{"operation":"document","citation":"CPF 520075041","title":"ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2007-11-27","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.262, 195.402, 195.404, 195.408, 195.438, 195.505, 195.507, 195.52, 195.54.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075041.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075041.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075041","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520075041","body":"Notice of Probable Violation involving ALYESKA PIPELINE SERVICE CO. PHMSA's enforcement data identifies the cited regulations as 195.262,  195.402,  195.404,  195.408,  195.438,  195.505,  195.507,  195.52,  195.54. The case was opened on 2007-11-27 and is reported as closed as of 2011-12-06. Proposed civil penalty: $817,000. Assessed civil penalty: $502,253. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520075041_Compromise Agreement and Order_11162011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075041/520075041_Compromise%20Agreement%20and%20Order_11162011.pdf\n\n520075041_Compromise Agreement and Order_11162011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075041/520075041_Compromise%20Agreement%20and%20Order_11162011_text.pdf\n\n520075041_NOPV_PCP_PCO_letter_11272007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075041/520075041_NOPV_PCP_PCO_letter_11272007.pdf\n\n520075041_nopv_pcp_pco_letter_11272007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075041/520075041_nopv_pcp_pco_letter_11272007_text.pdf\n\n520075041_Operator Response to Notice Attachment_02262008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075041/520075041_Operator%20Response%20to%20Notice%20Attachment_02262008.pdf\n\n520075041_Operator Response to Notice Cover Letter_02262008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075041/520075041_Operator%20Response%20to%20Notice%20Cover%20Letter_02262008.pdf\n\n520075041_Compromise Agreement and Order_11162011_text.pdf\n\nNOV 16 2011\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matters of )\n) CPF No. 5-2006-5018\nAlyeska Pipeline Service Company, ) CPF No. 5-2007-5041\n) CPF No. 5-2008-5008\nRespondent. ) CPF No. 5-2009-5019\n____________________________________)\nCOMPROMISE AGREEMENT AND ORDER\nThe U.S. Department of Transportation, Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) and Alyeska Pipeline Service Company (Alyeska or\nRespondent) have engaged in settlement discussions regarding the resolution of the four\nenforcement actions listed above. Having concluded those discussions, PHMSA and\nAlyeska (collectively, Parties) agree that a settlement of these matters is in the best\ninterests of the Parties and the public and will avoid further administrative proceedings or\nlitigation. The Parties further agree that the entry of this Compromise Agreement and\nOrder is the most appropriate means of accomplishing that objective.\nI. Procedural History.\nA. CPF No. 5-2006-5018\nOn April 19, 2006, PHMSA issued to Alyeska a Notice of Probable Violation, Proposed\nCivil Penalty, and Proposed Compliance Order (Notice). Item 1 of the Notice alleged\nthat Alyeska had violated 49 C.F.R. § 195.452(h)(2) and proposed assessing the company\na civil penalty of $260,000 for that violation. Item 2 of the Notice alleged that Alyeska\nhad violated 49 C.F.R. §§ 195.452(h)(3) and (h)(4)(i)(C) and proposed assessing the\ncompany a civil penalty of $90,000 for that violation. The Notice also proposed ordering\nAlyeska to complete certain corrective actions to address both violations.\nOn April 27, 2006, Alyeska submitted a written response to the Notice and requested an\ninformal hearing. That hearing was held on January 18, 2007, with an Attorney Advisor\nfrom the Office of Chief Counsel, PHMSA, presiding.\n\n\n\nOn January 13, 2010, the Associate Administrator for Pipeline Safety, PHMSA, issued a\nFinal Order in the case. The Final Order found that Alyeska had violated 49 C.F.R.\n§ 195.452(h)(2) as alleged in Item 1 of the Notice and assessed a civil penalty of\n$173,000. The Final Order further found that Alyeska had violated 49 C.F.R.\n§§ 195.452(h)(3) and (h)(4)(i)(C) as alleged in Item 2 of the Notice and assessed a civil\npenalty of $90,000. The Final Order also ordered Alyeska to complete certain corrective\nmeasures.\nOn February 8, 2010, Alyeska submitted a Petition for Reconsideration (Petition) of the\nFinal Order. The Petition sought, among other things, reconsideration of the civil penalty\nassessed against Alyeska for Item 1. On March 1, 2010, the Associate Administrator\ndenied that part of the Petition in a Decision on Reconsideration (Decision).