{"operation":"document","citation":"CPF 520090018","title":"Plains Products Terminals LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2009-06-26","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.603(b), 192.605(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520090018.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520090018.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520090018","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520090018","body":"Notice of Probable Violation involving Plains Products Terminals LLC. PHMSA's enforcement data identifies the cited regulations as 192.603(b),  192.605(a). The case was opened on 2009-06-26 and is reported as closed as of 2015-02-12. Proposed civil penalty: $108,800. Assessed civil penalty: $108,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520090018_closure letter_02122015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_closure%20letter_02122015.pdf\n\n520090018_closure letter_02122015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_closure%20letter_02122015_text.pdf\n\n520090018_Decision on Reconsideration_08302013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_Decision%20on%20Reconsideration_08302013.pdf\n\n520090018_Decision on Reconsideration_08302013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_Decision%20on%20Reconsideration_08302013_text.pdf\n\n520090018_FinalOrder_07082011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_FinalOrder_07082011.pdf\n\n520090018_FinalOrder_07082011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_FinalOrder_07082011_text.pdf\n\n520090018_NOPV PCP PCO_06262009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_NOPV%20PCP%20PCO_06262009.pdf\n\n520090018_NOPV PCP PCO_06262009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090018/520090018_NOPV%20PCP%20PCO_06262009_text.pdf\n\n520090018_NOPV PCP PCO_06262009_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 26, 2009\nMr. Jordan Janak\nDirector, Environmental & Regulatory Compliance\nPlains Products Terminals LLC\nc/o Plains Pipeline LLC\nP.O. Box 4648\nHouston, TX 77210-4648\nCPF 5-2009-0018\nDear Mr. Janak:\nOn November 4, 2008, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected your\nMartinez Terminal Gas Line in Martinez, California.\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. §192.603 General Provisions.\n(b) Each operator shall keep records necessary to administer the procedures\nestablished under §192.605.\n\n\n\nOperator staff could not provide implementation records to demonstrate they were properly\nadministering the procedures. Specifically, records documenting the following activities were all\nunavailable at the time of the inspection: the procedural manual review required under\n§192.605(a), review of personnel work under §192.605(b)(8) and §192.605(c)(4), a location\nspecific emergency plan required by §192.615(b)(2), emergency procedure training required by\n§192.615(b)(3), liaison with public officials required by §192.615(c), public awareness program\nactivities required by §192.616 (e, f, and g), pipeline patrolling required by §192.705, leak surveys\nfor years other than 2007 as required by §192.706, inspection and testing of pressure limiting and\nregulating stations required by §192.739 (under PG&E supply contract), and determination of\nadequate overpressure protection as required by §192.743.\n2. §192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) General Each operator shall prepare and follow for each pipeline, a manual for\nconducting operations and maintenance. For transmission lines, the manual must\nalso include procedures for handling abnormal operations. This manual must be\nreviewed and updated by the operator at intervals not exceeding 15 months, but at\nleast once each calendar year. This manual must be prepared before operations of a\npipeline commence. Appropriate parts of the manual must be kept at locations where\noperations and maintenance activities are conducted.\nAt the time of the inspection, the operator did not have specific written procedures for the natural\ngas pipeline. Some applicable procedures were available in its Part 195 hazardous liquid pipeline\nmanual that is used for their intrastate pipelines inspected by the California State Fire Marshal, but\na comprehensive procedural manual for operation, maintenance and emergencies was not available\nfor our inspector’s review. Based upon our conversations with your field staff, the operator\napparently made a decision to consider the natural gas pipeline to be non-regulated under Part 192.\nIt does appear some operations and maintenance activities, such as corrosion control monitoring\nfor the pipeline, were performed along with analogous Part 195 work. This resulted in only partial\ncompliance with the Federal safety regulations.