{"operation":"document","citation":"CPF 120115011","title":"NUSTAR TERMINALS OPERATIONS PARTNERSHIP L. P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-11-28","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.404(b)(1), 195.404(c)(3), 195.573(a)(1).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120115011.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120115011.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120115011","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120115011","body":"Notice of Probable Violation involving NUSTAR TERMINALS OPERATIONS PARTNERSHIP L. P.. PHMSA's enforcement data identifies the cited regulations as 195.404(b)(1),  195.404(c)(3),  195.573(a)(1). The case was opened on 2011-11-28 and is reported as closed as of 2013-01-08. Proposed civil penalty: $85,600. Assessed civil penalty: $85,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120115011_ NOPV-PCP_11282011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115011/120115011_%20NOPV-PCP_11282011.pdf\n\n120115011_ NOPV-PCP_11282011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115011/120115011_%20NOPV-PCP_11282011_text.pdf\n\n120115011_Final Order_12182012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115011/120115011_Final%20Order_12182012.pdf\n\n120115011_Final Order_12182012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115011/120115011_Final%20Order_12182012_text.pdf\n\n120115011_Operator Response to Notice_12292011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115011/120115011_Operator%20Response%20to%20Notice_12292011.pdf\n\n120115011_Final Order_12182012_text.pdf\n\nDECEMBER 18, 2012\nMr. Curtis V. Anastasio\nChief Executive Officer, President and Director\nNuStar Energy, LP\n2330 N. Loop 1604 West\nSan Antonio, TX 78248\nRe: CPF No. 1-2011-5011\nDear Mr. Anastasio:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $85,600. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Byron Coy, Director, Eastern Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Michael F. Pesch, Vice President, NuStar Terminals Operations Partnership, LP –\nP.O. Box 781609, San Antonio, Texas, 78278\nMr. J. R. Bluntzer, Executive Vice President of Operations, NuStar Terminals Operations\nPartnership, LP\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nNuStar Terminals Operations )\nPartnership, LP, ) CPF No. 1-2011-5011\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nBetween April 19 and 23, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of NuStar Pipeline\nOperating Partnership, LP (NuStar or Respondent), in Linden, New Jersey. NuStar is a\nsubsidiary of NuStar Energy, LP, which owns and operates 5,605 miles of refined product\npipelines, 2,000 miles of anhydrous ammonia pipelines, and 812 miles of crude oil pipelines\nthroughout the United States.\n1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated November 28, 2011, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with\n49 C.F.R. § 190.207, the Notice proposed finding that NuStar had committed various violations\nof 49 C.F.R. Part 195 and proposed assessing a civil penalty of $85,600 for the alleged\nviolations. The warning item required no further action but warned the operator to correct the\nprobable violation or face future potential enforcement action.\nNuStar responded to the Notice by letter dated December 30, 2011 (Response). The company\ncontested some of the allegations of violation, provided an explanation of its actions, and\nrequested that the proposed civil penalty be reduced. Respondent did not request a hearing and\ntherefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195 as follows:\n1 http://www nustarenergy.com/COMPANY/Pages/default.aspx (last accessed March 8, 2012).\n\n\n\n2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(b)(1), which states:\n§ 195.404 Maps and records.\n(a) ….\n(b) Each operator shall maintain for at least 3 years daily operating\nrecords that indicate--\n(1) The discharge pressure at each pump station.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(b)(1) by failing to properly\nmaintain for at least three years daily operating records indicating the discharge pressure for each\npump station. Specifically, the Notice alleged that NuStar’s Pipeline Certificate forms had\nincomplete or missing discharge pressure readings for the company’s Linden Terminal Station\nfrom August 8, 2008, through March 10, 2010, a period of approximately 579 days.2\nIn response, NuStar acknowledged that certain Pipeline Certificate forms had missing or\nincomplete data during the period in question.3 Respondent explained that the forms required\nmanifold pressures to be recorded on an hourly basis during intra-terminal transfers but that\nPHMSA’s audit had revealed “this process was not always followed.”