{"operation":"document","citation":"CPF 120175005M","title":"ERGON TERMINALING, INC. — Notice of Amendment","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-02-27","effective_on":null,"summary":"CLOSED notice of amendment citing 195.402(a), 195.402(c)(3).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120175005m.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120175005m.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120175005m","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120175005M","body":"Notice of Amendment involving ERGON TERMINALING, INC.. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.402(c)(3). The case was opened on 2017-02-27 and is reported as closed as of 2017-06-22. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120175005M_Closure Letter_06222017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175005M/120175005M_Closure%20Letter_06222017.pdf\n\n120175005M_Closure Letter_06222017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175005M/120175005M_Closure%20Letter_06222017_text.pdf\n\n120175005M_Notice of Amendment_02272017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175005M/120175005M_Notice%20of%20Amendment_02272017.pdf\n\n120175005M_Notice of Amendment_02272017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175005M/120175005M_Notice%20of%20Amendment_02272017_text.pdf\n\n120175005M_Operator Response to Notice_03232017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175005M/120175005M_Operator%20Response%20to%20Notice_03232017.pdf\n\n120175005M_Closure Letter_06222017_text.pdf\n\nOVERNIGHT EXPRESS DELIVERY\nJune 22, 2017\nJoel Pastorek, President\nErgon Terminaling, Inc.\n2829 Lakeland Drive\nJackson, MS 39125\nCPF 1-2017-5005M\nDear Mr. Pastorek:\nFrom September 14 to September 18, 2015, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code\ninspected Ergon Terminaling, Inc.’s (Ergon) pipeline facility at Magnolia, Ohio.\nAs a result of the inspection, Ergon was issued a Notice of Amendment (NOA) dated\nFebruary 27, 2017. In response to the NOA, Ergon submitted revised procedures on\nMarch 23, 2017. PHMSA reviewed the revised procedures, and determined that they required\nfurther revision to fully address the inadequacies that were defined in the NOA Items 1, 5, 6,\n7 and 8. PHMSA issued a Request for Further Amendment (Request) on April 18, 2017.\nOn May 22, 2017, Ergon requested that the 30-day response period to the Request be extended by\n30 days. PHMSA granted the 30-day extension. Ergon submitted its amended procedures on\nJune 12, 2017. My staff reviewed the amended procedures, and it appears that the inadequacies\noutlined in this Notice of Amendment have been corrected.\nThis letter is to inform you that no further action is necessary, and this case is now closed. Thank\nyou for your cooperation.\nSincerely,\nRobert Burrough\nActing Director, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n\n120175005M_Notice of Amendment_02272017_text.pdf\n\nNOTICE OF AMENDMENT\nOVERNIGHT EXPRESS DELIVERY\nFebruary 27, 2017\nMr. Russ Maroney\nVice President, Operations\nErgon Terminaling, Inc.\n2829 Lakeland Drive\nJackson, MS 39215\nCPF #1-2017-5005M\nDear Mr. Maroney:\nFrom September 14 to September 18, 2015 a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code\ninspected Ergon Terminaling, Inc. (Ergon) pipeline facility in Magnolia, Ohio.\nOn the basis of the inspection, PHMSA has identified the apparent inadequacies found within\nErgon’s plans or procedures, as described below:\n1. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a manual of\nwritten procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies. . .\nErgon’s written procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies for each pipeline system were\ninadequate. Specifically, Ergon failed to provide sufficient guidance for reviewing the manual at\nintervals not exceeding 15 months, but at least once each calendar year, and for changing the\nmanual as necessary to ensure that the manual is effective.\nDuring the inspection, the PHMSA Inspector reviewed Ergon’s Magnolia Operations Manual\nErgon Terminaling Inc, January 2015, Section 9.0. The procedure states, “A review of this manual\nwill be conducted at least annually to ensure up-to-date and safe operation of the system as well\nas minimize hazards in an emergency.” The procedure does not include details such as:\n\n\n\nCPF #1-2017-5005M\n1. Required interval for review of the manual\n2. Process and responsibility for:\na. documenting manual review and changes\nb. determining the effectiveness of the manual\n3. Record retention requirements\n2. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a manual of\nwritten procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies. . .\nErgon’s written procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies for each pipeline system were\ninadequate. Specifically, Ergon’s procedures failed to include sufficient guidance for establishing\nthe MOP in accordance with §195.406(a).