\nOn March 22, 2010, Alyeska made a payment of $90,000 in full satisfaction of the civil\npenalty assessed for Item 2. On April 20, 2010, Alyeska submitted, to the Director,\nPHMSA Western Region (Director), information documenting full compliance with the\ncorrective actions in the Final Order and the Decision. On July 29, 2010, Alyeska made\nanother payment of $173,000, under protest and with full reservation of rights, in full\nsatisfaction of the civil penalty assessed for Item 1.\nOn August 3, 2010, Alyeska filed a complaint in the United States District Court for the\nDistrict of Alaska, Case No. 3:10-CV-00177-JWS (Complaint). The Complaint alleged\nthat the Associate Administrator (1) had assessed Alyeska an excessive civil penalty for\nItem 1; (2) had failed to comply with the procedural requirements in 49 C.F.R.\n§ 190.213(e) in issuing his Final Order; and (3) had found Alyeska in violation of 49\nC.F.R. § 195.452(h)(2) without substantial evidence. The Complaint sought, among\nother things, the return of the $173,000 that Alyeska had paid to PHMSA for Item 1.\nOn October 20, 2011, PHMSA filed an answer (Answer) to the Complaint. The Answer\ndenied all of Alyeska’s allegations and asserted that the company had already admitted\nall of the facts necessary to affirm the Final Order.\nB. CPF 5-2007-5041\nOn November 27, 2007, PHMSA issued to Alyeska a Notice of Probable Violation,\nProposed Civil Penalty, and Proposed Compliance Order (Notice). The Notice alleged\nthat Alyeska had committed several violations of 49 C.F.R. Part 195 and proposed\nassessing the company a total civil penalty of $817,000 for those violations. The Notice\nalso proposed ordering Alyeska to complete certain corrective actions and issuing a\nwarning that the company take appropriate action to address several other probable\nviolations.\nAlyeska responded to the Notice on February 26, 2008, requesting an informal hearing.\nThat hearing was held on October 28, 2008, with an attorney from the Office of Chief\nCounsel, PHMSA, presiding.\n2\n\n\n\nC. CPF 5-2008-5008\nOn April 1, 2008, PHMSA issued to Alyeska a Notice of Probable Violation, Proposed\nCivil Penalty, and Proposed Compliance Order (Notice). The Notice alleged that\nAlyeska had committed several violations of 49 C.F.R. Part 195 and proposed a total civil\npenalty of $170,000 for those violations. The Notice also proposed ordering Alyeska to\ncomplete certain corrective actions to address several of those violations.\nOn May 22, 2008, Alyeska responded to the Notice and requested an informal hearing.\nThat hearing was held on October 30, 2008, with an attorney from the Office of Chief\nCounsel, PHMSA, presiding.\nD. CPF 5-2009-5019\nOn April 21, 2009, PHMSA issued to Alyeska a Notice of Probable Violation, Proposed\nCivil Penalty, and Proposed Compliance Order (Notice). The Notice alleged that\nAlyeska had committed two violations of 49 C.F.R. Part 195 and proposed a civil penalty\nof $43,800 for one of those violations. The Notice also proposed issuing a warning that\nthe company take appropriate corrective action to address the other probable violation.\nOn May 21, 2009, Alyeska responded to the Notice, requesting an informal hearing. That\nhearing was held on October 21, 2009, with an attorney from the Office of Chief\nCounsel, PHMSA, presiding.\nII. General Provisions.\n1. Alyeska acknowledges that the company and its pipeline system, known generally\nas the Trans-Alaska Pipeline System (TAPS), are subject to the jurisdiction of the Federal\npipeline safety laws, 49 U.S.C. 60101, et seq., and the regulations and administrative\norders issued thereunder. For purposes of this Compromise Agreement and Order,\nAlyeska acknowledges that it received proper notice of PHMSA’s actions in CPF 5-2006-\n5018, CPF 5-2007-5041, CPF 5-2008-5008, and CPF 5-2009-5019 (collectively,\nEnforcement Actions) and that the Notices, Final Orders, and Decisions issued in the\nEnforcement Actions all state claims upon which relief may be granted pursuant to 49\nU.S.C. 60101, et seq., and the regulations and orders issued thereunder.\n2. By entry of this Compromise Agreement and Order, PHMSA neither vacates nor\nwithdraws the Final Order and Decision issued in CPF 5-2006-5018. All provisions of\nthe Final Order and Decision in CPF 5-2006-5018 shall remain in full force and effect,\nexcept as expressly modified by this Compromise Agreement and Order. Nothing in this\nCompromise Agreement and Order shall bar consideration of the findings of violation set\nforth in the Final Order and Decision in CPF 5-2006-5018 as prior offenses in any future\nPHMSA enforcement action.