U.S. Department 400 Seventh Street, S.W. of Transportation Washington. D.C. 20590 1 Pipeline and Hazardous Materials Safety Administration Mr. James Johnson Vice President for Pipeline Operations Alyeska Pipeline Service Company P.O. Box 196660 Anchorage, AK 995 19-6660 Re: CPF No. 5-2002-5035 I Dear Mr. Johnson: 1 Enclosed is the Final Order issued by the Associate Administrat r for Pipeline Safety in the above-referenced case. The Final Order makes findings of violation with respect to Item 4b and 5 (Item # as alleged in the Notice of Probable Violation dated Dec. 3 1, 2002) an a civil penalty of $20,000. The Final Order also withdraws the allegation of terms of the Consent Agreement dated May 19, 2006, Item 3 and the associated civil penalty. The Final alleged to be inadequate in Item 1 have been paid this enforcement action will be closed. of that document under 49 C.F.R. 9 190.5. Sincerely, I Y m e s Reynolds Pipeline Compliance Office of Pipeline Safet Enclosure 1 cc: Lee Schoen Sheila Bishop Doody CERTIFIED MAIL - RETURN RECEIPT REQUESTED 1 DEPARTMENT OF PIPELINE AND HAZARDOUS MATERIALS SAFETY WASHINGTON, DC 1 In the Matter of ) ) Alyeska Pipeline Service Company,) ) Respondent. 1 FINAL ORDER From May 21 -26,2001, July 16-20,2001, July 24-25,2001, and 19-20,2002, a representative of the Office of Pipeline Safety (OPS), pursuant to conducted on-site pipeline safety inspections of Respondent's at Pump Stations 4,5,6 and 12 on the Trans Alaska Pipeline As a result of the inspections, the Director, Western Region, OPS, to Respondent, by letter dated December 3 1,2002, a Notice of Probable Violation, Civil Penalty, Proposed Compliance Order and Notice of Amendment C.F.R. 8 190.207, the Notice $9 195.41 2(a), 195.420(b), $23,000 for several of the alleged to correct the alleged violations. 190.237, that Respondent amend Emergencies. On, January 14,2003, Respondent requested an extension until April ,2003 to respond to the Notice, which the Regional Director granted on March 17,2003. Res ondent submitted its response to the Notice on April 3,2003 (Response). Respondent con sted the allegations, submitted detailed information to explain the allegations and reserved Ithe right to a hearing. Safety Administration (PHMSA) was created to hrther the highest degree of pipeline transportation and hazardous materials transportation. See, section 108 of the Norman Y. and Special Programs Improvement Act (Public Law 108-426, 118 Stat. 2423-2429 See also, 70 Fed. Reg.8299 (February 18,2005) redelegating the pipeline safety A hearing was held in the Western Region, OPS, on March 23,2004, Respondent submitted a Closing Statement dated May 22,2004. FINDINGS OF VIOLATION Item 2 in the Notice alleged Respondent had violated 49 C.F.R. 3 19. operator to inspect the surface conditions on rights-of-way at interva: but at least 26 times each calendar year. The Notice alleged OPS ins aerial and ground surveillance, extensive brush and tree encroach me^ areas between Pump Station 12 and the Valdez Marine Terminal, pre effectively inspecting and ascertaining the condition of the pipeline s Respondent maintained it conducts effective inspections of the surfac adjacent to the right-of-way. Respondent explained it conducts week quarterly ground surveillance and an annual line walk, and these ins^ observe the conditions of the pipe and right-of-way. Respondent fun from clearing between Check Valve 122 and Remote Gate Valve 12: because the steep grades make it hazardous for personnel to work in Respondent periodically brushes the area for cathodic protection mo1 Respondent conducts the required number of inspections through a r~ ground patrols. At issue is the adequacy of these inspections to detec The purpose of an operator inspecting along the right-of-way is to lot and to detect excavation activity that could affect the safe operation ( advised it is up to the operator to choose the method of surveillance, allow the surface condition to be adequately surveyed. (See OPS inte dated December 2, 1988.) Several interpretations have advised that kept of clear of brush and trees if visual aerial inspections are used. ( #195.4 12 8, dated May 28, 1991 .) However, this is -not required by r conducting surveillance of the right-of-way more frequently than the Although I understand OPS's concern that the brush appears to interi ability to observe right-of-way conditions, OPS did not show Respon unable to inspect surface conditions along the pipeline right-of- way. withdrawing this allegation of violation. Item 3 alleged Respondent violated 3 195.420(b) because it failed to ( block valves BL- 1 and BL-2 at Pump Station 12 and of valve #20M 1 the required intervals. The regulation requires an operator to inspect intervals not exceeding 7 L/z months, but at least twice each calendar : valve is functioning properly. Respondent and PHMSA have enterec agreement to resolve this allegation. The agreement was incorporate dated May 