{"operation":"document","citation":"CPF 520085014","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":"2008-06-09","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.401(b), 195.402, 195.404(c)(1), 195.571.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520085014.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520085014.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520085014","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520085014","body":"Notice of Probable Violation involving ALYESKA PIPELINE SERVICE CO. PHMSA's enforcement data identifies the cited regulations as 195.401(b),  195.402,  195.404(c)(1),  195.571. The case was opened on 2008-06-09 and is reported as closed as of 2011-01-05. Proposed civil penalty: $56,000. Assessed civil penalty: $56,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520085014_closure letter_01052011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520085014/520085014_closure%20letter_01052011.pdf\n\n520085014_closure letter_01052011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520085014/520085014_closure%20letter_01052011_text.pdf\n\n520085014_FinalOrder_01132010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520085014/520085014_FinalOrder_01132010.pdf\n\n520085014_FinalOrder_01132010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520085014/520085014_FinalOrder_01132010_text.pdf\n\n520085014_NOPV PCP PCO_06092008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520085014/520085014_NOPV%20PCP%20PCO_06092008.pdf\n\n520085014_operator response_07142008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520085014/520085014_operator%20response_07142008.pdf\n\n520085014_NOPV PCP PCO_06092008.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\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 9,2008\nMr. Mike Joynor\nSenior Vice President\nPipeline and Oil Movements\nAlyeska Pipeline Service Company\n900 East Benson Blvd.\nP.O. Box 196660\nAnchorage, AK 995 19-6660\nCPP 5-2008-5014\nDear Mr. Joynor:\nBetween October 15 and 19,2007, representatives of the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected\nthe Alyeska-operated Trans Alaska Pipeline System (TAPS) between Milepost 496 and\nMilepost 647, including Pump Stations 9 and 10. PHMSA also inspected Alyeska records\nregarding the effects of a 2006 flood on TAPS near Milepost (MP) 76 1.\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. 5 195.401 General requirements.\n(b)Whenever an operator discovers any condition that could adversely affect the\nsafe operation of its pipeline system, it shall correct it within a reasonable time.\nHowever, if the condition is of such a nature that it presents an immediate hazard\nto persons or property, the operator may not operate the affected part of the\nsystem until it has corrected the unsafe condition.\n\n\n\nIn October 2006, severe flooding affected the TAPS right-of-way at numerous stream\ncrossings along the southernmost 80 miles of the pipeline. As part of our October 2007\ninspection, we reviewed Alyeska's Civil Monitoring and ROW Maintenance Audit (#07-\n07), dated October 8,2007. Alyeska's audit included information pertaining to flooding\nat stream crossings. Our review indicates that Alyeska did not address potentially\nadverse conditions caused by this flooding within a reasonable time.\nAlyeska's internal audit identified an Authorization for Expenditure (AFE D400-40X)\napproved on February 1, 2007, that had not been completed per its original scope. The\nscope of the AFE stated,\n\"5 below ground pipeline scours locations will be investigated and the pipeline\nwill be repaired as required. One location PLMP 761.7, determined to be the\nlocation of the most severe scour, was investigated in 2006. It was found that\nduring the flood, the pipeline was washed clear of overburden and minor damage\nwas found to have occurred to the tape coating. Investigation determined that\nrepairs were not immediately required and were scheduled for 2007 due to\npumping safety conditions.\"\nAlyeska's audit also reported that near MP 761.7,\n\"The preliminary investigation work completed in November 2006 excavated\ntwo separate areas of approximately 8 feet each in length for performing the\nvisual inspections (total scour affected area of stream was approximately 80\nfeet). \"\nOur inspection revealed that the five identified scour locations were never investigated\nin 2007. The sixth at MP 761.7 was only partially investigated in 2006. Our inspections\nwere unable to find sufficient justification for cancellation of the planned 2007\ninvestigations at the six sites. Alyeska's internal audit similarly found insufficient\njustification for cancellation of the planned 2007 investigations at the six sites.