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000\nfor each violation for each day the violation persists up to a maximum of $1,000,000 for any\nrelated series of violations. The Compliance Officer has reviewed the circumstances and\nsupporting documentation involved in the above probable violations and has recommended that\nyou be preliminarily assessed a civil penalty of $108,800 as follows:\nItem number\nPENALTY\n1 $44,400\n2 $64,400\n2\n\n\n\nProposed Compliance Order\nWith respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to Plains\nProducts Terminals. Please refer to the Proposed Compliance Order, which is enclosed and made\na part of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. 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 for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you must\nprovide a second copy of the document with the portions you believe qualify for confidential\ntreatment redacted and an explanation of why you believe the redacted information qualifies for\nconfidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of\nthis Notice, this constitutes a waiver of your right to contest the allegations in this Notice and\nauthorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice\nwithout further notice to you and to issue a Final Order.\nIn your correspondence on this matter, please refer to CPF 5-2009-0018 and for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nChristopher Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\ncc: PHP-60 Compliance Registry\nPHP-500 J. Stahoviak (#120716)\n3\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Plains Products Terminals a Compliance Order\nincorporating the following remedial requirements to ensure the compliance of Plains Products\nTerminals with the pipeline safety regulations:\n1. In regard to Item Number 1 of the Notice pertaining to failure to keep records of\nrequired operations and maintenance activities as listed, the operator must perform\nand document all such required activities.\n2. In regard to Item Number 2 of the Notice pertaining to lack of a procedural manual\nfor operations, maintenance, and emergency response, the operator must either\ndevelop a free-standing manual for its natural gas pipeline, or adapt its existing\nhazardous liquid procedural manual to include the required procedures that must be\nadhered to for the natural gas pipeline.\n3. The operator must develop and perform all required procedures within 90 days.\n4. Plains Products Terminals shall maintain documentation of the safety improvement\ncosts associated with fulfilling this Compliance Order and submit the total to Chris\nHoidal, Director, Western Region, Pipeline and Hazardous Materials Safety\nAdministration. Costs shall be reported in two categories: 1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses, and 2) total\ncost associated with replacements, additions and other changes to pipeline\ninfrastructure.\n4\n\n520090018_closure letter_02122015_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nFebruary 12, 2015\nMr. Troy Valenzuela\nVice President of Environmental Health and Safety\nPlains Marketing, L.P.\n333 Clay Street, Suite 1600\nHouston, TX 77002\nRe: CPF 5-2009-0018\nClosure Letter\nDear Mr. Valenzuela:\nOn July 8, 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued a Final Order to Plains All American Pipeline, L.P. in the above-referenced case. This\nFinal Order included a Compliance Order and Civil Penalty assessment. Based on our review\nof the documentation you provided, confirmation of payment of the civil penalty, and a field\ninspection conducted by agency personnel on December 17, 2014, it has been determined that\nyou have complied with the terms of this Order.\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,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 J. Stahoviak (#120716)\n\n520090018_FinalOrder_07082011_text.pdf\n\nJUL 8 2011\nMr. John Keffer\nVice President, Terminals\nPlains All American Pipeline, L.P.\n333 Clay Street, Suite 1600\nHouston, TX 77002\nRe: CPF No. 5-2009-0018\nDear Mr. Keffer:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $108,800, and specifies actions that need to be taken by\nPlains All American Pipeline, L.P., to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Western Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided 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. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline Safety\nMr. Chris Hoidal, Director, Western Region, PHMSA\nMr. Jordan Janek\nSenior Director, Environmental and Regulatory Compliance\nPlains All American Pipeline, L.P.