\n3\n\n\n\n3. Alyeska agrees to the issuance of this Compromise Agreement and Order and\nhereby waives any further procedural requirements with respect to its issuance. Alyeska\nwaives all rights to contest the adequacy of the Notices, Final Orders, and Decisions\nissued in the Enforcement Actions and the validity of this Compromise Agreement and\nOrder, including all rights to administrative or judicial hearings or appeals.\n4. This Compromise Agreement and Order constitutes the final, complete, and\nexclusive agreement and understanding between the Parties with respect to the\nEnforcement Actions and the issues embodied in this agreement. The Parties\nacknowledge that there are no representations, agreements, or understandings relating to\nthe amount or collection of any civil penalties other than those expressly contained in this\nagreement, except that the terms of this agreement may be construed by reference to any\nNotices, Final Orders, and Decisions issued in the Enforcement Actions.\n5. Nothing in this Compromise Agreement and Order affects or relieves Alyeska of\nits responsibility to comply with all applicable requirements of the Federal pipeline safety\nlaws, 49 U.S.C. § 60101, et seq., and the regulations and orders issued thereunder.\nNothing in this agreement alters PHMSA’s right of access, entry, inspection, and\ninformation gathering, or its authority to bring any enforcement action against Alyeska\npursuant to the Federal pipeline safety laws, the regulations and orders issued thereunder,\nor any other provision of Federal or State law.\n6. This Compromise Agreement and Order does not waive or modify any Federal,\nstate, or local laws or regulations that are applicable to Alyeska’s pipeline system. This\nagreement is not a permit or a modification of a permit under any Federal, State, or local\nlaws or regulations. Alyeska remains responsible for achieving and maintaining\ncompliance with all applicable Federal, State, and local laws, regulations and permits.\n7. This Compromise Agreement and Order does not create rights in, or grant any\ncause of action to, any person not a party to this agreement. PHMSA is not liable for any\ninjuries or damages to persons or property arising from acts or omissions of Alyeska or\nits officers, employees, or agents carrying out the work required by this agreement.\nPHMSA, its officers, employees, agents, and representatives are not liable for any cause\nof action arising from any acts or omissions of Alyeska or its contractors in carrying out\nany work required by this agreement.\n8. This Compromise Agreement and Order shall apply to and be binding on\nAlyeska, its officers, directors, employees, successors and assigns, including, but not\nlimited to, subsequent purchasers.\nIII. Finding of Violations.\n9. With respect to CPF 5-2007-5041, the Parties mutually agree, and PHMSA hereby\nfinds, that Alyeska committed the violations alleged in Items 1, 2, 3, 4, 6, 8, and 9 of the\nNotice. The Parties mutually agree, and PHMSA hereby finds that Alyeska had\ninadequate procedures as alleged in Items 5, 7, 16a, and 16b of the Notice.4\n\n\n\n10. With respect to CPF 5-2008-5008, the Parties mutually agree, and PHMSA\nhereby finds, that Alyeska committed the violations alleged in Items 1, 2, 3, 5, 6, and 7 of\nthe Notice, but that the allegation in Item 4 of the Notice should be, and hereby is,\nwithdrawn.\n11. With respect to CPF 5-2009-5019, PHMSA hereby finds that the allegation in\nItem 1 of the Notice should be, and hereby is, withdrawn.\n12. The findings of violation in Paragraphs 9, 10, and 11 will be considered prior\noffenses in any subsequent enforcement actions taken against Alyeska.\nIV. Civil Penalty.\n13. The Parties mutually agree, and PHMSA hereby orders, that the total civil\npenalty assessed for Items 1 to 9 and 16a to 16b of the Notice in CPF 5-2007-5041 and\nItems 1 to 3 and 5 to 7 of the Notice for CPF 5-2008-5008 is Six-Hundred-Thousand\nDollars ($600,000).\n14. Alyeska will pay the civil penalty amount in Paragraph 13 within 30 days of\nsigning of this Compromise Order and Agreement. Payment may be made by sending a\ncertified check or money order, made payable to “U.S. Department of Transportation,” to\nthe Federal Aviation Administration, Mike Monroney Aeronautical Center, Financial\nOperations Division (AMZ-341), P.O. Box 269039, Oklahoma City, Oklahoma 73125.\nPayment may also be made by wire transfer through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury.\n15. The Parties agree that the civil penalty assessed and collected in this proceeding\nwill not be deductible for purposes of Federal taxes.\n16. The Parties agree that the civil penalty assessed and collected in this proceeding\nwill not be used in determining the amount of any civil penalty for any future\nenforcement action.