The Office of Pipeline Safety’s Enforcement Program is a key component of the Agency’s oversight mission, designed to ensure that pipeline operators are in full compliance with pipeline safety regulations, and are meeting PHMSA expectations for safe, reliable, and environmentally sound operation of their facilities.
PHMSA assures compliance through field inspections of facilities and construction projects; programmatic inspections of operator management systems, procedures, and processes; incident investigations; and through direct dialogue with operator management.
To facilitate compliance, PHMSA clarifies its regulatory expectations with published inspection forms and protocols; rule interpretations; posting of final orders on its website, guidance manuals and advisory notices; FAQs; and public meetings and workshops.
Finally, PHMSA has available a full range of enforcement tools to ensure that operators take appropriate and timely corrective actions for violations, and that they take preventive measures to preclude future failures or non-compliant operation of their pipelines.
Enforcement Program Objectives
To accomplish its mission, the Enforcement Program is organized and implemented to meet specific objectives relating to effectiveness, efficiency and consistency.
Effectiveness
- Operators have a complete understanding of PHMSA requirements and expectations, and, upon identification of a program deficiency – either by themselves or by PHMSA – work quickly to modify their program.
- Operators strive to avoid non-compliances in the first place, with priority on those compliance issues with the highest potential risk. Serious inadequacies or non-compliances are prevented.
- Operators learn from inspection findings, enforcement actions, and release incidents, and take corrective actions system-wide in order to address latent issues and to prevent future issues. Identified non-compliances are quickly and satisfactorily rectified.
- PHMSA has an accurate assessment of operator and industry compliance status, efforts, and apparent capabilities, including their timely mitigation of critical safety concerns.
- Stakeholders are confident that PHMSA’s oversight processes result in a high degree of full compliance by the regulated community.
Efficiency
- Agency resources are judiciously utilized, and are directed towards those activities and issues with the highest potential risk.
Consistency
- Enforcement and inspection processes repeatedly lead to the same results, given the same or similar circumstances.
Enforcement Mechanisms
The Enforcement Program has a number of different mechanisms to assure operator compliance and safe operation. (In Title 49, Part 190, Subpart B “Enforcement” in the Code of Federal Regulations) A brief synopsis of these mechanisms is provided below. This synopsis does not substitute for the regulations themselves.
Corrective Action Orders
If PHMSA determines that a particular pipeline represents a hazard to safety, the environment, or property, the Agency can issue a corrective action order (CAO) directing the operator to take specific actions. These specific actions depend on the individual pipeline and the situation that has created the unsafe condition. In determining a pipeline facility to be hazardous, the Agency considers the following:
- characteristics of the pipe and other equipment, including its age, physical properties, and manufacturing and construction information;
- commodity(ies) being transported, and the operating pressures involved;
- characteristics of the area around the pipeline (e.g., population, environmental resources, geologic conditions);
- any recommendations from the National Transportation Safety Board; and
- any other factors deemed important by the PHMSA Associate Administrator.
CAOs contain: a finding that the pipeline facility is hazardous to life, property, or the environment; relevant facts supporting the finding; the legal basis for the CAO; a description of specific corrective actions the operator must take; the date by which corrective actions must be completed; and the opportunity for an operator to request a hearing.
CAOs are often issued following pipeline accidents. Depending on the circumstances, PHMSA may direct the operator to reduce operating pressure or shut down the pipeline until safe operation can be assured. PHMSA may also direct the operator to test the pipeline to identify potentially injurious problems, as well as to take other preventive measures to preclude further failures. Pipeline tests often required in CAOs include in-line inspection (smart pigging), or hydrostatic pressure testing.
PHMSA conducts rigorous inspections to assure that conditions in its CAOs are met before allowing operators to return to normal operation.
Notice of Probable Violation
If information obtained during an inspection or some other source indicates that a violation of pipeline safety regulations has occurred, an PHMSA regional director can issue the operator a Notice of Probable Violation (NOPV). The NOPV states the laws, regulations, or orders which the operator is alleged to have violated and states the evidence upon which the allegations are based. NOPVs may propose that a civil penalty and/or a compliance order be issued to the operator, depending on the specific circumstances. The NOPV also informs the operator of its response options including the right to a hearing.
