{"operation":"document","citation":"CPF 120155015","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":"2015-09-10","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120155015.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120155015.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120155015","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120155015","body":"Notice of Probable Violation involving NUSTAR TERMINALS OPERATIONS PARTNERSHIP L. P.. PHMSA's enforcement data identifies the cited regulation as 195.432(b). The case was opened on 2015-09-10 and is reported as closed as of 2017-08-24. Proposed civil penalty: $54,700. Assessed civil penalty: $0. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120155015_Final Order_08242017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155015/120155015_Final%20Order_08242017.pdf\n\n120155015_Final Order_08242017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155015/120155015_Final%20Order_08242017_text.pdf\n\n120155015_NOPV_PCP_PCO_09102015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155015/120155015_NOPV_PCP_PCO_09102015.pdf\n\n120155015_NOPV_PCP_PCO_09102015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155015/120155015_NOPV_PCP_PCO_09102015_text.pdf\n\n120155015_Operator Response to Notice_10052015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155015/120155015_Operator%20Response%20to%20Notice_10052015.pdf\n\n120155015_Final Order_08242017_text.pdf\n\nAugust 24, 2017\nMr. John Roller\nVice President, Terminal Operations\nNuStar Terminals Operations Partnership, LP\n19003 IH-10 West\nSan Antonio, TX 78257\nRe: CPF No. 1-2015-5015\nDear Mr. Roller:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws the\nallegation of violation. This case is now closed. Service of the Final Order by certified mail is\neffective upon the date of mailing as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Director, Eastern Region, Office of Pipeline Safety, PHMSA\nMr. Michael Dillinger, Senior Counsel, NuStar Terminals Operations Partnership, 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. 1-2015-5015\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn August 26-28, 2014, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of NuStar Terminals\nOperations Partnership, LP (NuStar or Respondent), in Linden, New Jersey. NuStar is a\nsubsidiary of NuStar Energy, LP, a publicly-traded limited partnership based in San Antonio,\nTexas, with approximately 8,417 miles of pipeline and 90 terminal and storage facilities that\ntransport hazardous liquids, including crude oil, refined petroleum products, propane, and\nanhydrous ammonia.1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated September 10, 2015, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that NuStar had violated 49 C.F.R. § 195.432(b) and proposed assessing a civil\npenalty of $54,700 for the alleged violation. The Notice also proposed ordering Respondent to\ntake certain measures to correct the alleged violation or face potential enforcement action.\nNuStar responded to the Notice by letter dated October 5, 2015 (Response). NuStar contested\nthe allegation and requested a hearing. A hearing was subsequently held on February 17, 2016,\nin West Trenton, New Jersey. At the hearing, Respondent was represented by counsel.\nWITHDRAWAL OF ALLEGATION\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states, in\nrelevant part:\n1 Pipeline Safety Violation Report (Violation Report), (September 10, 2015) (on file with PHMSA), at 1.\n\n\n\nCPF No. 1-2015-5015\nPage 2\n§ 195.432 Inspection of in-service breakout tanks.\n(a)…\n(b) Each operator must inspect the physical integrity of\nin-service atmospheric and low-pressure steel above-ground\nbreakout tanks according to API Std 653 (except section 6.4.3,\nAlternative Internal Inspection Interval) (incorporated by reference,\nsee §195.3). However, if structural conditions prevent access to the\ntank bottom, its integrity may be assessed according to a plan\nincluded in the operations and maintenance manual under\n§195.402(c)(3). The risk-based internal inspection procedures in\nAPI Std 653, section 6.4.3 cannot be used to determine the internal\ninspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of two in-service atmospheric steel aboveground breakout tanks in accordance\nwith API Standard 653, incorporated by reference in Part 195. Specifically, the Notice alleged\nthat with respect to Tanks 32002 and 21408, NuStar failed to comply with section 12.5 of API\n653 which states: “Where settlement is anticipated, a tank receiving a hydrostatic test shall have\nthe foundation checked for settlement.” OPS noted the absence of shell-elevation measurements\nin its review of Respondent’s Storage Tank Hydrostatic Test Records for Tank 32002, dated\nFebruary 19, 2013, and Tank 21408, dated January 28, 2014. These hydrostatic tests were done\nfollowing certain repairs being made to these tanks.2\nIn its Response and at the hearing, NuStar pointed to the plain language of section 12.5, which\nstates that performing a check for settlement is only required “where settlement is anticipated”\nand explained that it did not anticipate settlement on either tank and had no reason to do so since\nthe tanks’ foundations were already loaded and previous settlement out-of-plane measurements\nwere acceptable under API 653.3\nAt the hearing, NuStar began by pointing out that the Out-of-Service Inspections performed on\nTank 32002 on October 25, 2012, and December 19, 2012, by DJA Inspection Services indicated\nthat “The out-of-plane settlement is acceptable per API-653.”4 Respondent noted that both of the\ntanks had been routinely monitored for settlement for many years and had never experienced any\nhistory of settlement issues.