\nNuStar explained that, historically, the Linden Terminal Station had not been considered a\n“pipeline facility” but, rather, a marine terminal facility with intra-terminal piping. 4 The\ncompany noted that prior to its acquisition of the facility, the previous owner/operator had never\nconsidered the intra-terminal “Marine to Inland” pipelines as being subject to the pipeline safety\nregulations. Respondent stated that it had recognized the potential applicability of PHMSA\nregulations to the terminal and had employed internal and external regulatory expertise to assess\nthe situation. Respondent further noted that during a PHMSA construction inspection of one of\nthese lines (i.e., the Buckeye Transfer pipeline) in 2008, NuStar had inquired about the\napplicability of 49 C.F.R. Part 195 to the intra-terminal pipelines but could not get a definitive\nanswer from the PHMSA inspector. Nevertheless, NuStar contended that in 2009 it made a\nunilateral decision to operate and maintain all intra-terminal transfer lines at the terminal in\naccordance with federal pipeline safety laws and regulations.\nNuStar also contended that several of the lines at the facility were not subject to the requirements\nof § 195.404(b)(1). First, it stated there were no discharge records for the Buckeye Transfer\npipeline because that line utilized a SCADA system which recorded pump discharge pressures\non a continuous basis and that such records had been provided to the PHMSA auditors, with no\nconcerns noted. Second, Respondent contended that its “LlN-STA-10” pipeline had not been\nused in hazardous liquid service for over 15 years and that it was physically disconnected from\nthe hazardous liquid system; therefore, there were no pump discharge records to be maintained.\n5\n2 Pipeline Safety Violation Report, (November 28, 2011) (Violation Report) at 3, and Exhibit A-1.\n3 Specifically, NuStar acknowledged that the forms for the Marine to Inland lines did not always reflect manifold\npressures on an hourly basis during intra-terminal transfers. Response at 2.\n4 Response at 1.\n5 Response at 2.\n\n\n\n3\nAs for Respondent’s contention that the LlN-STA-10 line had been idle for years, I agree this\nallegation of violation does not apply to inactive lines since they obviously do not have discharge\npressure records. As for the contention that the Buckeye Transfer line utilizes a SCADA system\nthat records discharge pressures on a continuous basis, PHMSA never intended for these records\nto be included in the Notice.\nIn summary, NuStar has conceded that some of the company’s discharge pressure records\nbetween 2008 and 2010 had missing and incomplete data. Accordingly, based upon a review of\nall of the evidence, I find that Respondent violated 49 C.F.R. § 195.404(b)(1) by failing to\nmaintain for at least three years daily operating records indicating the discharge pressure of each\npump station at its Linden Terminal Station.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), which states:\n§ 195.404 Maps and records.\n(a) ….\n(c) Each operator shall maintain the following records for the periods\nspecified:\n(1) ….\n(3) A record of each inspection and test required by this subpart shall\nbe maintained for at least 2 years or until the next inspection or test is\nperformed, whichever is longer.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain 51\nright-of-way (ROW) inspection records for at least two years or until the next inspection or test\nis performed, whichever is longer. Specifically, the Notice alleged that a single ROW inspection\nrecord, dated November 10, 2009, was the only record provided to PHMSA for the period\nextending from the second quarter of calendar year (CY) 2008 through the second quarter of CY\n2010. The Notice alleged that a NuStar employee had confirmed that a single\nNovember 10, 2009 ROW inspection record was the only documentation pertaining to the period\nin question.6\nIn its Response, NuStar acknowledged that it did not have proper ROW inspection records for\n46, as opposed to 51, inspections.7 The company stated that on November 10, 2009, NuStar\nbegan documenting ROW inspections on a bi-weekly basis in its Linden Right of Way\nInspection Report (Linden Reports).8 NuStar also contended that the PHMSA auditor was\nprovided with the Linden Reports for the period running from November 10, 2009, through the\ntime of the audit. The company contended that it did provide four ROW inspection records for\ninspections performed from November 10, 2009, to December 21, 2009.