-01-03. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520075008_closure letter_01032011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_closure%20letter_01032011.pdf\n\n520075008_closure letter_01032011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_closure%20letter_01032011_text.pdf\n\n520075008_Final Order_08172009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_Final%20Order_08172009.pdf\n\n520075008_Final Order_08172009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_Final%20Order_08172009_text.pdf\n\n520075008_notice letter_02082007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_notice%20letter_02082007.pdf\n\n520075008_notice letter_02082007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_notice%20letter_02082007_text.pdf\n\n520075008_Operator Requested A Hearing_03132007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_Operator%20Requested%20A%20Hearing_03132007.pdf\n\n520075008_notice letter_02082007_text.pdf\n\nU. S. Department\nof Transportation\nPipeline and\nHazardous Materials Safety\nAdministration\n12300 W Dakota Ave, Suite 110\nLakewood, CO 80228\nNOTICE OF PROBABLE VIOLATION\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT RE UESTED\nFebruary 8, 2007\nMr. Hank True\nPresident\nButte Pipeline Company\n455 North Poplar Street\nCasper, WY 82601\nSENT TO COMPLIANCE REGISTRY\nHardcopy ElecrroaicallyW\nPof Copiesg /Date~-C)'t\nCPF No. 5-2007-5008\nDear Mr. True:\nBetween June 6-10, 2005, July 18-21, 2005, and August 15-18, 2005, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA, pursuant to Chapter 601 of 49\nUnited States Code, inspected your of Butte Pipeline Company's (Butte PL) Butte pipeline\nsystem in Montana and Wyoming. This inspection included a review of supporting Operation\nand Maintenance (O&M) records for all systems in Casper and New Castle, Wyoming as well as\nBaker, Montana.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the\nprobable violations are:\n1. $195. 402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a manual\nof written procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies. This manual shall be reviewed at\nintervals not exceeding 15 months, but at least once each calendar year, and appropriate\nchanges made as necessary to insure that the manual is effective. This manual shall be\n\n\n\nprepared before initial operations of a pipeline commence, and appropriate parts shall\nbe kept at locations where operations and maintenance activities are conducted.\nButte PL procedures require periodic review of work done by the operator to determine the\nadequacy of procedures used in normal operations and maintenance. Butte PL has not\ncompleted any of these reviews.\nButte PL procedures require periodic review of work done by the operator to determine the\nadequacy of procedures used in controlling abnormal operations. Butte PL has not completed\nany of these reviews.\n$195. 402 Procedural manual for operations, maintenance, and emergencies.\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this\nsection must include procedures for the following to provide safety during maintenance\nand normal operations:\n(12) Establishing and maintaining liaison with fire, police, and other appropriate public\nofficials to learn the responsibility and resources of each government organization that\nmay respond to a hazardous liquid or pipeline emergency and acquaint the officials with\nthe operator's ability in responding to a hazardous liquid or carbon dioxide pipeline\nemergency and means of communication.\nButte PL liaison activity efforts do not ensure that local responders, including those at remote\nlocations, understand how to respond to a pipeline emergency for the Butte pipeline system.\n$195. 403 Emergency Response Training.\n(b) At the intervals not exceeding 15 months, but at least once each calendar year, each\noperator shall:\n(1) Review with personnel their performance in meeting the objectives of the emergency\nresponse training program set forth in paragraph (a) of this section; and\n(c) Each operator shall require and verify that its supervisors maintain a thorough\nknowledge of that portion of the emergency response procedures established under\n195. 402 for which they are responsible to ensure compliance.\nButte PL does not review with personnel, once each calendar year not to exceed 15 months,\ntheir performance in meeting the objectives of the emergency response training program.\nButte PL does not verify that their supervisors have adequate knowledge of emergency\nresponse procedures.\n$195. 422 Pipeline Repairs.\n(a) Each operator shall, in repairing its pipeline systems, insure that the repairs are\nmade in a safe manner and are made so as to prevent damage to persons or property.