# ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 520155015
- **title:** ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2015-07-10
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.412(b), 195.432(b), 195.573(d).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-520155015.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520155015.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-520155015
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520155015
**body:**

Notice of Probable Violation involving ALYESKA PIPELINE SERVICE CO. PHMSA's enforcement data identifies the cited regulations as 195.412(b),  195.432(b),  195.573(d). The case was opened on 2015-07-10 and is reported as closed as of 2016-12-06. Proposed civil penalty: $104,500. Assessed civil penalty: $52,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520155015_Final Order_11222016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155015/520155015_Final%20Order_11222016.pdf

520155015_Final Order_11222016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155015/520155015_Final%20Order_11222016_text.pdf

520155015_NOPV PCP PCO_07102015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155015/520155015_NOPV%20PCP%20PCO_07102015.pdf

520155015_NOPV PCP PCO_07102015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155015/520155015_NOPV%20PCP%20PCO_07102015_text.pdf

520155015_Operator Response to Notice_08132015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155015/520155015_Operator%20Response%20to%20Notice_08132015.pdf

520155015_NOPV PCP PCO_07102015_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
July 10, 2015
Mr. Thomas Barrett
President & CEO
Alyeska Pipeline Service Company
P.O. Box 196660
Anchorage, AK 99519
CPF 5-2015-5015
Dear Mr. Stokes:
Between April 23, 2013 and March 27, 2014, representatives of the Pipeline and Hazardous
Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States
Code, inspected the records and facilities of Alyeska Pipeline Service Company’s (Alyeska)
Trans Alaska Pipeline System, known as TAPS. This inspection included site visits to Pump
Station 1 through Pump Station 12 and the Valdez Marine Terminal (VMT). In addition,
operating and maintenance procedures and supporting implementation records were reviewed
in your Anchorage, Alaska office.



As a result of the inspection, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and
the probable violations are:
1. §195.432 Inspection of in-service breakout tanks.
(b) Each operator must inspect the physical integrity of in-service atmospheric and
low-pressure steel aboveground breakout tanks according to API Standard 653
(incorporated by reference, see § 195.3).
Alyeska did not perform monthly in-service inspections of low pressure steel aboveground
breakout tanks required by API Standard 653 section 6.3.1.2. During the inspection
performed by PHMSA and in additional discussions with Alyeska compliance personnel,
Alyeska staff stated that monthly inspections were not being conducted at Pump Station 7
from August 2010 through September 2011. Furthermore, our staff learned that only quarterly
inspections were being conducted at Pump Station 12 from July 2012 through March 2014.
Alyeska staff stated the rationale was it was a cold restart tank only and not considered to be
“in-service.” Alyeska must conduct monthly inspections of all PHMSA regulated
aboveground breakout tanks that are defined to be part of the “pipeline system,” and in
accordance with API Standard 653 section 6.3.1.2.
2. §195.412 Inspection of rights-of-way and crossings under navigable waters.
(b) Except for offshore pipelines, each operator shall, at intervals not exceeding 5
years, inspect each crossing under a navigable waterway to determine the condition
of the crossing.
Alyeska did not inspect each crossing under a navigable waterway to determine the condition
of the crossing at intervals not exceeding five years. When requested to provide the
inspection records for inspections of TAPS’ buried navigable waterway crossings, Alyeska
staff only provided a record for the Chena River crossing. Alyeska staff further stated that the
Chena River crossing was the only waterway crossing the company inspected per
§195.412(b).
Alyeska identifies several navigable waters which the TAPS crosses. In Table 52 of Alyeska
document, DB-180 – Design Basis Update, Edition 6, Revision 2, dated March 27, 2013,
Alyeska identified the Klutina River, Lowe River, Salcha River, and several other buried
waterway crossings they considered navigable. In addition, the United States Coast Guard
(USCG) has published a list of navigable waters of Alaska (Navigable Waters of the United
States within the Seventeenth Coast Guard District, Revision Date: March 2012). The
USCG’s list of navigable waters includes several navigable waterways where TAPS was
installed utilizing a buried, trench crossing. These trenched crossings include but are not
limited to the Klutina River, Lowe River, and Salcha River.
Alyeska is required to inspect each crossing under a navigable waterway to determine the
condition of the crossing at intervals not exceeding five years. Currently, Alyeska is only