\nNuStar then addressed the nature of the tank-repair work. According to NuStar’s records, the\nrepair to Tank 32002 involved replacement of the outer 15 feet of floor plate and the replacement\nof sand with grout. The repair to tank 21408 involved air-lifting the tank and rebuilding the pile\ncap. At the hearing, NuStar conceded that if a tank is lifted to re-level the tank, anticipation of\nsettlement would be called for but argued that in this case the tank was lifted to inspect the pile\ncap and it was not re-leveled. NuStar provided an Affidavit in which Gerald Maher, Tank\nIntegrity Manager for NuStar’s Eastern Region, testified about the basis for his conclusion that\n2 NOPV, at 2.\n3 Response, at 1.\n4 Response Exhibit 3.\n\n\n\nCPF No. 1-2015-5015\nPage 3\nhe did not anticipate settlement on either tank. Notably, Mr. Maher stated that “All foundation\nor pile-related work was to the pile cap area and was cosmetic or preventative. This did not\naffect the load bearing capacity of the piles or foundation.”5 He further stated that “None of the\nrepairs would add any weight or change the tank shapes” and noted that the tank function and\ntypes of products stored were not changing.6\nNuStar also provided a written analysis by Gary W. Powers, P.E., of Powers Engineering &\nInspection, Inc., an experienced API 653 inspector. In his analysis, Mr. Powers explained that\namong tank foundation designs, the pile cap is the foundation design that provides the best\nperformance for limiting settlement.7 He further stated that “We have conducted AST shell\nsettlement surveys on over 200 pile cap type foundations. When there have been repairs similar\nto those in this matter and even more extensive than those in this matter, none of these over 200\nfoundations have experienced differential settlement that would require settlement monitoring.”8\nMr. Powers also stated his opinion that after reviewing the repairs, “neither I, nor a reasonable\nAPI 653 Authorized Inspector, would have anticipated settlement.”9\nOPS did not dispute the expertise of Mr. Maher (who attended the hearing) or Mr. Powers and\ndid not present any evidentiary material that would outweigh the information and testimony\nprovided by NuStar on the issue of whether the type of repairs performed on the tanks were\nlikely to introduce settlement.\nFinally, NuStar demonstrated that subsequent out-of-plane settlement surveys performed on the\ntanks on November 2, 2015, showed that no settlement beyond acceptable limits had occurred\nfollowing the repairs, which is consistent with NuStar’s original determination that, based on the\nnature of the repairs, there was no reason to anticipate settlement.10\nOPS contended that even if NuStar did not anticipate settlement and no settlement occurred, at a\nminimum it should have prepared a written record of performing an analysis concerning whether\nsettlement was anticipated. The language and structure of section 12.5, however, does not\nsupport requiring a technical analysis for something that an operator does not reasonably\nanticipate will occur. While it may have been advisable for NuStar to have created and\nmaintained such a record to help it avoid compliance proceedings such as this, OPS did not cite\nany deficiency in Respondent’s operating and maintenance procedures for creating written\nrecords nor did the Notice allege the failure to maintain a required record.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that OPS\ndid not present evidence proving that settlement should have been anticipated, which is a\n5 Maher Affidavit, paragraph 5(f).\n6 Maher Affidavit, paragraph 5(g)-(h).\n7 NuStar Hearing Presentation, at 12.\n8 Id.\n9 Id.\n10 NuStar Hearing Presentation, at 14.\n\n\n\nCPF No. 1-2015-5015\nPage 4\nprerequisite under API 653 to trigger the requirement to check the tank foundations for\nsettlement. Based upon the foregoing, I hereby order that the allegation of violation be\nwithdrawn.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.11 In determining the amount of a civil penalty under 49 U.S.C.\n§ 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; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a civil\npenalty of $54,700 for the alleged violation of 49 C.F.R. § 195.432(b).\nAs discussed above, I have withdrawn the alleged violation. Therefore, the proposed civil\npenalty associated with this item is also withdrawn.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to the alleged violation of 49 C.F.R. §\n195.432(b). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of\nhazardous liquids or who owns or operates a pipeline facility is required to comply with the\napplicable safety standards established under chapter 601.\nAs discussed above, I have withdrawn the alleged violation. Therefore, the proposed compliance\norder is also withdrawn.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nAugust 24, 2017\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n11 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum\nCivil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).","truncated":false,"body_characters":12343}