\nP.O. Box 4648\nHouston, TX 77210-4648\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5326]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nPlains All American Pipeline, L.P., ) CPF No. 5-2009-0018\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn November 4, 2008, pursuant to 49 U.S.C. § 60117, a representative 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 Plains All\nAmerican Pipeline, L.P. (Plains or Respondent), the operator of a 1-mile pipeline system that\nsupplies natural gas to a terminal in Martinez, California.1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated June 26, 2009, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Plains had violated 49 C.F.R. §§ 192.603(b) and 192.605(a) and\nproposed assessing a civil penalty of $108,800 for the alleged violations. The Notice also\nproposed ordering Respondent to take certain measures to correct the alleged violations.\nPlains responded to the Notice by letter dated July 28, 2009 (Response). The company contested\nthe allegations on legal grounds, arguing that its pipeline is not subject to the requirements in\nPart 192. Respondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.603(b), which states:\n§ 192.603 General provisions.\n(a) . . . .\n(b) Each operator shall keep records necessary to administer the\nprocedures established under §192.605.\n1 SEC Form 10-K, Plains All American Pipeline, L.P., 2010,\nhttp://www.sec.gov/Archives/edgar/data/1070423/000110465910010102/a09-36206_110k.htm\n\n\n\n2\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.603(b) by failing to keep the\nrecords necessary to administer the procedures established under § 192.605. In particular, the\nNotice alleged that Plains did not have any records concerning: (1) the procedural manual\nrequired under § 192.605(a); the review of personnel work required under § 192.605(b)(8) and\n(c)(4); the emergency plan required under § 192.615; the emergency training procedures required\nunder § 192.615(c); the public awareness program required under § 192.616(e)-(g); the pipeline\npatrolling program required under § 192.705; the leak surveys required under § 192.706 (other\nthan for the 2007 calendar year); the relief device inspection and testing required under\n§ 192.739; and the overpressure protection determinations required under § 192.743.\nIn its Response, Plains argued that its pipeline is not subject to any of the requirements of 49\nC.F.R. Part 192, because it is not a gathering line, transmission line, or distribution line used in\nthe transportation of gas. Specifically, Respondent stated that its 1-mile pipeline supplies fuel\ngas to an intermittent operating thermal oxidizer and process heater at the Martinez terminal, and\nthat its normal operating pressure is 90 psig. Plains further noted that its pipeline interconnects\nwith a Pacific Gas & Electric (PG & E) transmission line, that it is located downstream from a\nregulator and customer meter, and that it is the sole user of the gas provided by PG & E.\nBased on these facts, Respondent asserted that its pipeline “is definitely not a gathering or\ndistribution line.” Plains also provided a more detailed explanation for why its pipeline is not a\ntransmission line, arguing that it operated at a hoop stress that is below 20 percent of its specified\nminimum yield strength (SMYS), did not transport gas within a storage field or to distribution\ncenter or storage facility, and did not transport gas to a large volume customer according to the\ndefinition provided in 49 C.F.R. § 192.3 and a February 14, 1990 letter of interpretation.2\nAccordingly, Respondent argued that its pipeline is not a gathering line, transmission line, or\ndistribution line used for the transportation of gas or subject to the pipeline safety requirements.\nSection 192.3 states that for purposes of 49 C.F.R. Part 192:\nTransmission line means a pipeline, other than a gathering line, that:\n(1) Transports gas from a gathering line or storage facility to a\ndistribution center, storage facility, or large volume customer that is not\ndown-stream from a distribution center; (2) operates at a hoop stress of 20\npercent or more of SMYS; or (3) transports gas within a storage field.\nNOTE: A large volume customer may receive similar volumes of gas as\na distribution center, and includes factories, power plants, and institutional\nusers of gas.\nFor purposes of this case, I accept Respondent’s contentions that its pipeline is not a gathering\nline or a distribution line, and that the applicability of Part 192 turns solely on whether its\npipeline is a transmission line used for the transportation of gas. With regard to the latter, I also\naccept Respondent’s assertion that its pipeline does not operate at a hoop stress of 20 percent or\nmore of SMYS or transport gas within a storage field. Therefore, the only remaining issue is\nwhether Respondent’s pipeline “transports gas from a gathering line or storage facility” to a\n“large volume customer that is not down-stream from a distribution center.”\n2 The Response refers to the interpretation as PI-89-019, dated September 18, 1989. However, the relevant\ninterpretation is actually PI-90-004, dated February 14, 1990.\n\n\n\n3\nThe “determination of whether a pipeline is . . . transmission line” is made “on a case-by-case\nbasis depending on the set of circumstances for each line.