# KIANTONE PIPELINE CORP — Notice of Probable Violation

**Citation:** CPF 12022050NOPV  
**Type / status:** enforcement / historical  
**Agency:** Pipeline and Hazardous Materials Safety Administration  
**Effective:** Not stated  
**Published:** 2022-10-06

CLOSED notice of probable violation citing 195.402(a), 195.52(a)(2), 195.54(a).

## Document text

Notice of Probable Violation involving KIANTONE PIPELINE CORP. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.52(a)(2),  195.54(a). The case was opened on 2022-10-06 and is reported as closed as of 2024-06-06. Proposed civil penalty: $675,402. Assessed civil penalty: $450,268. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

12022050NOPV_Decision on Petition for Reconsideration_06032024_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Decision%20on%20Petition%20for%20Reconsideration_06032024_(21-217159).pdf

12022050NOPV_Decision on Petition for Reconsideration_06032024_(21-217159)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Decision%20on%20Petition%20for%20Reconsideration_06032024_(21-217159)_text.pdf

12022050NOPV_Final Order_12262023_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Final%20Order_12262023_(21-217159).pdf

12022050NOPV_Final Order_12262023_(21-217159)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Final%20Order_12262023_(21-217159)_text.pdf

12022050NOPV_Operator Petition for Reconsideration_01162024_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20Petition%20for%20Reconsideration_01162024_(21-217159).pdf

12022050NOPV_Operator Post-hearing Brief_05222023_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20Post-hearing%20Brief_05222023_(21-217159).pdf

12022050NOPV_Operator Pre-Hearing Submisson_04102023_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20Pre-Hearing%20Submisson_04102023_(21-217159).pdf

12022050NOPV_Operator RtN and Request for Hearing_11212022_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20RtN%20and%20Request%20for%20Hearing_11212022_(21-217159).pdf

12022050NOPV_PCP_10062022_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PCP_10062022_(21-217159).pdf

12022050NOPV_PCP_10062022_(21-217159)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PCP_10062022_(21-217159)_text.pdf

12022050NOPV_PHC Hearing Scheduled_12142022_(21-217159).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PHC%20Hearing%20Scheduled_12142022_(21-217159).pdf

12022050NOPV_PHC Hearing Scheduled_12142022_(21-217159)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PHC%20Hearing%20Scheduled_12142022_(21-217159)_text.pdf

12022050NOPV_Decision on Petition for Reconsideration_06032024_(21-217159)_text.pdf

June 3, 2024
VIA ELECTRONIC MAIL TO: dwortman@urc.com
Mr. Dave Wortman
Vice President, Supply and Transportation
Kiantone Pipeline Corporation
15 Bradley Street, P.O. Box 780
Warren, PA 16365
Re: CPF No. 1-2022-050-NOPV
Dear Mr. Wortman:
Enclosed please find the Decision on the Petition for Reconsideration issued in the above-
referenced case. It denies your Petition for Reconsideration. Service of the Decision by certified
mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R.
§ 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA
Mr. John Wagner, Vice President, General Counsel and Corporate Secretary, Kiantone
Pipeline Corp., jwagner@urc.com
Mr. George C. Hopkins, Counsel for Kiantone Pipeline Corp., Vinson & Elkins, LLP,
ghopkins@velaw.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Kiantone Pipeline Corporation, ) CPF No. 1-2022-050-NOPV
)
)
)
Petitioner. )
____________________________________)
DECISION ON PETITION FOR RECONSIDERATION
In a December 26, 2023 Final Order, I found that Kiantone Pipeline Corporation (Kiantone or
Petitioner) had committed two violations of 49 C.F.R. Part 195 following an on-site pipeline
safety inspection by the Office of Pipeline Safety (OPS) of Petitioner’s facilities and records in
connection with investigating a release of crude oil at a facility operated by Kiantone in Warren,
Pennsylvania.1
In the Final Order, I assessed a civil penalty of $225,134 for Petitioner’s violation of 49 C.F.R.
§ 195.402(a) for failing to follow Operations, Maintenance, and Emergency (OM&E) Procedure
11.6.3 – Activities During Receipt of Crude Oil at Tank Farm (Item 1). I also assessed a civil
penalty of $225,134 for Petitioner’s violation of 49 C.F.R. § 195.402(a) for failing to follow its
OM&E Procedure Section 5.7.10 – Tank Farm Dike Drain Operations (Item 2). I withdrew one
allegation of violation (Item 3) after being persuaded by Kiantone’s argument that this allegation
was duplicative of Item 1.
2
On January 16, 2024, Kiantone submitted a Petition for Reconsideration (Petition) of the Final
Order.
3 Specifically, the Petition seeks reconsideration of Items 1 and 2 in the Final Order and
requests that these two findings of violation and the associated civil penalties be withdrawn.
4
Having considered the record and the arguments presented in the Petition, I am denying the
Petition and affirming the Final Order without modification.
1 Kiantone Pipeline Corporation, Final Order, CPF No. 1-2022-050-NOPV (Dec. 26, 2023) (Final Order).
2 OPS alleged a total of six violations including three warning items that required no further action, but warned
Kiantone to correct the alleged probable violations or face possible future enforcement action (Items 4, 5, and 6).
3 Petition for Reconsideration submitted by Mr. George C. Hopkins, Vinson & Elkins LLP, Counsel for Kiantone
Pipeline Corporation, to Mr. Alan K. Mayberry, Associate Administrator for Pipeline Safety, PHMSA, dated
January 16, 2024 (Petition).
4 Id.



Background
From July 8, 2021 through July 9, 2021, pursuant to 49 U.S.C. § 60117, representatives of OPS
conducted an on-site pipeline safety inspection of the facilities and records of Petitioner in
connection with investigating a release of crude oil in Warren, Pennsylvania. Kiantone manages
the 78-mile-long Kiantone Pipeline from West Seneca, New York to United Refining
Company’s facility in Warren, Pennsylvania including a tank farm for storage located on
Cobham Park Road in Warren, Pennsylvania (Cobham Tank Farm).5
On July 8, 2021, at approximately 12:20 a.m. Eastern Daylight Time (EDT), Kiantone Pipeline
experienced an overflow of Tank 652 at the Cobham Tank Farm. The overflow resulted in a
release of 2,672 barrels (bbl) of crude oil into secondary containment, which exited an open dike
drain valve and flowed downhill to a firewater retention pond. Following notification of the
incident to the National Response Center (NRC), OPS deployed accident investigation personnel
to the release site, along with the Pennsylvania Public Utility Commission.6
The material facts of the incident are not in dispute. A heavy storm caused a loss of power at the
Cobham Tank farm on July 7, 2021, at approximately 6:49 p.m. EDT. The power loss initiated
the uninterruptible power supply (UPS) to maintain communications with the facility’s control
center, but all other electrical equipment at the Cobham Tank Farm was inoperable, including
lights, pumps, and motor-operated valves. Kiantone’s UPS system, which powered the
communications at the facility, operated for about two hours before being depleted at
approximately 8:36 p.m. EDT. Commercial power was temporarily restored at approximately
9:22 p.m. EDT for 32 seconds. The restoration of power caused the remotely operated inlet
valves to Tanks 650, 651, and 652 to begin to open, but the valve operation ceased when power
was subsequently lost again. Tanks 650, 651, and 652 were all connected to the same manifold.
Tank 651 was in the process of receiving product at this time. Because Tank 652 now had a
partially opened inlet valve, Tank 652 also started to receive product. However, as the UPS was
depleted and thus the facility had no communications, Kiantone’s control center failed to detect
Tank 652’s valve operation. Therefore, the receiving of product by Tank 652 and its resulting
overflow was not detected by Kiantone until approximately 12:50 a.m. EDT on July 8, 2021.
The release was discovered when Kiantone’s pump house blender visually noticed oil coming
from the tank vents via illumination from his headlights as he drove within the facility after
being notified of a heavy smell of petroleum in the air by other personnel at the facility.7
As a result of the inspection and investigation, the Director, Eastern Region, OPS (Director),
issued to Petitioner, by letter dated October 6, 2022, a Notice of Probable Violation and
Proposed Civil Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed
finding that Kiantone had committed three violations of 49 C.F.R. Part 195 and proposed
5 Kiantone’s parent company, United Refining Company, is an independent refiner and marketer of petroleum
products in Pennsylvania and portions of New York and Ohio. United Refining Company website, Pipeline
Operations, available at https://www.urc.com/pipelines (last accessed Nov. 5, 2023).
6 Failure Investigation Report – Kiantone Pipeline Corporation – Incorrect Operation Aboveground Storage Tank
Overflow (Dec. 21, 2021), Executive Summary.
7 Recommendation, at 2-3.



