{"operation":"document","citation":"CPF 520111001","title":"NORTH BAJA PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-04-28","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.605(a), 192.605(b)(2).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520111001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520111001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520111001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520111001","body":"Notice of Probable Violation involving NORTH BAJA PIPELINE LLC. PHMSA's enforcement data identifies the cited regulations as 192.605(a),  192.605(b)(2). The case was opened on 2011-04-28 and is reported as closed as of 2013-02-12. Proposed civil penalty: $16,200. Assessed civil penalty: $16,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520111001_closure letter_02122013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_closure%20letter_02122013.pdf\n\n520111001_closure letter_02122013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_closure%20letter_02122013_text.pdf\n\n520111001_Final Order_11282012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_Final%20Order_11282012.pdf\n\n520111001_Final Order_11282012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_Final%20Order_11282012_text.pdf\n\n520111001_NOPV PCP PCO_04282011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_NOPV%20PCP%20PCO_04282011.pdf\n\n520111001_NOPV PCP PCO_04282011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_NOPV%20PCP%20PCO_04282011_text.pdf\n\n520111001_NOPV PCP PCO_04282011_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nApril 28, 2011\nMr. Ken Leier\nRegion Director\nTransCanada\nU.S. Western Pipe Region\n534 E. Spokane Fall Blvd.\nSpokane, WA 99202\nCPF 5-2011-1001\nDear Mr. Leier:\nOn December 8-13, 2010, a representative from the Arizona Corporation Commission on\nbehalf of the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected your\nEhrenberg Compressor Station and mainline pipe in Western Arizona.\nAs a result of the inspection, it appears that TransCanada, North Baja Pipeline LLC have\ncommitted probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal\nRegulations. The items inspected and the probable violations are:\n1. §192.605 Procedural manual for operations, maintenance, and emergencies\n(a) General. Each operator shall prepare and follow for each pipeline, a manual\nof written procedures for conducting operations and maintenance activities and\nfor emergency response. For transmission lines, the manual must also include\n\n\n\nprocedures for handling abnormal operations. This manual must be reviewed\nand updated by the operator at intervals not exceeding 15 months, but at least one\neach calendar year. This manual must be prepared before operations of a\npipeline system commence. Appropriate parts of the manual must be kept at\nlocations where operations and maintenance activities are conducted.\nTransCanada did not follow its written procedures for repairing pipeline coating. Per\nTransCanada’s Operating Procedure (Manual)/Specification “TES-COAT-EPU-US External\nEpoxy/Urethane Coating Systems, March 19, 2007 - repairing pipeline coating damage\nrequires that any affected areas be cleaned by sandblasting and/or roughing up of the original\ncoating. In December 2007, TransCanada sought to repair an area of damaged coating on its\npipeline. When that area was excavated in December 2010, it appeared as though hand-\napplied epoxy had simply been placed over the bare surface and original coating. Photographs\nof the excavated pipe are evidence that the pipe in the excavated area not had been prepared by\n“sandblasting” and/or roughing up of the repair areas original coating. The “sandblasting”\nand/or roughing up of the repair areas original coating are required in the company’s written\nprocedures.\n2. §192.605 Procedural manual for operations, maintenance, and emergencies\n(b) Maintenance and normal operations. The manual required by paragraph (a)\nof this section must include procedures for the following, if applicable, to provide\nsafety during maintenance and operations.\n(2) Controlling corrosion in accordance with the operations and maintenance\nrequirements of Subpart I of this part.\nPer TransCanada Operating Procedure (Manual) 25.0 192.463 – Cathodic Protection Criteria,\nTransCanada did not have a written procedure in place for identifying what level of\nabnormally high pipe-to-soil potentials would require remedial action. In the absence of that\nprocedure, TransCanada allowed the station yard to have potential pipe-to-soil readings in\nexcess of 2.0 volts for several years, and there was coating disbondment and damage found\nwhen yard piping was exposed in December of 2007.