May 6, 2022|Regulatory

PHMSA Issues $1MM Proposed Civil Penalty to Colonial Pipeline

Written by Marybeth Luczak, Executive Editor

The Pipeline and Hazardous Materials Safety Administration (PHMSA) on May 5 issued a proposed civil penalty of $986,400 to Colonial Pipeline Company for “multiple probable violations of federal pipeline safety regulations stemming from an inspection of the company’s Control Room Management procedures.” A Notice of Probable Violation (NOPV) released to Colonial Pipeline “alleges that failures to adequately plan and prepare for a manual restart and shutdown operation contributed to the national impacts when the [Colonial] pipeline remained out of service after the May 2021 cyber-attack,” PHMSA reported.

Following the May 7, 2021 ransomware cyber-attack on the Colonial Pipeline system, the U.S. Department of Transportation, along with PHMSA, the Federal Railroad Administration and other government agencies, worked to help mitigate impacts.

PHMSA has now issued a NOPV and Proposed Compliance Order to Colonial Pipeline (download below). The agency reported that from January through November 2020 it conducted an inspection of the company’s procedures and records for Control Room Management in Linden, N.J.; Hebert, La.; Greensboro, N.C.; and Alpharetta, Ga. Preliminary determinations found that Colonial Pipeline “was in probable violation of several PSRs [federal pipeline safety regulations], including a probable failure to adequately plan and prepare for manual shutdown and restart of its pipeline system,” the agency said. “PHMSA informed Colonial Pipeline of the alleged non-compliance items shortly after the 2020 inspections concluded.”

32022026_Colonial_Pipeline_NOPV_PCP_PCO_05052022 Download

PHMSA has “longstanding and comprehensive guidance on its enforcement of PSRs as well as its civil penalties, which are calculated using a range of criteria and based on statutory limitations,” the agency explained. “Under the authorities granted by Congress, PHMSA may propose civil penalties; the recipient of which may contest, contest in part, or accept. A pipeline operator that receives a proposed civil penalty may also request and receive an informal hearing before a presiding official of the agency and prior to a proposed civil penalty being finalized.”

“The 2021 Colonial Pipeline incident reminds us all that meeting regulatory standards designed to mitigate risk to the public is an imperative,” PHMSA Deputy Administrator Tristan Brown said. “PHMSA holds companies accountable for violations and aims to prevent any instances of non-compliance.”

PHMSA provides a history of its enforcement actions online.