# NORTH BAJA PIPELINE LLC — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 192.605(a), 192.605(b)(2).
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- **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.

Official case documents:

520111001_closure letter_02122013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_closure%20letter_02122013.pdf

520111001_closure letter_02122013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_closure%20letter_02122013_text.pdf

520111001_Final Order_11282012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_Final%20Order_11282012.pdf

520111001_Final Order_11282012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_Final%20Order_11282012_text.pdf

520111001_NOPV PCP PCO_04282011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_NOPV%20PCP%20PCO_04282011.pdf

520111001_NOPV PCP PCO_04282011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520111001/520111001_NOPV%20PCP%20PCO_04282011_text.pdf

520111001_NOPV PCP PCO_04282011_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
April 28, 2011
Mr. Ken Leier
Region Director
TransCanada
U.S. Western Pipe Region
534 E. Spokane Fall Blvd.
Spokane, WA 99202
CPF 5-2011-1001
Dear Mr. Leier:
On December 8-13, 2010, a representative from the Arizona Corporation Commission on
behalf of the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety
Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected your
Ehrenberg Compressor Station and mainline pipe in Western Arizona.
As a result of the inspection, it appears that TransCanada, North Baja Pipeline LLC have
committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal
Regulations. The items inspected and the probable violations are:
1. §192.605 Procedural manual for operations, maintenance, and emergencies
(a) General. Each operator shall prepare and follow for each pipeline, a manual
of written procedures for conducting operations and maintenance activities and
for emergency response. For transmission lines, the manual must also include



procedures for handling abnormal operations. This manual must be reviewed
and updated by the operator at intervals not exceeding 15 months, but at least one
each calendar year. This manual must be prepared before operations of a
pipeline system commence. Appropriate parts of the manual must be kept at
locations where operations and maintenance activities are conducted.
TransCanada did not follow its written procedures for repairing pipeline coating. Per
TransCanada’s Operating Procedure (Manual)/Specification “TES-COAT-EPU-US External
Epoxy/Urethane Coating Systems, March 19, 2007 - repairing pipeline coating damage
requires that any affected areas be cleaned by sandblasting and/or roughing up of the original
coating. In December 2007, TransCanada sought to repair an area of damaged coating on its
pipeline. When that area was excavated in December 2010, it appeared as though hand-
applied epoxy had simply been placed over the bare surface and original coating. Photographs
of the excavated pipe are evidence that the pipe in the excavated area not had been prepared by
“sandblasting” and/or roughing up of the repair areas original coating. The “sandblasting”
and/or roughing up of the repair areas original coating are required in the company’s written
procedures.
2. §192.605 Procedural manual for operations, maintenance, and emergencies
(b) Maintenance and normal operations. The manual required by paragraph (a)
of this section must include procedures for the following, if applicable, to provide
safety during maintenance and operations.
(2) Controlling corrosion in accordance with the operations and maintenance
requirements of Subpart I of this part.
Per TransCanada Operating Procedure (Manual) 25.0 192.463 – Cathodic Protection Criteria,
TransCanada did not have a written procedure in place for identifying what level of
abnormally high pipe-to-soil potentials would require remedial action. In the absence of that
procedure, TransCanada allowed the station yard to have potential pipe-to-soil readings in
excess of 2.0 volts for several years, and there was coating disbondment and damage found
when yard piping was exposed in December of 2007.
Proposed Civil Penalty
Under 49 United states Code, § 60122, you are subject to a civil penalty not to exceed
$100,000 for each violation for each day the violation persists up to a maximum of $1,000,000
for any related series of violations. The Compliance Officer has reviewed the circumstances
and supporting documentation involved in the above probable violation and has recommended
that you be preliminarily assessed a civil penalty of $16,200.00 as follows:
Item number PENALTY
1 $16,200.00



Proposed Compliance Order
With respect to item number 2, pursuant to 49 United States Code § 60118, the Pipeline and
Hazardous Materials Safety Administration proposes to issue a Compliance Order to
TransCanada. Please refer to the Proposed Compliance Order, which is enclosed and made a
part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline
Operators in Compliance Proceedings. Please refer to this document and note the response
options. Be advised that all material you submit in response to this enforcement action is
subject to being made publicly available. If you believe that any portion of your responsive
material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete
original document you must provide a second copy of the document with the portions you
believe qualify for confidential treatment redacted and an explanation of why you believe the
redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not
respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to
contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline
Safety to find facts as alleged in this Notice without further notice to you and to issue a Final
Order.
In your correspondence on this matter, please refer to CPF 5-2011-1001 and for each
document you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Chris Hoidal
Director, Western Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
cc: PHP-60 Compliance Registry
PHP-500 T. Finch (#133556)
Arizona Corporation Commission - Mr. Robert Miller