\nOf the several \"Type B\" repair sleeves installed on the Butte pipeline in 2004, only two were non-\ndestructively tested (NDTed) at the sleeve to pipe fillet welds. Operator's records do not appear\nto indicate if these welds were visually examined. Industry practice has been to use some type of\n\n\n\nNDT inspection of all sleeve to pipe fillet welds to insure that repairs are made in a safe manner\nto prevent damage to persons or property during and after repairs.\n5. $195, 428 Overpressure safety devices and overfill protection systems\n(a) Except as provided in paragraph (b) of this section, each operator shall, at intervals\nnot exceeding 15 months, but at least once each calendar year, or in the case of pipelines\nused to carry highly volatile liquids, at intervals not to exceed 7'/i months, but at least\ntwice each calendar year, inspect and test each pressure limiting device, relief valve,\npressure regulator, or other item of pressure control equipment to determine that it is\nfunctioning properly, is in good mechanical condition, and is adequate from the\nstandpoint of capacity and reliability of operation for the service in which it is used.\nButte PL does not, once each calendar year not to exceed 15 months, test or calibrate pressure\ntransducers that transmit data to the SCADA center on the Butte pipeline. Pressure transmitters\nthat send pressure data to manned SCADA centers are part of the pressure control system and as\nsuch must be tested once each calendar year not to exceed 15 months.\n6. $195. 440 Public awareness\nEach operator shall establish a continuing educational program to enable the public,\nappropriate government organizations and persons engaged in excavation-related\nactivities to recognize a hazardous liquid or a carbon dioxide pipeline emergency and to\nreport it to the operator or the fire, police, or other appropriate public officials. The\nprogram must be conducted in English and in other languages commonly understood by\na significant number and concentration of non-English speaking population in the\noperator's operating areas.\nButte PL's Public Awareness Program is inadequate at providing pipeline information to the\ngeneral public. A process (e. g. newspapers, flyers) to disseminate this information the public did\nnot exist.\n7. $195. 583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed to the\natmosphere for evidence of atmospheric corrosion, as follows:\nIf the i eline is located:\nThen the fre uenc of ins ection is:\nOnshore\nAt least once every 3 calendar years, but with intervals\nnot exceeding 39 months\nOffshore\nAt least once each calendar year, but with intervals not\nexceeding 15 months\n(b) During inspections you must give particular attention to pipe at soil-to-air\ninterfaces, under thermal insulation, under disbonded coatings, at pipe supports, in\nsplash zones, at deck penetrations, and in spans over water.\n(c) If you find atmospheric corrosion during an inspection, you must provide protection\nagainst the corrosion as required by Sec. 195. 581.\n\n\n\nButte PL has not completed or documented any of their atmospheric corrosion inspections. Butte\nPL has no plan for examining those pipe surfaces that are in contact with concrete saddles.\nPro osed Com liance Order\nPursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety\nAdministration proposes to issue a Compliance Order to Butte PL. Please refer to the Proposed\nCompliance Order that is enclosed and made a part of this Notice\nWarnin Items\nWith respect to item(s) la, lb, 2, 3a, 3b, and 6 we have reviewed the circumstances and\nsupporting documents involved in this case and have decided not to conduct additional\nenforcement action or penalty assessment proceedings at this time. We advise you to promptly\ncorrect these item(s). Be advised that failure to do so may result in Butte PL being subject to\nadditional enforcement action.\nRes onse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. If you do\nnot respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue a Final\nOrder.\nIn your correspondence on this matter, please refer to CPF 5-2007-500S and for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\ncc: PHP-60 Compliance Registry\nPHP-500 (G. Davis ¹114331, ¹114330, ¹114253)\n-4-\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) proposes to issue to Butte PL a Compliance Order incorporating the following remedial\nrequirements to ensure the compliance of Butte PL with the pipeline safety regulations:\n1 With respect to Item 4 of the Notice, Butte PL must:\nExcavate and nondestructively test 50% of all sleeve to pipe fillet welds made as part of the Butte\npipeline integrity repairs of 2004.