{"operation":"document","citation":"CPF 520177004","title":"PACIFIC OPERATORS OFFSHORE — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-12-19","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.440(a), 195.452(b)(5), 195.583(a), 195.9.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520177004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520177004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520177004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520177004","body":"Notice of Probable Violation involving PACIFIC OPERATORS OFFSHORE. PHMSA's enforcement data identifies the cited regulations as 195.440(a),  195.452(b)(5),  195.583(a),  195.9. The case was opened on 2017-12-19 and is reported as closed as of 2020-02-10. Proposed civil penalty: $15,500. Assessed civil penalty: $15,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520177004_FAA-Treasury Document_02102020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_FAA-Treasury%20Document_02102020.pdf\n\n520177004_Final Order_05032019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_Final%20Order_05032019.pdf\n\n520177004_Final Order_05032019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_Final%20Order_05032019_text.pdf\n\n520177004_NOPV PCP PCO_12192017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_NOPV%20PCP%20PCO_12192017.pdf\n\n520177004_NOPV PCP PCO_12192017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_NOPV%20PCP%20PCO_12192017_text.pdf\n\n520177004_Operator Response Request Abeyance of Final Order_05152019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_Operator%20Response%20Request%20Abeyance%20of%20Final%20Order_05152019.pdf\n\n520177004_Operator Response to Notice_04202018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_Operator%20Response%20to%20Notice_04202018.pdf\n\n520177004_Response to Operator Request for Abeyance_06262019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_Response%20to%20Operator%20Request%20for%20Abeyance_06262019.pdf\n\n520177004_Response to Operator Request for Abeyance_06262019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520177004/520177004_Response%20to%20Operator%20Request%20for%20Abeyance_06262019_text.pdf\n\n520177004_NOPV PCP PCO_12192017_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nDecember 19, 2017\nMr. Bruce E. Johnston\nPacific Operators Offshore LLC\nVice President, Operations Superintendent\n1145 Eugenia Pl. Ste. 200\nCarpinteria, CA 93013\nCPF 5-2017-7004\nDear Mr. Johnston:\nOn several occasions between February 14, 2017 and April 14, 2017, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), pursuant to Chapter 601 of 49 United States Code inspected the Pacific Operators\nOffshore LLC’s (PACOPS) pipeline system that serves Platform Hogan and the La Conchita\nSeparation Facility in La Conchita, California.\nAs a result of the inspection, it is alleged that PACOPS has committed probable violations of\nthe Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected\nand the probable violations are:\n\n\n\n1. §195.9 Outer continental shelf pipelines.\nOperators of transportation pipelines on the Outer Continental Shelf must\nidentify on all their respective pipelines the specific points at which operating\nresponsibility transfers to a producing operator. For those instances in which the\ntransfer points are not identifiable by a durable marking, each operator will have\nuntil September 15, 1998 to identify the transfer points. If it is not practicable to\ndurably mark a transfer point and the transfer point is located above water, the\noperator must depict the transfer point on a schematic maintained near the\ntransfer point. If a transfer point is located subsea, the operator must identify the\ntransfer point on a schematic which must be maintained at the nearest upstream\nfacility and provided to PHMSA upon request. For those cases in which\nadjoining operators have not agreed on a transfer point by September 15, 1998\nthe Regional Director and the MMS Regional Supervisor will make a joint\ndetermination of the transfer point.\nPACOPS, an operator of transportation pipelines on the Outer Continental Shelf,1 violated 49\nC.F.R. § 195.9 by failing to identify on all its respective pipelines the specific points at which\noperating responsibility transfers to a producing operator. At the time of the field inspection,\nPHMSA observed no visible marking on the pipe of Platform Hogan identifying the transfer\npoint.2 In addition, PACOPS could not provide any schematics maintained near the transfer\npoint to depict the transfer point.3\n2. §195.440 Public awareness.\n(a) Each pipeline operator must develop and implement a written continuing\npublic education program that follows the guidance provided in the American\nPetroleum Institute's (API) Recommended Practice (RP) 1162 (incorporated by\nreference, see §195.3).