assessing a total civil penalty of $675,402 for the alleged violations. The Notice also included an
additional three warning items pursuant to 49 C.F.R. § 190.205, which warned the operator to
correct these alleged probable violations or face possible future enforcement action.
Kiantone contested the allegations in the Notice and requested an informal hearing. A hearing
was subsequently held on April 20, 2023, in West Trenton, New Jersey, before a Presiding
Official from the Office of Chief Counsel, PHMSA. At the hearing, Petitioner was represented
by counsel. On December 26, 2023, I issued a Final Order in this case.
With respect to Item 1, I found that Petitioner violated 49 C.F.R. § 195.402(a) by failing to
follow OM&E Procedure 11.6.3 – Activities During Receipt of Crude Oil at Tank Farm and
assessed a civil penalty of $225,134. In assessing the civil penalty for this item, I applied the
statutory civil penalty assessment factors including the nature, circumstances, gravity, and
culpability of this violation.8 I noted that properly monitoring oil storage tank levels connected
to the same manifold during product delivery is a critical part of safe operations and must be
accomplished locally in the event of power or communications failures. Accordingly, I found
that the proposed civil penalty of $225,134 was supported by the record.
With respect to Item 2, I found that Petitioner violated 49 C.F.R. § 195.402(a) by failing to
follow its OM&E Procedure Section 5.7.10 – Tank Farm Dike Drain Operations and assessed a
civil penalty of $225,134. In assessing the civil penalty for this item, I applied the statutory civil
penalty assessment factors including the nature, circumstances, gravity, and culpability of this
violation. I noted that properly logging and monitoring a dike drain water discharge for oil after
a drain valve is opened is a critical part of safe operations. Accordingly, I found that a civil
penalty of $225,134 for the violation was supported by the record.
With respect to Item 3, I found that although Petitioner was required to identify and correct the
deficiencies that caused a prior abnormal operation event on June 30, 2021, involving a power
loss and had not done so by the time of the July 8, 2021 incident, its procedures did not specify a
time deadline to do so and it was not reasonable for OPS to expect that the process of identifying
and correcting the deficiencies that caused the June 30, 2021 incident to be resolved within this
time period. Accordingly, I withdrew this allegation.
On January 16, 2024, Kiantone submitted a petition requesting reconsideration of Items 1 and 2
in the Final Order.
Standard of Review
Under 49 C.F.R. § 190.243, Kiantone has the right to petition the Associate Administrator for
reconsideration of the Final Order. However, that right is not an appeal or an opportunity to seek
a de novo review of the record.9 It is a venue for presenting the Associate Administrator with
information that was not previously available or requesting that any errors in the Final Order be
corrected. Requests for consideration of additional facts or arguments must be supported by a
8 49 U.S.C. § 60122(b).
9 49 C.F.R. § 190.243(a)-(d).



statement of reasons as to why those facts or arguments were not presented prior to the issuance
of the Final Order. Repetitious information or arguments will not be considered.
Item 1
Throughout this proceeding, and again in its Petition, Kiantone argues that OPS’s allegation that
it failed to follow Product Receipt Procedure 11.6.3 was flawed because it was based on the
wrong OM&E procedure and as a result OPS was enforcing requirements that did not apply.10
While Item 1 in the Notice was based on an alleged failure to follow Product Receipt Procedure
11.6.3, Petitioner contended that during an unplanned communications failure such as the power
outage that occurred during the incident, its personnel were not required to follow the Product
Receipt Procedure. Petitioner continues to argue that instead, its Control Room Management
(CRM) Procedure 2.3.4 – Unplanned Communications Failure-Tank Farm (CRM 2.3.4) applied
to the exclusion of Product Receipt Procedure 11.6.3.11
In evaluating Kiantone’s argument, I noted in the Final Order that Product Receipt Procedure
11.6.3 includes a Table that defines a “Category 1” situation as occurring when power is lost,
communications are lost, or radar/laser on an active tank is lost. The plain meaning of the word
“or” in this procedure indicates that if any of those three conditions applied, that the hourly
reading and tank monitoring and facility attendance requirements of this procedure applied.
Thus, the existence of Category 1 in the Table of this procedure meant that Product Receipt
Procedure 11.6.3 encompassed either a loss of power scenario or a loss of communication
scenario such as occurred in this incident.
I found that OPS met its burden of establishing that the facility was in a “Category 1” situation
on the night of the incident and the tank monitoring and reading procedures set forth in the
Product Receipt Procedure 11.6.3 and its included table clearly applied. When the back-up
power failed at approximately 8:36 p.m. EDT, the facility was then without communications.
Thus, the tank monitoring and hourly readings and manning requirements described in 11.6.3
applied, to include the “Facility Category” table requirement in a “Category 1” situation. Under
the procedure, these readings may be taken remotely under 11.6.3 (when a facility has power and
the control center systems are working properly), or “locally” per the “current Facility Category”
listed in the table in 11.6.3. Per that table, during a “Category 1” situation, the facility must be
fully attended and the tanks at the facility must be monitored to ensure they do not show
unexpected loss or gain of inventory, and hourly tank readings must be taken. Based on the
manner in which Product Receipt Procedure 11.6.3 and the included table expressly apply to
either a loss of power scenario or a loss of communications scenario, Kiantone’s argument that
its procedures called for following CRM 2.3.4 to the exclusion of the Product Receipt Procedure
11.6.3 is flatly contradicted by the plain language of its written procedures.
10 Pre-hearing submission, at 2.
11 Under CRM 2.3.4, as it was written then, that procedure required that if the active tank lost power,
communications, or radar/ laser, that the facility must be fully attended, that the tank must be attended during first
and last hour of receipt, and that readings must be obtained from the tank gauge each hour during receipt.



Petitioner questioned whether I understood that both of these procedures used the same table and
continued to insist that CRM 2.3.4 operates to the exclusion of Product Receipt Procedure
11.6.3, arguing in its Petition that applying both procedures could be redundant.12 I continue to
find Kiantone’s argument unpersuasive. Section 11.6.3 as it existed at the time of the Accident
references CRM 2.3.4, and instructs that the pump house blender must “[f]ollow additional
manning requirements as listed in the table below for situations where the facility or tank may
change from Category 3 to a Category 1 or 2 (see Control Room Management procedures CRM
2.3.4, & CRM 2.3.5 for communications failures)”. Not only do the procedures omit any
instruction that Product Receipt Procedure 11.6.3 may be disregarded when communications are
lost, in fact, the procedures instruct the opposite, that “additional manning requirements” are to
be followed in situations where the facility or tank farm may change to a Category 1 situation.13
Petitioner stated that in its past practice, it had only applied CRM 2.3.4 during unplanned
communications failures and questioned whether I failed to consider a statement by a company
employee during the hearing to this effect.14 That is incorrect. In determining the
preponderance of the evidence, I weighed this statement against the evidence in its totality
including the plain black letter language of Petitioner’s written OM&E procedures. OM&E
procedures are put in writing for a reason. The procedures in effect at the time of the incident
must be followed by personnel in the field. Otherwise ad hoc practices that deviate from the
procedures could result in further risks to safety. An attempt to justify a failure to follow written
procedures by expressing someone’s opinion after the fact that the procedures mean something
other than what they actually say does not overcome the facts and the record in this case.
Petitioner went on to argue that although it deviated from CRM 2.3.4 in this instance, the
deviation occurred with respect to Tank 651 and had no impact on the release from Tank 652.15
However, OPS did not allege a failure to follow CRM 2.3.4 or that Product Receipt Procedure
11.6.3 applied exclusively. There is no suggestion that even if CRM 2.3.4 had been followed
with or without any deviation, it would have been impossible for Kiantone to follow Product
Receipt Procedure 11.6.3. Written procedures often interact with and contain internal references
to other procedures. It is not uncommon that more than one procedure may apply during an
incident and even if some of the same actions would be triggered, there is nothing unlawful
about OPS making the choice about which procedure it would cite to bring the allegation as long
as it meets its burden of proof with respect to cited procedure. Having fully reconsidered all
information in the record, I find that nothing in the Petition warrants any change in the findings
made in Item 1 of the Final Order.
Having considered Petitioner’s arguments, the preponderance of the evidence in this proceeding
supports the finding in the Final Order that Petitioner violated 49 C.F.R. § 195.402(a) by failing
to follow OM&E Procedure 11.6.3 – Activities During Receipt of Crude Oil at Tank Farm.
12 Petition, at 3.
13 Recommendation, at 7. It should also be noted that even if Petitioner had taken actions fully consistent with
CRM 2.3.4, doing so would not have made following Product Receipt Procedure 11.6.3 an impossibility.
14 Petition, at 4.
15 Petition, at 5.



