# BUTTE PIPELINE CO — Notice of Probable Violation

- **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:** Not available
- **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.

Official case documents:

520075008_closure letter_01032011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_closure%20letter_01032011.pdf

520075008_closure letter_01032011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_closure%20letter_01032011_text.pdf

520075008_Final Order_08172009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_Final%20Order_08172009.pdf

520075008_Final Order_08172009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_Final%20Order_08172009_text.pdf

520075008_notice letter_02082007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_notice%20letter_02082007.pdf

520075008_notice letter_02082007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_notice%20letter_02082007_text.pdf

520075008_Operator Requested A Hearing_03132007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075008/520075008_Operator%20Requested%20A%20Hearing_03132007.pdf

520075008_notice letter_02082007_text.pdf

U. S. Department
of Transportation
Pipeline and
Hazardous Materials Safety
Administration
12300 W Dakota Ave, Suite 110
Lakewood, CO 80228
NOTICE OF PROBABLE VIOLATION
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT RE UESTED
February 8, 2007
Mr. Hank True
President
Butte Pipeline Company
455 North Poplar Street
Casper, WY 82601
SENT TO COMPLIANCE REGISTRY
Hardcopy ElecrroaicallyW
Pof Copiesg /Date~-C)'t
CPF No. 5-2007-5008
Dear Mr. True:
Between June 6-10, 2005, July 18-21, 2005, and August 15-18, 2005, a representative of the
Pipeline and Hazardous Materials Safety Administration (PHMSA, pursuant to Chapter 601 of 49
United States Code, inspected your of Butte Pipeline Company's (Butte PL) Butte pipeline
system in Montana and Wyoming. This inspection included a review of supporting Operation
and Maintenance (O&M) records for all systems in Casper and New Castle, Wyoming as well as
Baker, Montana.
As a result of the inspection, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the
probable violations are:
1. $195. 402 Procedural manual for operations, maintenance, and emergencies.
(a) General. Each operator shall prepare and follow for each pipeline system a manual
of written procedures for conducting normal operations and maintenance activities and
handling abnormal operations and emergencies. This manual shall be reviewed at
intervals not exceeding 15 months, but at least once each calendar year, and appropriate
changes made as necessary to insure that the manual is effective. This manual shall be



prepared before initial operations of a pipeline commence, and appropriate parts shall
be kept at locations where operations and maintenance activities are conducted.
Butte PL procedures require periodic review of work done by the operator to determine the
adequacy of procedures used in normal operations and maintenance. Butte PL has not
completed any of these reviews.
Butte PL procedures require periodic review of work done by the operator to determine the
adequacy of procedures used in controlling abnormal operations. Butte PL has not completed
any of these reviews.
$195. 402 Procedural manual for operations, maintenance, and emergencies.
(c) Maintenance and normal operations. The manual required by paragraph (a) of this
section must include procedures for the following to provide safety during maintenance
and normal operations:
(12) Establishing and maintaining liaison with fire, police, and other appropriate public
officials to learn the responsibility and resources of each government organization that
may respond to a hazardous liquid or pipeline emergency and acquaint the officials with
the operator's ability in responding to a hazardous liquid or carbon dioxide pipeline
emergency and means of communication.
Butte PL liaison activity efforts do not ensure that local responders, including those at remote
locations, understand how to respond to a pipeline emergency for the Butte pipeline system.
$195. 403 Emergency Response Training.
(b) At the intervals not exceeding 15 months, but at least once each calendar year, each
operator shall:
(1) Review with personnel their performance in meeting the objectives of the emergency
response training program set forth in paragraph (a) of this section; and
(c) Each operator shall require and verify that its supervisors maintain a thorough
knowledge of that portion of the emergency response procedures established under
195. 402 for which they are responsible to ensure compliance.
Butte PL does not review with personnel, once each calendar year not to exceed 15 months,
their performance in meeting the objectives of the emergency response training program.
Butte PL does not verify that their supervisors have adequate knowledge of emergency
response procedures.
$195. 422 Pipeline Repairs.
(a) Each operator shall, in repairing its pipeline systems, insure that the repairs are
made in a safe manner and are made so as to prevent damage to persons or property.
Of the several "Type B" repair sleeves installed on the Butte pipeline in 2004, only two were non-
destructively tested (NDTed) at the sleeve to pipe fillet welds. Operator's records do not appear
to indicate if these welds were visually examined. Industry practice has been to use some type of



