96494625/Adobe Stock
Adobe Stock 96494665

PHMSA proposes nearly $1M in penalties for Colonial Pipeline violations

May 26, 2022
Safety administration says company’s ‘failure to adequately plan and prepare for manual shutdown and restart of its pipeline system’ worsened the impact of 2021 cyberattack

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has proposed fining the Colonial Pipeline Company nearly $1 million for “multiple probable violations” of federal pipeline safety regulations (PSRs) that worsened the impact of the May 2021 cyberattack on its system.

The proposed civil penalties of $986,400 were included in PHMSA’s recently issued Notice of Probable Violation (NOPV) and Proposed Compliance Order.

The agency conducted an inspection of Colonial’s procedures and records for Control Room Management (CRM) in Linden, N.J., Hebert, La., Greensboro, N.C., and Alpharetta, Ga., between January and November 2020, and determined the company was in probable violation of several PSRs, including a “failure to adequately plan and prepare for manual shutdown and restart of its pipeline system.”

PHMSA informed Colonial of the alleged non-compliance items shortly after the 2020 inspections concluded, the agency said. The NOPV alleges failures to adequately plan and prepare for a manual restart and shutdown operation contributed to the national impacts when the pipeline remained out of service after the attack.

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

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. 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, PHMSA added.

The agency publishes its entire history of enforcement actions online for public consumption.