Item 2
Throughout this proceeding, and again in its Petition, Kiantone argues that it met the
requirements of its procedures to periodically monitor the dike drain discharge for Tank 652
when the Pump House Operator drove through the facility at approximately 12:50 a.m. EDT.
Petitioner argues that the finding of violation in the Final Order for this item was erroneous
because it was based on an inference that when Petitioner’s Pump House Operator drove through
the facility and observed Tank 652 to be overflowing from the tank vents, the purpose of the
drive through the facility was not to investigate a heavy odor of petroleum that has been reported
and therefore satisfied the requirement for periodic monitoring of the dike drain discharge.
Specifically, the Petition stated:
The Final Order contends that “the pump house blender’s
drive through the facility occurred approximately 20 minutes
after a call to him from the personnel ‘sitting at 651 tank’
indicating there was a strong smell in the air” and that from
that point in time the Pump House Operator “[w]ent back to
the Farm around 12:50 AM to check on [ ] sitting at 651
tank.”48 In other words, the Final Order presumes that the
Pump House Operator was not at the Tank Farm to monitor
draining water, but rather to investigate the smell of odor, a
potential sign of release. This contention, however, is belied
by the signed witness statements.
In his witness statement, the Tank Gauger stated that at
“12:30AM” he “gauged 651 tank and called West Seneca.
Shortly after this the light flickered twice. I let Carl
Anderson and Ted know that this happened. I also let Ted
know there was a heavy smell.” The next time entry in the
statement is not until “1:30AM” because the entries are
mostly hourly.49 The Final Order appears to infer that all of
the events listed by the Tank Gauger for 12:30am occurred
at or around that time (as opposed to anywhere between
12:30am and 1:30am), including the gauging of Tank 651,
the call to West Seneca, the flickering of the lights, and the
communication of the smell of crude oil to the Pump House
Operator. But this disregards the clear sequencing of
multiple events over the span of an hour and the use of a
phrase like “[s]hortly after this” to indicate a lapse in time.
Furthermore, it conflates the forms of communication. The
Tank Gauger “called” the control room at West Seneca, 50
whereas he “let Ted know there was a heavy smell.”51 The
Final Order presumes the Tank Gauger “let” the Pump
House Operator know about the smell via phone call, but
other witness statements would contradict that inference. For



instance, the Pump House Operator’s witness statement
nowhere says that the Tank Gauger called him to alert him
to the smell of oil, particularly not between 12:30am and
12:50am. Rather, the witness statements from both the Pump
House Operator and the incoming Operations Shift
Supervisor show that they arrived at the Tank Farm at
approximately 12:50am. These statements show that it was
after their arrival when they had a brief conversation with
the Tank Gauger at Tank 651 regarding the smell of crude
oil.52 This finding thus rests on a single inference from one
of three statements and is not a firm basis to suggest that the
Pump House Operator’s return to the Tank Farm (or
subsequent monitoring of Tank 651 dike) was directly
prompted by a phone call from the Tank Gauger about the
smell of oil. That is a premise that is unsupported by a careful
consideration of the record. In other words, they did not
come to the Tank Farm because of the reported odor of oil,
but learned of it when they arrived as part of their
monitoring.16
Petitioner argued that the Final Order inaccurately inferred that the Tank Gauger reported the
heavy crude oil smell and that the statement prepared by its employee for the informal hearing
proved that the Pump House Operator’s drive through the facility at 12:50 a.m. EDT was not
done for the purpose of investigating the crude oil smell. Kiantone stated that the path of the
vehicle happened to result in the Pump House Operator’s observation of the crude oil overflow
from Tank 652 before he could reach the dike drain valve.17
While this employee statement appears to be somewhat at odds with the contemporaneous
evidence that a strong odor of petroleum had been reported and was being investigated, even
conceding that the purpose of the drive through the facility was for purposes other than
investigating the odor, the evidence in the record shows that Kiantone still failed to complete
documented periodic monitoring of the dike drain valve discharge. First, there is no dispute that
the dike drain valve was not logged open (nor later logged closed) as required under Kiantone’s
Dike Drain Procedure.18 The evidence shows those logs being updated days after the incident
(July 9, 2021) rather than when those actions were conducted as required by Kiantone’s
procedures.19 Second, while Kiantone may not have defined “periodically” in its procedures,
Petitioner never refuted the allegation that monitoring of the type required by the procedure (i.e.,
at the drain discharge) was not conducted at all. Petitioner’s argument is, at best, an attempt at
explaining why its employee did not perform the monitoring, even at 12:50 a.m. EDT.
16 Petition, at 8-9.
17 Petition, at 7.
18 See, e.g., Tr. at 96-104 and Kiantone Post-Hearing Brief, at 8.
19 Tr. at 109: 23-35; 110 1-10. See also Exhibit 21-217159 B-2 and Kiantone Exhibit No. 4 (labeled in Kiantone’s
Pre-Hearing Brief electronic exhibits as ((#24) 652 Dike Drain Log).



Petitioner’s argument that the required monitoring did not even need to begin until over three
hours had elapsed since the dike drain began discharging is also inconsistent with the purpose of
the monitoring required by the procedure which is to monitor the water discharge from the dike
drain for Tank 652 for oil. The purpose of monitoring a dike drain is to identify the escape of
crude oil into the containment area if and when it begins to take place. In other words, if the
operator doesn’t identify the escape of crude oil until it can be seen heavily flowing out of the
tank vents that happen to be visible from a passing vehicle’s headlamps at night, the operator is
not periodically monitoring the dike drain in an effective manner that has any possibility of
achieving the purpose of dike drain water monitoring down in the containment area. Kiantone’s
argument that its requirement to perform periodic monitoring of the water flowing from a dike
drain valve down in the containment area was met when a passing vehicle could see oil flowing
out of the tank vents lacks any merit even if it were true that the Pump House Operator was not
investigating the reported heavy crude oil smell as the purpose of his drive through the facility.
The failure to complete a written log of the valve opening/closure which would have been done
if the procedure were being followed is further evidence of this violation. Having fully
reconsidered all information in the record, I find that nothing in the Petition warrants any change
in the findings made in Item 2 of the Final Order.
Having considered Petitioner’s arguments, the preponderance of the evidence in this proceeding
supports the finding in the Final Order that Petitioner violated 49 C.F.R. § 195.402(a) by failing
to follow its OM&E Procedure Section 5.7.10 – Tank Farm Dike Drain Operations.
Assessment of Penalty
With respect to Item 1, Petitioner contends that rather than being assessed a civil penalty for
failure to follow OM&E Procedure 11.6.3 with respect to Tank 652, it should have been assessed
a de minimis penalty for failing to follow CRM 2.3.4 with respect to Tank 651.20 With respect
to Item 2, Petitioner contends that rather than being assessed a civil penalty for failure to follow
OM&E Procedure 5.7.10, it should receive a significantly reduced penalty for “a short delay in
filling out the logbook.”21 With respect to both items, Petitioner contends that the civil penalties
assessed in the Final Order were arbitrary and had misapplied the gravity factor because it had
engaged in cleanup and recovery efforts of the crude oil that was released and the Final Order
erred in considering any environmental impact in assessing the penalty.
With respect to Item 1, I have discussed at length above why Kiantone’s argument that rather
than being assessed a civil penalty for failure to follow OM&E Procedure 11.6.3 with respect to
Tank 652, it should have been assessed a de minimis penalty for failing to follow CRM 2.3.4
with respect to Tank 651 is unpersuasive. With respect to Item 2, I have also discussed above
why Petitioner’s failure to follow OM&E Procedure 5.7.10 is much more than a mere
recordkeeping violation.
20 Petition, at 2.
21 Petition, at 10.