19,2006. Under the agreement, PHMSA has agreed to w After the hearing, 11 2(a) requiring an not exceeding 3 weeks, :ctors observed, by on the right-of-way in uding Respondent from .face conditions. conditions on and I aerial surveillance, :tions are sufficient to zr explained it refrains or safety reasons e area. However, .oring. cture of aerial and surface conditions. te any pipeline leaks the pipeline. OPS has it the method must retation # 195.4 12 7 ghts-of-way are to be :e interpretation ylation. Respondent is :gulation requires. -e with Respondent's :nt's surveillance was lccordingly, I am a functional test of t Pump Station 11 at xch mainline valve at ar, to determine the nto a consent into a Consent Order draw this allegation. Item 4 alleged two violations of 49 C.F.R. $195.422(a) for two separate i stances of not completing repairs in a safe manner, and ensuring the repairs were made o as to prevent damage to persons or property. The first instance was at Pump Station 4 on Sept mber 22,2001, when Respondent's personnel removed a button-head sealant lubricant port fro a 24-inch mainline pump suction valve without relieving the pressure in the valve body. Th internal pressure of I 120 psig forced the button head out of the valve and 200 gallons of oil The second instance, also on September 22,2001, was at Pump Station 5 when not properly isolate the 24-inch header from tank TK 150. A discharge of 2,035 causing the lower explosive level in the enclosure to reach 100%. Respondent acknowledged the spills occurred at Pump Stations 4 and 5 ng the pipeline maintenance shutdown on September 22,2001 and created temporary un afe conditions. Section 195.422(a) requires an operator, when making repairs, to ensure he repairs are made in a safe manner and are made to prevent damage to persons or property. Re rpondent has not disputed the repairs made on September 22,2001 at evacuation of personnel, and a potentially explosive have been temporary, the regulation does not unsafe conditions. Accordingly, I find Respondent violated repairs. Respondent's corrective and mitigative actions, hearing, will be addressed in the penalty assessment section of this Orde Item 5 alleged Respondent violated $1 95.428(a) for not maintaining its dver pressure protection equipment at Pump Station 6. The Notice alleged Respondent had not c librated the pressureswitch- high #604 at Pump Station 6 from 1996 until November 2000. T e Notice further alleged although Respondent stopped the annual calibration and test of the switc 1when it decommissioned the switch, the switch still had a role in controlling pressure. Respondent explained it had mistakenly cancelled the semi annual mainknance of the pressure switch high #604 (PSH-604) in 1997 but has since reinstituted the annu calibration. Respondent maintained PSH-604 is a backup device for overpressure pr tection between Pump Stations 5 and 9 during pipeline shutdown and is not designed to provid protection during 1 normal operations. According to Respondent, the pipeline's integrity s protected by the primary over pressure protection devices at other pump stations. Section 195.428(a) requires an operator, at specified intervals, to inspec and test each pressure limiting device, relief valve, pressure regulator or other item of control equipment to determine that the device is functioning properly, and is adequate for thd service for which it is used. The regulation does not differentiate between primary and back overpressure safety devices. Thus, for any overpressure safety device, an operator is to ct the device at intervals not to exceed 7 1/2 months, but at least twice each calendar Respondent did not inspect and calibrate PSH-604 within the required intervals for a period, albeit due to a mistake. Accordingly, I find Respondent violated $ 195.428(a). These findings of violation will be considered prior offenses in any sub ?quent enforcement action taken against Respondent. PENALTY ASSESSMENT Under 49 U.S.C. 5 60122, when the Notice was issued, Respondent was dubject to a civil penalty not to exceed $25,000 per violation for each day of the violation up to a aximum of $500,000 for any related series of violations. The Notice proposed a total civil of $23,000 for violation of $5 195.420(b), 195.422 and 195.428 (Items 3,4a, 4b, and 5).