Pipeline penalty max to hit $200,000
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August 16, 2012
Pipeline penalty max to hit $200,000

In conformance with the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA) is proposing scores of administrative amendments to regulations at 49 CFR Parts 190, 192, 193, 195, and 199. The changes affect various aspects of enforcement, including maximum and minimum penalties, hearings, presiding officers at hearings, guidelines for communication between parties, and PHMSA’s authority to issue subpoenas. The PHMSA already performs many of the proposed amendments, and the intent of the proposal is to codify the changes. The proposed changes do not impose any new operating, maintenance, or other “substantive requirements” on pipeline owners or operators, states the PHMSA.

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Oil spill response plans

The main items in the action are proposed increases in the maximum civil penalties for violation of the pipeline safety laws and regulations from $100,000 to $200,000 per violation per day of violation and from $1 million to $2 million for a related series of violations.

The PHMSA has also proposed regulations to implement its new authority to enforce violations of oil spill response plans required by Section 4202 of the Oil Pollution Act. Among other things, the proposal lists the factors a PHMSA regional administrator must consider in determining the adequacy of response plans and also provides the operator 30 days to respond to a “notice of amendment,” which specifies the alleged inadequacies and the proposed action for revision of the plans or procedures. The right of the pipeline operator to request and be granted a hearing is also clarified. The proposed language indicates that the PHMSA regional administrator may withdraw the notice of amendment if the pipeline operator makes a convincing presentation at the hearing that the plan is adequate.

Enforcement hearings

Other proposed changes include:

  • Codification of the role, powers, and duties of the “presiding official” at an enforcement hearing. The term would be defined for the first time as an attorney on the staff of the Deputy Chief Counsel who is not engaged in investigative or prosecutorial functions.
  • Regulations to implement a separation of functions between agency employees involved with the investigation and prosecution of an enforcement case and those involved in deciding the case.
  • Language prohibiting ex parte communications relevant to the question to be decided in an enforcement case. An ex parte communication is one between a party to a pending case and the decision maker regarding an issue in that case occurring outside the presence of the other parties and without prior notice and opportunity for all parties to provide comment or rebuttal. The prohibition does not apply to routine administrative matters such as scheduling the hearing or clarification of the enforcement process.
  • Provisions ensuring that the PHMSA acts expeditiously in reviewing corrective action orders issued without prior notice. Respondents must request such reviews by answering the order in writing or by requesting a hearing. The PHMSA associate administrator must decide as soon as practicable following issuance of the order whether the order should remain in effect or be terminated. Once this determination is issued, the expedited review process is complete.
  • Clarification that the PHMSA has the authority to issue subpoenas for any reason to carry out its duties at any time, both during the investigative phase of an enforcement action and pursuant to a hearing.
  • Language to ensure that the owner or operator (O/O) of a pipeline facility must provide all records and information pertaining to an accident or incident to a representative of the Department of Transportation, including integrity management plans and test results. The O/O would also be required to provide all “reasonable assistance” in the investigation.

Other parts of the proposal apply to conducting informal hearings, the right to telephone conferences for civil penalty cases under $25,000, the right of a party to arrange for a transcript of the hearing, and a provision to ensure that parties have the opportunity to correct errors before filing a judicial appeal.

PHMSA’s proposed changes to pipeline safety administrative procedures were published in the August 13, 2012, FR.

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