With regard to whether the Final Order erred in considering any environmental impact in
assessing the penalty and misapplied the gravity factor because Kiantone had engaged in cleanup
and recovery efforts, I find Petitioner’s arguments unpersuasive. Under PHMSA’s statutory civil
penalty framework, the gravity of a violation, which includes its consequences, is required to be
considered by PHMSA. In assessing the civil penalties, the Final Order found that Kiantone’s
failure to follow OM&E Procedure 11.6.3 – Activities During Receipt of Crude Oil at Tank
Farm (Item 1) was a causal factor in the crude oil spill and the failure to periodically monitor the
dike drain discharge for Tank 652 on the night of the incident (Item 2) increased the severity
(i.e., the volume) of the spill.
With respect to Item 1, the civil penalty and the gravity factor in particular reflect the fact that
this accident was preventable. If Petitioner had followed the applicable procedure and not
allowed Tank 652 to receive the unplanned delivery of oil, the spill would not have occurred.
With respect to Item 2, the civil penalty and the gravity factor in particular reflect the fact that
the amount of oil spilled was more severe than it otherwise would have been. If Petitioner had
properly monitored the dike drain discharge for Tank 652, it would likely have detected and been
able to stop the overflow after a few hundred or even a few thousand gallons of oil had spilled.
Instead, approximately 112,000 gallons of oil were spilled. With respect to Petitioner’s
argument that the fact a spill occurred should have been irrelevant to the gravity factor because
the oil was cleaned up before it could spread beyond the firewater pond, the fact that Kiantone
had to clean up its own spill after it occurred is not a mitigating factor. Nothing in the history of
PHMSA’s civil penalty assessments requires that a spill must spread to further environmental
areas such as wildlife areas, or other property owners’ land before it can be considered as part of
the gravity factor. Moreover, there is nothing unlawful about PHMSA considering the sheer size
or volume of a given spill in assessing a civil penalty because even if oil-soaked soil is removed
and taken elsewhere, for example, some environmental impact is involved.
Having considered Petitioner’s arguments and the record in this case, I find that the civil penalty
assessments in this matter, in both the amounts and the factors to be considered in formulating
such, comply with the governing statute at 49 U.S.C. § 60122 and 49 C.F.R. § 190.223.
Accordingly, I find that nothing in the Petition warrants a reduction in the civil penalties assessed
in the Final Order for these violations.
Warning Items
The Final Order included three items, Items 4, 5 and 6, that were identified as warning items
pursuant to § 190.205. The warnings were for Petitioner’s alleged failure to follow its Abnormal
Operation Procedure 18.1.2 and associated form for reporting of abnormal operations;
Petitioner’s alleged failure to give notice of a September 15, 2018 tank fire to the National
Response Center; and Petitioner’s alleged failure to file an accident report on DOT Form 7000-1
after discovery of the September 15, 2018 tank fire.
In its response to the Notice and again in its Petition, Kiantone took issue with the OPS practice
of issuing warnings. Petitioner argued that the three warning items were unjustified because they
created the impression of non-compliance without the opportunity for any objection by the
pipeline operator.



The authority for OPS to issue warnings comes from 49 C.F.R. § 190.205 which states:
§ 190.205 Warnings.
Upon determining that a probable violation of 49
U.S.C. 60101 et seq., 33 U.S.C. 1321(j), or any regulation or
order issued thereunder has occurred, the Associate
Administrator or a Regional Director may issue a written
warning notifying the operator of the probable violation and
advising the operator to correct it or be subject to potential
enforcement action in the future. The operator may submit a
response to a warning, but is not required to. An adjudication
under this subpart to determine whether a violation occurred
is not conducted for warnings.
OPS has issued warnings to pipeline operators under this authority for decades. The Final Order
stated that if OPS finds a violation of any of these warning items in a subsequent inspection,
“Respondent may be subject to future enforcement action.” Thus, a warning item is not a finding
of violation, is not a prior offense, and involves no penalty. It is perplexing that Petitioner took
issue with these three items because if they were not mere warnings, the case may have ended up
involving three additional violations and associated civil penalties. To the extent Petitioner is
concerned that warnings allege noncompliance without any adjudication, it should be noted that
the phrase “Respondent may be subject to future enforcement action” does not mean that the
evidence of the past conduct referenced in the Notice will be the basis for another Notice.
Again, it is not a prior offense. The allegations in a future enforcement action, if any, would
have to be based on new evidence that the issue remained present after the Final Order is issued
and the operator would have a full opportunity to contest such allegations. In short, unless 49
C.F.R. § 190.205 is repealed, there is nothing stopping OPS from issuing warnings where
appropriate.
Due Process Arguments
Throughout this proceeding, Kiantone has contended that OPS continually deviated from the
legal theories initially proposed in the Notice, argued that OPS’ claims were entirely without
merit, and questioned whether it could receive fair treatment in an administrative agency
adjudication as opposed to a judicial proceeding.22 I disagree with these arguments. First, OPS
has held to the original allegations in the Notice. Nothing about the allegations in the Notice, or
the evidentiary basis put forward by OPS at the time the Notice was issued changed during the
course of this proceeding. The purpose of this proceeding was simply to apply the facts to the
enforceable requirements, nothing more, nothing less. Petitioner had ample opportunities to
present its arguments for all three items at every stage of this proceeding including: (1) in
response to the Notice; (2) during the hearing; (3) following the hearing; and (4) in its Petition.
Petitioner had a full and fair opportunity to present its arguments. While Items 1 and 2 were not
withdrawn as Item 3 was, the reason is that OPS met its burden of proving these two allegations,
not any lack of fairness in the process.
22 Post-hearing submission, at 15.



Petitioner is correct that the Part 190 administrative adjudication process, which has been in
place for decades, does not have all of the same procedures as a jury trial. However, the Part 190
administrative adjudication process is consistent with basic constitutional due process including
the right to notice of the proceeding, the right to appear and contest the evidence, the right to
counsel, and the opportunity for judicial review. With respect to Petitioner’s arguments
regarding the constitutionality of PHMSA’s governing statutes and underlying enforcement
regulations, the pipeline safety standards were mandated by Congress and do not arise from
common law predating the relevant statutes at 49 U.S.C. Chapter 601, nor are they predicated on
torts.23 Moreover, the Part 190 administrative process and the agency’s authority to assess civil
penalties for non-compliance was mandated by Congress and is codified at 49 U.S.C. 60122.
Notably, the U.S. Court of Appeals for the Sixth Circuit recently issued a decision on June 2,
2023, denying a pipeline operator’s petition for review of a PHMSA pipeline safety enforcement
civil penalty matter.24 In that case, the Court upheld PHMSA’s assessment of civil penalties in a
contested pipeline safety enforcement case, in which an administrative hearing was also held,
under the same procedural statutes and regulations which governed here.25
PHMSA takes its enforcement responsibilities very seriously and recognizes that its
administrative authority must be used judiciously and in a fair manner. At the same time, the
transportation of large volumes of flammable and toxic hazardous products by pipeline through
populated and environmentally sensitive areas has inherent risks and pipeline operators,
including large, sophisticated companies like Petitioner, are aware that they have chosen to
engage in a regulated industry that calls for prompt and efficient safety and compliance
proceedings.
RELIEF DENIED
Based on the information provided in the Petition, a review of the record, and for the reasons
stated above, I am affirming the Final Order without modification.
This Decision is the final administrative action in this proceeding.
June 3, 2024
_____________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
23 See Jarkesy v. Sec. & Exch. Comm'n, 34 F.4th 446, 453 (5th Cir. 2022) (citing Atlas Roofing Co. v. Occupational
Safety & Health Rev. Comm'n, 430 U.S. 442, 458 (1977)). See also American Power & Light Co. v. SEC, 329 U.S.
90 (1946).
24 See Wolverine Pipe Line Company v. DOT, PHMSA, Case No. 21-3405 (6th Cir., June 2, 2023); available online
at: https://www.govinfo.gov/content/pkg/USCOURTS-ca6-21-03405/pdf/USCOURTS-ca6-21-03405-0.pdf.
25 Id.