\n6 Violation Report at 8.\n7 Response at 3.\n8 Response at Exhibit C.\n\n\n\n4\nA review of the evidence shows that Respondent did provide four ROW inspection records for\nNovember 10, 2009, November 24, 2009, and December 2009, but that still does not account for\nthe vast bulk of the missing records. I find that the difference between the 51 ROW inspection\nrecords cited in the Notice and the 46 acknowledged by the Respondent is immaterial to the\nquestion of whether a violation occurred. Accordingly, based upon a review of all of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain right-\nof-way inspection records for at least two years.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), which states:\n§ 195.404 Maps and records.\n(a) ….\n(c) Each operator shall maintain the following records for the periods\nspecified:\n(1) ….\n(3) A record of each inspection and test required by this subpart shall\nbe maintained for at least 2 years or until the next inspection or test is\nperformed, whichever is longer.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain for\nat least two years inspection records for each mainline valve located at the Linden Terminal.\nSpecifically, the Notice alleged that NuStar failed to maintain for CYs 2008 and 2009 records for\n17 mainline-valve inspections conducted at the Linden Terminal in accordance with\n49 C.F.R. § 195.420(b).9 The Notice alleged that NuStar failed to provide valve inspection\nrecords for the following valves:\nLine Segment Valve Name\nLIN-STA-10 1. MBV20\n2. MBV30\n3. MBV40\nBuckeye Transfer 4. MBVM10\n5. LTV20\n6. MBVM20\n7. LTV10\nMarine to Inland #1 8. MBV10\n9. MBV30\nMarine to Inland #2 10. MBV10\n11. MBV20\n12. MBV30\nMarine to Inland #3 13. MBV10\n14. MBV20\n15. MBV30\n9 49 C.F.R. § 195.420(b) requires that each operator shall inspect, at intervals not exceeding 7½ months but at least\ntwice each calendar year, each mainline valve to determine that it is functioning properly.\n\n\n\n5\nMarine to Inland #4 16. MBV20\n17. MBV30\nIn response, NuStar acknowledged that the company had failed to provide mainline-valve\ninspection documentation for CYs 2008 and 2009 for the four “Marine to Inland” pipelines listed\nabove.10 However, NuStar maintained that the Buckeye Transfer pipeline did not begin\ntransporting hazardous liquids until January 2009 and therefore no mainline inspections were\nrequired for this pipeline in 2008. Similarly, Respondent maintained that mainline valve\ninspections were not required for the LIN-STA-10 pipeline for 2008 or 2009, as this pipeline was\nidled and not transporting hazardous liquids.\nAs for the Buckeye Transfer pipeline, I agree. After a review of the NPMS data submitted by\nNuStar, I find that mainline-valve inspections were not required for this line in 2008 and,\ntherefore, that no records needed to be maintained.\nAs for the LIN-STA-10 pipeline, I find that inspections of mainline valves were still required for\nthis line since it had not been formally abandoned. An abandoned pipeline must be physically\nisolated from active pipelines, disconnected from all sources of liquids, purged of liquids, and\nsealed at both ends; only pipelines permanently removed from service are exempt from Part 195\nregulations.11 If a pipeline has not been abandoned according to §195.402(c)(10), then it is\nconsidered active and the operator must comply with all requirements of Part 195. Accordingly,\nbased upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.404(c)(3) by failing to maintain for at least two years inspection records for each\nmainline valve on its LIN-STA-10 pipeline and the four “Marine to Inland” pipelines.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with\n§ 195.571:\n(1) Conduct tests on the protected pipeline at least once each calendar\nyear, but with intervals not exceeding 15 months. However, if tests at\nthose intervals are impractical for separately protected short sections of\nbare or ineffectively coated pipelines, testing may be done at least once\nevery 3 calendar years, but with intervals not exceeding 39 months.