If a civil penalty is proposed, the NOPV will include the amount of the proposed penalty as well as the maximum amount for which the operator is liable under the law. The Pipeline Safety Improvement Act of 2002 increased the civil penalty authority of PHMSA to a maximum of $100,000 per violation per day, up to a maximum of $1,000,000 for a related series of violations.
Compliance orders that are proposed in NOPVs specify the actions the operator must take to correct the violation. These actions depend on the violation, but could involve modifying procedures, changing operation and maintenance practices, conducting pipeline surveillance, or repairing/replacing inoperable or ineffective equipment.
Warning Letter
In some circumstances, PHMSA may elect to issue a Warning Letter instead of a Notice of Probable Violation when it believes a violation may exist. Warning Letters notify the operator of the probable violation and advise that the situation be corrected, or more stringent enforcement action may be taken. Warning Letters are generally reserved for violations that are “administrative” in nature and do not have a significant or immediate safety impact.
Notice of Amendment
If during an inspection, or through other means, PHMSA learns that the plans or procedures required by the regulations are inadequate, a region director can issue the operator a Notice of Amendment. A Notice of Amendment states the relevant regulation(s) and provides the operator 30 days to request a hearing to review the situation, or submit revised procedures. It the operator submits revised procedures to the region director, and these are deemed satisfactory, the case is closed. If the operator is unable to modify its procedures satisfactorily, the region director can recommend that an Order Directing Amendment be prepared requiring the necessary modifications.
If the operator requests a hearing, that proceeding is conducted as described below. After the hearing, the PHMSA Associate Administrator determines whether the plans and procedures are indeed inadequate, and if so, an order is issued to the operator to amend its procedures. If the Associate Administrator believes the existing procedures are adequate, then the Notice of Amendment is withdrawn.
Letter of Concern
Through inspections or other means, PHMSA Region Directors may become aware of situations that while not violations, are still worthy of informing operator management. These observations are communicated via Letters of Concern. Letters of Concern are not specifically identified in 49 CFR, Part 190 as an enforcement action: They are used to promote improved safety practices or encourage operators to address potential program weaknesses when violations are not present.
Enforcement Process
Sending a Notice of Probable Violation letter to an operator begins an enforcement proceeding. Within 30 days of receiving an NOPV, the operator must respond in one of several ways.
The operator may:
- Pay the civil penalty and/or agree to perform any actions required in a proposed compliance order;
- Submit additional information and evidence in response to the allegations in the NOPV, or to support mitigation of the proposed civil penalty; or
- Request a hearing stating the issues it intends to raise at the hearing.
If the operator fails to respond as described above, the operator waives its right to contest the allegations. The PHMSA Associate Administrator may then proceed to issue a Final Order directing that actions in any proposed Compliance Order be performed and any civil penalty to be paid.
Hearings
Hearings are informal and are conducted without strict adherence to the federal rules of evidence. PHMSA is typically represented by the Region Director and one or more inspectors who were involved during the inspection, or are helping to prepare the Region’s case.
While the operator and PHMSA are each allowed to present their case and respond to information the other may present, there is no formal cross examination during the hearing. Detailed written records of hearings are not prepared. The operator may submit any relevant information and call any witnesses it believes will support its position. It may offer additional facts, information, explanation, documents, testimony, or other items relevant to the issues under consideration. The operator may also examine evidence assembled by PHMSA in determining the alleged violation. The presiding attorney may also allow PHMSA to respond to or rebut information presented by the operator. Each side is permitted to argue its case on the issues under consideration. The operator may also request an opportunity to submit additional information after the hearing to further support its case or address issues raised at the hearing. The presiding attorney provides a reasonable time period for submittal of this information.
An operator is also provided an opportunity for a hearing when a Corrective Action Order is issued. The hearing process is similar to that described above, except that the time frames allowed for response are shorter. In these situations, an operator is allowed ten days to request a hearing or waive its opportunity for a hearing. Similarly, the presiding attorney at the hearing has only 48 hours to make a recommendation to the Associate Administrator.