\nPACOPS violated 49 C.F.R. § 195.440(a) by failing to implement its written continuing\npublic education program that follows the guidance provided in API 1162. Section 7 of API\n1162 discusses program documentation and recordkeeping, recommending that each operator\nestablish policies and procedures necessary to properly document its Public Awareness\nProgram and retain those key records for purposes of program evaluation.4 PACOPS has\n1 See 49 C.F.R. § 195.2 (defining Outer Continental Shelf as “all submerged lands lying seaward and outside the\narea of lands beneath navigable waters as defined in Section 2 of the Submerged Lands Act (43 U.S.C. 1301) and\nof which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control”).\n2 See Exhibit A to Violation Report (depicting a photograph of the offshore pipe at Platform Hogan with no\nmarking to identify specific points at which operating responsibility transferred to the producing operator).\n3 See Violation Report at page 7 (noting that at the time of the inspection, PACOPS staff could not identify any\nschematics to indicate transfer points).\n4 API 1162 at 26.\n2\n\n\n\nincorporated much of Section 7 into its own program. Specifically, PACOPS’s Public\nAwareness Plan, Section 12 - Documentation states, in pertinent part:\nThe Company shall collect and retain documentation of the public\nawareness program. These records demonstrate that the Company's\nprogram is in conformance with these procedures…5\nPACOPS’s Public Awareness Plan, Section 12.2 – Other Documentation Records, lists\nexamples of documentation records, including: “communication materials provided to each\nstakeholder audience (e.g. brochures, mailings, letters, etc.); lists, records, or other\ndocumentation of stakeholder audiences with whom the Company has communicated (e.g.\ncontact mailing rosters); implementation dates; postage receipts; response cards; audience\ncontact documentation (e.g. sign-in sheets, invitation lists, etc.); program evaluations,\nincluding current results, follow-up actions and expected results; [and] program\nenhancement(s).”6\nFinally, PACOPS’s Public Awareness Plan, Section 12.3 – Record Retention requires\nretention of records for “a minimum of five (5) years, or as defined in the Company's public\nawareness program section #12.5, whichever is longer. Record retention shall include: lists,\nrecords, or other documentation of stakeholder audiences with whom the Company has\ncommunicated; copies of all materials provided to each stakeholder audience; [and] all\nprogram evaluations, including current results and follow-up actions.”7\nAt the time of the inspection, PACOPS could not provide records to demonstrate compliance\nwith its public awareness program.8 By failing to collect and retain documentation of its\npublic awareness program pursuant to its own written procedures, as outlined above,\nPACOPS failed to implement its written continuing public education program in violation of\n49 C.F.R. § 195.440(a).\n5 See Exhibit B to Violation Report at 2 (noting that “the written program shall include the following: [a] statement\nof management commitment to achieving effective public/community awareness; [a] description of the roles and\nresponsibilities of personnel administering the program; [i]dentification of key personnel and their titles;\n[i]dentification of the media and methods of communication to be used in the program; [d]ocumentation of the\nfrequency and the basis for selecting that frequency for communicating with each of the targeted audiences; [t]he\nprocess for identifying program enhancements beyond the baseline program, including the basis for implementing\nsuch enhancements; [and] [t]he program evaluation process, including the evaluation objectives, methodology to\nbe used to perform the evaluation and analysis of the results, and criteria for program improvement based on the\nresults of the evaluation”).\n6 Id.\n7 Id. at 2-3.\n8 See Violation Report at 15 (noting that PACOPS staff could not find any records at the time of the inspection).\n3\n\n\n\n3. §195.452 Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline\nintegrity? Each operator of a pipeline covered by this section must:\n(5) Implement and follow the program.\nPACOPS did not implement and follow its Integrity Management Program in violation of 49\nC.F.R. § 195.452(b)(5). PACOPS’s Integrity Management Plan (IMP), Section 1.2 -\nIdentification of HCA Segments and Documentation states, in part:\nAll reviews to identify HCAs will be fully documented. This means methods\nand assumptions will be included where applicable, especially for exceptions.