12022050NOPV_PHC Hearing Scheduled_12142022_(21-217159)_text.pdf

December 14, 2022
VIA ELECTRONIC MAIL TO: ghopkins@velaw.com and robert.burrough@dot.gov
Mr. George C. Hopkins, Esq.
Counsel for Kiantone Pipeline Corporation
Vinson & Elkins LLP
2200 Pennsylvania Avenue, NW, Suite 500
Washington, DC 20037
Mr. Robert Burrough
Director, Eastern Region
Pipeline and Hazardous Materials Safety Administration
820 Bear Tavern Road, Suite 300
West Trenton, NJ 08628
Re: Notice of Hearing, Kiantone Pipeline Corporation
CPF No. 1-2022-050-NOPV
Dear Mr. Hopkins and Mr. Burrough:
In accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of
Probable Violation and Proposed Civil Penalty issued by the Pipeline and Hazardous Materials
Safety Administration in the above-referenced case. The hearing will take place on April 20,
2023, beginning at 8:30 a.m. Eastern Time.
The hearing will be held at the PHMSA Eastern Region office, 820 Bear Tavern Road, Suite
103, West Trenton, NJ 08628. Upon arrival at the building, attendees will be required to present
photo identification to security personnel. A contact phone number for the day of the hearing is
(609) 989-2171.
At least 10 calendar days prior to the hearing (or by April 10, 2023), both parties must submit
and exchange any additional written materials they intend to present at the hearing and the name
and email address of each attendee. This information should be provided electronically.
Materials not submitted by this date may be excluded. If you have any questions, please do not
hesitate to contact me.
Sincerely,
Larry White
Presiding Official



cc: Mr. Dave Wortman, Vice President Supply and Transportation, Kiantone Pipeline
Corporation, dwortman@urc.com
Mr. Joseph St. Peter, Eastern Region Counsel, Office of Pipeline Safety, PHMSA,
joseph.st.peter@dot.gov

12022050NOPV_Final Order_12262023_(21-217159)_text.pdf

December 26, 2023
VIA ELECTRONIC MAIL TO: dwortman@urc.com
Mr. Dave Wortman
Vice President, Supply and Transportation
Kiantone Pipeline Corporation
15 Bradley Street, P.O. Box 780
Warren, PA 16365
Re: CPF No. 1-2022-050-NOPV
Dear Mr. Wortman:
Enclosed please find the Final Order issued in the above-referenced case. It withdraws one
allegation of violation, makes findings of violation, and assesses a civil penalty of $450,268.
The penalty payment terms are set forth in the Final Order. This enforcement action closes
automatically upon receipt of payment. Service of the Final Order by e-mail is effective upon
the date of transmission and acknowledgement of receipt as provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA
Mr. John Wagner, Vice President, General Counsel and Corporate Secretary, Kiantone
Pipeline Corp., jwagner@urc.com
Mr. George C. Hopkins, Counsel for Kiantone Pipeline Corp., Vinson & Elkins, LLP,
ghopkins@velaw.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Kiantone Pipeline Corporation, ) CPF No. 1-2022-050-NOPV
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
From July 8, 2021 through July 9, 2021, pursuant to 49 U.S.C. § 60117, representatives of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Kiantone
Pipeline Corporation (Kiantone or Respondent) in connection with investigating a release of
crude oil in Warren, Pennsylvania. Kiantone’s parent company, United Refining Company
(URC), is an independent refiner and marketer of petroleum products in Pennsylvania and
portions of New York and Ohio. Kiantone Pipeline Corporation manages the 78-mile-long
Kiantone Pipeline from West Seneca, New York to URC’s refinery in Warren, Pennsylvania
including a tank farm for storage located on Cobham Park Road in Warren, Pennsylvania
(Cobham Tank Farm).1
On July 8, 2021, at approximately 12:20 a.m. Eastern Daylight Time (EDT), Kiantone Pipeline
experienced an overflow of Tank 652 at the Cobham Tank Farm. The overflow resulted in a
release of 2,672 barrels (bbl) of crude oil into secondary containment, which exited an open dike
drain valve and flowed downhill to a firewater retention pond. Following notification of the
incident to the National Response Center (NRC), PHMSA deployed accident investigation
personnel to the release site, along with the Pennsylvania Public Utility Commission.2
As a result of the inspection and investigation, the Director, Eastern Region, OPS (Director),
issued to Respondent, by letter dated October 6, 2022, a Notice of Probable Violation and
Proposed Civil Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed
finding that Kiantone had committed three violations of 49 C.F.R. Part 195 and proposed
assessing a total civil penalty of $675,402 for the alleged violations. The Notice also included an
1 United Refining Company website, Pipeline Operations, available at https://www.urc.com/pipelines (last accessed
Nov. 5, 2023).
2 Failure Investigation Report – Kiantone Pipeline Corporation – Incorrect Operation Aboveground Storage Tank
Overflow (Dec. 21, 2021), Executive Summary.



additional three warning items pursuant to 49 C.F.R. § 190.205, which warned the operator to
correct these probable violations or face possible future enforcement action
Kiantone responded to the Notice by letter dated November 21, 2022 (Response), as
supplemented by material submitted on April 10, 2023 (Pre-hearing submission). Kiantone
contested the allegations and requested an informal hearing. A hearing was subsequently held on
April 20, 2023, in West Trenton, New Jersey, before a Presiding Official from the Office of
Chief Counsel, PHMSA. At the hearing, Respondent was represented by counsel. After the
hearing, Respondent provided additional written material for the record, by letter dated May 22,
2023 (Post-hearing submission) and the Director provided a recommendation on June 21, 2023
(Recommendation).
FINDINGS OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) General. Each operator shall prepare and follow for each pipeline
system a manual of written procedures for conducting normal operations
and maintenance activities and handling abnormal operations and
emergencies. This manual shall be reviewed at intervals not exceeding 15
months, but at least once each calendar year, and appropriate changes made
as necessary to insure that the manual is effective. This manual shall be
prepared before initial operations of a pipeline system commence, and
appropriate parts shall be kept at locations where operations and
maintenance activities are conducted.
The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow its
written procedure for operations, maintenance & emergencies (OM&E Procedure) 11.6.3 –
Activities During Receipt of Crude Oil at Tank Farm (Product Receipt Procedure). Specifically,
the Notice alleged that Kiantone did not verify that tanks not scheduled to receive product at the
Cobham Tank Farm did not show an unexpected loss or gain of inventory, nor did Kiantone
obtain level gauge readings from each tank within the active manifolded system according to its
procedures and as a result, when Tank 652 started receiving product due to a partially opened
inlet valve, it went undetected until the tank overflowed.
The material facts of the incident are not in dispute. A heavy storm caused a loss of power at the
Cobham Tank farm on July 7, 2021, at approximately 6:49 p.m. EDT. The power loss initiated
the uninterruptible power supply (UPS) to maintain communications with the facility’s control
center, but all other electrical equipment at the Cobham Tank Farm was inoperable, including
lights, pumps, and motor-operated valves. Kiantone’s UPS system, which powered the
communications at the facility, operated for nearly two hours before being depleted at
approximately 8:36 p.m. Commercial power was temporarily restored at approximately 9:22



p.m. for 32 seconds. The restoration of power caused the remotely operated inlet valves to
Tanks 650, 651, and 652 to begin to open, but the valve operation ceased when power was
subsequently lost again. Tanks 650, 651, and 652 were all connected to the same manifold.
Tank 651 was in the process of receiving product at this time. Because Tank 652 now had a
partially opened inlet valve, Tank 652 also started to receive product. However, as the UPS was
depleted and thus the facility had no communications, Kiantone’s control center failed to detect
Tank 652’s valve operation. Therefore, the receiving of product by Tank 652 and its resulting
overflow was not detected by Kiantone until at or around approximately either 12:50 or 12:55
a.m. on July 8, 2021. The release was discovered when Kiantone’s pump house blender visually
noticed oil coming from the vents of the tank via illumination from his headlights as he drove
within the facility and after being notified of a heavy smell of petroleum in the air by other
personnel at the facility.3
In its Response and at the hearing, Kiantone contested Item 1, arguing that OPS’s allegation was
flawed because it was based “on the wrong O&M procedure” and as a result OPS was enforcing
requirements that did not apply.
4 While Item 1 in the Notice was based on an alleged failure to
follow Product Receipt Procedure 11.6.3, Respondent contended that during an unplanned
communications failure such as the power outage that occurred during the incident, its personnel
were not required to follow the Product Receipt Procedure. Respondent argued that instead, its
Control Room Management (CRM) Procedure 2.3.4 – Unplanned Communications Failure-Tank
Farm (CRM 2.3.4) applied.5
Kiantone stated that:During the outage and unplanned communications
failure on July 8th, Kiantone followed the requirements of CRM 2.3.4 then
in effect. First, the facility was “fully attended” because Kiantone had as
many as four personnel present at the Tank Farm Facility at various times
while Tank 651 was receiving crude oil product: the Pump House Operator;
the incoming and outgoing Shift Supervisors; and the Maintenance Laborer,
who stayed on the premises all night and took readings of Tank 651 during
the operations to move product to Tank 651. To Kiantone’s knowledge at
the time, Tank 651 was the only active tank, and thus the only tank subject
to CRM 2.3.4’s requirement to take manual readings every hour. The chart
provided in Exhibit 6 shows the hourly tank level readings taken at Tank
651 during receipt, including the first and last hour. The record thus
demonstrates that Kiantone followed the applicable written procedure—i.e.,
CRM 2.3.4, not Procedure 11.6.3—and there is therefore no factual basis
for PHMSA’s alleged violation of 49C.F.R. § 195.402(a) for failure to
follow the relevant O&M procedure.6
3 Recommendation, at 2-3.
4 Pre-hearing submission, at 2.
5 Under CRM 2.3.4, as it was written then, that procedure required that if the active tank lost power,
communications, or radar/ laser, that the facility must be fully attended, that the tank must be attended during first
and last hour of receipt, and that readings must be obtained from the tank gauge each hour during receipt.
6 Pre-hearing submission, at 8.