\n10 Response at 4.\n11 49 C.F.R. § 195.2, See also, In the Matter of Equistar Chemicals, LP, PHMSA Interp. No. 08-003 (Apr. 6, 2009)\n(available at www.phmsa.dot.gov/pipeline/regs/interps) (“ceasing normal operation of a pipeline does not remove\nthe pipeline from PHMSA’s jurisdiction[;] [but] [i]f you have abandoned a Part 195 jurisdictional pipeline according\nto § 195.402(c)(10) the requirements no longer apply[;] [however,] [t]he abandoned pipeline may not be returned to\nservice unless the pipeline was maintained according to Part 195 requirements while it was abandoned, or meets the\nrequirements of a newly designed and constructed pipeline.”)\n\n\n\n6\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct\ntests on cathodically protected (CP) pipelines at least once each calendar year, but with intervals\nnot exceeding 15 months. Specifically, the Notice alleged that the company’s corrosion control\nrecords showed an annual CP survey had been conducted on the pipeline system at the Linden\nTerminal on January 10, 2008, but not again until September 11, 2009, a period exceeding the\nrequired 15-month interval by six months. The Notice further alleged that NuStar personnel had\nacknowledged that the tests had exceeded the required 15-month interval.\n12\nIn response, Respondent acknowledged that it had exceeded the allowable interval between\nannual cathodic protection surveys by approximately three months between 2008 and 2009.13\nThe primary purpose of the annual testing required by § 195.573(a)(1) is to provide an operator\nwith information about whether it is providing adequate cathodic protection to its pipelines. I\nfind that NuStar conducted tests on its CP pipelines January 10, 2008, but did not complete its\nnext tests until September 11, 2009, which exceeded the required 15-month interval by three\nmonths and not the six months alleged in the Notice. Accordingly, based upon a review of all of\nthe evidence, I find that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct\ntests on CP pipelines at least once each calendar year, but with intervals not exceeding 15\nmonths.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $85,600 for the violations cited above.\nAs a preliminary matter, NuStar argued generally that several of the proposed penalties should\nbe reduced on account of ambiguity that had arisen regarding the applicability of Part 195 to the\nLinden Terminal facility and because of the company’s good-faith efforts to comply with the\nregulations. First, I would note that Respondent provided no evidence to support its contention\nthat a PHMSA inspector could not provide a definitive answer as to whether 49 C.F.R. Part 195\napplied to the intra-terminal pipelines. Second, in situations where there is genuine uncertainty\nregarding the applicability of Part 195 to an operator’s facilities, PHMSA provides a readily\n12 Violation Report at 19, and Attachment A at 25.\n13 Response at 5.\n\n\n\n7\navailable means of obtaining information and advice about compliance with pipeline safety\nregulations via PHMSA’s website, phone line, or email or a formal request for an interpretation\nunder 49 C.F.R. 190.11. There is no indication that NuStar availed itself any of these\nopportunities.\nItem 1: The Notice proposed a civil penalty of $10,700 for Respondent’s violation of\n49 C.F.R. § 195.404(b)(1), for failing to maintain for at least three years daily operating records\nindicating the discharge pressure for each pump station at the Linden Terminal Station. As\ndiscussed above, NuStar acknowledged that its Pipeline Certificate forms had missing and\nincomplete data but argued that the proposed penalty amount should be reduced for two reasons.\nFirst, it argued that the company deserved credit for remedial actions it had taken following the\ninspection. NuStar asserted that as part of its “dedication to continuous improvement,” it had\nrevised its Pipeline Certificate forms and procedures and re-trained its personnel.14 While such\nactions are commendable, I see no reason to mitigate a proposed penalty for actions that any\nreasonable and prudent operator would take in response to an allegation of violation.