\n”3 Citing a February 14, 1990 letter of\ninterpretation, Respondent first argues that a pipeline which operates at 90 psig cannot be\nconsidered a transmission line for purposes of 49 C.F.R. Part 192.\nexamples of large volume customers provided in § 192.3, i.e., factories, power plants, and\ninstitutional users of gas, consume “tens to hundreds of millions of cubic feet [of gas] per day,”\nwhile “[t]he average gas delivery to the Martinez Terminal over the past years was 0.25 million\ncubic feet.” According to Respondent, that makes it “more . . . akin to a small commercial\ncustomer, a term used in conjunction with residential customers in PHMSA’s definition of a\nservice line.”\n4 Plains further argues that the\nI do not find either of these arguments persuasive.\nWith regard to the first contention, the February 14, 1990 letter of interpretation concluded that\nthe pipeline at issue in that case, a tap on an interstate pipeline which operated in the range of\n400-800 psig, was making large volume deliveries for purposes § 192.3. It did not establish that\nrange as a minimum threshold or exclude a pipeline operating at less pressure from that\ndefinition. In fact, in a subsequent rulemaking, PHMSA stated that it had chosen not to “specify\na minimum volume of gas a pipeline must transport to a customer to qualify as transmission” for\npurposes of Part 192, because “[v]olumes vary, and setting an arbitrary threshold might unfairly\nreclassify some existing lines.”5\nWith regard to the second contention, the Martinez pipeline begins at a PG&E transmission line,\nwhere a pressure regulator and customer meter are located, and transports fuel gas to a terminal\nlocated approximately 1-mile away. In so doing, it crosses an interstate highway and delivers, on\naverage, approximately 252,000 cubic feet of fuel gas each day. Under these circumstances, I\ncannot find that the Plains pipeline is “akin to a small commercial customer.” Rather, it is a\npipeline that transports gas to a large volume customer, i.e., a transmission line subject to the\nrequirements of 49 C.F.R. Part 192.\nRespondent did not contest the allegation of violation on any other grounds. Accordingly, based\nupon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.603(b) by\nfailing to keep the records necessary to administer the procedures established under § 192.605.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(a), which states:\n§ 192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline,\na manual of written procedures for conducting operations and maintenance\nactivities and for emergency response. For transmission lines, the manual\nmust also include procedures for handling abnormal operations. This\n3 In the Matter of Unocal Corporation, PHMSA Interpretation #PI-96-021 (Sep. 25, 1996) (available at\nhttp://www.phmsa.dot.gov/pipeline/regs/interps).\n4 The Response refers to the interpretation as PI-89-019, dated September 18, 1989. However, the relevant\ninterpretation is actually PI-90-004, dated February 14, 1990.\n5 Regulatory Review; Gas Pipeline Safety Standards, 61 FR 28770, 28772 (June 6, 1996).\n\n\n\n4\nmanual must be reviewed and updated by the operator at intervals not\nexceeding 15 months, but at least once each calendar year. This manual\nmust be prepared before operations of a pipeline system commence.\nAppropriate parts of the manual must be kept at locations where\noperations and maintenance activities are conducted.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.605(a) by failing to have a manual\nof written procedures for conducting operations and maintenance activities and for emergency\nresponse. In particular, the Notice alleged that Plains had determined that its pipeline was not\nsubject to the requirements of 49 C.F.R. Part 192 and therefore did not have a comprehensive\nmanual for performing these activities.\nFor the reasons provided in Item 1, I find that Respondent’s pipeline is a transmission line\nsubject to the requirements of Part 192. Based upon a review of all of the evidence, I find that\nPlains violated 49 C.F.R. § 192.605(a) by failing to have a manual of written procedures for\nconducting operations and maintenance activities and for emergency response.\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.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $108,800 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $44,400 for Respondent’s violation of 49 C.F.R.\n§ 192.603, for failing to keep the records necessary to administer the procedures established\nunder § 192.605. Plains did not dispute the factual basis for that allegation, but argued that its\npipeline was not subject to the requirements of 49 C.F.R. Part 192 as matter of law. For the\nreasons provided above, I find that Respondent’s pipeline transports gas to a large volume\ncustomer and is a regulated transmission line. Plains has not argued that the penalty should be\nreduced on any other grounds and the proposed amount is justified by the relevant assessment\nconsiderations, including those that relate to the nature, circumstances, and gravity of the\nviolation, and the degree of operator culpability. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $44,400 for violating\n49 C.F.R. § 192.603.\nItem 2: The Notice proposed a civil penalty of $64,400 for Respondent’s violation of 49 C.F.R.\n§ 192.605(a), for failing to have a manual of written procedures for conducting operations and\nmaintenance activities and for emergency response. Plains did not dispute the factual basis for\nthat allegation, but argued that its pipeline was not subject to the requirements of 49 C.F.R. Part\n\n\n\n5\n192 as matter of law. For the reasons provided above, I find that Respondent’s pipeline\ntransports gas to a large volume customer and is a regulated transmission line. Plains has not\nargued that the penalty should be reduced on any other grounds and the proposed amount is\njustified by the relevant assessment considerations, including those that relate to the nature,\ncircumstances, and gravity of the violation, and the degree of operator culpability. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $64,400 for violating 49 C.F.R. § 192.605(a).\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 such payment to 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, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $108,800 civil penalty will result in accrual of interest at the current annual\nrate in 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 district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for\nviolations of 49 C.F.R. §§ 195.603(b) and 195.605(a), respectively. Under 49 U.S.C.\n§ 60118(a), each person who engages in the transportation of gas or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217,\nRespondent is ordered to take the following actions to ensure compliance with the pipeline safety\nregulations applicable to its operations:\n1. With respect to the violation of § 192.603 (Item 1), Respondent must develop and\nimplement procedures for maintaining all of the records necessary to administer the\nprocedures established under 192.605.\n2. With respect to the violation of § 192.605 (Item 2), Respondent must develop a\nmanual of written procedures for conducting operations and maintenance activities\nand for emergency response.\n3. Respondent must complete the actions in Items 1 and 2 within 90 days.\n4. It is requested that Respondent maintain documentation of the safety improvement\ncosts associated with fulfilling this compliance Order and submit the total to Chris\nHoidal, Director, Western Region, PHMSA. It is requested that the costs be reported\nin two categories: (1) total costs associated with preparation/revision of plans,\n\n\n\n6\nprocedures, studies and analyses, and (2) total cost associated with replacements,\nadditions and other changes to pipeline infrastructure.\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 and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to 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.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of this Final Order by the\nRespondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all\nother terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n520090018_Decision on Reconsideration_08302013_text.pdf\n\nAUGUST 30, 2013\nMr. Greg L. Armstrong\nChairman and CEO\nPlains All American Pipeline, LP\n333 Clay Street, Suite 1600\nHouston, TX 77002\nRe: CPF No. 5-2009-0018\nDear Mr. Armstrong:\nEnclosed please find the Decision on Reconsideration issued in the above-referenced case. It\ngrants your Petition for Reconsideration, in part, to the extent that you sought reconsideration of\nan erroneous factual determination in the July 8, 2011 Final Order that the Martinez pipeline was\na transmission pipeline, but denies your Petition insofar as it requested that the Final Order be\nvacated in its entirety for lack of PHMSA jurisdiction over the pipeline. The Decision upholds\nthe findings of violation and the civil penalty set forth in the Final Order. Service of the\nDecision by certified mail is deemed effective upon the date of mailing, or as otherwise provided\nunder 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Chris Hoidal, Director, Western Region, OPS\nMs. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS\nWilliam V. Murchison, Esquire, Counsel for Petitioner, 325 North St. Paul Street, Suite\n2700, Dallas, TX 75201\nMr. Jordan R. Janek, Senior Director, Environmental and Regulatory Compliance,\nPlains All American Pipeline, LP, P.O. Box 4648, Houston, TX 77210-4648\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED\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 )\nPlains All American Pipeline, LP, ) )\n)\n)\nPetitioner. )\n_____________________________ )\nCPF No. 5-2009-0018\nDECISION ON RECONSIDERATION\nIn a July 8, 2011 Final Order, I found that Plains All American Pipeline, LP (Plains or\nPetitioner), had committed two violations of the natural gas pipeline safety regulations in\n49 C.F.R. Part 192 with respect to its Martinez Pipeline.