KIANTONE PIPELINE CORP — Notice of Amendment

party submissionOfficial PDF120075003M_operator response_01022008.pdf#

120075003m_notice of amendment_12042007_text.pdf, page 1Official PDF409 3rd Street, SW, Suite 300 Weehrngton DC 20024 U S Department of Transportation Pipeline and Hazardous Materials SafetY Administration NOTICE OF AMENDMENT CERTIFIED MAIL - RETURN RECEIPT RE UESTED December 4, 2007 Mr Fred Martin Vice President, Supply and Transportation United Refimng Company Kiantone Pipehne Company 15 Bradley Street P 0 Box 780 Warren, PA 16365 CPF I-2007-5003M Dear Mr Martin On August 7-9, 2007, representatives of the Pipelme and Hazardous Matenals Safety Admimstration (PHMSA) and the State of New York as mterstate agent, pursuant to Chapter 601 of 49 United States Code inspected Ktantone's (KPL) procedures for mtegnty management in Buffalo, New York On the basis of the inspection, PHMSA has identified the apparent madequacies found witlun Ktantone'3 plans or procedures, as descnbed below 1. IM Plan Development in Framework Stage tt195. 452(b) What program and practices must operators use to manage pipeline integrity? (5) Implement and foBow the program;#

120075003m_notice of amendment_12042007_text.pdf, page 2t)195. 452(f) What are the elements of an integrity management program? An integrity manageinent program begins with the initial framework. An operator must continually change the program to reflect operating experience, conclusions drawn from results of the mtegrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. The Risk Analysis, Preventive & Mitigative Measures (including leak detection and EFRD evaluations), Contmual Evaluation and Assessment, and Program Evaluation porhons of the KPL IMP remain in the imtial framework/implementation phase In addition, portions of the KPL IMP were written at a descriptive level versus a working level For example, Ktantone's IMP Section 3 8 states "There will be a review of the msk analysis and threat identification for all hazardous hquid pipelines operated by Ktantone unde~ CFR part /95 annually KPL and (URC) (Unt ted Refinery Company' personnel will)ointly conduct the yearly review The review will include any assessment data gathered in the previous year, as well as any changes to the pipehne system, or the environment surrounding it " This statement provides no specific direction for performance and documentation of the annual review to assure consistent and quahty unplementation of this activity PHMSA encourages KPL to provide or reference additional working level detail in the IMP ILI Tool Tolerances/Uncertainty f195. 452 (f) An operator must include, at minimum, each of the following elements in its written integrity management program: (8) A process for review of integrity assessment results and information analysis by a person qualified to evaluate the results and mformatton (see paragraph (h)(2) of this section). t)195. 452 (h) (2) Discovery of a condition. Discovery of a condition occurs when an operator has adequate information about the condition to determine that the condition presents a potential threat to the integrity of the pipeline. An operator must promptly, but no later than 180 days after an integrity assessment, obtain sufficient information about a condition to make that determination, unless the operator can demonstrate that the 180-day period is impracticable. KPL does not directly apply tool uncertainty to ILI results when comparing to IM rule part H repair requirements durmg the discovery phase o f assessment review As indicated m FAQ 7 19, PHMSA does not specify a particular approach to tool uncertamty, but expects reasonable consideration of tool capabilities when comparing results to rule criteria KPL initially indicated that the vendor report already mcorporates tool tolerance, so there is no need to ad)ust In response to inspection team follow up to tins statement, KPL could not find a basis for this statement in the vendor report, which only contiuned the vendor tool performance criteria (provided to the mspection team)#