\nJustification for exceptions will also include HVL properties, topographical\nconsiderations, type of HCA, and significant of consequences. See section\n[1.4]1.3 for a full list of factors to consider in determining if a segment could\naffect an HCA.\nThe Company intends to utilize a Graphic Information System (GIS) as well\nas calculations of dispersion modeling distances to identify pipeline segments\nthat could affect HCAs. Also, local knowledge and experience will be used in\nthe determination of HCAs. These methods are discussed below. In the IMP\nrecords binder/files is a listing of the HCAs as a result of this review. 9\nAt the time of the inspection, PACOPS provided a copy of its 2016 Annual Pipeline\nAssessment Review, which stated that “[s]ince the onshore portion of the oil pipeline lies\nwithin 220 yards of the mean high tide line, PACOPS elects to conservatively define that\nboth segments of its pipeline reside within HCA.”10 Although PACOPS concluded that its\nonshore pipe resides in an HCA, PACOPS could not provide records to show the methods,\nassumptions, or calculations of dispersion modeling distances used in determining that its\npipeline segments could affect HCAs as required by Section 1.2 of its IMP.11\n4. §195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed to the\natmosphere for evidence of atmospheric corrosion, as follows:\n9 Exhibit D to Violation Report at 1.\n10 Exhibit E to Violation Report.\n11 See also 49 C.F.R. § 195.452(l)(1) (requiring operators to “maintain, for the useful life of the pipeline, records\nthat demonstrate compliance with the requirements of this subpart” that includes documents to support decisions\nand analyses).\n4\n\n\n\nPACOPS did not inspect each pipeline or portion of pipeline that is exposed to the atmosphere\nfor evidence of atmospheric corrosion in violation of 49 C.F.R. § 195.583(a). Specifically,\nPACOPS’s onshore pipe is required to be inspected at least once every 3 calendar years, but\nwith intervals not exceeding 39 months. At the time of the inspection, PACOPS provided\ninspection records to PHMSA showing that the onshore DOT pipe at La Conchita Facility had\nbeen inspected for atmospheric corrosion in 2008 and 2010.12 However, PACOPS could not\nprovide records or other substantiating evidence to demonstrate that atmospheric corrosion\ninspections were conducted in 2013 and 2016.\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to\nexceed $209,002 per violation per day the violation persists, up to a maximum of $2,090,022\nfor a related series of violations. For violations occurring prior to November 2, 2015, the\nmaximum penalty may not exceed $200,000 per violation per day, with a maximum penalty\nnot to exceed $2,000,000 for a related series of violations. The Compliance Officer has\nreviewed the circumstances and supporting documentation involved in the above probable\nviolation(s) and has recommended that you be preliminarily assessed a civil penalty of\n$15,500 as follows:\nItem number\nPENALTY\nItem 2\n$15,500\nWarning Items\nWith respect to Item 4, we have reviewed the circumstances and supporting documents\ninvolved in this case and have decided not to conduct additional enforcement action or\npenalty assessment proceedings at this time. We advise you to promptly correct this item.\nFailure to do so may result in additional enforcement action.\nProposed Compliance Order\nWith respect to Items 1, 2 and 3, pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Pacific Operators\nOffshore Operator LLC. Please refer to the Proposed Compliance Order, which is enclosed\nand made a part 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. All material you submit in response to this enforcement action may be made publicly\navailable. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you\n12 Exhibit F to Violation Report.\n5\n\n\n\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted\ninformation qualifies for confidential treatment under 5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, or request\na hearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this\nNotice, this constitutes a waiver of your right to contest the allegations in this Notice and\nauthorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this\nNotice without further notice to you and to issue a Final Order. If you are responding to this\nNotice, we propose that you submit your correspondence to my office within 30 days from\nreceipt of this Notice. This period may be extended by written request for good cause.\nIn your correspondence on this matter, please refer to CPF 5-2017-7004 and, for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nHuy Nguyen\nActing Director, 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 M. Garcia ((#156051)\n6\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 the Pacific Operator Offshore LLC (PACOPS)\na Compliance Order incorporating the following remedial requirements to ensure its\ncompliance with the pipeline safety regulations:\n1. 