~ 49 U.S.C. 5 60122 and 49 C.F.R. 5 190.225 require that, in determining t)le amount of the civil penalty, I consider the following criteria: nature, circumstances, and of the violation, degree of Respondent's culpability, history of Respondent's prior ability to pay the penalty, good faith by Respondent in attempting to Respondent's ability to continue in business, and such other Under the terms of the Consent Agreement dated May 19,2006, the alle ation and proposed penalty for Item 3 are withdrawn. For the two violations of 49 C.F.R. 195.422(a), the Notice proposed a ,000 civil penalty for the incident at Pump Station 4 and $10,000 for the incident at Pump 5. These violations both occurred on September 22,2001 when Respondent had two conduct repairs in a safe manner. Respondent said it took to mitigate and correct the unsafe conditions. Respondent resulted in injury to personnel or significant long term explained that when the Pump Station 4. spill occurred, and the spill isolated and removed with no damage to building was evacuated, fire foam applied to the oil level, and little or no long-term damage to the determined by its root cause analysis, provided immediate refresher training process and developed procedures for required to be at the work site when maintenance is performed. Each incident resulted in oil being spilled with being exposed to a dangerous situation. At Pump Station 5,2035 gallons spilled with a lower explosive level reaching Respondent's immediate actions are what any prudent operator would do to situation. Although Respondent's long term actions in revising its similar repairs are made safely are commendable, it is maintain its pipeline safely. This includes having the personnel to carry out operations and maintenance basis for reducing the civil penalty amounts. The Notice proposed a civil penalty of $5,000 for the violation of $195. 28(a). Respondent had not tested this pressure switch for five years. Although Respondent arg ed this was a redundant device, the regulations do not differentiate between maintenance of red 1dant devices and of primary devices. The switch was part of Respondent's overpressure probection logic. If the device had failed it could have led to a pipeline shutdown, increasing isk of an incident occurring during shutdown and subsequent start up operations. I do mitigating the penalty amount. Accordingly, having reviewed the record and considered the assessment riteria, I assess Respondent a total civil penalty of $20,000. 1 Payment of the civil penalty must be made within 20 days of service. ~e/leral regulations (49 C.F.R. 8 89.21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. ?Ieasury. Detailed instructions are contained in the enclosure. Questions concerning wire t sfers should be directed to: Financial Operations Division (AMZ- 120), Federal Aviatio Administration, Mike Monroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 7;"125; (405) 954-4719. Failure to pay the $20,000 civil penalty will result in accrual of interest the current annual rate in accordance with 3 1 U.S.C. Ħħ 37 17,3 1 C.F.R. 8 90 1.9 and 49 C.F.R. 5 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 may result in referral of the matter to the Attorney General for in a United States District Court. COMPLIANCE ORDER 1 The Notice proposed a compliance order with respect to item 2. Since t is allegation was withdrawn, Respondent will not be ordered to take any action. h AMENDMENT OF PROCEDURES The Notice (Item 1) alleged procedures in Respondent's maintenance an repair manual. (MR 48) were inadequate to comply with 49 C.F.R. Ħħ195.402(d) because they di Inot address deviations from normal operation, such as when an incident causes an abovegroun anchor to move more than three inches from center. The Notice proposed Respondent ts procedures to include methods for determining anchor movement greater than three for determining whether a safety-related condition report is required. Respondent explained it had conducted a structural support study and re iability centered maintenance analysis. The analysis showed three adjacent supports wo Id have to fail simultaneously for the pipe to be in danger of exceeding its design. Res ondent agreed its manual, at the time of the inspection, did not define the conditions of m!intenance for movement of pipeline anchors. Respondent said it had amended its procedures to the position of the anchors at least once every 90 days and to re-center the anchor if it had more than three inches. Respondent maintained this interval would be less than any procedures included painting alignment markers on all patrol will be able to see any misalignment. three inches from the anchor center Respondent considers a tripped primary method of identifying information System, a web-based tool in Respondent's intranet. The analysis and amended procedures now appear adequate for Respond to ensure the reliability of its pipe support system. No further amendment will be Under 49 C.F.R. 5 190.2 15, Respondent has a right to submit a Petition f r Reconsideration of this Final Order. The petition must be received within 20 days of Respo ent's receipt of this Final Order and must contain a brief statement of the issue(s). The filing f the petition automatically stays the payment of any civil penalty assessed. All other t rms of the order, including any required amendment of procedures, remain in full effect un ess the Associate I Administrator, on request, grants a stay. The terms and conditions of this Final Order are effective on receipt. pate Issued ss ciate Administrator or Pipeline Safety