\nIn an April 25,2008 letter to the Joint Pipe Office (JPO) entitled Cancellation of\nInvestigations at Six Identified 2006 Flood Locations, Alyeska stated,\n\"As a result of a significant flood event in October 2006, Alyeska Pipeline\nService Company (APSC) identified six locations (MP 745.26, MP 745.67, MP\n748.05, MP 752.18, MP 761.74 (near 761.7), and MP 766.78) for investigation of\nthe mainline pipe for possible flood related damage.\"\nHowever, based on the information (mostly MFL pig results) obtained subsequent to the\ntwo exploratory excavations, Alyeska canceled the pipeline excavations for the six\nidentified sites.\nPHMSA believes Alyeska did not adequately investigate and where needed, correct\nadverse conditions as the six scour areas in a reasonable time (initial investigation in\n\n\n\n2. 2006, deferredlcancelled in 2007, and rescheduled for 2008). Alyeska only excavated 16\nfeet of an estimated 80 feet of scour area at MP 761.73 (near MP 761.7) during 2006.\nFurther, Alyeska did not repair pipe or coating damage, uncovered at MP 76 1.73.\nAlyeska has indicated that it plans to re-excavate and repair coatinglcathodic protection\nsystem damage at MP 761.73 during the summer of 2008. Alyeska also recently\ncommitted to provide PHMSA and the JPO with justification for not investigating the\nother five scour areas including: how the depth of cover was determined, risk associated\nfrom another flood event, undisturbed depth of cover, and potential for rock and snow\nslides.\nEvidence:\n1. Photographs of damage pipe and coating.\n2. Pipe investigation Report MP 761.73, North excavation.\n3. Pipe investigation Report MP 761.73, South excavation.\n4. OM- 1, section 6 Pipeline Repairs, pages 6- 1 and 6-2.\n5 . MR-48, Table 2.1 Permissible Permanent Repair Methods, page 2-10.\n6. MR-48, section 2.6.1.5.2 Repair of Pipe Surface Damage, pages 2-16 and 2-17.\n7. MR-48, section 9.8.7 Repair of Damage, pages 9-30 and 9-3 1.\n8. Civil Monitoring and ROW Maintenance Audit #07-07, Pages 1-3 of 14.\n9. Cancellation of 2006 Flood digs, pages 1 and 2.\n10. MR-48 Section 9.2 Bedding and Padding Material pages 32-39.\n1 1. MR-48 Section 18 Pipe Coating Repairs, Pages 18- 1 through 18-5.\n12. Alyeska's response to JPO's letter regarding Cancellation of Investigations at Six\nIdentified 2006 Flood Locations.\n13. Alyeska's \"Milepost 761.7 Excavation Risk Assessment Summary.\"\n5 195.571 What criteria must I use to determine the adequacy of cathodic\nprotection?\nCathodic protection required by this subpart must comply with one or more of the\napplicable criteria and other considerations for cathodic protection contained in\nparagraphs 6.2 and 6.3 of NACE Standard RPOl69-96.\nFive areas (MP 567.66, 574.16, 574.33, 578.95, and 579.1 8) of the pipeline were found\nto have inadequate Cathodic Protection (CP). These areas of low CP readings were\nconfirmed by Over-the-Line Surveys conducted each year from 2003 to 2007. These\nfive areas of the pipeline did not meet criteria set forth in section 195.571.\nEvidence:\n1. Alyeska's CIS data for 2003, 1 sheet.\n2. Alyeska's CIS data for 2004, 2 sheets.\n3. Alyeska's CIS data for 2006,4 sheets.\n4. Alyeska's CIS data for 2007,4 sheets.\n\n\n\n3. 2. Alyeska's CIS data for 2004,2 sheets.\n3. Alyeska's CIS data for 2006,4 sheets.\n4. Alyeska's CIS data for 2007,4 sheets.\n5 . PHMSA spread sheet of low areas, 1 sheet.\n5 195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies. This manual shall\nbe reviewed at intervals not exceeding 15 months, but at least once each calendar\nyear, and appropriate changes made as necessary to insure that the manual is\neffective. This manual shall be prepared before initial operations of a pipeline\ncommence, and appropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\nAlyeska's manual of written operations and maintenance procedures at MP- 166-3.03,\n\"Facility Corrosion Integrity Monitoring\" and MP- 166-3.03-0 1, \"Facility Corrosion\nIntegrity Monitoring Engineering and Implementation,\" states that re-inspection\nintervals are based on the intervals set forth in API 570 \"Piping Inspection Code.