inspecting the Chena River crossing and is not inspecting the other rivers designated as
navigable by the USCG.
3. §195.573 What must I do to monitor external corrosion control?
(d) Breakout tanks. You must inspect each cathodic protection system used to
control corrosion on the bottom of an aboveground breakout tank to ensure that
operation and maintenance of the system are in accordance with API Recommended
Practice 651.
Alyeska is required by §195.573 to inspect each cathodic protection system used to control
corrosion on the bottom of an aboveground breakout tank to ensure that operation and
maintenance of the system are in accordance with API Recommended Practice 651. Alyeska
did not provide tank cathodic protection potential survey records for the PS12 breakout tank
for the year 2010. Alyeska was able to provide cathodic protection survey records for 2011
and 2012.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed
$200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a
related series of violations. For violations occurring prior to January 4, 2012, the maximum
penalty may not exceed $100,000 per violation per day, with a maximum penalty not to
exceed $1,000,000 for a related series of violations. The Compliance Officer has reviewed the
circumstances and supporting documentation involved in the above probable violation(s) and
has recommended that you be preliminarily assessed a civil penalty of $104,500 as follows:
Item number PENALTY
Item 1 $ 26,100
Item 2 $ 52,500
Item 3 $ 25,900
Proposed Compliance Order
With respect to item 2 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous
Materials Safety Administration proposes to issue a Compliance Order to Alyeska. 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. All material submit in response to this enforcement action may be 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 5-2015-5015 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
Enclosure: Response Options for Pipeline Operators in Compliance Proceedings
cc: PHP-60 Compliance Registry
PHP-500 R. Guisinger/D. Johnson (#143270)



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to Alyeska Pipeline Service Company a
Compliance Order incorporating the following remedial requirements to ensure the
compliance of Alyeska with the pipeline safety regulations:
1. In regard to Item Number 2 of the Notice pertaining to the inspection of each
crossing under a navigable waterway to determine the condition of the crossing
at intervals not exceeding five years, Alyeska must do the following:
a. Identify and list all locations where TAPS crosses under a navigable
waterway within 30 days after receipt of the Final Order.
b. Modify Alyeska’s Operation and Maintenance (O&M) procedures to
require inspection of each crossing under a navigable waterway to
determine the condition of the crossing at intervals not exceeding five
years. Our Advisory Bulletin (ADB-2015-01) regarding flooding, scour
and river migration, dated April 9, 2015, should be reviewed and addressed
in your procedure modifications. Complete the O&M revisions within 90
days after receipt of the Final Order.
c. Inspect each TAPS crossing under a navigable waterway to determine the
condition of the crossing. Complete inspection of each navigable water
crossing within 365 days after receipt of the Final Order. This Proposed
Compliance Order does not modify the current inspection cycle for the
Chena River crossing.
2. It is requested (not mandated) that Alyeska 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.

520155015_Final Order_11222016_text.pdf

November 22, 2016
Mr. Thomas Barrett
President & CEO
Alyeska Pipeline Service Company
P.O. Box 196660
Anchorage, AK 99519
Re: CPF No. 5-2015-5015
Dear Mr. Barrett:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, withdraws one alleged violation, and assesses a civil penalty of $52,000. The penalty
payment terms are set forth in the Final Order. When the civil penalty has been paid, 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,
Alan K. Mayberry
Acting Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Chris Hoidal, Director, Western Region, OPS
Mr. Rod Hanson, Sr. Vice-President, Operations & Maintenance, Alyeska
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 )
)
Alyeska Pipeline Service Company, ) CPF No. 5-2015-5015
)
Respondent. )
____________________________________)
FINAL ORDER
Between April 23, 2013 and March 27, 2014, pursuant to 49 U.S.C. § 60117, a representative of
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 Alyeska
Pipeline Service Company’s (Alyeska or Respondent) Trans Alaska Pipeline System, known as
TAPS. This inspection included site visits to Respondent’s Pump Station 1 through Pump
Station 12 and the Valdez Marine Terminal. In addition, operating and maintenance procedures
and supporting implementation records were reviewed in Alyeska’s Anchorage, Alaska office.
Alyeska operates TAPS, an 800-mile-long pipeline that transports crude oil from Prudhoe Bay to
Valdez, Alaska.1
As a result of the inspection, the Director, Western Region, OPS (Director), issued to
Respondent, by letter dated July 10, 2015, 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 Alyeska had violated 49 C.F.R. §§ 195.432, 195.412 and 195.573
and proposed assessing a civil penalty of $104,500 for the alleged violations. The Notice also
proposed ordering Respondent to take certain measures to correct the alleged violations.
Respondent responded to the Notice by letter dated August 13, 2015 (Response). The company
did not contest the allegations of violations relating to §195.432 (Item 1) and § 195.573 (Item 3)
and agreed to pay the proposed civil penalties for those items, totaling $52,000, as provided in 49
C.F.R. § 190.227. The company contested the allegation related to § 195.412 (Item 2), offered
additional information in response to the Notice, and requested that the proposed civil penalty
relating to Item 2 be eliminated. Respondent did not request a hearing and therefore has waived
its right to one.
1 Pipeline Safety Violation Report (Violation Report), (July 10, 2015) (on file with PHMSA), at 1.