NDT inspection of all sleeve to pipe fillet welds to insure that repairs are made in a safe manner
to prevent damage to persons or property during and after repairs.
5. $195, 428 Overpressure safety devices and overfill protection systems
(a) Except as provided in paragraph (b) of this section, each operator shall, at intervals
not exceeding 15 months, but at least once each calendar year, or in the case of pipelines
used to carry highly volatile liquids, at intervals not to exceed 7'/i months, but at least
twice each calendar year, inspect and test each pressure limiting device, relief valve,
pressure regulator, or other item of pressure control equipment to determine that it is
functioning properly, is in good mechanical condition, and is adequate from the
standpoint of capacity and reliability of operation for the service in which it is used.
Butte PL does not, once each calendar year not to exceed 15 months, test or calibrate pressure
transducers that transmit data to the SCADA center on the Butte pipeline. Pressure transmitters
that send pressure data to manned SCADA centers are part of the pressure control system and as
such must be tested once each calendar year not to exceed 15 months.
6. $195. 440 Public awareness
Each operator shall establish a continuing educational program to enable the public,
appropriate government organizations and persons engaged in excavation-related
activities to recognize a hazardous liquid or a carbon dioxide pipeline emergency and to
report it to the operator or the fire, police, or other appropriate public officials. The
program must be conducted in English and in other languages commonly understood by
a significant number and concentration of non-English speaking population in the
operator's operating areas.
Butte PL's Public Awareness Program is inadequate at providing pipeline information to the
general public. A process (e. g. newspapers, flyers) to disseminate this information the public did
not exist.
7. $195. 583 What must I do to monitor atmospheric corrosion control?
(a) You must inspect each pipeline or portion of pipeline that is exposed to the
atmosphere for evidence of atmospheric corrosion, as follows:
If the i eline is located:
Then the fre uenc of ins ection is:
Onshore
At least once every 3 calendar years, but with intervals
not exceeding 39 months
Offshore
At least once each calendar year, but with intervals not
exceeding 15 months
(b) During inspections you must give particular attention to pipe at soil-to-air
interfaces, under thermal insulation, under disbonded coatings, at pipe supports, in
splash zones, at deck penetrations, and in spans over water.
(c) If you find atmospheric corrosion during an inspection, you must provide protection
against the corrosion as required by Sec. 195. 581.



Butte PL has not completed or documented any of their atmospheric corrosion inspections. Butte
PL has no plan for examining those pipe surfaces that are in contact with concrete saddles.
Pro osed Com liance Order
Pursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety
Administration proposes to issue a Compliance Order to Butte PL. Please refer to the Proposed
Compliance Order that is enclosed and made a part of this Notice
Warnin Items
With respect to item(s) la, lb, 2, 3a, 3b, and 6 we have reviewed the circumstances and
supporting documents involved in this case and have decided not to conduct additional
enforcement action or penalty assessment proceedings at this time. We advise you to promptly
correct these item(s). Be advised that failure to do so may result in Butte PL being subject to
additional enforcement action.
Res onse to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in
Compliance Proceedings. Please refer to this document and note the response options. If you do
not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to
contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline
Safety to find facts as alleged in this Notice without further notice to you and to issue a Final
Order.
In your correspondence on this matter, please refer to CPF 5-2007-500S and for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Director, Western Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
cc: PHP-60 Compliance Registry
PHP-500 (G. Davis ¹114331, ¹114330, ¹114253)
-4-