\nProposed Civil Penalty\nUnder 49 United states Code, § 60122, you are subject to a civil penalty not to exceed\n$100,000 for each violation for each day the violation persists up to a maximum of $1,000,000\nfor any related series of violations. The Compliance Officer has reviewed the circumstances\nand supporting documentation involved in the above probable violation and has recommended\nthat you be preliminarily assessed a civil penalty of $16,200.00 as follows:\nItem number PENALTY\n1 $16,200.00\n\n\n\nProposed Compliance Order\nWith respect to item number 2, pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to\nTransCanada. Please refer to the Proposed Compliance Order, which is enclosed and made a\npart of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the response\noptions. Be advised that all material you submit in response to this enforcement action is\nsubject to being made publicly available. If you believe that any portion of your responsive\nmaterial qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete\noriginal document you must provide a second copy of the document with the portions you\nbelieve qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue a Final\nOrder.\nIn your correspondence on this matter, please refer to CPF 5-2011-1001 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nChris 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 T. Finch (#133556)\nArizona Corporation Commission - Mr. Robert Miller\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 TransCanada a Compliance Order incorporating\nthe following remedial requirements to ensure the compliance of TransCanada with the\npipeline safety regulations:\n1. In regard to Item Number 1 of the Notice pertaining to TransCanada not\nfollowing written procedures for repairing pipeline coating. TransCanada must\ntake the necessary steps to ensure that it is following its written procedures for\nrepairing pipeline coating damage. TransCanada must submit the semi-annual\nreports describing their efforts to follow their written procedures for repairing\npipeline coating damage. These reports must be transmitted to the Western\nRegion Director until it has been determined that TransCanada is following\ntheir written procedures for repairing pipeline coating damage.\n2. In regard to Item Number 2 of the Notice pertaining to the corrosion controlling\nprogram of abnormally high pipe-to-soil potentials. TransCanada must take the\nnecessary steps to ensure that it has written procedures specifying what level of\nabnormally high pipe-to-soil potentials would require further investigation or\nremedial action.\n3. TransCanada must complete the necessary steps to correct these deficiencies\nwithin 60 days of issuance of the Final Order.\n4. It is requested (not mandated) that TransCanada maintain documentation of the\nsafety improvement costs associated with fulfilling this Compliance Order and\nsubmit the total to Chris Hoidal, Director, Western Region, Pipeline and\nHazardous Materials Safety Administration. It is requested that these costs be\nreported in two categories: 1) total cost associated with preparation/revision of\nplans, procedures, studies and analyses, and 2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n\n520111001_Final Order_11282012_text.pdf\n\nNOVEMBER 28, 2012\nMr. Lee Hobbs\nPresident and General Manager\nNorth Baja Pipeline, LLC\n717 Texas Street\nHouston, TX 77002-2761\nRe: CPF No. 5-2011-1001\nDear Mr. Hobbs:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $16,200 and specifies actions that need to be taken by North\nBaja Pipeline, LLC to comply with the pipeline safety regulations. When the civil penalty has\nbeen paid and the terms of the compliance order have been completed, as determined by the\nDirector, Western Region, this enforcement action will be closed. Service of the Final Order by\ncertified mail is deemed effective upon the date of mailing, or as otherwise provided under\n49 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\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMs. Cynthia Presnell, Associate, Regional Asset Reliability, TransCanada, 201 W. North\nRiver Drive, Suite 505, Spokane WA 99201\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____________________________________\n)\nIn the Matter of )\n)\nNorth Baja Pipeline, LLC, ) CPF No. 5-2011-1001\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn December 8-13, 2010, pursuant to 49 U.S.C. § 60117, the Arizona Corporation Commission,\nas an agent for the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of\nPipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of North Baja Pipeline, LLC (North Baja or Respondent) in Arizona. North Baja’s\nnatural gas pipeline system consists of 80 miles of 30 and 36-inch diameter pipeline that runs\nfrom southwestern Arizona into California. The system is operated and partially owned by\nTransCanada Pipelines Limited.1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated April 28, 2011, 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 North Baja violated 49 C.F.R. § 192.605 and proposed assessing a\ncivil penalty of $16,200 for an alleged violation. The Notice also proposed ordering Respondent\nto take certain measures to correct the alleged violations.