{"operation":"document","citation":"CPF 520090019","title":"BIG WEST OF CALIFORNIA, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2009-07-02","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.465(b), 192.465(c), 192.705(c), 192.706(a), 192.739(a), 192.743.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520090019.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520090019.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520090019","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520090019","body":"Notice of Probable Violation involving BIG WEST OF CALIFORNIA, LLC. PHMSA's enforcement data identifies the cited regulations as 192.465(b),  192.465(c),  192.705(c),  192.706(a),  192.739(a),  192.743. The case was opened on 2009-07-02 and is reported as closed as of 2011-01-28. Proposed civil penalty: $122,600. Assessed civil penalty: $122,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520090019_FinalOrder_12302010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090019/520090019_FinalOrder_12302010.pdf\n\n520090019_FinalOrder_12302010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090019/520090019_FinalOrder_12302010_text.pdf\n\n520090019_NOPV PCP_07022009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090019/520090019_NOPV%20PCP_07022009.pdf\n\n520090019_NOPV PCP_07022009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090019/520090019_NOPV%20PCP_07022009_text.pdf\n\n520090019_operator_response_07282009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520090019/520090019_operator_response_07282009.pdf\n\n520090019_FinalOrder_12302010_text.pdf\n\nDEC 30 2010\nMs. Crystal Maggalet\nPresident\nBig West of California, LLC\nc/o Flying J, Inc.\n1104 Country Hills Drive\nOgden, UT 84403\nRe: CPF No. 5-2009-0019\nDear Ms. Maggalet:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a reduced civil penalty of $122,600. The penalty payment terms are set\nforth in the Final Order. This enforcement action closes automatically upon receipt of payment.\nService of the Final Order by certified mail is deemed effective upon the date of mailing, or as\notherwise 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. Chris Hoidal, Director, Western Region, PHMSA\nMr. Steven Peyton, Manager, Pipeline Operations,\nParamount Petroleum Corporation\n14700 Downey Avenue\nParamount, CA 90723\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [7005 1160 0001 0041 0855]\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 )\nBig West of California, LLC, ) CPF No. 5-2009-0019\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn March 24-25, 2009, 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 Big West of\nCalifornia, LLC (Big West or Respondent), in Bakersfield, California. At the time, Big West\nowned and operated a two-mile pipeline carrying fuel gas to its refinery in Bakersfield.1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated July 2, 2009, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Big\nWest had committed various violations of 49 C.F.R. Part 192 and proposed assessing a civil\npenalty of $122,600 for the alleged violations.\nBig West responded to the Notice by letter dated July 28, 2009. The company did not contest the\nallegations of violation but requested that the proposed civil penalty be reduced. Respondent did\nnot request a hearing and therefore has waived its right to one.\n1 On December 22, 2008, Big West of California, LLC, and several affiliates, including Flying J, Inc., and Big West\nOil, LLC, filed voluntary petitions in federal court seeking protection under Chapter 11 of the United States\nBankruptcy Code. See In re Flying J, Inc. et al, Case No. 08-13384, U.S. Bankruptcy Court, District of Delaware.\nNotwithstanding those filings, the issuance of this Final Order is permitted under 11 U.S.C. § 362(b)(4) (2006)\n(“The filing of a petition [in bankruptcy] . . . does not operate as a stay . . . of the commencement or continuation of\nan action or proceeding by a governmental unit . . . to enforce such governmental unit’s or organization’s police and\nregulatory power, including the enforcement of a judgment other than a money judgment, obtained in an action or\nproceeding by the governmental unit to enforce such governmental unit’s or organization’s police or regulatory\npower…”). As part of the court-approved reorganization, Big West Oil, LLC sold the assets at issue in this case to\nAlon USA Energy, Inc. (Alon), in 2010. The sale was consummated on June 1, 2010, and the pipeline is now\noperated by Paramount Petroleum Corporation, a subsidiary of Alon.\n\n\n\n2\nFINDINGS OF VIOLATION\nIn its Response, Big West did not contest the allegations in the Notice that it violated 49 C.F.R.\nPart 192, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.705, which states:\n§ 192.705 Transmission lines: Patrolling.\n(a) Each operator shall have a patrol program to observe surface\nconditions on and adjacent to the transmission line right-of-way for\nindications of leaks, construction activity, and other factors affecting\nsafety and operation.