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety Administration
(PHMSA) proposes to issue to Butte PL a Compliance Order incorporating the following remedial
requirements to ensure the compliance of Butte PL with the pipeline safety regulations:
1 With respect to Item 4 of the Notice, Butte PL must:
Excavate and nondestructively test 50% of all sleeve to pipe fillet welds made as part of the Butte
pipeline integrity repairs of 2004.
If any of the excavated welds shows indications of cracking then the balance of all welds will be
excavated and nondestructively tested.
Provide documentation of all weld mspections and any associated repairs to PHMSA.
2. With respect to Item 5 of the Notice, Butte PL must:
Test all pressure transducers that are used for operations of the Butte pipeline including those
transducers that are part of the computational pipeline monitoring (CPM) system.
Ensure that all pressure transducers that are used for operations of the Butte pipeline, including
those transducers that are part of the CPM system, are tested and inspected once each calendar
year not to exceed 15 months.
Provide documentation of tests for all pressure transducers that are used for operations of the Butte
pipeline including those transducers that are part of the CPM system.
3. With respect to Item 7 of the Notice, Butte PL must:
Complete an atmospheric corrosion inspection of all exposed piping on the Butte pipeline. These
inspections shall include but not be hmited to the soil to air interfaces and under pipe supports.
Document all of the above inspections
Provide protection for all areas of corrosion found during the above inspections.
4. Within 60 days of issuance of the Final Order, Butte Pipeline Company (Butte PL) must complete
the above items, and submit the required documentation and procedures to the Director, Western
Region, Pipehne and Hazardous Materials Administration, 12300 West Dakota Ave, ¹110,
Lakewood, Colorado 80228.
5. Butte PL shall maintain documentation of the safety improvement costs associated with fulfilling
this Compliance Order and submit the total to Director, Western Region, Pipeline and Hazardous
Materials Safety Administration. Costs shall be reported in two categories: 1) total cost associated
with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated
with replacements, additions and other changes to pipeline infrastructure.
-5-

520075008_Final Order_08172009_text.pdf

AUG 17, 2009
Mr. Hank True
President
Butte Pipeline Company
455 N. Poplar Street
P.O. Drawer 2360
Casper, WY 82602
Re: CPF No. 5-2007-5008
Dear Mr. True:
Enclosed is the Final Order issued in the above-referenced case. It makes findings of violation
and specifies actions that need to be taken by Butte Pipeline Company to comply with the
pipeline safety regulations. When the terms of the compliance order have been completed, as
determined by the Director, Western Region, this enforcement action will be closed. Your
receipt of this Final Order constitutes service of that document under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Chris Hoidal
Director, Western Region, PHMSA
Colin G. Harris, Esq.
Holme Roberts & Owen LLP
1801 13th St., Ste 300
Boulder, CO 80302-5387
VIA CERTIFIED MAIL—RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5746]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Butte Pipeline Company, ) CPF No. 5-2007-5008
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
On June 6-10, July 18-21, and August 15-18, 2005, pursuant to 49 U.S.C. § 60117, a
representative of the Pipeline and Hazardous Materials Safety Administration’s Office of
Pipeline Safety (PHMSA) conducted a safety inspection of the hazardous liquid pipeline systems
operated by Butte Pipeline Company (Butte or Respondent), and several related companies in
to Ft. Laramie and Guernsey, Wyoming. As a result of the inspection, the Director, Western
Region (Director) issued a combined notice of probable violation and proposed compliance order
(CPF No. 5-2006-5004) by letter dated February 21, 2006, to one of the companies (Belle
Fourche), alleging violations of the hazardous liquid pipeline safety regulations with respect to
the inspected facilities. By letters dated May 26 and December 26, 2006, Belle Fourche objected
to the notice on the grounds that the individual companies were separate and distinct legal
Montana and Wyoming.1 The Butte pipeline system transports crude oil from Baker, Montana,
entities and should be named separately.
In response to those objections, the Director withdrew the original charges on February 2, 2007,
and issued separate enforcement documents to each company, including a Notice of Probable
Violation and Proposed Compliance Order (Notice) issued in this case to Butte on February 8,
2
2007.
In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Butte had
committed certain violations of 49 C.F.R. Part 195 and proposed that Butte take measures to
correct the alleged violations. In addition, pursuant to 49 C.F.R. § 190.205, the Notice advised
Respondent to take appropriate corrective action to address several warning items or face future
potential enforcement action.
1 The companies inspected were Belle Fourche Pipeline Company (Belle Fourche), Bridger Pipeline Company,
LLC (Bridger), and Butte Pipeline Company. These companies share the same manual of operating procedures and
some of the same employees and officers.
2 The Director issued separate notices to Belle Fourche (CPF No. 5-2007-5002) and Bridger (CPF No. 5-2007-
5003). This Final Order concerns only the Notice issued to Butte. Final agency action has already been taken in the
cases involving Belle Fourche and Bridger.