As part of its argument that only CRM 2.3.4 applied, Kiantone also expressed the view that the
tasks in Product Receipt Procedure 11.6.3 that OPS maintained Kiantone should have performed,
such as monitoring tank product levels in all crude tanks hourly and verifying that tanks not
scheduled to receive product do not show an unexpected loss or gain of inventory, could only be
performed when the Control Center has normal communications.7
However, OPS emphasized that Product Receipt Procedure 11.6.3 includes a Table that defines a
“Category 1” situation as occurring when power is lost, communications are lost, or radar/laser
on an active tank is lost. The “or” in the procedure indicates that if any of those three conditions
applied, that the hourly reading and tank monitoring and facility attendance requirements
applied. Thus, the existence of Category 1 in the Table of this procedure meant that Product
Receipt Procedure 11.6.3 encompassed either a loss of power scenario or a loss of
communication scenario such as occurred in this incident. With regard to Respondent’s
argument that the CRM 2.3.4 Procedure applied to the exclusion of the Product Receipt
Procedure 11.6.3, OPS noted:
Section 11.6.3 as it existed at the time of the Accident references CRM
2.3.4, and instructs that the pump house blender must “[f]ollow additional
manning requirements as listed in the table below for situations where the
facility or tank may change from Category 3 to a Category 1 or 2 (see
Control Room Management procedures CRM 2.3.4, & CRM 2.3.5 for
communications failures)”. Nowhere does 11.6.3 say that it no longer
applies at a certain point or upon a facility moving to a “Category 1”
situation.8
In other words, a loss of power scenario or a loss of communications scenario are expressly
encompassed within the Product Receipt Procedure 11.6.3. In such a scenario, the Product
Receipt Procedure requires verification that tanks not scheduled to receive product do not show
unexpected loss or gain of inventory, and that hourly tank readings must be taken. Based on the
manner in which Product Receipt Procedure 11.6.3 and the included table apply to either a loss
of power scenario or a loss of communications scenario, Kiantone’s argument that its procedures
called for following CRM 2.3.4 to the exclusion of the Product Receipt Procedure 11.6.3 is
unpersuasive. In fact, the procedures instruct the opposite, that “additional manning
requirements as listed in the table below” are to be followed in situations where the facility or
tank farm may change to a Category 1 situation, in addition to also referring the reader to
procedures governing its control rooms at CRM 2.3.4 and 2.3.5 when communications are lost.9
Therefore, OPS met its burden of establishing that the facility was in a “Category 1” situation on
the night of the incident and the tank monitoring and reading procedures set forth in the Product
Receipt Procedure 11.6.3 and its included table clearly applied. When the back-up power failed
at approximately 8:36 p.m., the facility was then without communications. Thus, the tank
7 Post-hearing submission, at 4.
8 Recommendation, at 6-7.
9 Recommendation, at 7. It should also be noted that even if Respondent had taken actions fully consistent with
CRM 2.3.4, doing so would not have made following Product Receipt Procedure 11.6.3 an impossibility.



monitoring and hourly reading and manning requirements described in 11.6.3 applied, to include
the “Facility Category” table requirement in a “Category 1” situation. These readings may be
taken remotely under 11.6.3 (when a facility has power and the control center systems are
working properly), or “locally” per the “current Facility Category” listed in the table in 11.6.3.
Per that table, during a “Category 1” situation, the facility must be fully attended and the tanks at
the facility must be monitored to ensure they do not show unexpected loss or gain of inventory,
and hourly tank readings must be taken.
However, there is no dispute that no tank readings at all occurred until approximately 10:15 p.m.
at the earliest, according Kiantone. When the monitoring of tanks did begin sometime around
10:15 p.m., readings were only taken for Tank 651, and not for “all crude tanks” as required
under 11.6.3, nor to verify that “tanks not scheduled to receive product do not show an
unexpected loss or gain of inventory” as also required by the plain language of that procedure
despite Tanks 651 and 652 sharing a common manifold.
Finally, while there was some discussion at the hearing concerning the extent to which
Respondent’s actions were consistent with CRM 2.3.4 when the subject was raised by Kiantone
in its defense, OPS did not take a position on whether Respondent complied with CRM 2.3.4 or
ever allege that it failed to do so. Throughout this proceeding, OPS consistently maintained that
Kiantone failed to follow its Product Receipt Procedure 11.6.3 as alleged in the Notice.
Therefore, Respondent’s contention that OPS “continually moved further afield from the
violations and legal theories it initially alleged in the NOPV”10 or otherwise raised new claims
that were not alleged in the Notice is unfounded.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.402(a) by failing to follow OM&E Procedure 11.6.3 – Activities During Receipt of Crude
Oil at Tank Farm.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) General. Each operator shall prepare and follow for each pipeline
system a manual of written procedures for conducting normal operations
and maintenance activities and handling abnormal operations and
emergencies. This manual shall be reviewed at intervals not exceeding 15
months, but at least once each calendar year, and appropriate changes made
as necessary to insure that the manual is effective. This manual shall be
prepared before initial operations of a pipeline system commence, and
appropriate parts shall be kept at locations where operations and
maintenance activities are conducted.
The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow its
OM&E Procedure 5.7.10 – Tank Farm Dike Drain Operations (Dike Drain Procedure).
This procedure requires, in pertinent part, that Kiantone personnel:
10 Post-hearing submission, at 1, 15-16.



4. Logs the valve open in the dike drain log and periodically
monitors discharge. KPL/URC personnel must be present at the
Tank Farm Facility while any dike drain is manually open for
draining.
5. Returns valve to closed position when draining is complete and
documents in the dike drain log.
Specifically, the Notice alleged that Kiantone failed to have personnel present while the Tank
652 dike drain was manually opened for draining and required returning the valve to the closed
position when draining is complete.
In its Response and at the hearing, Kiantone contested Item 2. Respondent acknowledged that
neither the opening of the drain valve nor any monitoring was logged, but argued that: (1) the
observation of oil escaping from Tank 652 by the Pump House Operator on his drive through the
facility approximately three hours after the dike drain was opened constituted the periodic
monitoring required by the procedure; and (2) that a three hour interval was appropriate under
the circumstances.11
Specifically, Respondent contended that:
PHMSA’s entire claim is premised on reading a precise time limit into the
term “periodically” so that it incorporates a set frequency for monitoring.
PHMSA has offered no support either in the Kiantone manual itself or based
on a legal or programmatic position that “periodic” requires a specific time
period. The use of the term “periodically” means that Kiantone has the
flexibility to determine what frequency is appropriate under a particular set
of circumstances. Rather than pursuing a claim against Kiantone for having
failed to comply with its manual of written procedure, PHMSA is trying to
enforce a limitation that is not in Kiantone’s manual. Moreover, PHMSA
presented no evidence that the circumstances surrounding the amount of
rainfall the Tank Farm Facility received on July 7th and 8th warranted a
shorter timeframe for inspections.12
Respondent’s arguments, however, are unpersuasive. First, there is no dispute that the dike drain
valve was not logged open (nor later logged closed after the Accident) as required under
Kiantone’s Dike Drain Procedure.13 The evidence shows those logs being updated in days
following the Accident (July 9, 2021) rather than when those actions were conducted as required
by Kiantone’s procedures.14
11 Post-hearing submission, at 7.
12 Post-hearing submission, at 6.
13 See, e.g., Tr. at 96-104 and Kiantone Post-Hearing Brief, at 8.
14 Tr. at 109: 23-35; 110 1-10. See also Exhibit 21-217159 B-2 and Kiantone Exhibit No. 4 (labeled in Kiantone’s
Pre-Hearing Brief electronic exhibits as ((#24) 652 Dike Drain Log).