\" The\n\"corrosion rate\" referenced in API 570 is derived from measuring the difference between\nactual readings of wall thicknesses over time. Alyeska presented documentation that\nindicated that the following check valve by-passes were not or will not be inspected at\nthe intervals prescribed by API 570, as required by Alyeska's own manual of written\noperations and maintenance procedures:\nCV84 AB - Was last inspected by Alyeska in 2006. API 570 calculated re-\ninspection interval is 2 years, based on a 30 millyr. corrosion rate. Alyeska has\nscheduled the next re-inspection for 2010.\nCV90 D - Was last inspected by Alyeska in 2006. API 570 calculated re-\ninspection interval is 3 years, based on a 15 millyr. corrosion rate. Alyeska has\nscheduled the next re-inspection for 201 6.\nCV095 AB - Was last inspected by Alyeska in 2001. API 570 calculated re-\ninspection interval is 4 years, based on a 13 millyr. corrosion rate. Alyeska has\nscheduled the next re-inspection for 2014.\nAlyeska is not following their manual of written procedures for conducting nonnal\noperations and maintenance activities. Specifically, Alyeska is not following the written\nprocedures in MP- 166-3.03 or MP- 166-03.03-0 1 for determining re-inspection intervals\non valve bypass lines.\n\n\n\n4. Evidence:\n1. MPl66-3.03, \"Facility Corrosion Integrity Monitoring\", pages 1 through 9.\n2. API 570, \"Piping Inspection Code\" pages 6-1, 6-2,6-3, 7-1, 7-3.\n3. ASMEB31.3, Table A-1,page 140.\n4. Alyeska's spread sheet for valve bypass inspections.\n5. PHMSA analysis of Alyeska's Re-inspection Interval based API 570.\n5 195.404 Maps and Records.\n(c) Each operator shall maintain the following records for the periods specified;\n(I) The date, location, and description of each repair made to pipe shall be\nmaintained for the useful life of the pipe.\nAlyeska did not provide records of the wall thickness and grade for the DRA Sleeves\ninstalled at PS 09 and PS 10. The Alignment sheets (G-100 drawings) also do not show\nthe DRA injection ring for PS 09. These repairs and alterations are required information\nfor Alyeska's MR-48, \"Trans-Alaska Pipeline Maintenance and Repair Manual.\"\nEvidence:\n1. Drawing D-39-M600, \"Pump Station 9 DRA Injection Annular Ring Injection\nNozzle Sections & Details\".\n2. OM-1, \"Procedures Manual for Operations Maintenance and Emergencies\", pages\n10-9 through 10- 1 1.\n3. Alignment sheets for PS09 & PS10.\n4. As-built Data sheets showing DRA Sleeves at 28974t-27 & 30936+74.\nProposed Civil Penalty\nUnder 49 United States Code, 9 60122, you are subject to an administrative civil penalty not to\nexceed $100,000 for each violation for each day the violation persists up to a maximum of\n$1,000,000 for any related series of violations. The Compliance Officer has reviewed the\ncircumstances and supporting documentation involved in the above probable violations and has\nrecommended that you be preliminarily assessed a civil penalty of $56,000 as follows:\nItem Number\n2\nPENALTY\n$56,000\nProposed Compliance Order\nWith respect to Items 2,3, and 4 pursuant to 49 United States Code fj 601 18, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to Alyeska\nPipeline Service Company. Please refer to the Proposed Compliance Order, which is enclosed\nand made a part of this Notice.\n\n\n\nWarning Items\nWith respect to Item 1, we have reviewed the circumstances and supporting documents involved\nin this case and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to promptly correct this item. Be advised\nthat failure to do so may result in Alyeska Pipeline Service Company being subject to additional\nenforcement action.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators\nin Compliance Proceedings. Please refer to this document and note the response options. Be\nadvised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies\nfor confidential treatment under 5 U.S.C. 552(b), along with the complete original document\nyou must provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted information\nqualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days\nof receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this\nNotice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in\nthis Notice without further notice to you and to issue a Final Order.\nIn your correspondence on this matter, please refer to CPF 5-2008-5014 and for each document\nyou submit, please provide a copy in electronic format whenever possible.\nS i n c e E 7&\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 B. Flanders (#I 18833)\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Conzpliatzce Proceedings\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code tj 60 1 18, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Alyeska Pipeline Service Company a\nCompliance Order incorporating the following remedial requirements to ensure the compliance\nof Alyeska Pipeline Service Company with the pipeline safety regulations:\n1. 