\nSecond, NuStar argued that the proposed penalty is inconsistent with penalties assessed against\nother operators for similar violations. In particular, the company compared the present case to In\nthe Matter of ConocoPhillips Pipe Line Company, CPF No. 5-2011-5014, where the operator\nmade no attempt to record discharge pressures, as the system was not even equipped with a\npressure-reading device at the discharge location.15 Respondent argued that despite these facts,\nPHMSA chose not to levy any monetary penalty. NuStar requested that PHMSA forego the\nproposed penalty in the instant case and reduce it to a warning item, to demonstrate a fairer and\nmore consistent enforcement policy.\nI find such arguments unconvincing. As a general matter, PHMSA proposes and assesses civil\npenalties on a case-by-case basis, depending upon the facts and circumstances presented in each\ncase and the application of the assessment criteria set forth in 49 C.F.R. § 190.225.\nRespondent’s citation of another case that may be “similar” to the present case does not\nacknowledge the reality that each case presents unique facts.\nMoreover, I see no legal necessity to impose uniform penalties or remedies for similar violations.\nThe Supreme Court has held that absent a statutory provision to the contrary, “uniformity of\nsanctions for similar violations” is not required.16 Neither the Pipeline Safety Laws nor the\nimplementing regulations require uniformity of penalties for similar violations. Not only is\nPHMSA not legally required to adhere to identical remedies, it would be impracticable to\ncompare the factual circumstances of every past case when proposing or assessing penalties.17\n14 Id.\n15 In the Matter of ConocoPhillips Pipe Line Company, CPF No. 5-2011-5014, December 19, 2011. PHMSA final\norders are accessible on the agency’s website at http://primis.phmsa.dot.gov/comm/reports/enforce/Actions.\n16 See Butz v. Glover Livestock Commission Company, Inc., 411 U.S. 182, 186-87 (1973).\n17 In the Matter of ExxonMobil Pipeline Company, CPF No. 4-2004-5004, May 18 2009.\n\n\n\n8\nIn the ConocoPhillips case cited by Respondent, the operator failed to have a device to record\nthe discharge pressure at the pump station; therefore, the compliance order required it to provide\none. In contrast, NuStar used Pipeline Certificate forms that required manifold pressures to be\nrecorded but the company failed to follow its own procedures requiring documentation of\ndischarge pressures. The differing facts and circumstances of the two cases raise different\ngravity and risk considerations, and therefore resulted in different remedies being used to ensure\nfuture compliance.\nLastly, the proposed penalty in the instant case is based partially on NuStar’s apparent awareness\nof the regulatory requirement; the record shows that some of the records in question included\ndischarge pressure readings, while others did not. Finally, PHMSA also took into consideration\nRespondent’s unique history of prior offenses.18\nAccurate and complete discharge pressure readings are required to ensure safety by preventing\nover-pressuring of the pipeline outside the facility, including locations where the line crosses\npublic roads. Given all of the penalty criteria outlined above, I find that the proposed penalty in\nthis case is reasonable and fully supported by the record. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $10,700 for\nviolation of 49 C.F.R. § 195.404(b)(1).\nItem 2: The Notice proposed a civil penalty of $24,100 for Respondent’s violation of\n49 C.F.R. § 195.404(c)(3), for failing to maintain 51 right-of-way inspection records for at least\ntwo years. Respondent requested a reduction in the proposed civil penalty, suggesting that the\ncorrect number of ROW inspections not properly documented was 46, rather than 51.\nAs discussed above, I found that the difference between the number of inadequate records\nalleged in the Notice and the number acknowledged by NuStar was immaterial for purposes of\ndetermining a violation. Likewise, I have reviewed the penalty calculation for this Item and\ndetermined that even if the lower number of disputed records were used, it would not affect the\namount of the proposed penalty since the number of records involved was so large. In addition,\nthe duration of the violation was from April 19, 2008, until PHMSA’s inspection on\nApril 19, 2010, approximately 730 days. In terms of culpability, Respondent knew of its\nresponsibility to maintain the required records. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $24,100 for violation of\n49 C.F.R. § 195.404(c)(3).