\n(b) The frequency of patrols is determined by the size of the line, the\noperating pressures, the class location, terrain, weather, and other relevant\nfactors, but intervals between patrols may not be longer than prescribed in\nthe following table:\nMaximum interval between patrols\nClass\nlocation of\nline\nAt highway and railroad crossings At all other places\n1, 2 7 ½ months; but at least twice each\ncalendar year\n15 months; but at\nleast once each\ncalendar year.\n3 4 ½ months; but at least four times\neach calendar year\n7 ½ months; but at\nleast twice each\ncalendar year.\n4 4 ½ months; but at least four times\neach calendar year\n4 ½ months; but at\nleast four times each\ncalendar year.\n(c) Methods of patrolling include walking, driving, flying or other\nappropriate means of traversing the right-of-way.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.705 by failing to conduct required\npatrols to observe surface conditions on and adjacent to its pipeline’s right-of-way.\nRespondent’s entire pipeline is in a Class 3 location, and therefore patrols at highway and\nrailroad crossings must be conducted at least every 4 ½ months, but at least four times each\ncalendar year. The Notice alleged that Big West failed to patrol such crossings between May 17,\n2006 and December 19, 2008. Respondent did not contest this allegation of violation.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 192.705 by failing to conduct required patrols of its pipeline’s right-of-way.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.706, which states:\n\n\n\n3\n§ 192.706 Transmission lines: Leakage surveys.\nLeakage surveys of a transmission line must be conducted at intervals\nnot exceeding 15 months, but at least once each calendar year. However,\nin the case of a transmission line which transports gas in conformity with\n§192.625 without an odor or odorant, leakage surveys using leak detector\nequipment must be conducted—\n(a) In Class 3 locations, at intervals not exceeding 7 ½ months, but at\nleast twice each calendar year; and\n(b) In Class 4 locations, at intervals not exceeding 4 ½ months, but at\nleast four times each calendar year.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.706 by failing to conduct required\nleakage surveys of its pipeline. Big West’s pipeline is “a transmission line which transports gas\nin conformity with §192.625 without an odor or odorant,” and the entire pipeline is in a Class 3\nlocation. Therefore, the company is required to conduct leakage surveys at intervals not\nexceeding 7 ½ months, but at least twice each calendar year. The Notice alleged that Big West\nfailed to conduct any such leakage surveys between May 17, 2006 and December 19, 2008.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 192.706 by failing to conduct\nrequired leakage surveys.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a), which states:\n§ 192.739 Pressure limiting and regulating stations: Inspection and testing.\n(a) Each pressure limiting station, relief device (except rupture discs),\nand pressure regulating station and its equipment must be subjected at\nintervals not exceeding 15 months, but at least once each calendar year, to\ninspections and tests to determine that it is—\n(1) In good mechanical condition;\n(2) Adequate from the standpoint of capacity and reliability of\noperation for the service in which it is employed;\n(3) Except as provided in paragraph (b) of this section, set to control\nor relieve at the correct pressure consistent with the pressure limits of\n§192.201(a); and\n(4) Properly installed and protected from dirt, liquids, or other\nconditions that might prevent proper operation.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.739(a) by failing to subject its\npipeline’s primary relief device to inspections and tests at least every 15 months, but at least\nonce each calendar year. Specifically, the Notice alleged that Big West failed to conduct\nrequired inspections and tests in 2006, 2007, or 2008. Respondent did not contest this allegation\nof violation. Accordingly, based upon a review of all of the evidence, I find that Respondent\nviolated 49 C.F.R. § 192.739(a) by failing to conduct required tests and inspections of its\npipeline’s primary relief device.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.743, which states:\n\n\n\n4\n§ 192.743 Pressure limiting and regulating stations: Capacity of relief devices.\n(a) Pressure relief devices at pressure limiting stations and pressure\nregulating stations must have sufficient capacity to protect the facilities to\nwhich they are connected. Except as provided in §192.739(b), the capacity\nmust be consistent with the pressure limits of §192.201(a). This capacity\nmust be determined at intervals not exceeding 15 months, but at least once\neach calendar year, by testing the devices in place or by review and\ncalculations.\n(b) If review and calculations are used to determine if a device has\nsufficient capacity, the calculated capacity must be compared with the\nrated or experimentally determined relieving capacity of the device for the\nconditions under which it operates. After the initial calculations,\nsubsequent calculations need not be made if the annual review documents\nthat parameters have not changed to cause the rated or experimentally\ndetermined relieving capacity to be insufficient.\n(c) If a relief device is of insufficient capacity, a new or additional\ndevice must be installed to provide the capacity required by paragraph (a)\nof this section.