\nIf any of the excavated welds shows indications of cracking then the balance of all welds will be\nexcavated and nondestructively tested.\nProvide documentation of all weld mspections and any associated repairs to PHMSA.\n2. With respect to Item 5 of the Notice, Butte PL must:\nTest all pressure transducers that are used for operations of the Butte pipeline including those\ntransducers that are part of the computational pipeline monitoring (CPM) system.\nEnsure that all pressure transducers that are used for operations of the Butte pipeline, including\nthose transducers that are part of the CPM system, are tested and inspected once each calendar\nyear not to exceed 15 months.\nProvide documentation of tests for all pressure transducers that are used for operations of the Butte\npipeline including those transducers that are part of the CPM system.\n3. With respect to Item 7 of the Notice, Butte PL must:\nComplete an atmospheric corrosion inspection of all exposed piping on the Butte pipeline. These\ninspections shall include but not be hmited to the soil to air interfaces and under pipe supports.\nDocument all of the above inspections\nProvide protection for all areas of corrosion found during the above inspections.\n4. Within 60 days of issuance of the Final Order, Butte Pipeline Company (Butte PL) must complete\nthe above items, and submit the required documentation and procedures to the Director, Western\nRegion, Pipehne and Hazardous Materials Administration, 12300 West Dakota Ave, ¹110,\nLakewood, Colorado 80228.\n5. Butte PL shall maintain documentation of the safety improvement costs associated with fulfilling\nthis Compliance Order and submit the total to Director, Western Region, Pipeline and Hazardous\nMaterials Safety Administration. Costs shall be reported in two categories: 1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated\nwith replacements, additions and other changes to pipeline infrastructure.\n-5-\n\n520075008_Final Order_08172009_text.pdf\n\nAUG 17, 2009\nMr. Hank True\nPresident\nButte Pipeline Company\n455 N. Poplar Street\nP.O. Drawer 2360\nCasper, WY 82602\nRe: CPF No. 5-2007-5008\nDear Mr. True:\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation\nand specifies actions that need to be taken by Butte Pipeline Company to comply with the\npipeline safety regulations. When the terms of the compliance order have been completed, as\ndetermined by the Director, Western Region, this enforcement action will be closed. Your\nreceipt of this Final Order constitutes 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: Chris Hoidal\nDirector, Western Region, PHMSA\nColin G. Harris, Esq.\nHolme Roberts & Owen LLP\n1801 13th St., Ste 300\nBoulder, CO 80302-5387\nVIA CERTIFIED MAIL—RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5746]\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 )\nButte Pipeline Company, ) CPF No. 5-2007-5008\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn June 6-10, July 18-21, and August 15-18, 2005, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration’s Office of\nPipeline Safety (PHMSA) conducted a safety inspection of the hazardous liquid pipeline systems\noperated by Butte Pipeline Company (Butte or Respondent), and several related companies in\nto Ft. Laramie and Guernsey, Wyoming. As a result of the inspection, the Director, Western\nRegion (Director) issued a combined notice of probable violation and proposed compliance order\n(CPF No. 5-2006-5004) by letter dated February 21, 2006, to one of the companies (Belle\nFourche), alleging violations of the hazardous liquid pipeline safety regulations with respect to\nthe inspected facilities. By letters dated May 26 and December 26, 2006, Belle Fourche objected\nto the notice on the grounds that the individual companies were separate and distinct legal\nMontana and Wyoming.1 The Butte pipeline system transports crude oil from Baker, Montana,\nentities and should be named separately.\nIn response to those objections, the Director withdrew the original charges on February 2, 2007,\nand issued separate enforcement documents to each company, including a Notice of Probable\nViolation and Proposed Compliance Order (Notice) issued in this case to Butte on February 8,\n2\n2007.\nIn accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Butte had\ncommitted certain violations of 49 C.F.R. Part 195 and proposed that Butte take measures to\ncorrect the alleged violations. In addition, pursuant to 49 C.F.R. § 190.205, the Notice advised\nRespondent to take appropriate corrective action to address several warning items or face future\npotential enforcement action.\n1 The companies inspected were Belle Fourche Pipeline Company (Belle Fourche), Bridger Pipeline Company,\nLLC (Bridger), and Butte Pipeline Company. These companies share the same manual of operating procedures and\nsome of the same employees and officers.