\nItem 3: The Notice proposed a civil penalty of $24,100 for Respondent’s violation of\n49 C.F.R. § 195.404(c)(3), for failing to maintain inspection records for each mainline valve\nlocated at the Linden Terminal for at least two years. Respondent acknowledged that the\ncompany failed to provide mainline valve inspection documentation for CYs 2008 and 2009 on\nthe “Marine to Inland” pipelines. As discussed above, I found that NuStar failed to maintain\nproper records for these lines and its LIN-STA-10 pipeline, but not the Buckeye Transfer line.\n18 In the Matter of NuStar Pipeline Operating Partnership, L.P., Final Order (CPF No. 3-2011-5005) (December\n29, 2011); and NuStar Pipeline Operating Partnership, L.P., Final Order (CPF No. 3-2008-5013) (September 13,\n2010).\n\n\n\n9\nThe company argued that the proposed penalty should be reduced by 30 percent.19\nI disagree. Given the number of missing inspection records and the number of valves that were\nnot inspected over a two-year period, even with credit for the documentation submitted, the\nnumber of separate violations is so significant that no penalty reduction is warranted.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $24,100 for violation of 49 C.F.R. § 195.404(c)(3).\nItem 5: The Notice proposed a civil penalty of $26,700 for Respondent’s violation of\n49 C.F.R. § 195.573(a)(1), for failing to conduct tests on CP pipelines at least once each calendar\nyear, but with intervals not exceeding 15 months. NuStar did not dispute the allegation of\nviolation but requested that PHMSA reconsider the magnitude of penalty given the company’s\ndedication to “ensuring safety, regulatory compliance, and asset preservation through properly\nfunctioning [CP] systems.” As an illustration, NuStar proffered that it had invested over\n$150,000 in capital improvements to the terminal’s CP system over the past two years.\nRespondent also stated that it already spent over five times the proposed penalty amount in\nupgrades to its cathodic protection system.\n20\nWhile such measures may reflect a sincere and effective effort to improve safety, they do not\nconstitute a basis for mitigating a penalty imposed for multiple, significant safety violations that\noccurred prior to an accident. PHMSA has indeed recognized a “good faith” defense for actions\nvoluntarily taken by an operator before a violation occurs to achieve regulatory compliance but\nhas not generally given credit for corrective actions taken in response to an accident or a pending\nenforcement proceeding.21 In this case, I find that the actions taken by NuStar were largely ones\nthat any reasonable and prudent operator would have taken to protect its facilities and operating\npersonnel and do not constitute a basis for reducing a penalty.\nCathodic protection can limit external corrosion on buried pipelines through the application of\ndirect electric current to the metal of the pipeline. Protection is achieved when current flows to\nthe metal in an amount sufficient to prevent the loss of metal from the pipeline to the\nsurrounding environment. If insufficient current is provided, corrosion can result. Accurate and\ntimely CP information enables an operator to take action to remedy inadequate cathodic\nprotection. I find the nature, circumstances, and gravity of NuStar’s failure to conduct tests on\nCP pipelines within the required interval support assessment of the proposed penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $26,700 for violation of 49 C.F.R. § 195.573(a)(1).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $85,600.\n19 Response at 4.\n20 Response at 5.\n21 E.g., In the Matter of AGL Resources, Inc., Final Order, CPF No. 2-2006-3003 (July 7, 2009); and Panhandle\nEastern Pipeline Company, Final Order, CPF No. 3-2008-1002 (June 17, 2011).\n\n\n\n10\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $85,600 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nWARNING ITEM\nWith respect to Item 4, the Notice alleged a probable violation of Part 195 but did not propose a\ncivil penalty or compliance order for this item. Therefore, this is considered to be a warning\nitem. The warning was for:\n49 C.F.R. § 195.404(c)(3) (Item 4) ─ Respondent’s alleged failure to maintain\nrecords for each inspection and test performed on firefighting equipment for at\nleast two years at the Linden Terminal. Specifically, the Notice alleged that\nNuStar failed to provide any documentation verifying that a field storage tank\nused to fight fires at the Linden Terminal was in proper operating condition.