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.743 by failing to determine the\ncapacity of its pipeline’s pressure relief devices at least every 15 months, but at least once each\ncalendar year. Specifically, the Notice alleged that Big West did not determine its pipeline’s\nrelief capacity, either by testing the devices in place or by review and calculations, in 2006,\n2007, or 2008. Respondent did not contest this allegation of violation. Accordingly, based upon\na review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.743 by failing to\ndetermine its pipeline’s pressure relief capacity with the required frequency.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 192.465(b), which states:\n§ 192.465 External corrosion control: Monitoring.\n(a) . . . .\n(b) Each cathodic protection rectifier or other impressed current\npower source must be inspected six times each calendar year, but with\nintervals not exceeding 2 ½ months, to insure that it is operating.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.465(b) by failing to inspect each\ncathodic protection rectifier on its pipeline at least every 2 ½ months. Specifically, the Notice\nalleged that Big West did not inspect its pipeline’s rectifier between April 28, 2008 and\nSeptember 19, 2008. Respondent did not contest this allegation of violation. Accordingly, based\nupon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.465(b) by\nfailing to inspect its pipeline’s rectifier with the required frequency.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 192.465(c), which states:\n§ 192.465 External corrosion control: Monitoring.\n(a) . . . .\n(c) Each reverse current switch, each diode, and each interference\nbond whose failure would jeopardize structure protection must be\n\n\n\n5\nelectrically checked for proper performance six times each calendar year,\nbut with intervals not exceeding 2 ½ months. Each other interference bond\nmust be checked at least once each calendar year, but with intervals not\nexceeding 15 months.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.465(c) by failing to electrically\ncheck each critical interference bond at least every 2 ½ months. Specifically, the Notice alleged\nthat Big West failed to inspect its pipeline’s critical interference bond between April 28, 2008\nand September 19, 2008. Respondent did not contest this allegation of violation. Accordingly,\nbased upon a review of all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.465(c) by failing to inspect its pipeline’s critical interference bond with the required\nfrequency.\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 $122,600 for the violations cited above.\nIn its Response, Big West requested that the proposed civil penalty be reduced. The company\nmade several arguments in support of this request.\nFirst, Big West stated that PHMSA had never issued a civil penalty against the company before,\nand that the proposed penalty was “excessive for a first time fine.” PHMSA takes into account a\ncompany’s history of prior offenses in calculating proposed civil penalties. Thus, Big West’s\nenforcement history has already been incorporated into the proposed civil penalty. If PHMSA\nhad previously issued fines against Big West, the proposed penalty could have been substantially\nhigher. Accordingly, the information submitted by the company does not provide a basis for\nreducing the civil penalty.\nSecond, Big West stated that it had hired a contractor, Dick Brown Technical Services (DBTS),\nto improve the operations and maintenance of the pipeline at issue in this case. The company\nstated that DBTS took over operation of the pipeline in September 2008, and since that time Big\nWest had been in compliance with all operations and maintenance requirements. Although\nPHMSA commends the company for taking steps to ensure its future compliance with the\nregulations, such steps do not provide a basis for a civil penalty reduction. Operators are\nrequired to comply with the pipeline safety regulations at all times, and improvements in\ncompliance do not justify a reduction in civil penalties for previous violations.\n\n\n\n6\nThird, Big West stated that it had approved $200,000 in funding to make the pipeline at issue\n“piggable” in an effort to improve its integrity and safety. Although PHMSA supports\ninvestments to improve pipeline safety, such expenditures do not provide a basis for a civil\npenalty reduction.\nFourth, Big West stated that it had filed for bankruptcy but had remained committed to the\nimprovements described above. Again, all operators are required to comply with the pipeline\nsafety regulations, regardless of their financial circumstances. Accordingly, the fact that Big\nWest has taken steps to improve the safety of its pipeline notwithstanding its bankruptcy\nproceeding does not provide a basis for a civil penalty reduction.\nItem 1: The Notice proposed a civil penalty of $22,500 for Respondent’s violation of 49 C.F.R.\n§ 192.705, for failing to conduct required patrols of its pipeline right-of-way. Failure to conduct\nrequired patrols increases the chance that a gas leak or third-party encroachment could go\nundiscovered. Respondent failed to conduct any patrols for more than two and a half years, and\nthus failed to conduct approximately ten required patrols. I find that the nature, circumstances,\nand gravity of the violation justify the proposed penalty. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $22,500 for\nviolation of 49 C.F.R. § 192.705.\nItem 2: The Notice proposed a civil penalty of $22,500 for Respondent’s violation of 49 C.F.R.\n§ 192.706, for failing to conduct leakage surveys of its pipeline at the required intervals. Failure\nto conduct required leak surveys increases the chance that a gas leak could go undiscovered.\nRespondent failed to conduct any leak surveys for more than two and a half years, and thus failed\nto conduct approximately five surveys. I find that the nature, circumstances, and gravity of the\nviolation justify the proposed penalty. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $22,500 for violation of 49 C.F.R.\n§ 192.706.\nItem 3: The Notice proposed a civil penalty of $22,500 for Respondent’s violation of 49 C.F.R.\n§ 192.739(a), for failing to subject its pipeline’s primary relief device to inspections and tests\nwith the required frequency. Failure to conduct such inspections and tests increases the chance\nthat a relief device could develop a problem, which could threaten pipeline safety under certain\nconditions. Respondent failed to conduct any relief device inspections for a three-year period,\nand thus failed to conduct approximately three inspections. I find that the nature, circumstances,\nand gravity of the violation justify the proposed penalty. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $22,500 for\nviolation of 49 C.F.R. § 192.739(a).\nItem 4: The Notice proposed a civil penalty of $22,500 for Respondent’s violation of 49 C.F.R.\n§ 192.743, for failing to determine the capacity of its pipeline’s pressure relief devices with the\nrequired frequency. Failure to make such capacity determinations increases the chance that a\nrelief device could lack sufficient protective capacity. Respondent failed to make any capacity\ndeterminations for a three-year period, and thus failed to make approximately three\ndeterminations. I find that the nature, circumstances, and gravity of the violation justify the\nproposed penalty. Accordingly, having reviewed the record and considered the assessment\ncriteria, I assess Respondent a civil penalty of $22,500 for violation of 49 C.F.R. § 192.743.\n\n\n\n7\nItem 5: The Notice proposed a civil penalty of $16,300 for Respondent’s violation of 49 C.F.R.\n§ 192.465(b), for failing to inspect each cathodic protection rectifier on its pipeline at least every\n2 ½ months. Failure to conduct rectifier inspections increases the chance that an out-of-service\nrectifier could go undiscovered, which would weaken the pipeline’s cathodic protection system.\nRespondent failed to inspect its pipeline’s rectifier between April 28, 2008 and September 19,\n2008, a period of approximately four and a half months. Thus, Respondent exceeded the\nmaximum inspection interval by 68 days, missing one inspection. Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $16,300\nfor violation of 49 C.F.R. § 192.465(b).\nItem 6: The Notice proposed a civil penalty of $16,300 for Respondent’s violation of 49 C.F.R.\n§ 192.465(c), for failing to electrically check each critical interference bond at least every 2 ½\nmonths. Failure to conduct such checks increases the chance that a shorted bond could go\nundiscovered, which could create a pipeline integrity problem. Respondent failed to inspect its\ncritical interference bond between April 28, 2008 and September 19, 2008, a period of\napproximately four and a half months. Thus, Respondent exceeded the maximum inspection\ninterval by 68 days, missing one inspection. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $16,300 for violation of\n49 C.F.R. § 192.465(c).\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a total civil penalty of $ 122,600.\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.\nRespondent voluntarily filed a petition for chapter 11 bankruptcy on December 22, 2008, In re\nFlying J, Inc. et al, Case No. 08-13384, U.S. Bankruptcy Court, District of Delaware. To\nPHMSA’s knowledge, Respondent is conducting normal operations and is expected to do so\nfollowing reorganization. PHMSA has no evidence that payment of the penalty will adversely\naffect Respondent’s operations.\nTo the extent allowable, failure to pay the $122,600 civil penalty will result in accrual of interest\nat the current annual rate in accordance with 31 U.S.C. § 3717 and 49 C.F.R. Part 89, and may\nresult in referral of the matter to the Attorney General for appropriate action in a district court of\nthe United States.\nUnder 49 C.F.R. § 190.215, Respondent has the 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 the Final Order by the\nRespondent, provided they contain a brief statement of the issue(s) and meet all other\n\n\n\n8\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed but does not stay any other provisions of the Final Order, including\nany required corrective actions. If Respondent submits payment of the civil penalty, the Final\nOrder becomes the final administrative decision and the right to petition for reconsideration is\nwaived.\nThe 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","truncated":false,"body_characters":24056}