\n2 The Director issued separate notices to Belle Fourche (CPF No. 5-2007-5002) and Bridger (CPF No. 5-2007-\n5003). This Final Order concerns only the Notice issued to Butte. Final agency action has already been taken in the\ncases involving Belle Fourche and Bridger.\n\n\n\n2\nButte responded to the Notice by letter dated March 13, 2007 (Response). In its Response, the\ncompany contested the allegations of violation and requested a hearing. In accordance with 49\nC.F.R. § 190.211, a combined hearing was held on August 31, 2007, in Lakewood, Colorado,\nwith an attorney from the Office of Chief Counsel, PHMSA, presiding. Butte, Belle Fourche,\nand Bridger were jointly represented by counsel at the hearing. After the hearing, the companies\nsubmitted a single post-hearing brief (Brief) on October 11, 2007, and additional information by\nletter dated December 21, 2007. To the extent that the issues raised at the hearing and in the\nBrief relate to Butte, they are addressed below.\nAs a preliminary matter, the parties agree that in making findings of violation, PHMSA carries\nthe burden of proving the allegations set forth in the Notice, meaning that a violation may be\nfound only if the evidence supporting the allegation outweighs the evidence and reasoning\nmeet its burden of proof on all contested Items in the Notice (i.e., Items 4, 5, and 7). As\npresented by Respondent in its defense.3 Respondent argues in its Brief that PHMSA failed to\ndiscussed below, I find that PHMSA met its burden of proof on Items 4 and 7, but not Item 5.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent committed violations of 49 C.F.R. Part 195, as follows:\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.422(a), which states:\n§ 195.422 Pipeline repairs.\n(a) Each operator shall, in repairing its pipeline systems, insure that the\nrepairs are made in a safe manner and are made so as to prevent damage to\npersons or property.\nThe Notice alleged that Respondent violated § 195.422(a) by failing to ensure that integrity\nrepairs performed on the Butte pipeline in 2004 were made in a safe manner. Specifically, it\nalleged that Butte failed to use a nondestructive testing (NDT) method to examine all but two\ntype-B repair sleeves and associated sleeve-to-pipe fillet welds. The Notice also alleged that\nindustry practice has been to use NDT to ensure that type-B repair sleeves are installed in a safe\nmanner. The Notice alleged further that Respondent’s repair records did not indicate that visual\nexaminations of such welds had even been performed.\nDuring the PHMSA safety inspection, the inspector noted that although Butte had made more\nthan 50 integrity repairs to the Butte pipeline in 2004 using type-B repair sleeves, the company’s\nrecords indicated that only two sleeve repairs had been tested using NDT. The inspector noted\nfurther that there were no records of any of the repairs having been visually inspected.\nStatements by two of Respondent’s employees during the safety inspection indicated the\ncompany had visually inspected the welds but did not perform NDT on all the welds because\n3 PHMSA enforces the pipeline safety regulations and imposes sanctions for violations by conducting proceedings\nin accordance with 49 C.F.R. Part 190. Such proceedings are not “formal adjudications” under the Administrative\nProcedures Act (5 U.S.C. §§ 554 and 556). By way of comparison, however, it may be noted that the Supreme\nCourt has found in formal adjudications that the burden of proof includes the burden of persuasion, and the standard\nof proof is the preponderance-of-the-evidence standard. Dir., Office of Workers’ Comp. Programs, Dep’t of Labor\nv. Greenwich Collieries, 512 U.S. 267, 276 (1994); and Steadman v. SEC, 450 U.S. 91, 102 (1981).\n\n\n\n3\nNDT had been performed on two sleeve repairs and those tests had been successful. Violation\nReport at 2.\nButte raised several defenses to Item 4. First, it contended that the company ensured type-B\nrepair sleeves had been installed in a safe manner by using fully qualified welders and\nprovide the company with fair notice of the agency’s interpretation and application of this NDT\nprocedures and by visually inspecting the welds.4 Second, it argued that PHMSA failed to\nstandard.\nAs for Butte’s first defense that the company had ensured the repairs were made in a safe\nmanner, the company presented a witness who stated that he had been told by the welding\ntestified that, to his knowledge, the company had used qualified welders and procedures in the\nperformance of this particular type of repair. Id. at ¶ 8. Respondent argued that these measures\nconstituted compliance with § 195.422 and American Society of Mechanical Engineers (ASME)\npipeline transportation systems.” Response at 2. In particular, Respondent contended that\nensure the safety of repair welds. Id.