2
Butte responded to the Notice by letter dated March 13, 2007 (Response). In its Response, the
company contested the allegations of violation and requested a hearing. In accordance with 49
C.F.R. § 190.211, a combined hearing was held on August 31, 2007, in Lakewood, Colorado,
with an attorney from the Office of Chief Counsel, PHMSA, presiding. Butte, Belle Fourche,
and Bridger were jointly represented by counsel at the hearing. After the hearing, the companies
submitted a single post-hearing brief (Brief) on October 11, 2007, and additional information by
letter dated December 21, 2007. To the extent that the issues raised at the hearing and in the
Brief relate to Butte, they are addressed below.
As a preliminary matter, the parties agree that in making findings of violation, PHMSA carries
the burden of proving the allegations set forth in the Notice, meaning that a violation may be
found only if the evidence supporting the allegation outweighs the evidence and reasoning
meet its burden of proof on all contested Items in the Notice (i.e., Items 4, 5, and 7). As
presented by Respondent in its defense.3 Respondent argues in its Brief that PHMSA failed to
discussed below, I find that PHMSA met its burden of proof on Items 4 and 7, but not Item 5.
FINDINGS OF VIOLATION
The Notice alleged that Respondent committed violations of 49 C.F.R. Part 195, as follows:
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.422(a), which states:
§ 195.422 Pipeline repairs.
(a) Each operator shall, in repairing its pipeline systems, insure that the
repairs are made in a safe manner and are made so as to prevent damage to
persons or property.
The Notice alleged that Respondent violated § 195.422(a) by failing to ensure that integrity
repairs performed on the Butte pipeline in 2004 were made in a safe manner. Specifically, it
alleged that Butte failed to use a nondestructive testing (NDT) method to examine all but two
type-B repair sleeves and associated sleeve-to-pipe fillet welds. The Notice also alleged that
industry practice has been to use NDT to ensure that type-B repair sleeves are installed in a safe
manner. The Notice alleged further that Respondent’s repair records did not indicate that visual
examinations of such welds had even been performed.
During the PHMSA safety inspection, the inspector noted that although Butte had made more
than 50 integrity repairs to the Butte pipeline in 2004 using type-B repair sleeves, the company’s
records indicated that only two sleeve repairs had been tested using NDT. The inspector noted
further that there were no records of any of the repairs having been visually inspected.
Statements by two of Respondent’s employees during the safety inspection indicated the
company had visually inspected the welds but did not perform NDT on all the welds because
3 PHMSA enforces the pipeline safety regulations and imposes sanctions for violations by conducting proceedings
in accordance with 49 C.F.R. Part 190. Such proceedings are not “formal adjudications” under the Administrative
Procedures Act (5 U.S.C. §§ 554 and 556). By way of comparison, however, it may be noted that the Supreme
Court has found in formal adjudications that the burden of proof includes the burden of persuasion, and the standard
of proof is the preponderance-of-the-evidence standard. Dir., Office of Workers’ Comp. Programs, Dep’t of Labor
v. Greenwich Collieries, 512 U.S. 267, 276 (1994); and Steadman v. SEC, 450 U.S. 91, 102 (1981).



