BUCKEYE PARTNERS, LP — Notice of Probable Violation

case documentOfficial PDF120125010_NOPV_PCP_PCO_06112012.pdf#

party submissionOfficial PDF120125010_Operator Response_07102012.pdf#

120125010_Closure letter_04052013_text.pdf, page 1Official PDFU.S. Department Of Transportation Pipeline and 609.989.2171 Hazardous Materials Safety Administration 820 Bear Tavern Road, Suite 103 West Trenton, NJ 08628 OVERNIGHT EXPRESS MAIL April 05, 2013 Carl Ostach Vice President, Domestic Operations Buckeye Partners, L.P. Five TEK Park 9999 Hamilton Blvd, Breinigsville, PA 18031 CPF 1-2012-5010 Dear Mr. Ostach: On October 17, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office, Office of Pipeline Safety (OPS), issued to Buckeye Partners, L.P. (Buckeye) a Final Order in the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. We have received your letter dated January 18, 2013, wherein you summarized the actions taken to comply with this Order, along with the documents that were enclosed with it. Based on our review of the documents that you had provided and confirmation of payment of the civil penalty, which we received on July 12, 2012, it has been determined that you have complied with the terms of this Order. Accordingly, this case is now closed and no further action is contemplated with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, Byron Coy, PE Director, Eastern Region Pipeline and Hazardous Materials Safety Administration#

120125010_NOPV-PCP-PCO_06112012_text.pdf, page 1Official PDFU.S. Department 820 Bear Tavern Road, Suite 103 Of Transportation West Trenton, NJ 08628 Pipeline and 609.989.2171 Hazardous Materials Safety Administration NOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER OVERNIGHT EXPRESS MAIL June 11, 2012 Mr. Thomas S. Collier, VP, Performance Assurance & Asset Integrity Buckeye Partners, L.P. Five TEK Park 9999 Hamilton Boulevard Breinigsville, PA 18031 CPF 1-2012-5010 Dear Mr. Collier: From December 13 – 17, 2010, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected Buckeye Partners, L.P.’s (Buckeye) Public Awareness Program in Breinigsville, Pennsylvania. As a result of the inspection, it appears that you have committed a probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation is: 1. §195.440 Public awareness (c) The operator must follow the general program recommendations, including baseline and supplemental requirements of API RP 1162, unless the operator provides justification in its program or procedural manual as to why compliance with all or certain provisions of the recommended practice is not practicable and not necessary for safety. Buckeye failed to follow the general program recommendation, including specific program documentation and recordkeeping requirements of American Petroleum Institute (API) Recommended Practice (RP) 1162. Buckeye did not document the requirements prescribed in Section 7.1(g) of API RP 1162.#

120125010_NOPV-PCP-PCO_06112012_text.pdf, page 2CPF 1-2012-5010 Buckeye did not document the criteria for program improvement based on the results of the evaluation in its Public Education Program Manual, All Sections Issued: 5/06, Section K- Program Evaluation. There was no documentation on how Buckeye determines the changes and/or modifications to its program based on the results and findings of its effectiveness evaluation. Furthermore, Buckeye did not record key program elements to demonstrate the level of implementation. Pursuant to Section 7.2 of API RP 1162, “[r]ecord keeping should include... c. [a]ll program evaluations, including current results, follow-up actions and expected results.” According to a Buckeye representative, a four-year effectiveness evaluation was held on June 24, 2010 and participants discussed effectiveness ideas. A copy of the meeting notes were provided to a PHMSA representative. The meeting notes consisted of random topics and had no record of findings, conclusions, or results. Also, there was no documentation on whether or not program improvement(s) would be implemented. Additionally, Buckeye’s Public Education Program Manual, All Sections Issued: 5/06, Section K- Program Evaluation provided a list of questions to be used in the evaluation process; however, answers transcribed into the meeting notes had insufficient details to provide meaningful conclusions. Therefore, Buckeye failed to demonstrate compliance with the specific program documentation and recordkeeping requirements of API RP 1162. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation and has recommended that you be preliminarily assessed a civil penalty of $17,500 as follows: Item number PENALTY 1 $ 17,500 Proposed Compliance Order With respect to item 1 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Buckeye. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment 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 believe qualify for confidential treatment redacted and an explanation of why you believe 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 waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. 120125010_NOPV_PCP-PCO_06112012 Page 2 of 4#