120075003m_notice of amendment_12042007_text.pdf, page 3Further follow up indicated that the ILI vendor anomaly reporting is as-called by the tool and does not include tool tolerance consideration At the time of inspection, KPL did not include tool tolerance when evaluating ILI assessment data Weighting of Risk Factors jj195. 452(f) An operator must include, at minimum, each of the followmg elements m its written integrity management program: (3) An analysis that integrates all available information about the integrity of the enure pipeline and the consequences of a failure (see paragraph (g) of this section); 5452(g) 8'hat is an information analysis? In periodically evaluating the integrity of each pipeline segment (paragraph (j) of this sechon), an operator must analyze all available information about the mtegrity of the entire pipeline and the consequences of a failure. This information includes. . . (4) Informahon about how a fadure would affect the high consequence area, such as location of the water mtake; jj195. 450 High consequence area means: (1) A commercially navigable waterway. . . (2) A high population area. . . (3) An other populated area . . (4) An unusually sensitive area. . . j Although risk analysis results were not yet final at the time of inspection, KPL mdicated that estimated nsk of fnlure (ROF) values will include sigruficant contribution from "Impact on Business" consequence factors Tlus is problematic when evaluating the risk to rule-defined high consequence areas The apphcation of Impact on Busmess consequence factors that result in sigmficant "nsk" estimations is problematic when evaluahng the risk to rule-defined lugh consequence areas As indicated in FAQ 8 18 "If consequences considered in the nsk analysis are expanded to include consequences related to operator business performance, then the operator must provide assurance that this approach does not skew decisions away from protection of HCAs For example, consideration of operator business performance consequences should not result in pipehne segments " with high nsk to HCAs bemg given lower priority for tntegnty assessments than segments with low risks to HCAs but higher business consequences Classification of Anomahes tj195. 452(h) What actions must an operator take to address integrity issues? The KPL process to classify anomalies and identify if in HCA-affecting pipehne segments was not adequately defined and documented in the IMP During the inspection, several anomahes from a 2006 ILI assessment were initially identified to the inspection team as "180-day conditions " Upon further investigation by the inspection team, these were determined to be m non HCA-affecting segments and#

120075003m_notice of amendment_12042007_text.pdf, page 4would have been "60-day" conditions (dent with metal loss on bottom of pipe) if they had been in HCA-affecting portions of the pipehne IMP Section 4 03, Company Compliance (3 05 4), stated "- Anomalies are identifie with an integmty assessment (The integmty assessment of the Kiantone Pipeline will be accomplished by running instrument internal inspection tools on a fiv-year mterval) The data will be reviewed by URC Inspection and Engineenng Department personnel along with Kiantone management as soon as possible upon receiptPom the vendor Vendors are required to submit reports to KPL not later than 180 days from the pig run Anomahes will be pnontized per Appendix A as immediate, 60-day, 180-day, or other with the repair response to fall within given specifics " IMP Section 4 4, Discovery of a Condition, stated "Discovery of a condition occurs when Kiantone has adequate mformation about the condition to determine that the condition presents a potential threat to the integnty of the pipehne Kiantone will promptly, but no later than 180 days after an integmty assessment, obtain sufficient mformation about a condition to make that determination, unless Kiantone can demonstrate that the 180-day penod is impracticable This determmation will be made by the KPL manager or appropnate designee (e g URC Inspection Dept, URC Engineemng Dept, etc)" Res onse to this Notice This Notice is provided pursuant to 49 U S C $ 60108(a) and 49 C F R ) 190 237 Enclosed as part of tlus Notice is a document entitled Response Options for Pipehne Operators in Comphance Proceedmgs Please refer to ttus document and note the response options Be advised that all material you submit in response to this enforcement action is sublect to being made pubhcly available If you beheve that any portion of your responsive material quahfies for confidentia treannent under 5 U S C 552(b), along with the complete original document you must provide a second copy of the document with the portions you beheve quahfy for confidentia treatment redacted and an explanation of why you beheve the redacted information qualifies for confidential treatment under 5 U S C 552(b) If you do not respond within 30 days of receipt of this Notice, this constitutes a wiuver of your nght to contest the allegations in this Notice and authonzes the Associate Admimstrator for Pipehne Safety to find facts as alleged in tlus Notice without further notice to you and to issue a Fmal Order#

120075003m_notice of amendment_12042007_text.pdf, page 5If, afier opportunity for a heanng, your plans or procedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C F R $ 190 237) If you are not contesting this Notice, we propose that you submit your amended procedures to my office within one hundred twenty (120) days of receipt of this Notice This penod may be extended by wntten request for good cause Once the madequacies identified herein have been addressed in your amended procedures, this enforcement action will be closed In correspondence concermng this matter, please refer to CPF I-2007-5003M and, for each document you submit, please provide a copy in electronic format whenever possible Sincerely, Byron E Coy, PE Director, Eastern Region Pipehne and Hazardous Matenals Safety Admimstration Enclosure Response Options for Pipelme Operators in Compliance Proceedings#