\nforeman that all of the welds were visually inspected.5 Brief Ex. 6 at ¶ 9. The witness also\nStandard B31.4, which Respondent referred to as “the relevant professional code governing\nSection 451.6.3 of ASME B31.4 “allows for ‘other methods’ along with visual inspection” to\nWith regard to the use of qualified workers and procedures, Respondent is correct to point out\nthat these are critical for ensuring repairs are made in a safe manner. However, the use of\nqualified workers and procedures is not a substitute for post-repair examination. The use of\nqualified workers and procedures may serve prospectively to make it more likely that repairs will\nbe made safely in the future, but the use of post-repair examinations is also needed to ensure that\nrepairs were in fact made safely.\nWith regard to the visual examinations, I find little support in the record for Respondent’s\nassertion that it conducted visual examinations of the repair welds, other than second-hand\naccounts and hearsay. Even if visual examinations were performed, they do not provide enough\ninformation on their own to determine whether repair welds were safely performed. Therefore,\nanother type of post-repair examination method was required besides just visual examinations.\nWhile Butte attempted to convince PHMSA that “other methods,” generally, are acceptable\nunder the relevant industry standard, the company curiously neglected to disclose that the\nstandard actually states,\n“Welds made during pipeline repairs . . . should also be examined by at\nleast one other nondestructive examination method.” ASME B31.4 § 451.6.3(b) (2002)\n(emphasis added).\nNDT may be the industry-recognized method to ensure type-B repair sleeves are installed in a\nsafe manner, but the text of § 195.422(a) does not explicitly require the use of NDT to determine\nthe safety of such repairs. As Respondent correctly notes, § 195.422(a) is a performance-based\n4 In its Response, Butte indicated that it had also performed a post-repair hydrostatic test to ensure the safety of the\nrepairs on the Butte pipeline; but at the hearing, the company clarified that it had not actually performed a\nhydrostatic test of the Butte line.\n5 It is not evident in the record when the witness actually spoke to the foreman. Respondent was not able to locate\nthe foreman for this proceeding. Brief at 8.\n\n\n\n4\nregulation, which requires a specified minimum level of safety for pipeline repairs without\nprescribing a specific process or method for each type of repair. With regard to the repairs at\nissue in this case, the question is whether Respondent used a post-repair evaluation process\ncapable of ensuring that type-B repair sleeves were installed in a safe manner. Respondent did\nnot make the assertion that it ever used NDT testing, or testing of any kind other than visual\nexaminations, to examine all of the repair welds. For the reasons expressed above, I find\nRespondent failed to determine the safety of the 2004 type-B sleeve repairs on the Butte pipeline\nusing a method capable of complying with § 195.422(a).\nAs for Butte’s second argument that PHMSA failed to provide fair notice of its interpretation of\nthis regulation, Respondent argued that it “could not have reasonably ascertained that OPS now\nconsiders NDT to be a mandatory requirement under 49 C.F.R. § 195.422(a),” because the\nregulation, on its face, imposes no such requirement. Brief at 10. Accordingly, Respondent\nargued that “it would violate due process to hold any party liable under this interpretation.”\nResponse at 3.\nButte has misinterpreted the agency’s application of § 195.422. PHMSA does not take the\nposition that NDT is always a mandatory requirement of the regulation. Rather, the agency notes\nthe industry practice has been to use NDT to meet the performance-based requirement for the\ntype of pipeline repair at issue in this case. PHMSA applies the text of § 195.422(a) to require\nthat operators ensure each pipeline repair has been made in a safe manner through the use of an\nevaluation method capable of demonstrating the safety of that particular repair.\nRespondent is correct that governmental agencies may not violate a person’s right of due process\nby depriving such person of property without providing a minimum level of “fair notice” as to\nwhat may constitute a violation of law. “Due process requires that parties receive fair notice\nbefore being deprived of property . . . . In the absence of notice—for example, where the\nregulation is not sufficiently clear to warn a party about what is expected of it—an agency may\nnot deprive a party of property by imposing civil or criminal liability.” Gen. Elec. Co. v. U.S.