2. 3. 4. In regard to Item 1 of the Notice pertaining to not having a visible marking on\nthe pipe to indicate transfer point, PACOPS must identify on all its outer\ncontinental shelf pipelines the specific points at which operating responsibility\ntransfers to a producing operator by durable marking. If it is not practicable to\ndurably mark a transfer point and the transfer point is located above water, the\noperator must depict the transfer point on a schematic maintained near the\ntransfer point. Pictures or any other documentation to show compliance of 49\nC.F.R. § 195.9 must be submitted to PHMSA within 30 days after receipt of\nthe Final Order.\nIn regard to Item 2 of the Notice pertaining to not implementing its written\ncontinuing public education program, PACOPS must submit records such as\nstakeholder lists, brochures, or pamphlets indicating message, documentation\nof sent messages, maps, procedures, plans, evaluation results, follow-up\nactions, and other relevant documentation that supports compliance to PHMSA\nwithin 180 days after receipt of the Final Order.\nIn regard to Item 3 of the Notice pertaining to not having records to show the\nmethods, assumptions, or calculations of dispersion modeling distances used in\ndetermining pipeline segments that could affect HCAs, PACOPS must submit\nthese records for the onshore portion of the oil pipeline from Platform Hogan\nto La Conchita Onshore Processing Facility to PHMSA within 180 days after\nreceipt of the Final Order.\nIt is requested (not mandated) that PACOPS maintain documentation of the\nsafety improvement costs associated with fulfilling this Compliance Order and\nsubmit the total to Huy Nguyen, Acting Director, Western Region, Pipeline\nand Hazardous Materials Safety Administration. It is requested that these costs\nbe reported in two categories: 1) total cost associated with preparation/revision\nof plans, procedures, studies and analyses, and 2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n7\n\n520177004_Final Order_05032019_text.pdf\n\nMay 3, 2019\nMr. Robert Carone\nManaging Member\nPacific Operators Offshore, LLC\n1145 Eugenia Place, Suite 200\nCarpinteria, CA 93013\nRe: CPF No. 5-2017-7004\nDear Mr. Carone:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws one of\nthe allegations of violation, makes other findings of violation, assesses a civil penalty of $15,500,\nand specifies actions that need to be taken by Pacific Operators Offshore, LLC, to comply with\nthe pipeline safety regulations. The penalty payment terms are set forth in the Final Order.\nWhen the civil penalty has been paid and the terms of the compliance order completed, as\ndetermined by the Director, Western Region, this enforcement action will be closed. Service of\nthe Final Order by certified mail is effective upon the date of mailing, as provided under 49\nC.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Director, Western Region, Office of Pipeline Safety, PHMSA\nMr. Bruce E. Johnston, Vice President, Operations Superintendent, Pacific Operators\nOffshore, LLC\nMr. Clement Alberts, Environmental Coordinator, Pacific Operators Offshore, LLC\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____________________________________\nIn the Matter of )\nPacific Operators Offshore, LLC, ) CPF No. 5-2017-7004\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom February 14 through April 14, 2017, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Pacific\nOperators Offshore, LLC (PACOPS or Respondent), in La Conchita, California. PACOPS\noperates two drilling platforms on the Outer Continental Shelf (OCS), an onshore oil and gas\nprocessing facility in Ventura County, California, and 6.44 miles of pipelines connecting the\nplatforms with the processing facility.1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated December 19, 2017, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to 49\nC.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nPACOPS had violated 49 C.F.R. §§ 195.9, 195.440(a), and 195.452(b)(5) and proposed\nassessing a civil penalty of $15,500 for the alleged violations. The Notice also proposed\nordering Respondent to take certain measures to correct the alleged violations. The warning item\nrequired no further action, but warned the operator to correct the probable violation or face\npossible future enforcement action.\nAfter requesting and receiving an extension of time to respond, PACOPS responded to the\nNotice by letter dated April 20, 2018 (Response). The company contested the allegations,\noffered additional information in response to the Notice, and requested that the proposed civil\npenalty be eliminated. Respondent did not request a hearing and therefore has waived its right to\none.