{"operation":"document","citation":"CPF 120176001","title":"MAGELLAN TERMINALS HOLDINGS, LP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-01-20","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120176001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120176001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120176001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120176001","body":"Notice of Probable Violation involving MAGELLAN TERMINALS HOLDINGS, LP. PHMSA's enforcement data identifies the cited regulation as 195.432(b). The case was opened on 2017-01-20 and is reported as closed as of 2018-12-12. Proposed civil penalty: $28,600. Assessed civil penalty: $28,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120176001_Final Order_11292018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120176001/120176001_Final%20Order_11292018.pdf\n\n120176001_Final Order_11292018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120176001/120176001_Final%20Order_11292018_text.pdf\n\n120176001_NOPV PCP_01202017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120176001/120176001_NOPV%20PCP_01202017.pdf\n\n120176001_NOPV PCP_01202017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120176001/120176001_NOPV%20PCP_01202017_text.pdf\n\n120176001_Final Order_11292018_text.pdf\n\nNovember 29, 2018\nMr. Michael N. Mears\nPresident and Chief Executive Officer\nMagellan Midstream Partners, LP\nOne Williams Center\nTulsa, OK 74172\nRe: CPF No. 1-2017-6001\nDear Mr. Mears:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nMagellan Terminals Holdings, LP. It makes a finding of violation and assesses a civil penalty of\n$28,600. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon receipt of payment. 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: Mr. Robert Burrough, Director, Eastern Region, Official Pipeline Safety, PHMSA\nMr. Jason Smith, Director, Asset Integrity, Magellan Midstream Partners, 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______________________________________________\nIn the Matter of )\n)\n)\nMagellan Terminals Holdings, LP, )\na subsidiary of Magellan Midstream Partners, LP, )\nRespondent. )\n______________________________________________ )\n) CPF No. 1-2017-6001\nFINAL ORDER\nFrom May 18 through May 22, 2015, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Magellan\nTerminal Holdings, LP (Magellan or Respondent), in New Haven, Connecticut. Magellan, a\nsubsidiary of Magellan Midstream Partners, LP, operates five marine terminals throughout the\ncountry in Connecticut, Delaware, Louisiana, and two sites in Texas. The terminals transport\nand store a full range of petroleum products, as well as operate in-place storage facilities and\nassociated piping.1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated January 20, 2017, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Magellan\nhad violated 49 C.F.R. § 195.432, and proposed assessing a civil penalty of $28,600 for the\nalleged violation.\nMagellan Midstream Partners, LP, responded to the Notice on behalf of Magellan by letter dated\nMarch 13, 2017 (Response). The company did not contest the allegation of violation but\nprovided information concerning the actions it had taken. Respondent did not request a hearing\nand therefore has waived its right to one.\nFINDING OF VIOLATION\nIn its Response, Magellan did not contest the allegation in the Notice that it violated 49 C.F.R.\n§ 195.432, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n1 See https://www.magellanlp.com/WhatWeDo/MarineStorage.aspx. Current as of 9/14/2018.\n\n\n\nCPF No. 1-2017-6001\nPage 2\n§ 195.432 Inspection of in-service breakout tanks.\n(a) …\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 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 in-service atmospheric and low-pressure steel aboveground breakout tanks\naccording to API Standard 653. Specifically, the Notice alleged that Magellan did not conduct\nan external inspection of 7 breakout tanks within the 5-year interval specified under API\nStandard, 653 Section 6.3.2.1 – External Inspection, which states:\nAll tanks shall be given a visual external inspection by an authorized\ninspector. This inspection shall be called the external inspection and must\nbe conducted at least every 5 years or RCA/4N years (where RCA is the\ndifference between the measured shell thickness and the minimum required\nthickness in mils, and N is the shell corrosion rate in mils per year)\nwhichever is less. Tanks may be in operation during this inspection.\nDuring the inspection, PHMSA allegedly examined Magellan’s inspection reports, and found\nthat seven tanks (Hamden 4H / Hamden 5H / Hamden 6H / Hamden 7H / Hamden 11H / New\nHaven 4A / New Haven 11A) exceeded the maximum interval specified by API Standard 653.\nRespondent had no record of having inspected the tanks on or before the five-year anniversary of\nthe last inspections that had taken place from April 20 to May 20, 2010. In a subsequent email\ndated July 10, 2015, PHMSA allegedly asked for the inspection records and Magellan responded\nthat there was no date set for the inspections but that they would be completed during the “5th\ncalendar year.”\nIn its response, Magellan did not contest the allegation of violation and acknowledged that it had\nbeen operating on a “5th calendar year” system instead of a “5th anniversary of the last\ninspection” system to determine subsequent inspections and that it had revised its Tank Integrity\nProgram to require inspections on the anniversary date of a tank’s last inspection.\nAccordingly, based upon a review of all the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.432(b) by failing to inspect the physical integrity of in-service atmospheric and low-\npressure steel aboveground breakout tanks according to API Standard 653.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\n\n\n\nCPF No. 1-2017-6001\nPage 3\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.2 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 total\ncivil penalty of $28,600 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $28,600 for Respondent’s violation of 49 C.F.R.\n§ 195.432(b), for failing to inspect the physical integrity of in-service atmospheric and low-\npressure steel aboveground breakout tanks according to API Standard 653. Magellan neither\ncontested the allegation nor presented any evidence or argument justifying elimination of the\nproposed penalty. Accordingly, having reviewed the record and considered the assessment\ncriteria, I assess Respondent a civil penalty of $28,600 for violation of 49 C.F.R. § 195.432(b).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.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 (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $28,600 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.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nNovember 29, 2018\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n2 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":10143}