120125010_NOPV-PCP-PCO_06112012_text.pdf, page 3CPF 1-2012-5010 Please submit all correspondence in this matter to Byron Coy, PE, Director, PHMSA Eastern Region, 820 Bear Tavern Road, Suite 103, W. Trenton, NJ 08628. Please refer to CPF 1-2012-5010 on each document you submit, and please whenever possible provide a signed PDF copy in electronic format. Smaller files may be emailed to Byron.Coy@dot.gov. Larger files should be sent on a CD accompanied by the original paper copy to the Eastern Region Office. Sincerely, Byron Coy, PE Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 120125010_NOPV_PCP-PCO_06112012 Page 3 of 4#

120125010_NOPV-PCP-PCO_06112012_text.pdf, page 4CPF 1-2012-5010 PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Buckeye Partners, L.P. (Buckeye) a Compliance Order incorporating the following remedial requirements to ensure the compliance of Buckeye with the pipeline safety regulations: 1. In regards to Item Number 1 of the Notice pertaining to Buckeye’s failure to follow the general program recommendation, including specific program documentation and recordkeeping requirements of American Petroleum Institute (API) Recommended Practice (RP) 1162, Buckeye shall review its June 24, 2010 four-year effectiveness evaluation meeting notes. Based on that review, Buckeye must provide the following: • Documentation of criteria for program improvement based on the results of the evaluation. • Records of current results, follow-up actions, and expected results. Then, Buckeye must perform the following in reference to the above: a) If any improvement(s) are identified, Buckeye must implement those improvement(s) in accordance with its written Public Awareness Program; or b) Buckeye must provide justification why improvement(s) have not been or will not be implemented. 2. Buckeye must provide a summary report that must include documentation and records mentioned in Item 1 (above), and a timeframe when improvements will be implemented, if any, within 90 days after receipt of a Final Order. 3. It is requested (not mandated) that Buckeye maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Byron Coy, Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 120125010_NOPV_PCP-PCO_06112012 Page 4 of 4#

120125010_Final Order_10172012_text.pdf, page 1Official PDFOCTOBER 17, 2012 Mr. Clark Smith President & Chief Executive Officer Buckeye Partners, L.P. One Greenway Plaza Suite 600 Houston, TX 77046 Re: CPF No. 1-2012-5010 Dear Mr. Smith: Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of violation, specifies actions that need to be taken by Buckeye Partners, L.P to comply with the pipeline safety regulations, and assesses a civil penalty of $17,500. This is to acknowledge receipt of payment of the full penalty amount, by wire transfer, dated July 12, 2012. When the terms of the Compliance Order have been completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Final Order 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, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Thomas S. Collier, Vice President, Performance Assurance & Asset Integrity, Buckeye Partners, L.P. Five TEK Park, 9999 Hamilton Boulevard, Breinigsville, PA 18031 Mr. Byron Coy, Director, Eastern Region, OPS Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120125010_Final Order_10172012_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ____________________________________ ) In the Matter of ) ) Buckeye Partners, L.P., ) CPF No. 1-2012-5010 ) Respondent. ) ____________________________________) FINAL ORDER Between December 13 and 17, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities, records, and Public Awareness Program of Buckeye Partners, L.P. (BPL or Respondent) in Breinigsville, PA. BPL owns and operates approximately 6,000 miles of pipelines transporting refined petroleum products and highly volatile liquids.1 As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated June 11, 2012, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that BPL had violated 49 C.F.R. § 195.440(c) and proposed assessing a civil penalty of $17,500 for the alleged violation. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violation. BPL responded to the Notice by letter dated July 10, 2012 (Response). The company did not contest the allegation of violation but stated it intended to comply with the proposed compliance order and pay the proposed civil penalty. Subsequently, BPL paid the proposed civil penalty of $17,500, as provided in 49 C.F.R. § 190.227. Payment of the penalty serves to close the case with prejudice to Respondent. FINDING OF VIOLATION In its Response, BPL did not contest the allegation in the Notice that it violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.440(c), which states: 1 http://www.buckeye.com/BusinessOperations/tabid/56/Default.aspx and http://www.buckeye.com/AboutUs/tabid/54/Default.aspx (last accessed on June 22, 2012).#