\n1 Pacific Operators Offshore, LLC, 2018 Annual Report for Calendar Year 2017, Hazardous Liquid Pipeline\nSystems, Form PHMSA F 7000-1.1 (on file with PHMSA).\n\n\n\nCPF No. 5-2017-7004\nPage 2\nFINDINGS 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. § 195.9, which states:\n§ 195.9 Outer continental shelf pipelines.\nOperators of transportation pipelines on the Outer Continental Shelf\nmust identify on all their respective pipelines the specific points at which\noperating responsibility transfers to a producing operator. For those\ninstances in which the transfer points are not identifiable by a durable\nmarking, each operator will have until September 15, 1998 to identify the\ntransfer points. If it is not practicable to durably mark a transfer point and\nthe transfer point is located above water, the operator must depict the\ntransfer point on a schematic maintained near the transfer point. If a transfer\npoint is located subsea, the operator must identify the transfer point on a\nschematic which must be maintained at the nearest upstream facility and\nprovided to PHMSA upon request. For those cases in which adjoining\noperators have not agreed on a transfer point by September 15, 1998 the\nRegional Director and the MMS Regional Supervisor will make a joint\ndetermination of the transfer point.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.9 by failing to identify the specific\npoints at which operating responsibility for its transportation pipelines on the OCS transfers to a\nproducing operator. Specifically, the Notice alleged that PACOPS did not have any visible\nmarking on the pipe of Platform Hogan that identified the transfer point. Additionally, PACOPS\nallegedly did not maintain any schematics near the transfer point that depicted the transfer point.\nIn its Response, PACOPS did not dispute that it had no visible markings or schematics of the\ntransfer point, but argued that no reasonable justification exists for a violation since the company\nis both the operator of the transportation pipeline and the operator of the producing operator.\nRespondent argued that it is not possible to delineate an “arbitrary” transfer point under 49\nC.F.R. § 195.9 because “production and transportation are contiguous and under the\nresponsibility of a single common operating entity.” Additionally, Respondent argued that\nresponsibility for determining the transfer point falls jointly upon PHMSA and the Department\nof the Interior’s Bureau of Safety and Environmental Enforcement (BSEE), one of the successor\nagencies of the Minerals Management Service (MMS),2 and not upon the operator. Respondent\nprovided evidence of a March 2018 email exchange between a PACOPS employee and an\nemployee of BSEE, in which they discussed where on this facility PHMSA and BSEE\njurisdiction should be transferred and concluded that no designation or transfer point was needed.\nHaving considered PACOPS’ Response and the arguments presented, I find them unpersuasive.\nFirst, the purpose of the pipeline safety requirement to designate a transfer point under § 195.9 is\n2 Bureau of Safety and Environmental Enforcement, website, available at https://www.bsee.gov/who-we-\nare/history/reorganization.\n\n\n\nCPF No. 5-2017-7004\nPage 3\nto indicate clearly, to both regulators and operator personnel, the precise point at which a\npipeline must meet the safety regulations in 49 C.F.R. Part 195. This transfer point marks the\npoint at which safety oversight transfers from BSEE to OPS. The depiction of this transfer point,\neither via a durable marking on the pipeline facility or in a schematic maintained near the\ntransfer point, provides a practical and useful means of designating where OPS’ oversight begins\nat the facility and ensuring that transportation pipelines comply with PHMSA regulations.3\nWhile 49 C.F.R. § 195.9 requires an operator to determine the point at which a production line\nbecomes a transportation line, this determination is not arbitrary. In most cases, the transfer\npoint will occur at a specific valve or flange where these adjoining operations interconnect.\nSecond, I find the opinions in the March 2018 email exchange provide no additional support for\nRespondent’s argument. Section 195.9 controls when and where an operator must identify its\ntransportation pipelines. A unilateral statement from a BSEE employee, made two decades after\nthe transfer-point-designation deadline contained in § 195.9 expired, does not serve to absolve\nPACOPS’ responsibility for designating a transfer point on its pipeline.