\nEPA, 53 F.3d 1324, 1328-29 (D.C. Cir. 1995) (citations omitted) (internal quotation marks\nomitted). See also, United States v. Chrysler Corp., 158 F.3d 1350, 1354 (D.C. Cir. 1998);\nTrinity Broad. of Fla., Inc. v. FCC, 211 F.3d 618, 628 (D.C. Cir. 2000). When an agency\ninterprets a regulation through enforcement rather than pre-enforcement efforts, the issue of\nnotice rests on “whether the regulated party received, or should have received, notice of the\nagency’s interpretation in the most obvious way of all: by reading the regulations. If, by\nreviewing the regulations and other public statements issued by the agency, a regulated party\nacting in good faith would be able to identify, with ‘ascertainable certainty,’ the standards with\nwhich the agency expects parties to conform, then the agency has fairly notified a petitioner of\nthe agency’s interpretation.” Gen. Elec. Co., 53 F.3d at 1329.6\n6 Such “ascertainable certainty” may not be possible where an agency has given conflicting public interpretations of\na regulation. In addition, even in those situations where an “agency does not issue contradictory public statements,\nit may fail to give sufficient fair notice to justify a penalty if the regulation is so ambiguous that a regulated party\ncannot be expected to arrive at the correct interpretation using standard tools of legal interpretation, must therefore\nlook to the agency for guidance, and the agency failed to articulate its interpretation before imposing a penalty.”\nUnited States v. Lachman, 387 F.3d 42, 57-58 (1st Cir. 2004) (citation omitted).\n\n\n\n5\nIt is evident from the text of § 195.422(a) that a pipeline operator is required to ensure that each\npipeline repair is made in a safe manner. It follows necessarily that the operator must employ a\nmethod of evaluating the repair that is capable of demonstrating whether or not the repair was\nmade safely. As a matter of law, therefore, I find that Butte had fair notice of the requirement\nimplicit in § 195.422(a) that it must use an evaluation method capable of determining type-B\nsleeve repairs were made in a safe manner. Unfortunately, for the reasons expressed above, the\nmethods used by Butte were insufficient to comply with this requirement.\nRespondent’s assertion that the company was not aware NDT was the “industry standard” is\nspecious, as Butte itself cited the ASME B31.4 standard, which states that repair welds should be\nexamined by NDT. Whether or not NDT is the industry standard, however, is not controlling\nbecause § 195.422(a) does not bind Respondent to the industry standard. Respondent may\ncomply with the regulation by using one or more evaluation methods capable of determining that\n“the repairs are made in a safe manner”; however, the operator must be able to demonstrate that\nthe chosen method is capable of making such a determination. In this case, Butte failed to use an\nevaluation method capable of demonstrating the repairs were safely made.\nAccordingly, after considering all of the evidence and arguments presented, I find Respondent\nviolated § 195.422(a) by failing to ensure that type-B repairs sleeves were completed in a safe\nmanner.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:\n§ 195.428 Overpressure safety devices and overfill protection systems.\n(a) [E]ach operator shall, at intervals not exceeding 15 months, but at least\nonce each calendar year . . . inspect and test each pressure limiting device,\nrelief valve, pressure regulator, or other item of pressure control equipment to\ndetermine that it is functioning properly, is in good mechanical condition, and\nis adequate from the standpoint of capacity and reliability of operation for the\nservice in which it is used.\nThe Notice alleged that Respondent violated § 195.428(a) by failing to inspect and test certain\npressure control equipment on the Butte pipeline to determine if such equipment was functioning\nproperly, was in good mechanical condition, and was adequate in terms of capacity and\nreliability of operation. Specifically, the Notice alleged that Butte failed to calibrate “pressure\ntransducers that transmit data to the [Supervisory Control and Data Acquisition (SCADA)]\ncenter on the Poplar pipeline.” Notice at 3. The Notice further stated that “[p]ressure\ntransmitters that send pressure data to manned SCADA centers are part of the pressure control\nsystem.” Id.