2. 3. 5. 6. In regard to Item Number 2 of the Notice pertaining to Low CP at MP 567.66, MP\n574.16, MP574.33, MP 578.95 and MP 579.18:\nWithin twelve (12) months of receipt of the Final Order, Alyeska shall take\nappropriate action to bring the cathodic protection levels at the above-listed locations\ninto compliance with one or more of the applicable criteria and other considerations\nfor cathodic protection contained in Paragraphs 6.2 and 6.3 of NACE Standard\nRPO 1 169-96 (incorporated by reference, see 6 195.3) as required by tj 195.57 1.\nAlyeska shall conduct CIS at the above-listed locations and provide the results of\nsuch CIS by September 30,2009.\nIn regard to Item Number 3 of the Notice pertaining to the reinspection interval for\ninternal corrosion based on API 5701 MP-166-3.03, \"Facility Corrosion Integrity\nMonitoring\":\nAlyeska shall properly re-determine the re-inspection intervals for check-valve\nbypasses listed in the Notice in accord with Alyeska's written procedures and\nspecifications (API 570) and submit to PHMSA a revised inspection plan which will\nensure that Alyeska re-inspects internal corrosion in check valve bypasses in a\ntimely manner.\nIn regard to Item Number 4 of the Notice pertaining to \"As-built\" information of\nDRA Injection Rings at PS09 & PS10:\nAlyeska shall determine the wall thickness and grade of material used for the DRA\ninjection rings at PS09 & PS10, include this information in their \"As-built\" records,\nand maintain these records for the life of the pipeline. Alyeska shall provide these\nupdated records within 180 days.\nIJnless another time frame is indicated, Alyeska shall conduct the activities in the\nabove-listed items and submit documentation of compliance within sixty (60) days\nof receipt of the Final Order.\nAlyeska Pipeline Service Company shall maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the\ntotal to Chris Hoidal, Director, Western, Pipeline and Hazardous Materials Safety\nAdministration. Costs shall be reported in two categories: 1) total cost associated\nwith preparationfrevision of plans, procedures, studies and analyses, and 2) total cost\nassociated with replacements, additions and other changes to pipeline infi-astructure.\n\n520085014_closure letter_01052011_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 5, 2011\nMr. Mike Joynor\nSenior Vice President\nAlyeska Pipeline Service Company\n900 East Benson Blvd.\nP.O. Box 196660\nAnchorage, AK 99519-6660\nCPF 5-2008-5014\nDear Mr. Joynor:\nOn January 13, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Alyeska Pipeline Service Company a Final Order in the above-referenced case.\nThis Order included a Compliance Order and Civil Penalty assessment. Based on our review\nof the documentation you provided and confirmation of payment of the civil penalty paid on\nFebruary 4, 2010, it has been determined that you have complied with the terms of this\nOrder.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nDennis Hinnah\nDeputy Director, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 B. Flanders (#118833)\n\n520085014_FinalOrder_01132010_text.pdf\n\nJAN 13 2010\nMr. Mike Joynor\nSenior Vice President\nOil Movements, Engineering and Pipeline\nAlyeska Pipeline Service Company\n900 East Benson Blvd.\nP.O. Box 196660\nAnchorage, AK 99519-6660\nRe: CPF No. 5-2008-5014\nDear Mr. Joynor:\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation\nand assesses a civil penalty of $56,000. The Final Order also specifies actions that need to be\ntaken by Alyeska Pipeline Service Company to comply with the pipeline safety regulations. The\npenalty payment terms are set forth in the Final Order. When the civil penalty has been paid and\nthe terms of the compliance order are completed, as determined by the Director, Western Region,\nthis enforcement action will be closed. Your receipt of the Final Order constitutes service of that\ndocument under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Chris Hoidal, Director, Western Region, PHMSA\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5258]\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 )\nAlyeska Pipeline Service Company, ) CPF No. 5-2008-5014\n)\n)\n)\nRespondent. )\n_______________________________________________ )\nFINAL ORDER\nFrom October 15 to 19, 2007, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Alyeska Pipeline\nService Company (Alyeska or Respondent) in Anchorage, Alaska. Alyeska is the operator of the\nTrans Alaska Pipeline System (TAPS), an 800-mile-long pipeline that transports crude oil from\nbetween Milepost 496 and Milepost 647, including Pump Stations 9 and 10, along with the\nPrudhoe Bay to Valdez, Alaska.1 This inspection covered those portions of the TAPS that lie\ncompany’s records of a 2006 flood that occurred near Milepost 761.