120125010_Final Order_10172012_text.pdf, page 32 § 195.440 Public awareness. (c) The operator must follow the general program recommendations, including baseline and supplemental requirements of API RP 1162, unless the operator provides justification in its program or procedural manual as to why compliance with all or certain provisions of the recommended practice is not practicable and not necessary for safety. The Notice alleged that Respondent violated 49 C.F.R. § 195.440(c) by failing to follow the program recommendations of American Petroleum Institute (API) Recommended Practice (RP) 1162, including baseline and supplemental requirements. Specifically, the Notice alleged that BPL failed to follow and implement a public awareness program (PAP) meeting the general program recommendations set forth in API RP 1162, including specific program documentation and recordkeeping requirements, and failed to evaluate its PAP’s effectiveness in accordance with company procedures. The Notice stated that BPL failed to document key program elements of its PAP to demonstrate the level of implementation. Pursuant to Section 7.2 of API RP 1162, “[r]ecord keeping should include... [a]ll program evaluations, including current results, follow-up actions and expected results.” PHMSA’s investigation also revealed that Buckeye did not document the criteria for program improvement based on the results of the evaluation and its Public Education Program Manual, All Sections Issued: 5106, Section K- Program Evaluation. 2 PHMSA found no documentation on how Buckeye addressed changes and/or modifications to its program based on the results and findings of its effectiveness evaluation. In its Response, Respondent acknowledged that it should have documented the results of its program effectiveness review in a manner that better met the requirements of Section K of its Public Education Program Manual and API RP 1162.3 Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.440(c) by failing to follow and implement a public awareness program that meets the general program recommendations set forth in API RP 1162, including specific program documentation and recordkeeping requirements, and failing to evaluate its PAP’s effectiveness in accordance with company procedures. This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any 2 Violation Report, Exhibit A. 3 Response.#

120125010_Final Order_10172012_text.pdf, page 43 related series of violations.4 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; the Respondent’s ability to pay the penalty and any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. 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 $17,500 for the violations cited above. Item 1: The Notice proposed a civil penalty of $17,500 for Respondent’s violation of 49 C.F.R. § 195.440(c), for failing to follow and implement a public awareness program meeting the general program recommendations set forth in API RP 1162, including specific program documentation and recordkeeping requirements, and failing to evaluate its PAP’s effectiveness in accordance with company procedures. BPL neither contested the allegation nor presented any evidence or argument justifying a reduction in or elimination of the proposed penalty. BPL is fully culpable for the violation. Respondent was cognizant of the requirement to follow the program recommendations of API RP 1162, including baseline and supplemental requirements. Respondent acknowledged its failure to comply with the requirements of Section K of its Public Education Program Manual and API RP 1162. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $17,500 for violation of 49 C.F.R. § 195.440(c), which has already been paid by Respondent. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49 C.F.R. § 195.440(c). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 195.440(c) (Item 1), Respondent must review its June 24, 2010-Public Awareness Program Review meeting notes regarding its program effectiveness evaluation and document the criteria for its program improvement, and record current results, follow-up actions, and expected results. If the need for improvements is identified, Buckeye Partners, L.P. must implement those improvements in accordance with its written Public Awareness Program or provide justification why the improvements have not been or will not be implemented. 4 Effective January 3, 2012, the maximum administrative civil penalties for violations of the federal pipeline safety regulations were doubled to $200,000 per violation with a maximum of $2,000,000 for a related series of violations (The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pub. L. 112-90)). Because the violations in this case occurred prior to the increase, the higher maximums do not apply.#

120125010_Final Order_10172012_text.pdf, page 54 2. Within 90 days after receipt of this Final Order, Buckeye Partners, L.P. must submit a summary report detailing the actions taken regarding the above Item, including a timeframe for implementation, supporting documentation and records, to the Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration, 820 Bear Tavern Rd, Suite 103, West Trenton, NJ 08628. Please reference CPF# 1-2012-5010 in the title of the summary report. 3. It is requested (not mandated) that Buckeye Partners, L.P. maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Byron Coy, Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions, and other changes to pipeline infrastructure The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $100,000 for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#