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to TransCanada a Compliance Order incorporating
the following remedial requirements to ensure the compliance of TransCanada with the
pipeline safety regulations:
1. In regard to Item Number 1 of the Notice pertaining to TransCanada not
following written procedures for repairing pipeline coating. TransCanada must
take the necessary steps to ensure that it is following its written procedures for
repairing pipeline coating damage. TransCanada must submit the semi-annual
reports describing their efforts to follow their written procedures for repairing
pipeline coating damage. These reports must be transmitted to the Western
Region Director until it has been determined that TransCanada is following
their written procedures for repairing pipeline coating damage.
2. In regard to Item Number 2 of the Notice pertaining to the corrosion controlling
program of abnormally high pipe-to-soil potentials. TransCanada must take the
necessary steps to ensure that it has written procedures specifying what level of
abnormally high pipe-to-soil potentials would require further investigation or
remedial action.
3. TransCanada must complete the necessary steps to correct these deficiencies
within 60 days of issuance of the Final Order.
4. It is requested (not mandated) that TransCanada maintain documentation of the
safety improvement costs associated with fulfilling this Compliance Order and
submit the total to Chris Hoidal, Director, Western Region, Pipeline and
Hazardous Materials Safety Administration. It is requested that these costs be
reported in two categories: 1) total cost associated with preparation/revision of
plans, procedures, studies and analyses, and 2) total cost associated with
replacements, additions and other changes to pipeline infrastructure.

520111001_Final Order_11282012_text.pdf

NOVEMBER 28, 2012
Mr. Lee Hobbs
President and General Manager
North Baja Pipeline, LLC
717 Texas Street
Houston, TX 77002-2761
Re: CPF No. 5-2011-1001
Dear Mr. Hobbs:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a civil penalty of $16,200 and specifies actions that need to be taken by North
Baja Pipeline, LLC to comply with the pipeline safety regulations. When the civil penalty has
been paid and the terms of the compliance order have been completed, as determined by the
Director, Western Region, this enforcement action will be closed. Service of the Final Order by
certified mail is deemed effective upon the date of mailing, or as otherwise provided under
49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Chris Hoidal, Director, Western Region, OPS
Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS
Ms. Cynthia Presnell, Associate, Regional Asset Reliability, TransCanada, 201 W. North
River Drive, Suite 505, Spokane WA 99201
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
North Baja Pipeline, LLC, ) CPF No. 5-2011-1001
)
Respondent. )
____________________________________)
FINAL ORDER
On December 8-13, 2010, pursuant to 49 U.S.C. § 60117, the Arizona Corporation Commission,
as an agent for the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of
Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and
records of North Baja Pipeline, LLC (North Baja or Respondent) in Arizona. North Baja’s
natural gas pipeline system consists of 80 miles of 30 and 36-inch diameter pipeline that runs
from southwestern Arizona into California. The system is operated and partially owned by
TransCanada Pipelines Limited.1
As a result of the inspection, the Director, Western Region, OPS (Director), issued to
Respondent, by letter dated April 28, 2011, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the
Notice proposed finding that North Baja violated 49 C.F.R. § 192.605 and proposed assessing a
civil penalty of $16,200 for an alleged violation. The Notice also proposed ordering Respondent
to take certain measures to correct the alleged violations.
TransCanada responded to the Notice by letter dated November 14, 2011 (Response). The
company did not contest the allegations of violation but did contest the terms of the proposed
compliance order. Respondent did not request a hearing and therefore has waived its right to
one.
FINDINGS OF VIOLATION
In its Response, North Baja did not contest the allegations in the Notice that it violated 49 C.F.R.
Part 192, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(a), which states:
1 http://www northbajapipeline.com/ (last accessed on August 16, 2012).