CPF No. 5-2015-5015
Page 2
FINDINGS OF VIOLATION
In its Response, Alyeska did not contest the allegations in the Notice relating to Items 1 and 3,
that it violated 49 C.F.R. Part 195, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:
§ 195.432 Inspection of in-service breakout tanks.
(a) ….
(b) Each operator must inspect the physical integrity of in-service atmospheric
and low-pressure steel aboveground breakout tanks according to API Std 653
(except section 6.4.3, Alternative Internal Inspection Interval) (incorporated by
reference, see §195.3). However, if structural conditions prevent access to the
tank bottom, its integrity may be assessed according to a plan included in the
operations and maintenance manual under §195.402(c)(3). The risk-based
internal inspection procedures in API Std 653, section 6.4.3 cannot be used to
determine the internal inspection interval.
The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to perform
monthly in-service inspections of low-pressure steel aboveground breakout tanks required by
API Standard 653 section 6.3.1.2.2 Specifically, the Notice alleged that during the inspection
performed by PHMSA, and in additional discussions with Alyeska compliance personnel,
Respondent’s staff stated that monthly inspections had not been conducted at Pump Station 7
from August 2010 through September 2011. Furthermore, PHMSA staff learned that only
quarterly inspections had been conducted at Pump Station 12 from July 2012 through March
2014. 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. § 195.432(b) by failing to
perform monthly in-service inspections of low pressure steel aboveground breakout tanks
required by API Standard 653 section 6.3.1.2.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(d), which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) ….
(d) Breakout tanks. You must inspect each cathodic protection system used to
control corrosion on the bottom of an aboveground breakout tank to ensure that
operation and maintenance of the system are in accordance with API RP 651
(incorporated by reference, see §195.3). However, this inspection is not required
if you note in the corrosion control procedures established under §195.402(c)(3)
why complying with all or certain operation and maintenance provisions of API
RP 651 is not necessary for the safety of the tank.
2 API Std 653, section 6.3.1.2 states that the interval of routine in-service inspections from the outside of the
breakout tank shall be consistent with conditions at the particular site, but shall not exceed one month.



CPF No. 5-2015-5015
Page 3
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(d) by failing to inspect each of
its cathodic protection systems used to control corrosion on the bottom of an aboveground
breakout tank, so as to ensure that operation and maintenance of the system are in accordance
with API Recommended Practice 651. Specifically, the Notice alleged that Alyeska could not
provide tank cathodic protection potential survey records for the PS 12 breakout tank for 2010.
Respondent could only provide such records for its PS12 breakout tank for 2011 and 2012.
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. § 195.573(d) by failing to inspect each
of its cathodic protection systems used to control corrosion on the bottom of an aboveground
breakout tank, so as to ensure that operation and maintenance of the system are in accordance
with API Recommended Practice 651.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
In its Response, Alyeska contested the allegation in the Notice relating to Item 2, that it violated
49 C.F.R. Part 195, as follows:
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.412(b), which states:
§ 195.412 Inspection of rights-of-way and crossings under navigable waters.
(a) ….
(b) Except for offshore pipelines, each operator shall, at intervals not
exceeding 5 years, inspect each crossing under a navigable waterway to determine
the condition of the crossing.
The Notice alleged that Respondent violated 49 C.F.R. § 195.412(b) by failing to inspect each
crossing under a navigable waterway to determine the condition of the crossing at intervals not
exceeding five years. Specifically, the Notice alleged that when requested to provide the
inspection records for inspections of TAPS’s buried navigable waterway crossings, Alyeska staff
only provided a record for the Chena River crossing. The Notice alleged that TAPS contains
several other buried pipelines that cross under navigable waterways, including, but not limited to,
crossing under the Klutina River, Lowe River, and Salcha River. During the inspection, Alyeska
staff allegedly stated that the Chena River crossing was the only waterway crossing Respondent
inspected per § 195.412(b).
In its Response, Alyeska stated that it fully complied with § 195.412(b) because the Chena River
Crossing is the only commercially navigable waterway crossed underneath by the TAPS.
Alyeska asserted that a “navigable waterway” for the purposes of § 195.412(b) is a
“commercially navigable waterway” and, therefore, the Chena River is the only “navigable
waterway” for purposes of § 195.412(b) that the TAPS crosses.
Alyeska argued that it used PHMSA’s preferred database, the National Waterways Network
(NWN), to identify commercially navigable waterways that are potentially regulated under