3
NDT had been performed on two sleeve repairs and those tests had been successful. Violation
Report at 2.
Butte raised several defenses to Item 4. First, it contended that the company ensured type-B
repair sleeves had been installed in a safe manner by using fully qualified welders and
provide the company with fair notice of the agency’s interpretation and application of this NDT
procedures and by visually inspecting the welds.4 Second, it argued that PHMSA failed to
standard.
As for Butte’s first defense that the company had ensured the repairs were made in a safe
manner, the company presented a witness who stated that he had been told by the welding
testified that, to his knowledge, the company had used qualified welders and procedures in the
performance of this particular type of repair. Id. at ¶ 8. Respondent argued that these measures
constituted compliance with § 195.422 and American Society of Mechanical Engineers (ASME)
pipeline transportation systems.” Response at 2. In particular, Respondent contended that
ensure the safety of repair welds. Id.
foreman that all of the welds were visually inspected.5 Brief Ex. 6 at ¶ 9. The witness also
Standard B31.4, which Respondent referred to as “the relevant professional code governing
Section 451.6.3 of ASME B31.4 “allows for ‘other methods’ along with visual inspection” to
With regard to the use of qualified workers and procedures, Respondent is correct to point out
that these are critical for ensuring repairs are made in a safe manner. However, the use of
qualified workers and procedures is not a substitute for post-repair examination. The use of
qualified workers and procedures may serve prospectively to make it more likely that repairs will
be made safely in the future, but the use of post-repair examinations is also needed to ensure that
repairs were in fact made safely.
With regard to the visual examinations, I find little support in the record for Respondent’s
assertion that it conducted visual examinations of the repair welds, other than second-hand
accounts and hearsay. Even if visual examinations were performed, they do not provide enough
information on their own to determine whether repair welds were safely performed. Therefore,
another type of post-repair examination method was required besides just visual examinations.
While Butte attempted to convince PHMSA that “other methods,” generally, are acceptable
under the relevant industry standard, the company curiously neglected to disclose that the
standard actually states,
“Welds made during pipeline repairs . . . should also be examined by at
least one other nondestructive examination method.” ASME B31.4 § 451.6.3(b) (2002)
(emphasis added).
NDT may be the industry-recognized method to ensure type-B repair sleeves are installed in a
safe manner, but the text of § 195.422(a) does not explicitly require the use of NDT to determine
the safety of such repairs. As Respondent correctly notes, § 195.422(a) is a performance-based
4 In its Response, Butte indicated that it had also performed a post-repair hydrostatic test to ensure the safety of the
repairs on the Butte pipeline; but at the hearing, the company clarified that it had not actually performed a
hydrostatic test of the Butte line.
5 It is not evident in the record when the witness actually spoke to the foreman. Respondent was not able to locate
the foreman for this proceeding. Brief at 8.