2
§ 192.605 Procedural manual for operations, maintenance, and emergencies.
(a) General. Each operator shall prepare and follow for each pipeline,
a manual of written procedures for conducting operations and maintenance
activities and for emergency response. For transmission lines, the manual
must also include procedures for handling abnormal operations. This
manual must be reviewed and updated by the operator at intervals not
exceeding 15 months, but at least once each calendar year. This manual
must be prepared before operations of a pipeline system commence.
Appropriate parts of the manual must be kept at locations where
operations and maintenance activities are conducted.
The Notice alleged that Respondent violated 49 C.F.R. § 192.605(a) by failing to follow, for
each pipeline, a manual of written procedures for conducting operations and maintenance
activities. Specifically, the Notice alleged that North Baja failed to follow its operating
procedures when repairing pipeline coating damage. According to Respondent’s procedures,
prior to repairing pipeline coating damage, the affected area must be prepared by sandblasting or
“roughing up” the original coating. In December 2007, Respondent initiated repair of damaged
coating on its pipeline. However, upon excavation in December 2010, it was clear that the
pipeline was not properly subjected to sandblasting or “roughing up” prior to the application of
epoxy. Photographs2 of the excavated area demonstrate that the hand-applied epoxy was placed
over the bare surface and original coating of the pipeline, in violation of the company’s written
procedures.
Respondent did not contest this allegation of violation, but provided information regarding its
contract for the repair and the coating specification for the conditions observed in 2007. In its
response, North Baja forwarded written evidence that appears to demonstrate that its contractor
was to sandblast the damaged areas prior to coating the pipeline. Notwithstanding this evidence,
the Respondent acknowledges that “the 2010 photographs show disbondment similar to that
observed in 2007 and 2008 ….. [and] the Company cannot produce evidence to demonstrate that
the work was performed as indicated by the contractor invoices.”3
Accordingly, based upon a review of all of the evidence, I find that Respondent violated
49 C.F.R. § 192.605(a) by failing to follow its written procedures requiring that, prior to
repairing coating damage, any affected areas be cleaned by sandblasting or “roughing up” the
original coating.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(2), which states:
§ 192.605 Procedural manual for operations, maintenance, and emergencies.
(a) ….
(b) Maintenance and normal operations. The manual required by paragraph
(a) of this section must include procedures for the following, if applicable, to
provide safety during maintenance and operations.
2 Pipeline Safety Violation Report, at 9.
3 Response, at 2.



3
(1) ….
(2) Controlling corrosion in accordance with the operations and maintenance
requirements of subpart I of this part.
The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(2) by failing to include in
its procedural manual for operations, maintenance, and emergencies, a procedure for controlling
corrosion in accordance with the operations and maintenance requirements of Subpart I of this
part. Specifically, the Notice alleged that North Baja had no written procedure for identifying
abnormally high levels of pipe-to-soil potentials requiring remedial action. When reviewing the
TransCanada Operations Procedure Manual 25.0 192.463 – Cathodic Protection Criteria, the
inspector found that there was no written procedure for identifying what level of abnormally high
pipe-to-soil potentials would require remedial action.
Respondent did not contest this allegation of violation.
Accordingly, based upon a review of all of the evidence, I find that Respondent violated
49 C.F.R. § 192.605(b)(2) by failing to include in its procedural manual a procedure for
controlling corrosion in accordance with the operations and maintenance requirements of
Subpart I of this part.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any
related series of violations. In determining the amount of a civil penalty under 49 U.S.C.
§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,
circumstances, and gravity of the violation, including adverse impact on the environment; the
degree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s
ability to pay the penalty and any effect that the penalty may have on its ability to continue doing
business; and the good faith of Respondent in attempting to comply with the pipeline safety
regulations. In addition, I may consider the economic benefit gained from the violation without
any reduction because of subsequent damages, and such other matters as justice may require.
The Notice proposed a total civil penalty of $16,200 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $16,200 for Respondent’s violation of 49 C.F.R.
§ 192.605(a), for failing to follow its own procedures when repairing pipeline coating by first
preparing the original coating through sandblasting or “roughing up”. The Respondent
submitted several pieces of evidence in support of its request for a reduction of the proposed civil
penalty. First, a TransCanada employee sent an email to the project contractor that specifically
mentions that sandblasting should be assessed an extra labor charge. Second, it appears that, as
of March 2007, prior to the attempted remediation of the coating damage in this case,
TransCanada had a specification in place for coating applications on TransCanada facilities in