\n1 Specifically, I found that Plains had\nviolated 49 C.F.R. § 192.603(b) by failing to keep records for administering its operations,\nmaintenance, and emergency procedures; and had violated § 192.605(a) by failing to have a\ncomplete manual of procedures for conducting operations, maintenance, and emergency\nactivities.\n2 I assessed Plains a civil penalty of $108,000 for committing these violations and\nordered the company to take certain actions to comply with the cited regulations.\n3\nOn September 2, 2011, Plains submitted a Petition for Reconsideration (Petition) of the Final\nOrder.\n4 In its Petition, Plains contends that the Martinez Pipeline is “not a gathering line, is not a\ndistribution line, [and] is not a transmission line” and therefore is not subject to the Part 192\npipeline safety regulations at all.\n5 Petitioner further contends that because the Martinez Pipeline\nis an intrastate pipeline, PHMSA lacks authority to regulate it insofar as PHMSA has delegated\n1 In the Matter of Plains All American Pipeline, L.P., Final Order, CPF No. 5-2009-0018 (Jul. 8, 2011). The\noriginal Notice of Probable Violation, Proposed Civil Penalty and Proposed Compliance Order (Notice) was issued\nto Plains Products Terminals, LLC, the operator of the Martinez Pipeline. The Final Order, however, was issued to\nPlains Products Terminal’s parent company, Plains All American Pipeline, LLC. The Petition was filed on behalf of\nboth entities.\n2 Final Order at pp. 1-4.\n3 Id. at pp. 4-6.\n4 On July 20, 2011, Plains submitted a request for an extension of the 20-day deadline for filing its Petition under\n49 C.F.R. § 190.215, which PHMSA granted. On August 5, 2011, Plains submitted an additional request to extend\nthe filing deadline until September 15, 2011, which PHMSA also granted. On November 6, 2011, PHMSA granted\na stay of the Final Order pending the issuance of a Decision on Reconsideration.\n5 Petition at pp. 13.\n\n\n\n2\ndirect regulatory responsibility for intrastate natural gas pipelines in California to the California\nPublic Utilities Commission (CPUC), in accordance with the annual certification process set\nforth in 49 U.S.C. § 60105. For these reasons, Petitioner contends that the Final Order should be\nvacated in its entirety for lack of PHMSA jurisdiction and authority over the pipeline. On\nDecember 21, 2011, the Western Region, Office of Pipeline Safety (OPS), submitted a Response\nto the Petition (Response) and on January 4, 2012, Plains submitted a Reply to the Response\n(Reply).\nHaving reviewed the record, including all factual and legal arguments, I find that the\nJuly 8, 2011 Final Order made an erroneous factual determination that the Martinez Pipeline is a\ntransmission line. I further find that a preponderance of the evidence establishes the Martinez\nPipeline is a distribution line, not a transmission line. Accordingly, the Petition is granted in\npart, to the extent that it sought reconsideration of this erroneous factual determination. I also\nfind that the Martinez Pipeline, as an intrastate distribution pipeline subject to the jurisdiction of\n49 U.S.C. 60101 et seq., is subject to PHMSA’s direct regulatory authority because,\nnotwithstanding its § 60105 certification, the CPUC does not actually regulate California lines\nsuch as the Martinez Pipeline that are not within the definition of a “public utility” subject to the\nCPUC’s authority under state law. Accordingly, the Petition is denied insofar as it requested that\nthe Final Order be vacated in its entirety for lack of PHMSA jurisdiction and authority over the\npipeline.\nBackground\nThe Martinez Pipeline is a six-inch-diameter natural gas pipeline constructed in 1995 that\noriginates at a meter run located in the 1900 block of Marina Vista Avenue in Martinez, Contra\nCosta County, California, and transports natural gas a distance of approximately one mile to\nPetitioner’s Martinez Petroleum Products Terminal (Terminal). Petitioner, a publicly-traded\ncompany engaged in the transportation, storage, and marketing of petroleum and natural-gas-\nrelated petroleum products, is the operator of the pipeline, having acquired it on\nNovember 15, 2006.6 The gas transported in the pipeline supplies a thermal oxidizer unit and a\nprocess heater at the Terminal. The Terminal is the sole consumer of the gas transported by the\npipeline.