\nButte raised several defenses to Item 5. The company argued, inter alia, that the requirements in\n§ 195.428(a) do not apply to the pressure transducers/transmitters identified in the Notice\nbecause Butte’s pipeline uses on-site overpressure protection devices that are “hard-wired to\nmechanically shut down the system locally and independently of the SCADA system” when\npressure reaches a certain level. Brief at 12. Respondent distinguished those devices from\npressure transducers/transmitters that send pressure data to a SCADA center, arguing that the\nregulation only applies to its mechanical devices.\n\n\n\n6\nThe term “transducer” is a generic reference to an electro-mechanical device that reads a\nphysical metric (in this case, pipeline pressure) and translates that data into an electronic signal\nthat can then be transmitted, usually by wire. The term “transmitter” is an electronic assembly\ncomprised of a transducer at the front end, which transmits the signal. Although the two terms\ncan be distinguished in certain applications, the use of these terms interchangeably in the Notice\nrefers to the common assembly that Butte uses to measure pipeline pressure, translate that data\ninto an electronic signal, and transmit that data to the company’s SCADA center. For brevity,\nthis Final Order uses the term “pressure transmitter” to refer to this entire mechanism.\nRespondent is correct to point out that local mechanical pressure control equipment is covered by\n§ 195.428(a), but the regulation is not so limited as to exclude other types of devices used to\ncontrol operating pressure on a pipeline. By its terms, § 195.428(a) requires “each pressure\nlimiting device, relief valve, pressure regulator, or other item of pressure control equipment” to\nbe tested and inspected at specified intervals. The regulation does not define “pressure control\nequipment,” but the commonly understood (dictionary) meaning of the words pressure, control,\nand equipment would include any device used to control or limit pressure in the pipeline.\nAn interpretation of § 195.428(a) that applies to all types of pressure transmitters, to the extent\nthey control pipeline pressure, could be legally supported; but I have found as a matter of policy\npressure transmitters that serve as an integral part of a pipeline’s overpressure protection system\ncompared with those that only function to send pressure information to a SCADA system for\nother reasons. For example, certain pressure transmitters on a pipeline may be utilized to send\npressure data to remote terminal units or program logic computers that use the data to\nautomatically control pressure to avoid an overpressure event. These types of pressure\nthat § 195.428(a) should not be applied so broadly.7 There are certain distinctions between\ntransmitters, and other devices integral to a pipeline’s overpressure protection system, should be\nand are covered by the regulatory requirements in § 195.428(a). By comparison, pressure\ntransmitters that only send pressure information to a SCADA system for use by a human\ncontroller, or for other informational purposes, might not be part of a particular pipeline’s\noverpressure protection system, and as such are not intended to be covered by § 195.428(a).\nI have reviewed the evidence in this case to determine whether the pressure transmitters\nidentified in the Notice were integral to Butte’s pipeline overpressure protection system.\nPHMSA did not introduce evidence showing how the pressure transmitters on Butte’s pipeline\nsystem were actually utilized other than that the devices sent pressure information to the\ncompany’s SCADA center. This evidence is insufficient to demonstrate that the pressure\ntransmitters were integral to the pipeline’s overpressure control system. Butte, on the other\nhand, introduced evidence that its overpressure control system utilized local mechanical devices\nthat operated independently of its SCADA system. Without additional evidence in the record\ndemonstrating that the pressure transmitters were an integral part of Butte’s overpressure\nprotection system, I cannot find a violation of § 195.428(a).\n7 See In the Matter of Bridger Pipeline Company, LLC, CPF No. 5-2007-5003, Decision on Reconsideration (Jun.\n16, 2009) (finding § 195.428(a) applies to pressure transmitters to the extent they are integral to a pipeline’s\noverpressure protection system).\n\n\n\n7\nAccordingly, I am withdrawing the finding of violation with respect to § 195.428(a). Since the\nviolation is withdrawn for the above reasons, it is not necessary to address the additional\narguments for withdrawal presented by Butte for this Item.\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.583, which states:\n§ 195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed to\nthe atmosphere for evidence of atmospheric corrosion, as follows:\nIf the pipeline is located: Then the frequency of inspection is:\nOnshore At least once every 3 calendar years, but\nwith intervals not exceeding 39 months . . . .