4
regulation, which requires a specified minimum level of safety for pipeline repairs without
prescribing a specific process or method for each type of repair. With regard to the repairs at
issue in this case, the question is whether Respondent used a post-repair evaluation process
capable of ensuring that type-B repair sleeves were installed in a safe manner. Respondent did
not make the assertion that it ever used NDT testing, or testing of any kind other than visual
examinations, to examine all of the repair welds. For the reasons expressed above, I find
Respondent failed to determine the safety of the 2004 type-B sleeve repairs on the Butte pipeline
using a method capable of complying with § 195.422(a).
As for Butte’s second argument that PHMSA failed to provide fair notice of its interpretation of
this regulation, Respondent argued that it “could not have reasonably ascertained that OPS now
considers NDT to be a mandatory requirement under 49 C.F.R. § 195.422(a),” because the
regulation, on its face, imposes no such requirement. Brief at 10. Accordingly, Respondent
argued that “it would violate due process to hold any party liable under this interpretation.”
Response at 3.
Butte has misinterpreted the agency’s application of § 195.422. PHMSA does not take the
position that NDT is always a mandatory requirement of the regulation. Rather, the agency notes
the industry practice has been to use NDT to meet the performance-based requirement for the
type of pipeline repair at issue in this case. PHMSA applies the text of § 195.422(a) to require
that operators ensure each pipeline repair has been made in a safe manner through the use of an
evaluation method capable of demonstrating the safety of that particular repair.
Respondent is correct that governmental agencies may not violate a person’s right of due process
by depriving such person of property without providing a minimum level of “fair notice” as to
what may constitute a violation of law. “Due process requires that parties receive fair notice
before being deprived of property . . . . In the absence of notice—for example, where the
regulation is not sufficiently clear to warn a party about what is expected of it—an agency may
not deprive a party of property by imposing civil or criminal liability.” Gen. Elec. Co. v. U.S.
EPA, 53 F.3d 1324, 1328-29 (D.C. Cir. 1995) (citations omitted) (internal quotation marks
omitted). See also, United States v. Chrysler Corp., 158 F.3d 1350, 1354 (D.C. Cir. 1998);
Trinity Broad. of Fla., Inc. v. FCC, 211 F.3d 618, 628 (D.C. Cir. 2000). When an agency
interprets a regulation through enforcement rather than pre-enforcement efforts, the issue of
notice rests on “whether the regulated party received, or should have received, notice of the
agency’s interpretation in the most obvious way of all: by reading the regulations. If, by
reviewing the regulations and other public statements issued by the agency, a regulated party
acting in good faith would be able to identify, with ‘ascertainable certainty,’ the standards with
which the agency expects parties to conform, then the agency has fairly notified a petitioner of
the agency’s interpretation.” Gen. Elec. Co., 53 F.3d at 1329.6
6 Such “ascertainable certainty” may not be possible where an agency has given conflicting public interpretations of
a regulation. In addition, even in those situations where an “agency does not issue contradictory public statements,
it may fail to give sufficient fair notice to justify a penalty if the regulation is so ambiguous that a regulated party
cannot be expected to arrive at the correct interpretation using standard tools of legal interpretation, must therefore
look to the agency for guidance, and the agency failed to articulate its interpretation before imposing a penalty.”
United States v. Lachman, 387 F.3d 42, 57-58 (1st Cir. 2004) (citation omitted).



5
It is evident from the text of § 195.422(a) that a pipeline operator is required to ensure that each
pipeline repair is made in a safe manner. It follows necessarily that the operator must employ a
method of evaluating the repair that is capable of demonstrating whether or not the repair was
made safely. As a matter of law, therefore, I find that Butte had fair notice of the requirement
implicit in § 195.422(a) that it must use an evaluation method capable of determining type-B
sleeve repairs were made in a safe manner. Unfortunately, for the reasons expressed above, the
methods used by Butte were insufficient to comply with this requirement.
Respondent’s assertion that the company was not aware NDT was the “industry standard” is
specious, as Butte itself cited the ASME B31.4 standard, which states that repair welds should be
examined by NDT. Whether or not NDT is the industry standard, however, is not controlling
because § 195.422(a) does not bind Respondent to the industry standard. Respondent may
comply with the regulation by using one or more evaluation methods capable of determining that
“the repairs are made in a safe manner”; however, the operator must be able to demonstrate that
the chosen method is capable of making such a determination. In this case, Butte failed to use an
evaluation method capable of demonstrating the repairs were safely made.
Accordingly, after considering all of the evidence and arguments presented, I find Respondent
violated § 195.422(a) by failing to ensure that type-B repairs sleeves were completed in a safe
manner.
Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:
§ 195.428 Overpressure safety devices and overfill protection systems.
(a) [E]ach operator shall, at intervals not exceeding 15 months, but at least
once each calendar year . . . inspect and test each pressure limiting device,
relief valve, pressure regulator, or other item of pressure control equipment to
determine that it is functioning properly, is in good mechanical condition, and
is adequate from the standpoint of capacity and reliability of operation for the
service in which it is used.
The Notice alleged that Respondent violated § 195.428(a) by failing to inspect and test certain
pressure control equipment on the Butte pipeline to determine if such equipment was functioning
properly, was in good mechanical condition, and was adequate in terms of capacity and
reliability of operation. Specifically, the Notice alleged that Butte failed to calibrate “pressure
transducers that transmit data to the [Supervisory Control and Data Acquisition (SCADA)]
center on the Poplar pipeline.” Notice at 3. The Notice further stated that “[p]ressure
transmitters that send pressure data to manned SCADA centers are part of the pressure control
system.” Id.
Butte raised several defenses to Item 5. The company argued, inter alia, that the requirements in
§ 195.428(a) do not apply to the pressure transducers/transmitters identified in the Notice
because Butte’s pipeline uses on-site overpressure protection devices that are “hard-wired to
mechanically shut down the system locally and independently of the SCADA system” when
pressure reaches a certain level. Brief at 12. Respondent distinguished those devices from
pressure transducers/transmitters that send pressure data to a SCADA center, arguing that the
regulation only applies to its mechanical devices.