\n§195.406 Maximum operating pressure states in part that:\na) Except for surge pressures and other variations from normal operations, no operator may\noperate a pipeline at a pressure that exceeds any of the following:\n(1) The internal design pressure of the pipe determined in accordance with §195.106. . .\n(2) The design pressure of any other component of the pipeline.\n(3) Eighty percent of the test pressure for any part of the pipeline which has been pressure tested\nunder Subpart E of this part.\n(4) Eighty percent of the factory test pressure or of the prototype test pressure for any individually\ninstalled component which is excepted from testing under §195.305.\n(5) For pipelines under §§195.302(b)(1) and (b)(2)(i), that have not been pressure tested under\nSubpart E of this part, 80 percent of the test pressure or highest operating pressure to which the\npipeline was subjected for 4 or more continuous hours that can be demonstrated by recording charts\nor logs made at the time the test or operations were conducted.\nDuring the inspection, the PHMSA inspector reviewed Ergon’s Magnolia Operations Manual\nErgon Terminaling, Inc, Sec. 3.1, January 2015.\nThe procedure, Section 3.1, states in part that:\n“ETI - MAG has established the maximum operating pressure (MOP) in accordance with the\nrequirements of 49 CFR 195.106. The formula used is as follows:\nP= (2St/D) (E) (F)...\nUsing this formula, the calculated MOP for the pipeline is 1,423 psi.\nNOTE: The weakest component in the system is the pipe.”\nThe procedure does not include details on how to establish the MOP in accordance with §195.406\nsuch as:\n1. Identification of pipeline components that must be assessed\n2. Methodology for determining the design pressure of each component of the pipeline\n3. Responsibility for performing the calculations.\n4. Documentation requirements\n120175005M_Notice of Amendment_02272017_text Page 2 of 7\n\n\n\nCPF #1-2017-5005M\n3. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a manual of\nwritten procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies. . .\nErgon’s written procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies for each pipeline system were\ninadequate. Specifically, Ergon’s procedures failed to reference the documents that provided\nguidance for making a record of a pressure test in accordance with §195.310(b).\nDuring the inspection the PHMSA inspector reviewed, Ergon’s Magnolia Operations Manual\nErgon Terminaling Inc, January 2015, Section 3.1 and Hydrostatic Testing Procedure, revised\nNovember, 2005.\nErgon’s Hydrostatic Testing Procedure, Section 8.0 provides requirements for record keeping,\nhowever, it was not referenced in Ergon’s O&M manual, nor was it revised and updated with the\nO&M manual.\n4. § 195.402(c)(3)\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this\nsection must include procedures for the following to provide safety during maintenance and\nnormal operations.\n(3) Operating, maintaining and repairing the pipeline system in accordance with each of the\nrequirements of this subpart and subpart H of this part.\nErgon’s procedures for operating, maintaining and repairing the pipeline system in accordance\nwith each of the requirements of this subpart were inadequate. Specifically, Ergon’s procedures\ndid not provide sufficient guidance on how to inspect the surface conditions on or adjacent to each\npipeline right-of-way in accordance with §195.412(a).\nDuring the inspection, the PHMSA inspector reviewed Ergon’s Magnolia Operations Manual\nErgon Terminaling, Inc, January 2015, Section 3.11. The procedure stated that “The complete\nright-of-way is inspected by a contracted air patrol every 12 days, at intervals not exceeding 14\ndays. Visual land inspection of the right-of-way is carried out by field personnel on a regular basis\nand/or as conditions require. Underwater crossing (Ohio River crossing) inspections are\nconducted every five (5) years by a certified diving contractor, in accordance with the IMP\nplan. Inspection records are maintained at the ETI-MAG office.”\nThe procedure does not include details such as:\n1. Responsibility for inspection report review\n2. Process for follow-up / remedial work e.g. prioritization, scheduling, responsibility\n3. Documentation requirements\n4. Process for ROW inspections when conditions do not permit an aerial inspection\n5. Record retention requirements\n6. Definition of “on a regular basis” or “as conditions require.”\n120175005M_Notice of Amendment_02272017_text Page 3 of 7\n\n\n\nCPF #1-2017-5005M\n5. § 195.402(c)(3)\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this\nsection must include procedures for the following to provide safety during maintenance and\nnormal operations.\n(3) Operating, maintaining and repairing the pipeline system in accordance with each of the\nrequirements of this subpart and subpart H of this part.