{"operation":"document","citation":"CPF 520095015","title":"PHILLIPS 66 PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2009-03-17","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(h)(3).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520095015.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520095015.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520095015","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520095015","body":"Notice of Probable Violation involving PHILLIPS 66 PIPELINE LLC. PHMSA's enforcement data identifies the cited regulation as 195.452(h)(3). The case was opened on 2009-03-17 and is reported as closed as of 2011-08-19. Proposed civil penalty: $30,000. Assessed civil penalty: $30,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520095015_Final Order_07222011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520095015/520095015_Final%20Order_07222011.pdf\n\n520095015_Final Order_07222011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520095015/520095015_Final%20Order_07222011_text.pdf\n\n520095015_NOPV PCP_03172009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520095015/520095015_NOPV%20PCP_03172009.pdf\n\n520095015_NOPV PCP_03172009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520095015/520095015_NOPV%20PCP_03172009_text.pdf\n\n520095015_operator response_04162009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520095015/520095015_operator%20response_04162009.pdf\n\n520095015_Final Order_07222011_text.pdf\n\nJUL 22 2011\nMr. Dennis Smith\nPresident\nConocoPhillips Pipeline Company\n600 North Dairy Ashford\nP.O. Box 2197\nHouston, Texas 77252-2197\nRe: CPF No. 5-2009-5015\nDear Mr. Smith:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and assesses a civil penalty of $30,000. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided 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. Todd Tullio, Manager, Regulatory Compliance, ConocoPhillips Pipeline Company\nMr. Van P. Williams, Esq., Senior Counsel, ConocoPhillips\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [7005 1160 0001 0075 9602]\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)\nConocoPhillips Pipeline Company, ) CPF No. 5-2009-5015\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn October 31, 2008, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), met\nwith ConocoPhillips Pipeline Company (CPPL or Respondent) to discuss repairs on its Denver-\nChase Pipeline System. CPPL is a wholly-owned subsidiary of ConocoPhillips. CPPL operates\nmore than 11,000 miles of pipelines and more than 60 storage terminals in the United States.1\nAfter this meeting, the Director, Western Region, OPS (Director), issued to Respondent, by letter\ndated March 17, 2009, a Notice of Probable Violation and Proposed Civil Penalty (Notice). In\naccordance with 49 C.F.R. § 190.207, the Notice proposed finding that CPPL had committed a\nviolation of 49 C.F.R. § 195.452(h)(3) and proposed assessing a civil penalty of $30,000 for the\nalleged violation.\nCPPL responded to the Notice by letters dated April 16, 2009 and July 17, 2009 (collectively,\nResponse). Respondent contested the allegations and requested a hearing which was\nsubsequently held on July 29, 2009 in Washington, D.C., with an attorney from the Office of\nChief Counsel, PHMSA, presiding. CPPL was represented by counsel at the hearing. CPPL\nelected not to submit a post-hearing brief.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(3), which states in\nrelevant part:\n1 http://www.conocophillipspipeline.com/EN/Pages/index.aspx (last accessed April 21, 2011).\n\n\n\n2\n§ 195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues?\n(3) Schedule for evaluation and remediation. An operator must\ncomplete remediation of a condition according to a schedule prioritizing\nthe conditions for evaluation and remediation. If an operator cannot meet\nthe schedule for any condition, the operator must explain the reasons why\nit cannot meet the schedule and how the changed schedule will not\njeopardize public safety or environmental protection.\nOPS alleged in the Notice that Respondent violated 49 C.F.R. § 195.452(h)(3) by failing to\nremediate a condition on the Denver-Chase pipeline system according to a prioritized schedule\nmeeting certain deadlines specified in the regulations and failing to explain the reasons why it\ncould not meet this schedule. Specifically, ConocoPhillips was required under § 195.452(h)(3)\nto explain how its modified schedule for the repairs on the Denver-Chase line would not\njeopardize public safety or environmental protection.