\nNuStar presented information in its Response showing that it had taken certain actions to address\nthe cited item. If OPS finds a violation of this provision in a subsequent inspection, Respondent\nmay be subject to future enforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has the right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of the Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed but does not stay any other provisions of the Final Order, including\nany required corrective actions. If Respondent submits payment of the civil penalty, the Final\nOrder becomes the final administrative decision and the right to petition for reconsideration is\nwaived.\n\n\n\n11\nThe terms and conditions of this Final Order [CPF No.: 1-2011-5011] are effective upon service\nin accordance with 49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n120115011_ NOPV-PCP_11282011_text.pdf\n\nU.S. Department 820 Bear Tavern Road, Suite 103\nOf Transportation West Trenton, NJ 08628\nPipeline and 609.989.2171\nHazardous Materials\nSafety Administration\nNOTICE OF PROBABLE VIOLATION\nand\nPROPOSED CIVIL PENALTY\nEXPRESS OVERNIGHT MAIL\nNovember 28, 2011\nJ.R. Bluntzer, Sr.\nVice President of Operations\nNuStar Terminals Operations Partnership, L.P.\n2330 N. LOOP 1604 West\nSan Antonio, TX 78248\nCPF 1-2011-5011\nDear Mr. Bluntzer,\nBetween April 19 and April 23, 2010, representatives from the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected NuStar Terminals\nOperations Partnership L.P.’s (NuStar) ST Linden Terminal in Linden, New Jersey.\nAs a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety\nRegulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are:\n1. § 195.404 Maps and records.\n(b) Each operator shall maintain for at least 3 years daily operating records that indicate-\n(1) The discharge pressure at each pump station; and\nNuStar failed to maintain daily operating records from 2008 through 2010 that indicated the discharge\npressure at each pump station during normal and abnormal operations at the Linden Terminal. A PHMSA\nrepresentative reviewed NuStar’s Pipeline Certificate form and identified missing or incomplete data.\nNuStar’s Pipeline Certificate form is used to manually record the start time and intervals. NuStar failed to\n\n\n\nCPF 1-2011-5011\nrecord the discharge pressure at all the time intervals noted on the form on the Pipeline Certificate forms\ndated 8/8/08, 5/18/09, 12/26/09, and 12/27/09, and 3/30/10.\nIt is important to note that upon further review, a PHMSA representative discovered that the discharge\npressure records were not only incomplete, but more importantly the chosen time interval for collecting\npressure data during normal and abnormal operation, did not provide for an adequate record of discharge\npressure.\n2. §195.404 Maps and records\n(c) Each operator shall maintain the following records for the periods specified:\n(3) A record of each inspection and test required by this subpart shall be maintained for at\nleast 2 years or until the next inspection or test is performed, whichever is longer.\nNuStar failed to maintain fifty-one (51) right-of-way (ROW) inspection records for at least 2 years.\nPursuant to §195.412(a), each operator shall, at intervals not exceeding 3 weeks, but at least 26 times each\ncalendar year, inspect the surface condition on or adjacent to each pipeline right-of-way. A PHMSA\nrepresentative requested NuStar personnel to provide ROW records for the second quarter of the calendar\nyear 2008 through the second quarter of calendar year 2010. NuStar could only produce a single ROW\nrecord for an inspection that took place on 11/10/2009.\n3. §195.404 Maps and records\n(c) Each operator shall maintain the following records for the periods specified:\n(3) A record of each inspection and test required by this subpart shall be maintained for at\nleast 2 years or until the next inspection or test is performed, whichever is longer.\nNuStar failed to maintain inspection records for seventeen (17) mainline valves located at the Linden\nTerminal for at least 2 years. Pursuant to §195.420(b), an operator shall, at intervals not exceeding 7 ½\nmonths but at least twice each calendar year inspect each mainline valve to determine that it is\nfunctioning properly. Nustar personnel provided a list (below) of mainline valves; however, no records of\ninspections conducted on those valves were available for calendar years 2008 and 2009.