\nErgon’s procedures for operating, maintaining and repairing the pipeline system in accordance\nwith each of the requirements of this subpart were inadequate. Specifically, Ergon’s procedures\ndid not provide sufficient guidance on how to inspect and document inspections conducted on\noverpressure safety devices and overfill protection systems in accordance with §195.428.\nDuring the inspection the PHMSA inspector reviewed Ergon’s Magnolia Operations Manual\nErgon Terminaling Inc, January 2015, Section 3.8. The procedure states that “Overpressure safety\ncontrol is installed at the ETI - MAG terminal on the discharge side of the pump. Each pressure\nlimiting device, relief valve, and pressure regulator, as well as any other pressure control\nequipment, is inspected and tested at least once each calendar year, at intervals not exceeding 15\nmonths, to ensure that the equipment is functioning properly, is in good mechanical condition, has\nadequate capacity, and is reliable. The crude oil at the facility is not a highly volatile liquid due to\nvapor pressure and flammability. Inspection and testing records are maintained at the ETI – MAG\noffice.”\nThe procedure does not include details such as:\n1. 2. 3. 4. 5. 7. Criteria used to determine an acceptable “as-found” relief pressure.\nActions required if the relief valve “as-found” pressure does not meet the criteria.\nCriteria used to determine “pass” and “fail.”\nResponsibility for inspection report review\nProcess for managing remedial work e.g. prioritization, scheduling, responsibility\n6. Record retention requirements\nDocumentation requirements e.g. what data must be captured and where is it recorded\n6. § 195.402(c)(3)\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this\nsection must include procedures for the following to provide safety during maintenance and\nnormal operations.\n(3) Operating, maintaining and repairing the pipeline system in accordance with each of the\nrequirements of this subpart and subpart H of this part.\nErgon’s procedures for operating, maintaining and repairing the pipeline system in accordance\nwith each of the requirements of this subpart were inadequate. Specifically, Ergon’s procedures\ndid not provide sufficient guidance on how to inspect each pipeline or portion of pipeline that is\nexposed to the atmosphere for evidence of atmospheric corrosion in accordance with §195.583(a).\nDuring the inspection, the PHMSA inspector reviewed Ergon’s Magnolia Operations Manual\nErgon Terminaling Inc, Section 3.2, January 2015. The procedure states, “Portions of pipeline\nthat are exposed to the atmosphere shall be cleaned, primed, and painted with an acceptable\noutdoor metallic paint product. These portions of pipeline shall be inspected at least once every\n120175005M_Notice of Amendment_02272017_text Page 4 of 7\n\n\n\nCPF #1-2017-5005M\nthree (3) calendar years, but with intervals not exceeding 39 months. Particular attention shall be\ngiven to pipe at soil-to-air interfaces, under thermal insulation, under disbanded coatings, at pipe\nsupports, in splash zones, at deck penetrations, and in spans over water. If atmospheric corrosion\nis found during an inspection, protection shall be provided against corrosion by cleaning, priming,\nand applying an acceptable outdoor metallic paint product.”\nThe procedure does not include details such as:\n1. Classification and assessment of atmospheric corrosion\n2. Responsibility for:\na. conducting the inspection\nb. inspection report review\n3. Process for managing remedial work e.g. prioritization, scheduling, responsibility\n4. Record retention requirements\n5. Documentation requirements\n7. § 195.402(c)(3)\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this\nsection must include procedures for the following to provide safety during maintenance and\nnormal operations.\n(3) Operating, maintaining and repairing the pipeline system in accordance with each of the\nrequirements of this subpart and subpart H of this part.\nErgon’s procedures for operating, maintaining and repairing the pipeline system in accordance\nwith each of the requirements of this subpart were inadequate. Specifically, Ergon’s procedures\ndid not provide sufficient guidance on how to give particular attention to pipe at soil-to-air\ninterfaces, under thermal insulation, under disbonded coatings, at pipe supports, in splash zones,\nat deck penetrations and in spans over water in accordance with §195.583(b).\nDuring the inspection, the PHMSA inspector reviewed Ergon’s Magnolia Operations Manual\nErgon Terminaling Inc, January 2015, Section 3.2. The procedure states, “Portions of pipeline\nthat are exposed to the atmosphere shall be cleaned, primed, and painted with an acceptable\noutdoor metallic paint product. These portions of pipeline shall be inspected at least once every\nthree (3) calendar years, but with intervals not exceeding 39 months. Particular attention shall be\ngiven to pipe at soil-to-air interfaces, under thermal insulation, under disbanded coatings, at pipe\nsupports, in splash zones, at deck penetrations, and in spans over water. If atmospheric corrosion\nis found during an inspection, protection shall be provided against corrosion by cleaning, priming,\nand applying an acceptable outdoor metallic paint product.”