\nTransCanada responded to the Notice by letter dated November 14, 2011 (Response). The\ncompany did not contest the allegations of violation but did contest the terms of the proposed\ncompliance order. Respondent did not request a hearing and therefore has waived its right to\none.\nFINDINGS OF VIOLATION\nIn its Response, North Baja 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. § 192.605(a), which states:\n1 http://www northbajapipeline.com/ (last accessed on August 16, 2012).\n\n\n\n2\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\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 follow, for\neach pipeline, a manual of written procedures for conducting operations and maintenance\nactivities. Specifically, the Notice alleged that North Baja failed to follow its operating\nprocedures when repairing pipeline coating damage. According to Respondent’s procedures,\nprior to repairing pipeline coating damage, the affected area must be prepared by sandblasting or\n“roughing up” the original coating. In December 2007, Respondent initiated repair of damaged\ncoating on its pipeline. However, upon excavation in December 2010, it was clear that the\npipeline was not properly subjected to sandblasting or “roughing up” prior to the application of\nepoxy. Photographs2 of the excavated area demonstrate that the hand-applied epoxy was placed\nover the bare surface and original coating of the pipeline, in violation of the company’s written\nprocedures.\nRespondent did not contest this allegation of violation, but provided information regarding its\ncontract for the repair and the coating specification for the conditions observed in 2007. In its\nresponse, North Baja forwarded written evidence that appears to demonstrate that its contractor\nwas to sandblast the damaged areas prior to coating the pipeline. Notwithstanding this evidence,\nthe Respondent acknowledges that “the 2010 photographs show disbondment similar to that\nobserved in 2007 and 2008 ….. [and] the Company cannot produce evidence to demonstrate that\nthe work was performed as indicated by the contractor invoices.”3\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 192.605(a) by failing to follow its written procedures requiring that, prior to\nrepairing coating damage, any affected areas be cleaned by sandblasting or “roughing up” the\noriginal coating.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(2), which states:\n§ 192.605 Procedural manual for operations, maintenance, and emergencies.\n(a) ….\n(b) Maintenance and normal operations. The manual required by paragraph\n(a) of this section must include procedures for the following, if applicable, to\nprovide safety during maintenance and operations.\n2 Pipeline Safety Violation Report, at 9.\n3 Response, at 2.\n\n\n\n3\n(1) ….\n(2) Controlling corrosion in accordance with the operations and maintenance\nrequirements of subpart I of this part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(2) by failing to include in\nits procedural manual for operations, maintenance, and emergencies, a procedure for controlling\ncorrosion in accordance with the operations and maintenance requirements of Subpart I of this\npart. Specifically, the Notice alleged that North Baja had no written procedure for identifying\nabnormally high levels of pipe-to-soil potentials requiring remedial action. When reviewing the\nTransCanada Operations Procedure Manual 25.0 192.463 – Cathodic Protection Criteria, the\ninspector found that there was no written procedure for identifying what level of abnormally high\npipe-to-soil potentials would require remedial action.\nRespondent did not contest this allegation of violation.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 192.605(b)(2) by failing to include in its procedural manual a procedure for\ncontrolling corrosion in accordance with the operations and maintenance requirements of\nSubpart I of this part.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\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 $16,200 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $16,200 for Respondent’s violation of 49 C.F.R.\n§ 192.605(a), for failing to follow its own procedures when repairing pipeline coating by first\npreparing the original coating through sandblasting or “roughing up”. The Respondent\nsubmitted several pieces of evidence in support of its request for a reduction of the proposed civil\npenalty. First, a TransCanada employee sent an email to the project contractor that specifically\nmentions that sandblasting should be assessed an extra labor charge. Second, it appears that, as\nof March 2007, prior to the attempted remediation of the coating damage in this case,\nTransCanada had a specification in place for coating applications on TransCanada facilities in\n\n\n\n4\nthe United States that identified the appropriate surface preparation in great detail.4 Lastly,\nTransCanada