6
The term “transducer” is a generic reference to an electro-mechanical device that reads a
physical metric (in this case, pipeline pressure) and translates that data into an electronic signal
that can then be transmitted, usually by wire. The term “transmitter” is an electronic assembly
comprised of a transducer at the front end, which transmits the signal. Although the two terms
can be distinguished in certain applications, the use of these terms interchangeably in the Notice
refers to the common assembly that Butte uses to measure pipeline pressure, translate that data
into an electronic signal, and transmit that data to the company’s SCADA center. For brevity,
this Final Order uses the term “pressure transmitter” to refer to this entire mechanism.
Respondent is correct to point out that local mechanical pressure control equipment is covered by
§ 195.428(a), but the regulation is not so limited as to exclude other types of devices used to
control operating pressure on a pipeline. By its terms, § 195.428(a) requires “each pressure
limiting device, relief valve, pressure regulator, or other item of pressure control equipment” to
be tested and inspected at specified intervals. The regulation does not define “pressure control
equipment,” but the commonly understood (dictionary) meaning of the words pressure, control,
and equipment would include any device used to control or limit pressure in the pipeline.
An interpretation of § 195.428(a) that applies to all types of pressure transmitters, to the extent
they control pipeline pressure, could be legally supported; but I have found as a matter of policy
pressure transmitters that serve as an integral part of a pipeline’s overpressure protection system
compared with those that only function to send pressure information to a SCADA system for
other reasons. For example, certain pressure transmitters on a pipeline may be utilized to send
pressure data to remote terminal units or program logic computers that use the data to
automatically control pressure to avoid an overpressure event. These types of pressure
that § 195.428(a) should not be applied so broadly.7 There are certain distinctions between
transmitters, and other devices integral to a pipeline’s overpressure protection system, should be
and are covered by the regulatory requirements in § 195.428(a). By comparison, pressure
transmitters that only send pressure information to a SCADA system for use by a human
controller, or for other informational purposes, might not be part of a particular pipeline’s
overpressure protection system, and as such are not intended to be covered by § 195.428(a).
I have reviewed the evidence in this case to determine whether the pressure transmitters
identified in the Notice were integral to Butte’s pipeline overpressure protection system.
PHMSA did not introduce evidence showing how the pressure transmitters on Butte’s pipeline
system were actually utilized other than that the devices sent pressure information to the
company’s SCADA center. This evidence is insufficient to demonstrate that the pressure
transmitters were integral to the pipeline’s overpressure control system. Butte, on the other
hand, introduced evidence that its overpressure control system utilized local mechanical devices
that operated independently of its SCADA system. Without additional evidence in the record
demonstrating that the pressure transmitters were an integral part of Butte’s overpressure
protection system, I cannot find a violation of § 195.428(a).
7 See In the Matter of Bridger Pipeline Company, LLC, CPF No. 5-2007-5003, Decision on Reconsideration (Jun.
16, 2009) (finding § 195.428(a) applies to pressure transmitters to the extent they are integral to a pipeline’s
overpressure protection system).