\nErgon’s procedure was a copy of the regulation as stated in 195.583(b). The procedure does not\ninclude details such as:\n1. Methodology for:\na. paying particular attention to each of the stated items.\nb. assessing the integrity of the underground portion of the soil-to-air interface when\nthe visual inspection of the aboveground portion indicates bare pipe or damaged or\ndisbonded coating\n2. Responsibility for:\n120175005M_Notice of Amendment_02272017_text Page 5 of 7\n\n\n\nCPF #1-2017-5005M\na. conducting the inspection\nb. inspection report review\n3. Process for managing remedial work e.g. prioritization, scheduling, responsibility\n4. Record retention requirements\n5. Documentation requirements\n8. § 195.402(c)(3)\n(c) Maintenance and normal operations. The manual required by paragraph (a) of this\nsection must include procedures for the following to provide safety during maintenance and\nnormal operations.\n(3) Operating, maintaining and repairing the pipeline system in accordance with each of the\nrequirements of this subpart and subpart H of this part.\nErgon’s procedures for operating, maintaining and repairing the pipeline system in accordance\nwith each of the requirements of this subpart were inadequate. Specifically, Ergon’s procedures\ndid not provide sufficient guidance on monitoring atmospheric corrosion in accordance with\n§195.583(c).\nDuring the inspection, the PHMSA inspector reviewed Ergon’s Magnolia Operations Manual\nErgon Terminaling Inc, January 2015, Section 3.2. The procedure states in part that, “Portions of\npipeline that are exposed to the atmosphere shall be cleaned, primed, and painted with an\nacceptable outdoor metallic paint product. . .. If atmospheric corrosion is found during an\ninspection, protection shall be provided against corrosion by cleaning, priming, and applying an\nacceptable outdoor metallic paint product.”\nThe procedure does not include details such as:\n1. Process for managing remedial work e.g. prioritization, scheduling, responsibility\n2. Methodology for:\na. cleaning, priming, and applying an acceptable outdoor metallic paint product\nb. selecting an acceptable paint product\n3. Record retention requirements\n4. Documentation requirements\n120175005M_Notice of Amendment_02272017_text Page 6 of 7\n\n\n\nCPF #1-2017-5005M\nResponse to this Notice\nThis Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. Enclosed as\npart of this Notice is a document entitled Response Options for Pipeline Operators in Compliance\nProceedings. Please refer to this document and note the response options. Be advised that all\nmaterial you submit in response to this enforcement action is subject to being made publicly\navailable. If you believe that any portion of your responsive material qualifies for confidential\ntreatment under 5 U.S.C. 552(b), along with the complete original document you must provide a\nsecond copy of the document with the portions you believe qualify for confidential treatment\nredacted and an explanation of why you believe the redacted information qualifies for confidential\ntreatment under 5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, revised\nprocedures, or a request for a hearing under §190.211. Failure to respond within 30 days of receipt\nof this Notice constitutes a waiver of your right to contest the allegations in this Notice, and\nauthorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice\nwithout further notice to you and to issue an Order Directing Amendment. If your plans or\nprocedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans\nor procedures to correct the inadequacies (49 C.F.R. § 190.206). If you are not contesting this\nNotice, we propose that you submit your amended procedures to my office within 30 days of\nreceipt of this Notice. This period may be extended by written request for good cause. Once the\ninadequacies identified herein have been addressed in your amended procedures, this enforcement\naction will be closed.\nIt is requested (not mandated) that Ergon Terminaling, Inc. maintain documentation of the safety\nimprovement costs associated with fulfilling this Notice of Amendment (preparation/revision of\nplans, procedures) and submit the total to Robert Burrough, Acting Director, Eastern Region,\nPipeline and Hazardous Materials Safety Administration. In correspondence concerning this\nmatter, please refer to CPF# 1-2017-5005M and, for each document you submit, please provide a\ncopy in electronic format whenever possible.\nSincerely,\nRobert Burrough\nActing Director, Eastern Region\nPipeline and Hazardous Materials Safety Administration\nEnclosure: Response Options for Pipeline Operators in Compliance Proceedings\n120175005M_Notice of Amendment_02272017_text Page 7 of 7","truncated":false,"body_characters":20419}