\n(b) During inspections you must give particular attention to pipe at soil-to-\nair interfaces, under thermal insulation, under disbonded coatings, at pipe\nsupports, in splash zones, at deck penetrations, and in spans over water.\n(c) If you find atmospheric corrosion during an inspection, you must\nprovide protection against the corrosion as required by § 195.581.\nThe Notice alleged that Respondent violated § 195.583 by failing to perform documented\natmospheric corrosion inspections. Specifically, the PHMSA inspector noted that Butte did not\nhave records of any completed atmospheric corrosion inspections and that none of the pipe\nsupports appeared to have been inspected. Violation Report at 4. When the PHMSA inspector\nasked company officials whether Butte planned to inspect pipe surfaces that were in contact with\nconcrete supports, Respondent’s lead engineer indicated that the company did not have\nprocedures to examine those pipe surfaces and had not documented any external corrosion\ninspections. Violation Report at 4.\nRespondent contended, inconclusively, that “Butte [was] in material compliance, or [has] been\naddressing the alleged deficiencies.” Brief at 13-14 (emphasis added). At the hearing,\nRespondent’s lead engineer stated that while the company had not used specific forms to\ndocument its atmospheric corrosion inspections, the company did perform generic inspections\nand identified corrosive surfaces at times. In its Brief, Butte introduced an affidavit from the\nsame person, stating that “specific external corrosion inspection procedures were not necessarily\nwritten down,” but that the company had “routine inspection procedures for pipelines,” and that\n“any significant external corrosion that was found would have been addressed appropriately.”\nBrief Ex. 6 at ¶ 28. The witness also stated that the company had a reference to external\ncorrosion in its operations and maintenance (O&M) manual and has been taking actions to\nimprove inspection procedures. Id. at ¶ 29.\nWhile Butte’s lead engineer testified that the company performed “routine” O&M inspections,\nthe company could not state explicitly how or when these inspections occurred, whether such\ninspections occurred at the requisite intervals under § 195.583, whether the company always\nchecked for atmospheric corrosion during such inspections, or whether such inspections\nspecifically checked pipe surfaces that were in contact with concrete supports—all requirements\nunder the regulation. Butte was also unable to produce any records of having performed such\ninspections, which the company is required to keep under § 195.589(c).\n\n\n\n8\nRespondent’s evidence concerning efforts to improve its forms and procedures after the PHMSA\ninspection are not relevant to the determination of whether or not Respondent was in compliance\nat the time of the inspection. Accordingly, after considering all of the evidence, I find Butte\nviolated 49 C.F.R. § 195.583 by failing to perform documented atmospheric corrosion\ninspections, particularly at pipe surfaces in contact with concrete supports.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nFreedom of Information Act (FOIA) Issue: Finally, Respondent objected generally to the\nsetting of a hearing in this proceeding while the company still had a FOIA request for documents\npending with the agency. Butte argued in its Brief that PHMSA’s decision to go forward with\nthe hearing, despite the company’s FOIA request and over its objections, constituted “a violation\nof Respondent’s due process rights.” Brief at 14. Respondent did not present any evidence or\ncite any legal authority in support of this claim.\nPHMSA has specific procedures in place to guarantee a respondent’s procedural due process\nrights in informal adjudications. See 49 C.F.R. Part 190. In accordance with those procedures,\nPHMSA provided Butte with all of the materials from the agency’s case file well in advance of\nthe date set for the hearing. See § 190.211(e). Therefore, Butte cannot reasonably assert that its\nprocedural due process rights were violated.\nFurthermore, the law provides that an agency may proceed with an adjudication despite a\nrespondent’s filing of a FOIA request. The Supreme Court has stated, “Discovery for litigation\npurposes is not an expressly indicated purpose of the [Freedom of Information] Act.”\nRenegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974). The Court has further\ncautioned against “[i]nterference with the agency proceeding [that] opens the way to the use of\nthe FOIA as a tool of discovery . . . over and beyond that provided by the regulations issued by\nthe [agency] for its proceedings.” Id","truncated":true,"body_characters":49377}