4
the United States that identified the appropriate surface preparation in great detail.4 Lastly,
TransCanada submitted daily inspection reports and contractor invoices from the time of the
2007 repair that purport to demonstrate the affected areas were sandblasted. While the company
has presented a great deal of evidence to demonstrate that it complied with its procedures, the
most compelling evidence are the 2010 photographs of the excavated pipeline. If the work had
been done according to TransCanada’s specifications, the 2010 pipeline would not be in the
same condition as was noted in 2007. Given that the company has no explanation for the
condition that was observed in 2010, it can only be inferred that, even though the Respondent
properly contracted for the remediation, the affected areas were not in fact properly prepared
prior to recoating. Despite its procedures, the Respondent failed to adequately verify that the
work was properly completed and a potentially dangerous condition was allowed to persist for
three years. This facility is located in a Class 1 location directly adjacent to a LNG facility. In
the event of a pipeline failure and gas release, significant damage could have ensued.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $16,200 for violation of 49 C.F.R. § 192.605(a).
In summary, having reviewed the record and considered the assessment criteria for the Item cited
above, I assess Respondent a total civil penalty of $16,200.
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike
Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The
Financial Operations Division telephone number is (405) 954-8893.
Failure to pay the $16,200 civil penalty will result in accrual of interest at the current annual rate
in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a district
court of the United States.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for
violations of 49 C.F.R. §§ 192.605(a) and 192.605(b)(2), respectively. Under 49 U.S.C.
§ 60118(a), each person who engages in the transportation of gas or who owns or operates a
pipeline facility is required to comply with the applicable safety standards established under
chapter 601. The Director has indicated that Respondent has taken the following actions to
address some of the cited violations:
4 Page 8 of 20, TransCanada Specification, TES-COAT-EPU-US External Epoxy/Urethane Coating Systems.
March 15, 2007.



5
In response to the Notice, Respondent modified its procedure 192.463 – Cathodic Protection
Criteria, Section 4.0 subpart 5 to read as follows:
Potentials that result in excessive generation of hydrogen are avoided to minimize the
possibility of cathodic protection disbanding of coating systems or pipe damage.
Polarized potentials more negative than -1.200 volts measured with reference to a
saturated copper-copper sulfate half-cell may require further monitoring. Polarized
potentials more negative than -1.300 volts measured with reference to a saturated copper-
copper sulfate half-cell require diagnostic testing and/or further analysis as outlined in
the Company’s standard, TES-CP-SS, Cathodic Protection Survey Specification and
NACE SP0169-2007, Control External Corrosion on Underground or Submerged
Metallic Piping Systems. Additional diagnostic testing is conducted when disbanded
coating or pipe damage is discovered.
Accordingly, I find that compliance has been achieved with respect to this violation. Therefore,
the compliance terms proposed in the Notice for Item 2 is not included in this Order.
As for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and
49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance
with the pipeline safety regulations applicable to its operations:
1. With respect to the violation of § 192.605(a) (Item 1), Respondent must submit
the semi-annual reports describing efforts to follow its written procedures for
repairing pipeline coating damage. These reports must be transmitted to the Western
Region Director until such a time as he determines that TransCanada has established
an acceptable record of following its written procedures for repairing pipeline coating
damage.
The Director may grant an extension of time to comply with any of the required items upon a
written request timely submitted by the Respondent and demonstrating good cause for an
extension.
Failure to comply with this Order may result in administrative assessment of civil penalties not
to exceed $100,000 for each violation for each day the violation continues or in referral to the
Attorney General for appropriate relief in a district court of the United States.
The terms and conditions of this Final Order are effective upon service in accordance with
49 C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety

520111001_closure letter_02122013_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
February 12, 2013
Mr. Lee Hobbs
President and General Manager
North Baja Pipeline, LLC
717 Texas Street
Houston, TX 77002-2761
CPF 5-2011-1001
Closure Letter
Dear Mr. Hobbs:
On November 28, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued to North Baja Pipeline LLC a Final Order in the above-referenced case. The Final Order
included a Compliance Order to take remedial actions on the portions of the pipelines located
inside the Ehrenberg Compressor Station grounds. Specifically, North Baja Pipeline LLC
modified its procedure 192.463 – Cathodic Protection Criteria, section 4.0 subpart 5.
North Baja Pipeline LLC also submitted the semi-annual reports describing efforts to follow its
written procedures for repairing pipeline coating damage. It has been determined that
TransCanada/North Baja Pipeline LLC has established an acceptable record of following its
written procedures for repairing pipeline coating damage. It has been determined that you have
complied with the terms of this Order. PHMSA also received your civil penalty payment.
Accordingly, this case is now closed and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
Chris Hoidal
Director, Western Region
Pipeline and Hazardous Materials Safety Administration
cc: Robert Miller, ACC
Tom Finch, PHP 500
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