submitted daily inspection reports and contractor invoices from the time of the\n2007 repair that purport to demonstrate the affected areas were sandblasted. While the company\nhas presented a great deal of evidence to demonstrate that it complied with its procedures, the\nmost compelling evidence are the 2010 photographs of the excavated pipeline. If the work had\nbeen done according to TransCanada’s specifications, the 2010 pipeline would not be in the\nsame condition as was noted in 2007. Given that the company has no explanation for the\ncondition that was observed in 2010, it can only be inferred that, even though the Respondent\nproperly contracted for the remediation, the affected areas were not in fact properly prepared\nprior to recoating. Despite its procedures, the Respondent failed to adequately verify that the\nwork was properly completed and a potentially dangerous condition was allowed to persist for\nthree years. This facility is located in a Class 1 location directly adjacent to a LNG facility. In\nthe event of a pipeline failure and gas release, significant damage could have ensued.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $16,200 for violation of 49 C.F.R. § 192.605(a).\nIn summary, having reviewed the record and considered the assessment criteria for the Item cited\nabove, I assess Respondent a total civil penalty of $16,200.\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 $16,200 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.\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. §§ 192.605(a) and 192.605(b)(2), 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. The Director has indicated that Respondent has taken the following actions to\naddress some of the cited violations:\n4 Page 8 of 20, TransCanada Specification, TES-COAT-EPU-US External Epoxy/Urethane Coating Systems.\nMarch 15, 2007.\n\n\n\n5\nIn response to the Notice, Respondent modified its procedure 192.463 – Cathodic Protection\nCriteria, Section 4.0 subpart 5 to read as follows:\nPotentials that result in excessive generation of hydrogen are avoided to minimize the\npossibility of cathodic protection disbanding of coating systems or pipe damage.\nPolarized potentials more negative than -1.200 volts measured with reference to a\nsaturated copper-copper sulfate half-cell may require further monitoring. Polarized\npotentials more negative than -1.300 volts measured with reference to a saturated copper-\ncopper sulfate half-cell require diagnostic testing and/or further analysis as outlined in\nthe Company’s standard, TES-CP-SS, Cathodic Protection Survey Specification and\nNACE SP0169-2007, Control External Corrosion on Underground or Submerged\nMetallic Piping Systems. Additional diagnostic testing is conducted when disbanded\ncoating or pipe damage is discovered.\nAccordingly, I find that compliance has been achieved with respect to this violation. Therefore,\nthe compliance terms proposed in the Notice for Item 2 is not included in this Order.\nAs for the remaining compliance terms, 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:\n1. With respect to the violation of § 192.605(a) (Item 1), Respondent must submit\nthe semi-annual reports describing efforts to follow its written procedures for\nrepairing pipeline coating damage. These reports must be transmitted to the Western\nRegion Director until such a time as he determines that TransCanada has established\nan acceptable record of following its written procedures for repairing pipeline coating\ndamage.\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 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.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n520111001_closure letter_02122013_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nFebruary 12, 2013\nMr. Lee Hobbs\nPresident and General Manager\nNorth Baja Pipeline, LLC\n717 Texas Street\nHouston, TX 77002-2761\nCPF 5-2011-1001\nClosure Letter\nDear Mr. Hobbs:\nOn November 28, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to North Baja Pipeline LLC a Final Order in the above-referenced case. The Final Order\nincluded a Compliance Order to take remedial actions on the portions of the pipelines located\ninside the Ehrenberg Compressor Station grounds. Specifically, North Baja Pipeline LLC\nmodified its procedure 192.463 – Cathodic Protection Criteria, section 4.0 subpart 5.\nNorth Baja Pipeline LLC also submitted the semi-annual reports describing efforts to follow its\nwritten procedures for repairing pipeline coating damage. It has been determined that\nTransCanada/North Baja Pipeline LLC has established an acceptable record of following its\nwritten procedures for repairing pipeline coating damage. It has been determined that you have\ncomplied with the terms of this Order. PHMSA also received your civil penalty payment.\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: Robert Miller, ACC\nTom Finch, PHP 500","truncated":false,"body_characters":25527}