|
Alyeska sues federal safety regulator Operator of trans-Alaska oil pipeline argues PHMSA levied ‘excessive’ fine for alleged violations, requests $173,000 refund Wesley Loy For Petroleum News
The operator of the trans-Alaska oil pipeline is suing its federal regulator in a bid to defeat a $263,000 fine.
In a lawsuit now pending in Alaska’s federal court, Alyeska Pipeline Service Co. argues the fine is excessive and arbitrary.
The suit is against the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration.
The agency issued a final order against Alyeska on Jan. 13, 2010, alleging the company committed two violations of pipeline safety regulations.
First, Alyeska was too slow to obtain a vendor’s full report on a 2004 pig run on the 800-mile pipeline, PHMSA said. A pig is a device that travels through a pipeline to test for hazards such as corrosion.
Second, Alyeska failed to promptly repair a dent discovered during the summer of 2004 on top of a buried segment of pipe near mile 546. The dent, which had metal loss, wasn’t repaired until June 2005, the agency said.
Alyeska is an Anchorage-based consortium that runs the pipeline for owners BP, ConocoPhillips, ExxonMobil, Chevron and Koch Industries.
Alyeska’s arguments Originally, PHMSA imposed a civil penalty totaling $350,000. But after Alyeska contested the allegations and requested a hearing, which was held on Jan. 18, 2007, the agency trimmed the amount to $263,000.
Alyeska sued PHMSA on Aug. 3, 2010.
The suit contends the $173,000 penalty assessed for the pigging violation is “excessive in light of PHMSA’s past enforcement practice against Alyeska and other entities.”
Alyeska also complains that the agency didn’t issue its final order until almost three years after the hearing, thus violating a federal regulation requiring that such orders be issued “expeditiously.”
Alyeska further argues that PHMSA’s final order is “unsupported by substantial evidence.”
The suit asks the court to enjoin PHMSA from enforcing the order, and require the agency to return the $173,000 that Alyeska already has paid under protest.
In answer to the lawsuit, PHMSA argued the $263,000 civil penalty is “just, reasonable, and appropriate.”
| 