\nSpecifically, the Notice alleged that ConocoPhillips had received the MFL Caliper Combo tool\nassessment report on November 27, 2007 for the Denver-Chase line which revealed seven\nanomalies, some of which met the criteria for immediate action. Although the operator initially\nplanned a temporary pressure deration of 80% of the maximum operating pressure (MOP),\nRespondent modified this plan and instead reduced the pressure to less than 20% SMYS while\nthe anomalies were repaired. At the October 31, 2008 meeting, CPPL divulged that a\nnotification had not been submitted to the PHMSA Integrity Management Database in November\n2007 informing OPS of the modified schedule for repairs on the line. OPS argued that pursuant\nto § 195.452(h)(3), ConocoPhilips should have notified OPS of the reasons why it could not\nmeet the original repair deadlines and more importantly explain how the modified schedule\nwould not jeopardize public or environmental safety.2 At the hearing, Respondent\nacknowledged that the explanation was never filed but stated that a clerical error was the reason\nwhy it was never sent to OPS.\nConocoPhillips had an obligation under the pipeline safety regulations to submit a notice to\nPHMSA explaining the reasons why the repair schedule was modified and how this change\nwould not jeopardize the safety of the environment and the public. I have reviewed the evidence\npresented in this case and find that ConocoPhillips failed to comply with this regulation.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.452(h)(3) by failing to explain the reasons why it could not meet the schedule for\nremediating the repair on the Denver-Chase line and how the modified schedule would not\njeopardize the safety of the public or the environment.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\n2 The process for filing IMP notifications with PHMSA is summarized in 49 C.F.R. § 195.452(m).\n\n\n\n3\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; the 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 $30,000 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $30,000 for Respondent’s violation of 49 C.F.R.\n§ 195.452(h)(3), for failing to provide OPS with an explanation of why it could not meet the\nschedule for remediation of an immediate repair condition on the Denver-Chase pipeline. At the\nhearing, Respondent argued that the civil penalty should be reduced since the failure to notify\nwas not intentional, the line was a low pressure line and therefore low risk, and the company\ntook conservative measures by decreasing the pressure to less than 20% of SMYS.\nConocoPhillips also argued that the safety of the public and the environment were never in\njeopardy due to the pressure decrease to less than 20% SMYS. In addition, Respondent noted\nthat it enhanced its IMP program to prevent future omissions by creating a formal\ncommunication log to track complex derations and status of notifications.\nThe civil penalty is supported, in particular, by the gravity of the violation. The Denver-Chase\npipeline is located in a high consequence area and one of the anomalies was in a designated\nwetland area. Although OPS did not argue that the failure to submit the notification was\nintentional, OPS viewed the omission as a significant risk to public safety. It prohibited OPS\nfrom evaluating Respondent’s remedial measures at the time of implementation and limited\nfurther discussion if additional safety considerations were required. This pressure deration\noccurred in a high consequence area and therefore it is particularly important that OPS have the\nopportunity to elevate alternative safety measures while the anomalies are undergoing repairs.\nOPS was not informed of the schedule modification until a year after the pressure reduction was\ninstituted. OPS should have been included in the collaborative process to develop an alternative\nmeasure.\nIn its Response and at the hearing, ConocoPhillips argued that the pressure reduction ensured\nthat the modified schedule did not compromise the safety of the public or the environment and\ntherefore a civil penalty reduction is appropriate. The fact that this modified schedule did not\nimpact the safety of the public or the environment does not cure the violation. Respondent was\nrequired to explain how the modified schedule would not create a safety issue and failed to do so.\nIn addition, Respondent is culpable since it was aware of the required notification process and\nyet failed to use it. Having reviewed the civil penalty factors, including but not limited to the\nnature, circumstances and gravity of the violation and the operator’s culpability, I find that the\nproposed civil penalty amount is appropriate. Accordingly, having reviewed the record and\n\n\n\n4\nconsidered the assessment criteria, I assess Respondent a civil penalty of $30,000 for violating\n49 C.F.R. § 195.452(h)(3).\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 $30,000 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 district\ncourt of the 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 service of the Final Order by\nthe Respondent, 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 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":13336}