On April 7, 2014, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) announced the agency proposed an all-time high of more than $9.7 million in civil penalties in 2013 to pipeline operators for violations of safety regulations.  PHMSA’s summary of cases involving civil penalties indicated that of the 266 initiated enforcement matters in 2013, 63 advanced to the civil penalty stage and accounted for the record amount of penalties.

Since 2009, PHMSA has increased its enforcement activities, issuing 544 enforcement orders and proposing $33 million in civil penalties.  PHMSA noted that its tougher enforcement approach is a result of internal improvements to pipeline inspection and tracking, and improved enforcement efficiency.  In addition to internal improvements, in September 2013, PHMSA implemented regulations stemming from the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, which doubled the PHMSA’s maximum civil penalty authority from $100,000 to $200,000 for each violation, and from $1,000,000 to $2,000,000 for related series of violations (see September 30, 2013 edition of the WER).

While PHMSA noted that it has increased enforcement activities, it also highlighted that serious pipeline incidents have decreased.  Specifically, PHMSA reported a 45 percent decrease in incidents that resulted in worker fatalities or serious injury since 2009.

In response to the record amount of proposed penalties, U.S. Department of Transportation Secretary Anthony Foxx said, “The proposed fines send the powerful message that we are holding non-compliant pipeline operators accountable for their actions and will be using our higher civil penalty authority to the max whenever necessary.”

A copy of the announcement is available here.