CPF No. 5-2015-5015
Page 4
§195.412.3 The NWN identified only two rivers that are crossed by Respondent – the Yukon
River and the Chena River.4 Respondent eliminated the Yukon River because the pipe does not
cross “under” the river, but rather crosses the river by bridge, leaving only the Chena River that
is subject to § 195.412(b).5
Alyeska stated that PHMSA defines a “navigable waterway” as a “commercially navigable
waterway” in a January 29, 2001 Letter of Interpretation.6 In that letter, in response to a request
from a pipeline operator for clarification of the definition of “navigable waterways” for purposes
of compliance with § 195.412(b), PHMSA stated that “navigable waterways” were waterways
that had been designated as “commercially navigable waterways” by the NWN.7
Having reviewed the evidence, I find Alyeska correctly notes that § 195.412(b) does not define
“navigable waterway” nor is it expressly defined anywhere in 49 C.F.R. Part 195.8 On
September 8, 2000, PHMSA issued a rule addressing the abandonment of underwater pipeline
facilities.9 In this rule, PHMSA defined “navigable waterways” as “commercially navigable
waterways… where a substantial likelihood of commercial navigation exists.”10 The 2000 Rule
also noted that “guidance in determining the affected waterways is available in a geographic
database of navigable waterways in and around the United States…called the National
Waterways Network (NWN).”11 While the 2000 Rule addressed changes in §195.59, PHMSA
has since issued guidance applying this definition of “navigable waterways” and the use of the
NWN to §195.412.12
3 Respondent provided a copy of from the NWN listing the State of Alaska Waterways. Response, Ex. E.
4 Response at 4.
5 Response at 4.
6 Response at 4; Marathon Ashland Pipeline LLC, Letter of Interpretation, PL-01-0100 at 1 (Jan. 29, 2001),
available at
http://www.phmsa.dot.gov/portal/site/PHMSA/menuitem.6f23687cf7b00b0f22e4c6962d9c8789/?vgnextoid=228571
dd2f4a6410VgnVCM100000d2c97898RCRD&vgnextchannel=2b9b34d513f95410VgnVCM100000d2c97898RCR
D&vgnextfmt=print.
7 Marathon Ashland Pipeline LLC, Letter of Interpretation, PL-01-0100 at 1.
8 Response at 3.
9 Pipeline Safety: Underwater Abandoned Pipeline Facilities, Final Rule, 65 FR 54,440 (Sep. 8, 2000) (2000 Rule).
10 2000 Rule at 54,442
11 2000 Rule at 54,442.
12 Operations and Maintenance Enforcement Guidance, Part 195 Subpart F, § 195.412 at 51-56 (Dec. 1, 2014)
(noting that “[t]he specific requirement for an underwater pipeline crossing inspection needs to be based on actual
commercial water traffic in that area”); Marathon Ashland Pipeline LLC, Letter of Interpretation, PL-01-0100 at 1.



