PHMSA Penalties Effect on Pipeline Incidents

In April of 2014, PHMSA released a statement summarizing the impact of strict enforcement on pipeline safety compliance for 2013. PHMSA proposed more than $9.7 million in civil penalties against pipeline operators who violated safety regulations the highest yearly amount since the inception of the agency. From these proposed civil penalties, PHMSA initiated 266 enforcement cases in the areas of:

• integrity management programs
• risk assessments
• failure prevention programs
• mitigation programs
• other regulatory violations identified during failure investigations and routine inspections

PHMSA has chosen to pursue a reduction of safety violations through tougher enforcement. Tougher enforcements have led to a traceable and proven reduction in pipeline incidents and thereby an increase in pipeline safety. Since 2009, PHMSA has proposed more than $33 million in civil penalties against pipeline operators and reported a 45% reduction in serious pipeline incidents. Serious pipeline incidents, by PHMSA definition, are “those resulting in fatalities or major injuries”.

With such impressive results, PHMSA will continue on the path of tougher enforcement. As recently as September 2013, PHMSA adopted new maximum penalties for pipeline operators in violation of safety regulations. The new maximum penalties are a result of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, which doubles the maximum civil penalty amount PHMSA could impose. Now, pipeline operators can be fined up to $200,000 for each violation and $2,000,000 for a related series of violations.