\nThird, a finding of violation in this case is consistent with past agency practice. PHMSA has\npreviously enforced 49 C.F.R. § 195.9 against operators that operate interconnected production\nand transportation pipelines as in the instant case.4 Such published enforcement actions provide\nthe regulated community with fair notice that PHMSA expects operators of interconnected\nsystems to demarcate a jurisdictional dividing line between the two portions of their systems.\nFinally, Respondent’s assertion that responsibility for marking the transfer point falls jointly\nupon PHMSA and BSEE is also unpersuasive. The joint agency-determination process noted in\n§ 195.9 is applicable only where two adjoining operators cannot agree on a transfer point. In the\ninstant case, PACOPS cannot avail itself of this provision since there is no disagreement with an\nadjoining operator on the location of a transfer point.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.9 by failing to identify the specific points at which operating responsibility for its\ntransportation pipelines on the OCS transfers to a producing operator.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.440(a), which states:\n§ 195.440 Public awareness.\n(a) Each pipeline operator must develop and implement a written\ncontinuing public education program that follows the guidance provided in\nthe American Petroleum Institute's (API) Recommended Practice (RP)\n1162 (incorporated by reference, see §195.3).\n3 Pipeline Safety: Regulations Implementing Memorandum of Understanding With the Department of the Interior\n62 Fed. Reg. 61692, 61693 (Nov. 19, 1997).\n4 E.g., In the Matter of Chevron USA, Inc., CPF No. 4-2011-9001, 2012 WL 3144497 (DOT June 14, 2012),\navailable at\nhttps://primis.phmsa.dot.gov/comm/reports/enforce/CaseDetail_cpf_420119001.html?nocache=6360#_TP_1_tab_2.\n\n\n\nCPF No. 5-2017-7004\nPage 4\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.440(a) by failing to implement its\nwritten continuing education program pursuant to API RP 1162. Specifically, the Notice alleged\nthat PACOPS failed to comply with Section 7 of API RP 1162 and Section 12 of the company’s\nPublic Awareness Plan (PAP), which requires PACOPS to “collect and retain documentation of\nthe public awareness program.” Section 12.2 of the PAP lists examples of the documentation\nthat must be retained, and Section 12.3 requires retention of said documentation for a minimum\nof five years. PACOPS did not provide any records of its PAP or otherwise demonstrate\ncompliance with API RP 1162 and 49 C.F.R. § 195.440(a).\nIn its Response, PACOPS did not dispute that it failed to provide PHMSA records demonstrating\ncompliance with § 195.440(a), but argued that no stakeholder audience exists with respect to the\ncompany’s PAP, noting that the facility in question is surrounded by empty land on three sides\nand a freeway and ocean on the fourth. This argument is not persuasive; stakeholder audiences\nare not limited to potentially-affected members of the public. Under Section 3 of API RP 1162,\nstakeholder audiences include the affected public, emergency officials, local public officials, and\nexcavators. Although the instant facility may be sited in a remote location, Respondent’s PAP\nmust, at the very least, inform emergency officials and local public officials whose jurisdictions\nencompass the facility of how to identify a potential hazard, to protect themselves, to notify\nemergency response personnel, and to notify the pipeline operator in the event of a pipeline\nemergency. This requirement is especially important given the facility's close proximity to the\nocean.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.440(a) by failing to implement its written continuing education program pursuant to API\nRP 1162.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(b) What program and practices must operators use to manage pipeline\nintegrity? Each operator of a pipeline covered by this section must:\n(1) Develop a written integrity management program that addresses the\nrisks on each segment of pipeline . . . .\n(5) Implement and follow the program.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to implement\nand follow its own written Integrity Management Program (IMP). Specifically, the Notice\nalleged that while PACOPS conservatively considered the onshore portion of its pipeline to be\nwithin a High Consequence Area (HCA), the company did not provide records demonstrating the\nmethods, assumptions, or calculations used in determining that this facility was within an HCA,\nas required by Section 1.2 of PACOPS’ IMP.\nIn its Response, PACOPS noted that it used a “reasonable common-sense assessment” to\ndetermine that the facility was located within an HCA, based on its proximity to the ocean.