\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to Alyeska,\nby letter dated June 9, 2008, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that Respondent had violated 49 C.F.R. §§ 195.571, 195.402, and 195.404, and\nassessing the company a civil penalty of $56,000 for the alleged violations. The Notice also\nproposed finding that Alyeska had committed a probable violation of 49 C.F.R. § 195.401, and\nwarned Respondent to take appropriate corrective actions or be subject to future enforcement\naction.\nAlyeska responded to the Notice by letter dated July 14, 2008 (Response). Respondent contested\nthe allegations, offered information in response to the allegations, and requested that the\nproposed civil penalty be reduced. Respondent did not request a hearing and therefore has\nwaived its right to one.\n1 http://www.alyeska-pipe.com/pipelinefacts.html (accessed Oct. 20, 2009).\n\n\n\n2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.571 which states:\n§ 195.571 -- What criteria must I use to determine the adequacy of\ncathodic protection?\nCathodic protection required by this subpart must comply with one or\nmore of the applicable criteria and other considerations for cathodic\nprotection contained in paragraphs 6.2 and 6.3 of NACE Standard RP\n0169 (incorporated by reference, see Sec. 195.3).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.571 by failing to have adequate\ncathodic protection (CP) on the TAPS. Specifically, Respondent’s records revealed low CP\nreadings at Mileposts 567.66, 574.16, 574.33, 578.95, and 579.18 during close interval surveys\n(CIS) conducted between 2003 and 2007.\nAlyeska has not disputed this allegation. Accordingly, after considering all the evidence, I find\nRespondent violated 49 C.F.R. § 195.571 by failing to have adequate CP on the TAPS at the\ncited locations.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.404 which states:\n§ 195.404 – Maps and records.\n(a) . . . .\n(b) . . . .\n(c) Each operator shall maintain the following records for the periods\nspecified:\n(1) The date, location, and description of each repair made to pipe\nshall be maintained for the useful life of the pipe.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404 by failing to maintain records\nof repairs and alterations made to the TAPS. Specifically, Respondent was unable to provide\nrecords of wall thickness and grade for the DRA Sleeves installed at Pump Stations 9 and 10.\nAdditionally, Respondent’s Alignment sheets (G-100 drawings) did not show the DRA injection\nring for Pump Station 9. OPS also noted that a record of such repairs and alterations must be\nmaintained according to Respondent’s MR-48 “Trans-Alaska Pipeline Maintenance and Repair\nManual.”\nRespondent has not disputed this allegation. Accordingly, after considering all the evidence, I\nfind Respondent violated 49 C.F.R. § 195.404 by failing to maintain records of repairs and\nalterations made to the pipeline.\n\n\n\n3\nThese findings of violation will be considered a prior offense in any subsequent enforcement\naction taken against Respondent.\nWITHDRAWAL OF ALLEGATION\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.402 which states:\n§ 195.402 -- Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal\noperations and maintenance activities and handling abnormal\noperations and emergencies. This manual shall be reviewed at intervals\nnot exceeding 15 months, but at least once each calendar year, and\nappropriate changes made as necessary to insure that the manual is\neffective. This manual shall be prepared before initial operations of a\npipeline system commence, and appropriate parts shall be kept at\nlocations where operations and maintenance activities are conducted.