\nPHMSA has a history of regulating the Martinez Pipeline and its prior operators, including on-\nsite inspections by PHMSA in 2001, 2005, and 2008. On September 20, 2004, PHMSA issued a\nFinal Order in an enforcement action against Shore Terminals, LLC, the former operator of the\nMartinez Pipeline.7 This Final Order required that certain actions be taken to comply with the\nfederal pipeline safety regulations, including establishing written operating and maintenance\nprocedures, recordkeeping programs, and the placement of markers along the route of the\npipeline. These actions had not all been completed by the time Plains acquired the pipeline in\nNovember of 2006. Therefore, this enforcement proceeding was still open at the time Plains\n6 http://www.paalp.com/ (last accessed Apr. 11, 2012).\n7 In the Matter of Shore Terminals, LLC, CPF No. 5-2001-0010, Final Order (September 20, 2004). The Research\nand Special Programs Administration was PHMSA’s predecessor agency.\n\n\n\n3\nacquired the pipeline and presumably, through its due diligence process, Plains was aware that\nPHMSA had exercised federal authority over the pipeline in the past.\nOn November 4, 2008, an inspector from the Western Region, OPS, performed an on-site\npipeline safety inspection of the Martinez Pipeline. Following the inspection, by letter dated\nJune 26, 2009, the Director, Western Region, OPS (Director) issued the Notice to Plains,\nalleging that it had violated 49 C.F.R. §§ 192.603(b) and 192.605(a) by failing to have a manual\nof written procedures and keeping the records necessary to administer its procedures for\nconducting operations, maintenance, and emergency activities. The Notice proposed assessing a\ncivil penalty of $108,800 for the alleged violations and proposed ordering Plains to take certain\nmeasures to correct the same.\nOn July 28, 2009, Petitioner responded by contesting the allegations in the Notice on legal\ngrounds.8 Plains argued that the Martinez Pipeline is not a transmission line under the definition\nprovided in 49 C.F.R. § 192.3 because the line operates at a hoop stress below 20 percent of its\nspecified minimum yield strength (SMYS), does not transport gas within a storage field or to a\ndistribution center or storage facility, and does not transport gas to a large volume customer.\nOn April 14, 2011, I issued the Final Order in this case. Based on the available record at that\ntime, I agreed that Petitioner’s line does not operate at a hoop stress of 20 percent or more of\nSMYS or transport gas within a storage field. However, I did find that it transports gas to a large\nvolume customer and determined that it therefore met the definition of a transmission line and on\nthat basis was subject to the Part 192 requirements for transmission lines.9 Plains did not dispute\nthe allegations in the Notice on any other grounds, and the evidence showed that Petitioner did\nnot have a manual or keep the records necessary to administer its procedures for conducting\noperations, maintenance, and emergency activities for the Martinez Pipeline. Accordingly, I\nfound that Petitioner violated 49 C.F.R. §§ 192.603(b) and 192.605(a), assessed Plains a civil\npenalty of $108,800, and ordered the company to take certain actions to comply with the natural\ngas pipeline safety regulations in 49 C.F.R. Part 192.10\nOn September 2, 2011, Plains filed its Petition, contending that the Martinez Pipeline is “not a\ngathering line, is not a distribution line, [and] is not a transmission line” and therefore is not\nsubject to the federal pipeline safety requirements at all.\n11 In particular, Plains argues that the\nMartinez Pipeline is not a transmission line under § 192.3 because it does not transport gas to a\nlarge volume customer and is downstream from a distribution center.12 Petitioner further argues\nthat the Martinez Pipeline is a customer-owned service line, making it exempt from the Part 192\n8 Petitioner did not request an informal hearing under 49 C.F.R. §§ 190.209-211.\n9 Final Order at pp. 1-4.\n10 Id. at pp. 4-6.\n11 Petition at pp. 13.\n12 Id. at pp. 6-11.\n\n\n\n4\nrequirements.\n13 In addition, Petitioner contends that because the Martinez Pipeline is an\nintrastate pipeline, PHMSA lacks authority to regulate it since the agency has delegated direct\nregulatory responsibility over intrastate natural gas pipelines in California to the CPUC, in\naccordance with the annual certification process set forth in 49 U.S.C. § 60105. Based on these\narguments, Petitioner contends that the Final Order should be vacated in its entirety for lack of\nPHMSA jurisdiction and authority over the pipeline.\nStandard of Review\nA Petitioner is afforded the right to petition the Associate Administrator for reconsideration of a\nFinal Order. That right, however, does not constitute an appeal or an opportunity to seek a de\nnovo review of the record. Instead, a Petitioner may present previously unavailable information\nor ask for the correction of any errors in a final order. Repetitious information or arguments will\nnot be considered.14 Section 190.215(b) of the pip","truncated":true,"body_characters":57679}