7
Accordingly, I am withdrawing the finding of violation with respect to § 195.428(a). Since the
violation is withdrawn for the above reasons, it is not necessary to address the additional
arguments for withdrawal presented by Butte for this Item.
Item 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.583, which states:
§ 195.583 What must I do to monitor atmospheric corrosion control?
(a) You must inspect each pipeline or portion of pipeline that is exposed to
the atmosphere for evidence of atmospheric corrosion, as follows:
If the pipeline is located: Then the frequency of inspection is:
Onshore At least once every 3 calendar years, but
with intervals not exceeding 39 months . . . .
(b) During inspections you must give particular attention to pipe at soil-to-
air interfaces, under thermal insulation, under disbonded coatings, at pipe
supports, in splash zones, at deck penetrations, and in spans over water.
(c) If you find atmospheric corrosion during an inspection, you must
provide protection against the corrosion as required by § 195.581.
The Notice alleged that Respondent violated § 195.583 by failing to perform documented
atmospheric corrosion inspections. Specifically, the PHMSA inspector noted that Butte did not
have records of any completed atmospheric corrosion inspections and that none of the pipe
supports appeared to have been inspected. Violation Report at 4. When the PHMSA inspector
asked company officials whether Butte planned to inspect pipe surfaces that were in contact with
concrete supports, Respondent’s lead engineer indicated that the company did not have
procedures to examine those pipe surfaces and had not documented any external corrosion
inspections. Violation Report at 4.
Respondent contended, inconclusively, that “Butte [was] in material compliance, or [has] been
addressing the alleged deficiencies.” Brief at 13-14 (emphasis added). At the hearing,
Respondent’s lead engineer stated that while the company had not used specific forms to
document its atmospheric corrosion inspections, the company did perform generic inspections
and identified corrosive surfaces at times. In its Brief, Butte introduced an affidavit from the
same person, stating that “specific external corrosion inspection procedures were not necessarily
written down,” but that the company had “routine inspection procedures for pipelines,” and that
“any significant external corrosion that was found would have been addressed appropriately.”
Brief Ex. 6 at ¶ 28. The witness also stated that the company had a reference to external
corrosion in its operations and maintenance (O&M) manual and has been taking actions to
improve inspection procedures. Id. at ¶ 29.
While Butte’s lead engineer testified that the company performed “routine” O&M inspections,
the company could not state explicitly how or when these inspections occurred, whether such
inspections occurred at the requisite intervals under § 195.583, whether the company always
checked for atmospheric corrosion during such inspections, or whether such inspections
specifically checked pipe surfaces that were in contact with concrete supports—all requirements
under the regulation. Butte was also unable to produce any records of having performed such
inspections, which the company is required to keep under § 195.589(c).



8
Respondent’s evidence concerning efforts to improve its forms and procedures after the PHMSA
inspection are not relevant to the determination of whether or not Respondent was in compliance
at the time of the inspection. Accordingly, after considering all of the evidence, I find Butte
violated 49 C.F.R. § 195.583 by failing to perform documented atmospheric corrosion
inspections, particularly at pipe surfaces in contact with concrete supports.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
Freedom of Information Act (FOIA) Issue: Finally, Respondent objected generally to the
setting of a hearing in this proceeding while the company still had a FOIA request for documents
pending with the agency. Butte argued in its Brief that PHMSA’s decision to go forward with
the hearing, despite the company’s FOIA request and over its objections, constituted “a violation
of Respondent’s due process rights.” Brief at 14. Respondent did not present any evidence or
cite any legal authority in support of this claim.
PHMSA has specific procedures in place to guarantee a respondent’s procedural due process
rights in informal adjudications. See 49 C.F.R. Part 190. In accordance with those procedures,
PHMSA provided Butte with all of the materials from the agency’s case file well in advance of
the date set for the hearing. See § 190.211(e). Therefore, Butte cannot reasonably assert that its
procedural due process rights were violated.
Furthermore, the law provides that an agency may proceed with an adjudication despite a
respondent’s filing of a FOIA request. The Supreme Court has stated, “Discovery for litigation
purposes is not an expressly indicated purpose of the [Freedom of Information] Act.”
Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974). The Court has further
cautioned against “[i]nterference with the agency proceeding [that] opens the way to the use of
the FOIA as a tool of discovery . . . over and beyond that provided by the regulations issued by
the [agency] for its proceedings.” Id
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