Kiantone’s argument that observing the oil spill via the illumination of vehicle headlights while
driving within the facility three hours after the drain was opened constituted an attempt to
periodically monitor the dike drain discharge for Tank 652, is not consistent with the evidence.
As OPS noted, the pump house blender’s drive through the facility occurred approximately 20
minutes after a call to him from the personnel “sitting at 651 tank” indicating there was a strong
smell in the air. He stated that he “[w]ent back to the Farm around 12:50 AM to check on [ ]
sitting at 651 tank. After a brief conversation I proceeded to check the rest of area. While
driving out of 651 dike I saw the that the vents on 652 were flowing oil.”15 In short, he does not
even assert that he was conducting the periodic monitoring of the water discharge from the dike
drain required by the procedure.
Respondent’s argument is also inconsistent with the purpose of the monitoring required by the
procedure which is to monitor the water discharge from the dike drain for Tank 652 for oil.
While Kiantone may not have defined “periodically” in its procedures, no showing was made
that monitoring of the type required by the procedure was conducted at all. Rather, the oil spill
was fortunately discovered via happenstance. OPS met its burden of showing that Kiantone’s
assertion that discovery of the ongoing oil spill via car headlights hitting Tank 652 constituted
“periodic” monitoring of the water flowing from a dike drain valve is not a method contemplated
by its procedures and lacks any merit.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.402(a) by failing to follow its OM&E Procedure Section 5.7.10 – Tank Farm Dike Drain
Operations.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) General. Each operator shall prepare and follow for each pipeline
system a manual of written procedures for conducting normal operations
and maintenance activities and handling abnormal operations and
emergencies. This manual shall be reviewed at intervals not exceeding 15
months, but at least once each calendar year, and appropriate changes made
as necessary to insure that the manual is effective. This manual shall be
prepared before initial operations of a pipeline system commence, and
appropriate parts shall be kept at locations where operations and
maintenance activities are conducted.
The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow its
OM&E Procedure section 18.1 - Abnormal Operations (AO Procedures). Specifically, the
Notice alleged that Kiantone failed to conduct a proper review of a prior abnormal operation on
15 During the hearing, Kiantone’s representative opined that the pump house blender was on his way to check the
“dike drain valve that’s marked there at 652”, but the pump house blender’s actual statement contains no such
assertion and there was no testimony given to suggest that the witness had personal knowledge of the pump house
blender’s motivations.



June 30, 2021 (eight days earlier) to determine and correct all the deficiencies in procedures,
safety equipment, and monitoring or control systems prior to the incident, resulting in recurrence
of the malfunction and the release of product. On June 30, 2021, the facility lost commercial
power, prompting the UPS to take over. Once the UPS was depleted about two hours later,
communications between the facility and the control center were lost. When power was fully
restored shortly thereafter, communications were reestablished with the tanks. At that point, the
valve for only Tank 651 was supposed to be open, but the control center observed that the inlet
valves for Tanks 650 and 652 had been inadvertently opened. At the same time, the high-level
alarm for Tank 651 was triggered—despite the fact that the high-level point had not been
reached—prompting the pipeline to shut down. The control center remotely closed the inlet
valve for Tank 652, but the valve for Tank 650 had to be manually closed. Respondent recorded
these abnormal operations and initiated the process of conducting a root cause analysis.16
In its Response and at the hearing, Kiantone contested Item 3. Respondent explained that only 8
days had elapsed since the June 30, 2021 incident and it was not reasonable for OPS to expect
that the process of identifying and correcting the deficiencies that caused the incident to be
resolved. Respondent’s applicable Procedure 18.1 for reviewing and resolving such an issue
states:
Once abnormal operations have ended, operators at the Pipeline Control
Center and/or the Pipeline Manager will monitor pipeline operations to be
sure the abnormal condition has been corrected and the pipeline is operating
safely.
The Pipeline Manager is responsible to review the actions of personnel who
responded to an abnormal operation to determine:
• Whether the response was timely and appropriate, to ensure protection
of persons and property.
• Whether employee actions followed company-approved procedures.
• Whether any deficiencies exist in Kiantone O&M procedures, safety
equipment, or pipeline monitoring and/or control systems.
Kiantone pointed out that neither OPS regulations nor its applicable procedure contained a time
requirement for completing these reviews and correcting any deficiency. Respondent pointed to
OPS’ own pre-hearing brief in which OPS stated, “eight days after a power loss, when the
Accident occurred, Kiantone was still not monitoring all tanks connected to the same manifold
during the Power Loss.” Kiantone argued this proved that in its Item 3 citation, OPS was really
just repackaging the allegation in Item 1. Kiantone argued that Item 3 should be struck as
duplicative of Item 1.17
For its part, OPS acknowledged that the requirement in Respondent’s procedure to identify and
16 Pre-hearing submission, at 12.
17 Post-hearing submission, at 10.



correct all deficiencies did not have a time requirement, but stated that Respondent had a general
obligation not to operate the facility until such operation could be done safely. During the
hearing, OPS acknowledged that Respondent had begun the process of analyzing the root cause
of the June 30, 2021 incident, but expressed its opinion that there were preventative and
mitigative measures that could have been identified and completed by Respondent during the
eight-day period.18
While OPS is correct that operators are obligated to operate its facilities safely at all times, in the
absence of an applicable regulation that has a deadline, OPS is seeking to enforce Respondent’s
existing procedures, but it did not call for the closure of the tanks. Moreover, I agree with
Respondent that identifying and correcting the root causes of the deficiency at the storage facility
in this case—for example procuring additional UPS equipment to increase the capacity during
power outages to be much longer than two hours—would reasonably take longer than eight days
to plan and complete. Therefore, the only actions that Respondent could reasonably be expected
to take in the eight-day period would have been effective monitoring to verify that the tanks
within the shared manifold system did not show an unexpected loss or gain of inventory. In this
particular case, however, these are precisely the actions or lack thereof for which Kiantone was
already cited in Item 1 of the Notice and found to be in violation of in Item 1 of this Order.
Therefore, Respondent is correct that due to the period between the incidents only being eight
days and it only being realistically possible that the same measures to ensure effective
monitoring as required by Item 1 could be accomplished in less than eight days, the alleged
failure to take such actions in Items 1 and 3 in the Notice are effectively duplicative.
19 However,
I emphasize that nothing in this Order should be construed to diminish the obligation of pipeline
operators to implement fully effective corrective actions as soon as they reasonably could be
accomplished following a failure or accident as required.
Accordingly, after considering all of the evidence, I find that under the particular circumstances
of this case, the conduct or lack thereof that constituted alleged noncompliance in Item 3 of the
Notice is materially the same conduct or lack thereof that was alleged to constitute
noncompliance in Item 1, such that in this case Item 3 is effectively duplicative of Item 1.
Based upon the foregoing, I hereby order that Item 3 be withdrawn.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
18 For example, OPS stated that Respondent could have closed off its tanks entirely.
19 This does not mean that steps to address the cause of an accident need not be taken immediately. If there had
been sufficient time for the operator to complete the analysis and complete the installation of new equipment, etc., or
if Item 1 did not exist to make it duplicative, this item would likely have been upheld.



ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.20
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue
doing business; the good faith of Respondent in attempting to comply with the pipeline safety
regulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.
In addition, I may consider the economic benefit gained from the violation without any reduction
because of subsequent damages, and such other matters as justice may require. The Notice
proposed a total civil penalty of $675,402 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $225,134 for Respondent’s violation of 49
C.F.R. § 195.402(a), for failing to follow its OM&E Procedure 11.6.3 – Activities During
Receipt of Crude Oil at Tank Farm.
Respondent argued that the proposed civil penalty amount in the Notice for Item 1 should be
reduced or eliminated. With respect to the nature and circumstances of this violation, properly
monitoring oil storage tank levels connected to the same manifold during product delivery is a
critical part of safe operations and must be accomplished locally in the event of power or
communications failures. With respect to the gravity of this violation, 2,672 bbl of crude oil
were in fact spilled from the tank requiring clean-up operations. With respect to culpability, the
proposed penalty amount in the Notice was at the low end of the range (two points) and did not
reflect any heightened level of egregiousness or deliberate decision not to comply. As to good
faith, while the storm itself was beyond Respondent’s control, it presented no circumstances
beyond its control that would have prevented it from accomplishing the required local
monitoring during the outage incident and Respondent was aware of the potential for power
failures to occur. Therefore, there is no justification for a good faith or other matters as justice
may require credit. I find that the record supports the civil penalty amount proposed in the
Notice. Respondent presented no information that would warrant a reduction in the civil penalty
proposed in the Notice for this item.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $225,134 for this violation of 49 C.F.R. § 195.402(a).
Item 2: The Notice proposed a civil penalty of $225,134 for Respondent’s violation of 49
C.F.R. § 195.402(a), for failing to follow its OM&E Procedure 5.7.10 – Tank Farm Dike Drain
Operations
Respondent argued that the proposed civil penalty amount in the Notice for Item 2 should be
reduced or eliminated. With respect to the nature and circumstances of this violation, properly
20 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.



logging and monitoring a dike drain water discharge for oil after a drain valve is opened is a
critical part of safe operations. With respect to the gravity of this violation, 2,672 bbl of crude
oil were in fact spilled from the tank requiring clean-up operations. With respect to culpability,
the proposed penalty amount in the Notice was at the low end of the range (two points) and did
not reflect any heightened level of egregiousness or deliberate decision not to comply. As to
good faith, while the storm itself was beyond Respondent’s control, it presented no
circumstances beyond its control that would have prevented it from properly logging and
monitoring the dike drain water discharge after the valve was opened. Therefore, there is no
justification for a good faith or other matters as justice may require credit. I find that the record
supports the civil penalty amount proposed in the Notice. Respondent presented no information
that would warrant a reduction in the civil penalty proposed in the Notice for this item.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $225,134 for this violation of 49 C.F.R. § 195.402(a).
Item 3: The Notice proposed a civil penalty of $225,134 for Respondent’s violation of 49
C.F.R. § 195.402(a), for failing to follow its OM&E Procedure section 18.1 - Abnormal
Operations. Since this alleged violation has been withdrawn, the proposed penalty is not
assessed.
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $450,268.
Payment of the civil penalty must be made within 20 days after receipt of this Final Order.
Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer
through the Federal Reserve Communications System (Fedwire), to the account of the U.S.
Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire
transfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation
Administration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,
Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the civil penalty will result in accrual of interest at the current annual rate in
accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those
same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment
is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result
in referral of the matter to the Attorney General for appropriate action in a district court of the
United States.
WARNING ITEMS
With respect to Items 4, 5 and 6, the Notice alleged probable violations of Part 195, but
identified them as warning items pursuant to § 190.205. The warnings were for:



49 C.F.R. § 195.402(a) (Item 4) ─ Respondent’s alleged failure to follow its
Abnormal Operation Procedure 18.1.2 and associated form for reporting of
abnormal operations;
49 C.F.R. § 195.52(a) (Item 5) ─ Respondent’s alleged failure to give notice of a
September 15, 2018 tank fire to the National Response Center; and
49 C.F.R. § 195.54(a) (Item 6) ─ Respondent’s alleged failure to file an accident
report on DOT Form 7000-1 after discovery of the September 15, 2018 tank fire.
Kiantone presented information in its Response showing that it had taken certain actions to
address the cited items. If OPS finds a violation of any of these items in a subsequent inspection,
Respondent may be subject to future enforcement action.
Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final
Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey
Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of
Chief Counsel, PHMSA, at the same address. The written petition must be received no later than
20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a
brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing
of a petition automatically stays the payment of any civil penalty assessed. The other terms of
the order, including any corrective action, remain in effect unless the Associate Administrator,
upon request, grants a stay. If Respondent submits payment of the civil penalty, the Final Order
becomes the final administrative decision and the right to petition for reconsideration is waived.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
December 26, 2023
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

## Provenance

- Official: Yes
- Source: <https://primis.phmsa.dot.gov/enforcement-data/case/12022050NOPV>
- Source ID: `phmsa-enforcement`
- SHA-256: `cfa5b0dc78b3e123c0186462717332f67cad0b1bd794eac0a9a7f20172757035`
- Retrieved: 2026-08-20T04:44:44.458Z
- Exported: 2026-08-25T01:04:19.416Z
- Document slug: `phmsa-enforcement-12022050nopv`

### Source metadata

```json
{
  "cpf": "12022050NOPV",
  "operator": "KIANTONE PIPELINE CORP",
  "region": "Eastern",
  "pipelineType": "INTERSTATE LIQUID",
  "caseStatus": "CLOSED",
  "citedSections": [
    "195.402(a)",
    "195.52(a)(2)",
    "195.54(a)"
  ],
  "dataAsOf": "08/04/2026 12PM",
  "caseDataAsOf": "2026-08-04",
  "attachmentCount": 12,
  "attachments": [
    {
      "name": "12022050NOPV_Decision on Petition for Reconsideration_06032024_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Decision%20on%20Petition%20for%20Reconsideration_06032024_(21-217159).pdf",
      "bytes": 265100,
      "category": "agency_document"
    },
    {
      "name": "12022050NOPV_Decision on Petition for Reconsideration_06032024_(21-217159)_text.pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Decision%20on%20Petition%20for%20Reconsideration_06032024_(21-217159)_text.pdf",
      "bytes": 207217,
      "category": "agency_document"
    },
    {
      "name": "12022050NOPV_Final Order_12262023_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Final%20Order_12262023_(21-217159).pdf",
      "bytes": 2633699,
      "category": "agency_document"
    },
    {
      "name": "12022050NOPV_Final Order_12262023_(21-217159)_text.pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Final%20Order_12262023_(21-217159)_text.pdf",
      "bytes": 254384,
      "category": "agency_document"
    },
    {
      "name": "12022050NOPV_Operator Petition for Reconsideration_01162024_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20Petition%20for%20Reconsideration_01162024_(21-217159).pdf",
      "bytes": 302399,
      "category": "party_submission"
    },
    {
      "name": "12022050NOPV_Operator Post-hearing Brief_05222023_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20Post-hearing%20Brief_05222023_(21-217159).pdf",
      "bytes": 166236,
      "category": "party_submission"
    },
    {
      "name": "12022050NOPV_Operator Pre-Hearing Submisson_04102023_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20Pre-Hearing%20Submisson_04102023_(21-217159).pdf",
      "bytes": 528411,
      "category": "case_document"
    },
    {
      "name": "12022050NOPV_Operator RtN and Request for Hearing_11212022_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_Operator%20RtN%20and%20Request%20for%20Hearing_11212022_(21-217159).pdf",
      "bytes": 160686,
      "category": "party_submission"
    },
    {
      "name": "12022050NOPV_PCP_10062022_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PCP_10062022_(21-217159).pdf",
      "bytes": 1994864,
      "category": "case_document"
    },
    {
      "name": "12022050NOPV_PCP_10062022_(21-217159)_text.pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PCP_10062022_(21-217159)_text.pdf",
      "bytes": 151165,
      "category": "case_document"
    },
    {
      "name": "12022050NOPV_PHC Hearing Scheduled_12142022_(21-217159).pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PHC%20Hearing%20Scheduled_12142022_(21-217159).pdf",
      "bytes": 197908,
      "category": "agency_document"
    },
    {
      "name": "12022050NOPV_PHC Hearing Scheduled_12142022_(21-217159)_text.pdf",
      "url": "https://primis.phmsa.dot.gov/enforcement-documents/12022050NOPV/12022050NOPV_PHC%20Hearing%20Scheduled_12142022_(21-217159)_text.pdf",
      "bytes": 8564,
      "category": "agency_document"
    }
  ],
  "extractedAgencyDocumentCount": 3,
  "attachmentPolicy": "Official attachment links are retained. Agency-issued documents may also include a verified local PDF and page-level text representation.",
  "jurisdiction": "US",
  "operatorName": "KIANTONE PIPELINE CORP"
}
```