Final Orders
Final Orders are issued to direct operators to take specific corrective actions and/or to direct them to pay a civil penalty. If the operator waives its right to a hearing, the Office of Chief Counsel makes a recommendation to the PHMSA Associate Administrator for the appropriate administrative action, either a compliance order, a civil penalty or both. If a hearing has been conducted, the presiding attorney reviews the information provided at the hearing, as well as any supplemental information supplied by the operator subsequent to the hearing, and makes a recommendation to the PHMSA Associate Administrator for final administrative action.
The Associate Administrator reviews the information and issues a Final Order to the operator. The Final Order includes a statement of findings and determination as to whether each alleged violation has been proved. The Final Order may direct the operator to pay a civil penalty. In determining the amount of penalty to be assessed, the PHMSA Associate Administrator considers the following factors:
- nature, circumstances, and gravity of the violation;
- degree of operator culpability;
- operator’s history of prior offenses;
- operator’s ability to pay;
- any good faith effort by the operator in attempting to achieve compliance;
- the effect on the operator’s ability to stay in business; and
- other matters as justice may require.
The Pipeline Safety Improvement Act of 2002 also allows consideration of the economic benefit gained by the operator from the violation.
The Final Order may also direct the operator to take certain actions, and identifies the time frame in which they must be completed. PHMSA posts all Final Orders on its web site. After the operator has paid the civil penalty and the PHMSA Region Director has confirmed that any actions required in the Final Order have been satisfactorily completed, the case is closed.
Petition for Reconsideration
Although the vast majority of enforcement cases are concluded as described above, the regulations provide an opportunity for an operator to petition the PHMSA Associate Administrator to reconsider the findings specified in the Final Order. Such a petition must be received no later than 20 days after the Final Order is served. The petition must contain a brief statement of the complaint and an explanation as to why the actions specified in the Final Order should be changed. An operator may present additional information to support its petition, but must explain why that information was not presented during or after the hearing. Repetitious information or arguments already considered are not a legitimate reason to petition for reconsideration, and such petitions are not considered. By filing a petition for reconsideration, the civil penalty is stayed until a final decision on the Petition is made. However, the operator still must take any actions specified in the Final Order, unless the PHMSA Associate Administrator provides otherwise.
The Associate Administrator may grant or deny, in whole or in part, any petition for reconsideration without further proceedings. The Associate Administrator may also request additional information to assist in making a determination on the need to revise the conditions or civil penalty specified in the Final Order. The Associate Administrator renders a decision within 20 days of receiving the petition unless it is impractical to do so.
Criminal Penalties
The United States Code and the pipeline safety regulations also specify conditions under which criminal penalties may be taken. These are:
- If any person willfully and knowingly violates a pipeline safety requirement or the conditions of an Order, that individual, if convicted, is subject to a fine of not more than $25,000 for each offense, imprisonment for not more than five years, or both.
- If any person willfully violates a regulation or Order applicable to off-shore gathering lines, that individual, if convicted, is subject to a fine of not more than $25,000 for each offense, imprisonment for not more than five years, or both.
- If any person willfully and knowingly injures or destroys (or attempts to injure or destroy) any interstate pipeline facility, that individual, if convicted, is subject to a fine of not more than $25,000 for each offense, imprisonment for not more than 15 years, or both.
- If any person willfully and knowingly defaces, damages, removes, or destroys any pipeline sign, right-of-way marker, or marine buoy, that individual, if convicted, is subject to a fine of not more than $5000 for each offense, imprisonment not to exceed one year, or both.
- If an PHMSA employee becomes aware of any actual or possible activity subject to criminal penalties, the employee reports this information to the Pipeline and Hazardous Materials Safety Administration Chief Counsel for investigation. Upon completion of the investigation, the Chief Counsel may refer the case to the Department of Justice for criminal prosecution of the offender.
Nationwide and Operator-specific enforcement reports depicting PHMSA's enforcement activities are available. Also see the Inspection and Enforcement Process Flow Chart for a higher-level view of the enforcement process.