Processing Magazine

Fines for pipeline safety violations hit record high in 2013

April 16, 2014
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The total value of civil penalties imposed on U.S. pipeline operators for alleged safety violations broke all records in 2013, reaching the unprecedented sum of $9.78 million, the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) has announced. However, the number of serious pipeline incidents that resulted in major injuries or fatalities has been going steadily down, a PHMSA statement also revealed.

Since 2009 civil penalties totaling more than $33 million have been proposed by the regulator. In 2013 there were 22 cases resolved, with the collective penalties proposed for them adding up to just over $1.5 million. Of these, about 85 percent, or $1.3 million, has already been collected. A further 41 cases from last year are still pending. Analysts noted that the 85 percent of cases resolved last year was below the average in recent years. For example, in 2011 and 2012 rates stood at 95 percent and 92 percent, respectively. Still, last year's rate was higher than the average in the period 2004-2010.

The largest civil penalty proposed last year was the $2.66 million fine against Exxon Mobil Pipeline Co. for safety breaches that led to the rupture of the Pegasus pipeline and a major oil spill in Arkansas in March 2013. Investigation by the PHMSA suggested that the company had violated federal regulations related to pipeline integrity requirements in densely populated areas.