CPF No. 5-2015-5015
Page 5
In the January 29, 2001 Letter of Interpretation, PHMSA stated that the “National Waterways
Network (NWN) database is the basis we use to identify commercially navigable waterways.
Our use of this database replaces the use of the referenced USCG designation.”13 It further
stated that the waterway at issue was subject to §195.412 because it was “considered
commercially navigable and that it will be included in the next annual release of the National
Waterways dataset in March of 200l. Therefore, we will continue to regard this river as
commercially navigable under the published classifications.”14 PHMSA’s Operations &
Maintenance Enforcement Guidelines, published as a reference tool for operators, supports the
incorporation of the 2000 Rule’s definition of “navigable waterways” in §195.412, stating that
“[t]he specific requirement for an underwater pipeline crossing inspection needs to be based on
actual commercial water traffic in that area.”15
In its Recommendation, OPS relied on a November 1973 Interpretation letter to define
“navigable waterway”.16 This letter definition is broader than that of the 2000 Rule:
navigable waters of the United States shall be construed to mean those waters of
the United States, including the territorial seas adjacent thereto, the general
character of which is navigable, and which, either by themselves or by uniting
with other waters, form a continuous waterway on which boats or vessels may
navigate or travel between two or more States, or to or from foreign nations .... 17
OPS argues that PHMSA’s preferred database defining “navigable waterways” is that the United
States Coast Guard (USGC) database and that under the USCG, Respondent has an obligation to
inspect far more crossings that the Chena River crossing.18
While OPS is correct that the 1973 Interpretation letter defined “navigable waterway,” I find that
the 2000 Rule and PHMSA’s subsequent guidance delineate PHMSA’s current definition and
treatment of a “navigable waterway.” It is therefore reasonable for operators to conclude that a
“navigable waterway” is a “commercially navigable waterway.”
Applying this definition to Alyeska’s system, the Chena River is the only “navigable waterway”
for purposes of § 195.412(b) under which the TAPS crosses because it is the only waterway
crossing “where a substantial likelihood of commercial navigation exists.”
13 Marathon Ashland Pipeline LLC, Letter of Interpretation, PL-01-0100 at 1.
14 Marathon Ashland Pipeline LLC, Letter of Interpretation, PL-01-0100 at 1.
15 Operations and Maintenance Enforcement Guidance, Part 195 Subpart F, § 195.412 at 55.
16 Recommendation at 4. Note: the correct date of the letter of interpretation is November 16, 1973. Colonial
Pipeline Company, Letter of Interpretation, PI-73-037 (Oct. 18, 1973). OPS also references a June 18, 1994 Letter
of Interpretation. A copy of this letter was not provided and could not be located.
17 Colonial Pipeline Company, Letter of Interpretation, PI-73-037.
18 Recommendation at 2.



CPF No. 5-2015-5015
Page 6
Accordingly, after considering all of the evidence, I find that Alyeska did not violate 49 C.F.R.
§ 195.412(b) by failing to inspect each crossing under a navigable waterway to determine the
condition of the crossing at intervals not exceeding five years because the at issue waterways are
not commercially navigable waterways. Based upon the foregoing, I hereby order that Item 2 be
withdrawn.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 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; 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 $104,500 for the violations cited above.
Items 1 and 3: The Notice proposed a civil penalty of $52,000 for Respondent’s violation of 49
C.F.R. § 195.432 for failing to perform monthly in-service inspections of low pressure steel
aboveground breakout tanks required by API Standard 653 section 6.3.1.2, and Respondent’s
violation of 49 C.F.R. § 195.573 for failing to inspect each of its cathodic protection systems
used to control corrosion on the bottom of an aboveground breakout tank, so as to ensure that
operation and maintenance of the system are in accordance with API Recommended Practice
651. Respondent did not contest these violations and agreed to pay the proposed civil penalties.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $52,000 for violation of 49 C.F.R. §§ 195.432 and 195.573.
Item 2 has been withdrawn and, therefore, there is no civil penalty associated with Item 2.
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $52,000.
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 (AMK-325), Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 S Macarthur Blvd, Oklahoma City, OK 79169. The
Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the $52,000 civil penalty will result in accrual of interest at the current annual rate



CPF No. 5-2015-5015
Page 7
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 Item 2 in the Notice for a violation of 49
C.F.R. § 195.412(b). Under 49 U.S.C. § 60118(a), each person who engages in the
transportation of hazardous liquids or who owns or operates a pipeline facility is required to
comply with the applicable safety standards established under chapter 601.
Item 2 has been withdrawn, and therefore, the compliance terms proposed in the Notice for Item
2 are not included in this Order.
Under 49 C.F.R. § 190.243, Respondent has a right to submit a Petition for Reconsideration of
this Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline
Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC
20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA
will accept petitions received no later than 20 days after receipt of this Final Order by the
Respondent, provided they contain a brief statement of the issue(s) and meet all other
requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of
any civil penalty assessed. If Respondent submits payment of the civil penalty, the Final Order
becomes the final administrative decision and the right to petition for reconsideration is waived.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
November 22, 2016
________________________________________ ___________________
Alan K. Mayberry Date Issued
Acting Associate Administrator
for Pipeline Safety
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