\nLine Segment Valve Name\nLIN-STA-10 1. MBV20\n2. MBV30\n3. MBV40\nBuckeye Transfer 4. MBVM10\n5. LTV20\n6. MBVM20\n7. LTV10\nMarine to Inland #1 8. MBV10\n9. MBV30\nMarine to Inland #2 10. MBV10\n11. MBV20\n12. MBV30\nMarine to Inland #3 13. MBV10\n14. MBV20\n15. MBV30\nMarine to Inland #4 16. MBV20\n17. MBV30\n120115011_ NOPV-PCP_11282011 Page 2 of 4\n\n\n\nCPF 1-2011-5011\n4. §195.404 Maps and records\n(c) Each operator shall maintain the following records for the periods specified:\n(3) A record of each inspection and test required by this subpart shall be maintained for at\nleast 2 years or until the next inspection or test is performed, whichever is longer.\nNuStar failed to maintain records of inspections and tests performed on firefighting equipment at the\nLinden Terminal for at least 2 years. 49 CFR Part 195.430(a) requires operators to ensure firefighting\nequipment is in proper operating condition at all times. During the inspection, NuStar personnel stated\nthat a field storage tank located in the firehouse at the Linden Terminal was used for fighting fires.\nNuStar personnel could not produce any records that verified the field storage tank at Linden Terminal\nwas in proper operating condition to fight fires.\n5. §195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine whether cathodic protection\nrequired by this subpart complies with 195.571:\n(1) Conduct tests on the protected pipeline at least once each calendar year, but with\nintervals not exceeding 15 months. However, if tests at those intervals are impractical for\nseparately protected short sections of bare or ineffectively coated pipelines, testing may be\ndone at least once every 3 calendar years, but with intervals not exceeding 39 months.\nNustar failed to conduct tests on cathodically protected pipeline at the required interval. At the time of\nthe inspection, NuStar provided corrosion control records that showed it conducted a cathodic protection\n(CP) survey on its protected pipelines on 1/10/2008 and the next CP survey was conducted on 9/11/2009.\nWhile NuStar completed the tests once each calendar year, the time frame between 1/10/2008 and\n9/11/2009 exceeded the maximum of 15 months interval as prescribed in§195.573(a)(1). Additionally,\nNuStar personnel confirmed that the corrosion control records documented the dates the CP surveys were\nconducted. Therefore, the records verified that the pipeline system at Linden Terminal had in fact been\ntested at an interval exceeding 15 months.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each\nviolation for each day the violation persists up to a maximum of $1,000,000 for any related series of\nviolations. The Compliance Officer has reviewed the circumstances and supporting documentation\ninvolved in the above probable violation and has recommended that you be preliminarily assessed a civil\npenalty of $85,600 as follows:\nItem number PENALTY\n1 $10,700\n2 $24,100\n3 $24,100\n5 $26,700\n120115011_ NOPV-PCP_11282011 Page 3 of 4\n\n\n\nCPF 1-2011-5011\nWarning Item\nWith respect to item 4, we have reviewed the circumstances and supporting documents involved in this\ncase and have decided not to conduct additional enforcement action or penalty assessment proceedings at\nthis time. We advise you to promptly correct these item(s). Be advised that failure to do so may result in\nNuStar being subject to additional enforcement action.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. Be advised that\nall material you submit in response to this enforcement action is subject to being made publicly available.\nIf you believe that any portion of your responsive material qualifies for confidential treatment under 5\nU.S.C. 552(b), along with the complete original document you must provide a second copy of the\ndocument with the portions you believe qualify for confidential treatment redacted and an explanation of\nwhy you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If\nyou do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to\nfind facts as alleged in this Notice without further notice to you and to issue a Final Order.\nPlease send your correspondence to Byron Coy, Director, PHMSA Eastern Region, 820 Bear Tavern\nRoad, Suite 103, West Trenton, NJ 08628 and please refer to CPF 1-2011-5011. For each document you\ns","truncated":true,"body_characters":40291}