\nV. Compliance Order.\n17. The Parties mutually agree, and PHMSA hereby finds, that Alyeska has satisfied\nthe terms of all of the proposed compliance orders for the Enforcement Actions, except\nfor the following:\nA. CPF 5-2008-5008\ni. With respect to the violation of § 195.583 (Item 7), Alyeska must develop\nand implement a risk-based atmospheric corrosion control program for\nTAPS, as required under that regulation. Alyeska must submit, for\n5\n\n\n\napproval by the Director, documentation of the program within 180 days\nof the Effective Date of this Compromise Order and Agreement.\nVI. Warning Items.\n18. The Parties mutually agree, and PHMSA hereby orders, that Alyeska has\nreceived a warning for committing the probable violations in Items 10, 13, and 14 of the\nNotice in CPF 5-2007-5041 and Item 2 of the Notice in CPF 5-2009-5019, and that the\ncompany must take appropriate corrective actions or be subject to future enforcement\naction. PHMSA hereby finds that the warnings in Items 11, 12 and 15 of the Notice in\nCPF 5-2007-5041 should be, and hereby are, withdrawn.\nVII. Dismissal of Complaint.\n19. The Parties agree to sign, and that Alyeska will file, a voluntary \"Stipulation for\nDismissal of Action,\" in a form substantially similar to the document attached to this\norder as Exhibit A, in the United States District Court for the District of Alaska within\nthirty (30) days of Alyeska’s payment of the civil penalty amount referenced in paragraph\n13 of this Compromise Order and Agreement. Said dismissal will be with prejudice and\nwithout costs or fees for either of the Parties.\nVIII. Dispute Resolution\n20. PHMSA and Alyeska will attempt to resolve any disputes arising under this\nCompromise Agreement and Order on an informal basis. If Alyeska and PHMSA are\nunable to informally resolve the dispute within 15 days, Alyeska may request in writing,\nwithin 10 days, a written determination resolving the dispute from the Associate\nAdministrator for Pipeline Safety. Such a request must include all of the information that\nAlyeska believes is relevant to the dispute. If the request is submitted as provided herein,\nthe Associate Administrator will issue a final determination in writing. The existence of\na dispute and PHMSA’s consideration of matters placed in dispute will not excuse, toll,\nor suspend any term or timeframe for completion of any work to be performed under this\nagreement during the pendency of the dispute resolution process, except as agreed by the\nDirector or the Associate Administrator in writing.\nIX. Enforcement\n21. This Compromise Agreement and Order are subject to all enforcement authorities\navailable to PHMSA under 49 U.S.C. § 60101 et seq. and 49 C.F.R. Part 190, including\nthe assessment of civil penalties as determined in accordance with the requirements of 49\nU.S.C. § 60122 and 49 C.F.R. §§ 190.223 to 190.225, if PHMSA determines that\nAlyeska is not complying with the terms of this agreement, any determinations made by\nthe Director, or, if appealed, with any decisions of the Associate Administrator. Failure\nto comply with the terms of this agreement may also result in referral to the Attorney\nGeneral for appropriate relief in a United States District Court pursuant to 49 U.S.C.\n§ 60120.\n6\n\n\n\nX. Effective Date.\n22. The “Effective Date” is the date on which this Compromise Agreement and\nOrder has been signed by both Alyeska and PHMSA.\nXI. Modification.\n23. The terms of this Compromise Agreement and Order may be modified by mutual\nagreement of the parties. Such modifications must be in writing and signed by both\nparties.\nXII. Termination.\n24. This Compromise Agreement and Order will terminate upon Alyeska’s payment\nof the civil penalty referenced in Paragraphs 13 and 14 and upon its completion of the\nterms set forth in Paragraph 17 of Section V, as determined, in writing, by the Director.\nNothing in this agreement prevents Alyeska or PHMSA from completing any of the\nobligations earlier than the deadlines provided for in this agreement.\nXIII. Ratification.\n25. The Parties’ undersigned representatives certify that they are fully authorized to\nenter into the terms and conditions of this Compromise Agreement and Order and to\nexecute and legally bind such party to this document.\n26. The Parties hereby agree to all conditions and terms of this Compromise\nAgreement and Order:\nFor PHMSA: For Alyeska:\n___________________________ ____________________________\nJeffrey D. Wiese Michael W. Joynor\nAssociate Administrator Senior Vice President of Operations\nfor Pipeline Safety Alyeska Pipeline Service Company\n_____________________ _____________________\nDate Date\n7","truncated":false,"body_characters":18428}