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.402 by failing to follow its manual\nof written procedures for conducting normal operations and maintenance activities. Specifically,\nthe Notice alleged that, under MP-166-3.03, “Facility Corrosion Integrity Monitoring,” and MP-\n166-3.03-01, “Facility Corrosion Integrity Monitoring Engineering and Implementation,” of\nAlyeska’s manual, re-inspection intervals for monitoring corrosion integrity were to be\ndetermined on the basis of the corrosion rate formula set forth in American Petroleum Institute\n(API) 570, “Piping Inspection Code.” The Notice further alleged that, according to\nRespondent’s own records, the following three valves on bypass piping were not inspected or\nwould not be inspected at the required intervals:\n• CV84 AB – Respondent’s last inspection of this valve occurred in 2006. The\ncalculated re-inspection interval under API 570 would be 2 years based on 30\nmil/yr. corrosion rate. Respondent’s next scheduled re-inspection was not until\n2010.\n• CV90 D – Respondent’s last inspection occurred in 2006. The calculated re-\ninspection interval under API 570 would be 3 years based on 15 mil/yr. corrosion\nrate. Respondent’s next scheduled re-inspection was not until 2016.\n• CV095 AB – Respondent’s last inspection occurred in 2001. Therefore, the\ncalculated re-inspection interval under API 570 would be 4 years based on 13\nmil/yr. corrosion rate. Respondent’s next scheduled re-inspection was not until\n2014.\nAlyeska requested in its Response that this allegation of probable violation be withdrawn. In\nsubstantiating that request, Respondent argued that it does follow its own procedures for re-\ninspection intervals on valve bypass piping. Specifically, Respondent stated that it calculates\nhalf-life inspection intervals based on its procedures, MP-166-3.03 and MP-166-3.03-01, which\nrequire that re-inspection interval calculations be based on a combination of RSTRENG® and\n\n\n\n4\nAmerican Society of Mechanical Engineers (ASME) B31G, not API 570. Respondent further\nargued that PHMSA incorrectly assumed Respondent’s re-inspection dates for “CV84” and\nother words, Respondent argued that PHMSA incorrectly assessed Respondent’s corrosion rates\nbased on API 570 and erroneously assumed Respondent’s projected re-inspection intervals for\nthe following valves:\n“CV90 D” were based on 80% remaining wall loss, not the half-life of the bypass piping.2 In\n• CV84 AB – Because Respondent used a 40 mil/yr. corrosion rate based upon data from\nmultiple grid locations, not the API 570 30 mil/yr. corrosion rate, a re-inspection need not\noccur until 2010.\n• CV90 D – Because Respondent used a 20 mil/yr. corrosion rate based upon data from\nmultiple grid locations, not the API 570 15 mil/yr. corrosion rate, a re-inspection need not\noccur until 2012.\n• CV095 AB – Because Respondent used a 10 mil/yr. corrosion rate based upon data from\nmultiple grid locations, not the API 570 13 mil/yr. corrosion rate, a re-inspection need not\noccur until 2008.3\nI find Respondent’s arguments for withdrawing this probable violation persuasive. In its\nResponse, Alyeska provided updated copies of its procedures, MP-166-3.03 and MP-166-3.03-\n01. Although Respondent made some revisions to its manual subsequent to the OPS inspection\nin question, Respondent’s substantive procedures for re-inspection remained unchanged.4 in both versions of Respondent’s manual its procedure for re-inspection is stated as follows:\nThus,\nFacility piping is organized or segmented into unique operating environments or\nline segments (legs) to which inspection classifications are assigned in accordance\nwith API 570, “Piping Inspection Code – Inspection, Repair, Alteration, and\nRerating of In-Service Piping Systems.” Half-life sample inspection intervals or\nfrequencies are based upon projected failure dates calculated for each leg using\nthe RSTRENG method. The actual grid corrosion strings and an assumed or\nactual corrosion rate are used to determine the future date when the leg will be in\nan out-of-code condition. Actual corrosion rates may be determined from\ninspection history or corrosion coupon data.5\nIt appears that, in reviewing Respondent’s records, OPS misinterpreted Alyeska’s procedures by\nrelying on incomplete documentation to calculate the re-inspection intervals for these three\nvalves. Specifically, Respondent’s records displayed re-inspection intervals for those valves\nbased on 80% remaining wall loss, not on the half-life of the bypass piping. Respondent has\n2 In 2001, the date of CV095AB’s last inspection, Respondent had not yet developed MP-166-3.03-01. Thus,\nAlyeska concedes in its Response that PHMSA correctly presumed that the “RSTRENG PID” date of 2014 in\nRespondent’s records was the re-inspection interval for that valve.