\nRespondent’s choice to “conservatively define” the onshore portion of its pipeline as being\n\n\n\nCPF No. 5-2017-7004\nPage 5\nwithin an HCA is documented in the company’s 2016 assessment records. In the instant case, I\nagree with Respondent that detailed analyses and calculations are not necessary to support the\ninclusion of PACOPS’ pipe within an HCA. The onshore pipeline facility is located within 220\nyards of the mean high-tide line, a fact sufficient to support Respondent’s documented decision\nto “conservatively define” the facility as being within an HCA.\nAccordingly, after considering all of the evidence, I find that Respondent did not commit a\nviolation of 49 C.F.R. § 195.452(b)(5). Based upon the foregoing, I hereby order that Item 3 be\nwithdrawn.\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$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.5 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; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require.\nItem 2: The Notice proposed a civil penalty of $15,500 for Respondent’s violation of 49 C.F.R.\n§ 195.440(a), for failing to implement its written continuing education program pursuant to API\nRP 1162. Respondent’s arguments relating to the allegations of violation, as outlined above, are\nwithout merit. Respondent did not otherwise submit information that warrants reducing the civil\npenalty. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $15,500 for violation of 49 C.F.R. § 195.440(a).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.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 (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $15,500 civil penalty will result in accrual of interest at the current annual rate\n5 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum\nCivil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).\n\n\n\nCPF No. 5-2017-7004\nPage 6\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, 2, and 3 in the Notice for\nviolations of 49 C.F.R. §§ 195.9, 195.440(a), and 195.452(b)(5), respectively. Under 49 U.S.C.\n§ 60118(a), each person who engages in the transportation of hazardous liquids or who owns or\noperates a pipeline facility is required to comply with the applicable safety standards established\nunder chapter 601.\nRespondent argued that the proposed compliance terms should be withdrawn, along with the\nviolations. With regard to Items 1 and 2, as discussed above, Respondent’s arguments as to the\nallegation of violation are not persuasive. Accordingly, I find no reason to modify the\ncompliance terms with respect to Items 1 and 2. With regard to Item 3, I agree with\nRespondent’s arguments, and have ordered that Item 3 be withdrawn. Accordingly, I also\nwithdraw the compliance terms with respect to Item 3.\nFor the above reasons, the Compliance Order is modified as set forth below.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.9 (Item 1), Respondent must identify on all\nits Outer Continental Shelf pipelines the specific points at which operating\nresponsibility transfers to a producing operator by durable marking. If it is not\npracticable to durably mark a transfer point and the transfer point is located above\nwater, the operator must depict the transfer point on a schematic maintained near the\ntransfer point. Pictures or any other documentation to show compliance with 49\nC.F.R. § 195.9 must be submitted to PHMSA within 30 days after receipt of this Final\nOrder.\n2. With respect to the violation of § 195.440(a) (Item 2), Respondent must submit\nrecords such as stakeholder lists, brochures or pamphlets indicating message,\ndocumentation of sent messages, maps, procedures, plans, evaluation results, follow-\nup actions, and other relevant documentation that supports compliance with 49 C.F.R.\n§ 195.440(a) to PHMSA within 180 days after receipt of this Final Order.\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.\n\n\n\nCPF No. 5-2017-7004\nPage 7\nIt is requested that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nWARNING ITEM\nWith respect to Item 4, the Notice alleged a probable violation of Part 195 but did not propose a\ncivil penalty or compliance order for this item. Therefore, this is considered to be a warning\nitem. The warning was for:\n49 C.F.R. § 195.583(a) (Item 4) ─ Respondent’s alleged failure to inspect each\npipeline or portion of pipeline that is exposed to the atmosphere for evidence of\natmospheric corrosion.\nPACOPS requested withdrawal of Item 4, alleging that the company’s third-party contractors\nperformed atmospheric corrosion checks during other physical inspections of the facility. Under\n§ 190.205, PHMSA does not adjudicate warning items to determine whether or not a probable\nviolation occurred. If OPS finds a violation of this provision in a subsequent inspection,\nRespondent may be subject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nMay 3, 2019\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":39198}