\n3 Respondent recalculated the re-inspection interval for this valve based on MP-166-3.03-01 and submitted a record\nof the results of that recalculation with its Response.\n4 Response, Exhibit 2.\n5 Section 5.1.6, MP-166-3.03, “Facility Corrosion Integrity Monitoring” (effective April 25, 2008); Section 5.1.5,\nMP-166-3.03, “Facility Corrosion Integrity Monitoring” (effective April 12, 2006).\n\n\n\n5\nsubmitted records showing the remaining strength and half-life re-inspection intervals, Safe\nMaximum Operating Pressures, and 80% wall loss of the valves. Moreover, Alyeska’s use of the\nhalf-life of the bypass piping to determine re-inspection intervals was consistent with its\noperations and maintenance procedures.\nTherefore, after considering all the evidence, I find that Respondent did not violate 49 C.F.R.\n§ 195.402 and therefore the probable violation alleged in Item 3 of the Notice is hereby\nwithdrawn.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under 49 U.S.C. § 60122\nand 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and\ngravity of the violation, including adverse impact on the environment; the degree of\nRespondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s ability to\npay the penalty and any effect that the penalty may have on its ability to continue doing business;\nand the good faith of Respondent in attempting to comply with the pipeline safety regulations.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $56,000 for the violations cited above.\nThe Notice proposed a civil penalty of $56,000 for Item 2 of the Notice for failing to have\nadequate CP on the TAPS. In its Response, Alyeska requested that the civil penalty for this\nviolation be reduced on the basis of certain mitigating circumstances. Specifically, Respondent\nnoted that the results of its close interval surveys (CIS) show that, in recent years, two of the five\ncited locations met the criteria in the National Association of Corrosion Engineers (NACE) SP\n0169-02. Respondent further stated that it conducted those tests utilizing CP monitoring coupons\nand CIS, as required by its Monitoring Procedure MP-166-3.22, Pipeline Cathodic Protection, a\nprocedure that uses the criteria in NACE SP 0169-2002, Sections 6.2 and 6.3, to determine the\nadequacy of CP.\nI do not find Respondent’s arguments persuasive. First, although the two Milepost locations\ncited in Alyeska’s Response did pass the NACE SP 0169-02 CP criteria in the most recent year\ntested (2007), those locations failed to meet the criteria in previous years. Specifically, Milepost\n574.16 failed in 2003, 2004, and 2005 but passed in 2006 and 2007. Similarly, Milepost 574.33\nfailed in 2006 and passed in 2003, 2004, 2005, and 2007. Second, PHMSA already considered\nthese mitigating circumstances identified by Alyeska in calculating the proposed civil penalty\namount. Indeed, the Pipeline Safety Violation Report (Violation Report), CPF. 5-2008-5014\n(signed April 4, 2008), contains the CIS data sheets for 2003, 2004, 2006, and 2007 that\nRespondent cites as evidence in favor of mitigation. In other words, Respondent’s bases for\nrequesting a reduction in the civil penalty are already reflected in the original amounts proposed\nin the Notice.\n\n\n\n6\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a total civil penalty of $56,000.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $56,000 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a United\nStates District Court.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 2 , 3 and 4 for violations of 49\nC.F.R. §§ 195.571 and 195.404 respectively. As discussed above I withdrew the probable\nviolation alleged in Item 3 of the Notice. Therefore, the compliance order item associated with\nthat allegation is also withdrawn.\nIn its Response, Alyeska requested that the proposed compliance order for Item 2 be withdrawn.\nRespondent argued that it has developed a broad mitigation plan for known low CP areas, which\nwas discussed with PHMSA at a meeting conducted on May 1, 2008. Moreover, Respondent\ncontends that it has developed an action plan to add continuous anodes powered by a remote\nplan for reaching compliance of this item, it has not fully implemented this plan to achieve\npersuasive.\nwind/solar generator in 2009 at the five locations.6 While Respondent has developed an action\ncompliance. Therefore, I do not find Respondent’s argument for withdrawal of Item 2 to be\nRespondent also objected to the proposed completion date for this item. I have taken into\naccount factors, such as project season and weather, in setting the completion date required by\nthis Order.\nUnder 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids\nor who owns or operates a pipeline facility is required to comply with the applicable safety\nstandards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance\nwith the pipeline safety regulations applicable to its operations:\n6 I note that Respondent has installed wind generators to correct low CP levels in the past, but those generators did\nnot provide enough power to maintain CP levels. Use of such unsuccessful methods could fail to meet the objective\nof the compliance order for this item.\n\n\n\n7\n1. With respect to the violation of § 195.571 (Item 2), Respondent must, within 12 months\nof receipt of the Final Order, take appropriate action to bring the cathodic protection\n(CP) levels at Milepost 567.66, Milepost 574.16, Milepost 574.33, Milepost 578.95, and\nMilepost 579.18, into compliance with one or more of the applicable criteria and other\nconsiderations for CP contained in Paragraphs 6.2 and 6.3 of the NACE Standard\nRP01169-96 as required by § 195.571. Respondent must conduct a Close Interval Survey\n(CIS) at the above-listed locations and provide the results of such CIS by September 30,\n2010.\n2. With respect to the violation of § 195.404 (Item 4), Respondent must determine the wall\nthickness and grade of material used for the DRA Injection Rings at PS09 and PS10,\ninclude this information in its “As-built” records, and maintain these records for the life\nof the pipeline. Respondent must provide these updated records within 180 days of\nreceipt of the final order.\n3. Respondent must maintain documentation of the safety improvement costs associated\nwith fulfilling this Compliance Order and submit the total to Chris Hoidal, Director,\nWestern Region, Office of Pipeline Safety, 12300 W. Dakota Ave. #110, Lakewood, CO\n80228. Costs must be reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and 2) total cost\nassociated with replacements, additions and other changes to pipeline infrastructure. The\ndocumentation of the costs must be submitted within 60 days of completion of\nCompliance Order Item #1.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent demonstrating good cause for an extension.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\nto exceed $100,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nWARNING ITEM\nWith respect to Item 1, the Notice alleged probable violations of Part 195 but did not propose a\ncivil penalty or compliance order for these items. Therefore, these are considered to be warning\nitems. The warning was for:\n49 C.F.R. § 195.401 (Notice Item 1) – Respondent’s alleged failure to adequately\ninvestigate and where needed, correct adverse conditions of six scour areas in a\nreasonable time. Specifically, in October 2006, severe flooding affected the TAPS right-\nof-way (ROW) at numerous stream crossings along the southernmost 80 miles of the\npipeline. During the October 2007 inspection, PHMSA’s inspectors reviewed\nRespondent’s Civil Monitoring and ROW Maintenance Audit (Audit), dated October 8,\n2007. PHMSA’s inspection revealed that five scour locations identified in the Audit\nwere never investigated in 2007 due to cancellation of the investigations by Respondent.\n\n\n\n8\nMoreover, a sixth scour location identified in the Audit was only partially investigated in\n2006. PHMSA’s inspectors were unable to find sufficient justification for Respondent’s\ncancellation of the planned 2007 investigations of the six sites. Respondent’s Audit\nsimilarly found insufficient justification. At the time of inspection, Respondent had\nexcavated only 16 feet of an estimated 80 feet scour area at Milepost 761.73 (near\nMilepost 761.7) during 2006. Further, Respondent did not repair pipe or coating damage,\nuncovered at Milepost 761.73. Respondent indicated it planned to re-excavate and repair\ncoating/cathodic protection system damage at Milepost 761.73 during the summer of\n2008.\nHaving considered such information, I find, pursuant to 49 C.F.R. § 190.205, that a probable\nviolation of 49 C.F.R. § 195.401 (Notice Item 1) has occurred. Alyeska presented information\nin its Response showing that it had taken certain actions to address the cited items. If OPS finds\na violation for this item in a subsequent inspection, Respondent may be subject to future\nenforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Rec","truncated":true,"body_characters":40873}