# KINDER MORGAN LIQUID TERMINALS, LLC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 120185005
- **title:** KINDER MORGAN LIQUID TERMINALS, LLC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2018-01-18
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.428(a), 195.573(a)(1), 195.575(c), 195.589(c).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-120185005.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-120185005.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-120185005
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/120185005
**body:**

Notice of Probable Violation involving KINDER MORGAN LIQUID TERMINALS, LLC. PHMSA's enforcement data identifies the cited regulations as 195.428(a),  195.573(a)(1),  195.575(c),  195.589(c). The case was opened on 2018-01-18 and is reported as closed as of 2019-10-29. Proposed civil penalty: $217,400. Assessed civil penalty: $217,400. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

120185005_Closure Letter_10292019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185005/120185005_Closure%20Letter_10292019.pdf

120185005_Closure Letter_10292019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185005/120185005_Closure%20Letter_10292019_text.pdf

120185005_Final Order_03082019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185005/120185005_Final%20Order_03082019.pdf

120185005_Final Order_03082019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185005/120185005_Final%20Order_03082019_text.pdf

120185005_NOPV PCP PCO_01182018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185005/120185005_NOPV%20PCP%20PCO_01182018.pdf

120185005_NOPV PCP PCO_01182018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185005/120185005_NOPV%20PCP%20PCO_01182018_text.pdf

120185005_Closure Letter_10292019_text.pdf

OVERNIGHT EXPRESS DELIVERY
October 29, 2019
Joshua Etzel
Vice President – Operations & Engineering
Kinder Morgan Liquid Terminals, LLC
78 Lafayette Street
Carteret, NJ 07008
CPF 1-2018-5005
Dear Mr. Etzel:
On March 8, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued
to Kinder Morgan Liquid Terminals, LLC (KMLT) a Final Order in the above-referenced case.
This Order included a Compliance Order and Civil Penalty assessment. Based on our review of
the documentation you provided and confirmation of payment of the civil penalty, 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,
Robert Burrough
Director, Eastern Region
Pipeline and Hazardous Materials Safety Administration

120185005_Final Order_03082019_text.pdf

March 8, 2019
Mr. Richard D. Kinder
Executive Chairman
Kinder Morgan, Inc.
1001 Louisiana Street, Suite 1000
Houston, Texas 77002
Re: CPF No. 1-2018-5005
Dear Mr. Kinder:
Enclosed is the Final Order issued in the above-referenced case to your subsidiary, Kinder
Morgan Liquid Terminals, LLC. It makes findings of violation, assesses a civil penalty of
$217,400, and specifies actions that need to be taken to comply with the pipeline safety
regulations. The penalty payment terms are set forth in the Final Order. When the civil penalty
has been paid and the terms of the compliance order completed, as determined by the Director,
Eastern Region, Office of Pipeline Safety, PHMSA, this enforcement action will be closed.
Service of the Final Order by certified mail is effective upon the date of mailing as provided
under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA
Mr. Joshua Etzel, President – Operations and Engineering, Kinder Morgan Liquid
Terminals, LLC, 78 Lafayette Street, Carteret, NJ 07008
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Kinder Morgan Liquid Terminals, LLC, ) CPF No. 1-2018-5005
a subsidiary of Kinder Morgan, Inc., )
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
From August 31 through September 3, 2015, 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 and records of Kinder
Morgan Liquid Terminals, LLC (KMLT or Respondent), in Carteret, New Jersey. KMLT
operates approximately 14.6 miles of natural gas transmission pipeline, 88.4 miles of hazardous
liquid transmission pipeline, and 279 breakout tanks across five different states. The facilities
inspected were comprised of 2.28 miles of hazardous liquid transmission pipeline, and two
terminal locations in Carteret and Perth Amboy, New Jersey. The terminal locations have 87
total breakout tanks. The commodities transported are refined petroleum products.1
As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,
by letter dated January 18, 2018, 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 KMLT had committed four violations of 49 C.F.R. Part 195 and proposed
assessing a civil penalty of $217,400 for the alleged violations. The Notice also proposed
ordering Respondent to take certain measures to correct the alleged violations.
After requesting and receiving an extension of time to respond, KMLT responded to the Notice
by letter dated February 28, 2018 (Response). Respondent did not contest the allegations of
violations but provided an explanation of its actions and requested that Item 4 of the Notice be
reduced to a Warning Item, with no associated penalty, and that the remaining proposed civil
penalties be reduced. KMLT also requested additional time to comply with the Proposed
Compliance Order. Respondent did not request a hearing and therefore has waived its right to
one.
1 Pipeline Safety Violation Report (Violation Report), (January 18, 2018) (on file with PHMSA), at 1.



CPF No. 1-2018-5005
Page 2
FINDINGS OF VIOLATION
In its Response KMLT did not contest the allegations 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. § 195.428(a), which states:
§ 195.428 Overpressure of safety devices and overfill protection systems.
(a) Except as provided in paragraph (b) of this section, each operator shall,
at intervals not exceeding 15 months, but at least once each calendar year, or
in the case of pipelines used to carry highly volatile liquids, at intervals not to
exceed 7½ months, but at least twice each calendar year, inspect and test each
pressure limiting device, relief valve, pressure regulator, or other item of
pressure control equipment to determine that it is functioning properly, is in
good mechanical condition, and is adequate from the standpoint of capacity
and reliability of operation for the service in which it is used.
The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and
test, at the required intervals, the relief devices located on surge tanks ST-3, ST-4, ST-5, ST-6,
and 150-1 to determine that they were adequate from the standpoint of capacity. Specifically,
the Notice alleged that KMLT’s records of capacity calculations for the referenced relief devices
did not identify the tanks, were not dated, and did not include any information related to the
capacity of the devices.
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and
test, at the required intervals, the relief devices located on surge tanks ST-3, ST-4, ST-5, ST-6,
and 150-1 to determine that they were adequate from the standpoint of capacity.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine
whether cathodic protection required by this subpart complies with
§ 195.571:
(1) Conduct tests on the protected pipeline at least once each calendar
year, but with intervals not exceeding 15 months. However, if tests at those
intervals are impracticable for separately protected short sections of bare or
ineffectively coated pipelines, testing may be done at least once every 3
calendar years, but with intervals not exceeding 39 months.
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct
corrosion-control monitoring tests at least once per calendar year, but with intervals not
exceeding 15 months. Specifically, the Notice alleged that KMLT’s records from January 1,
2012, through December 31, 2014, showed that KMLT failed to take 25 structure pipe-to-soil
readings from 2013 through 2014.



CPF No. 1-2018-5005
Page 3
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct
corrosion-control monitoring tests at least once per calendar year, but with intervals not
exceeding 15 months.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.575(c), which states:
§ 195.575 Which facilities must I electrically isolate and what
inspections, tests, and safeguards are required?
(a) ….
(c) You must inspect and electrically test each electrical isolation to
assure the isolation is adequate.
The Notice alleged that Respondent violated 49 C.F.R. § 195.575(c) by failing to inspect and
electrically test each electrical isolation to assure the isolation is adequate. Specifically, the
Notice alleged that KMLT’s records from January 1, 2012, through December 31, 2014, showed
that KMLT failed to take seven casing pipe-to-soil readings from 2013 through 2014.
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.575(c) by failing to inspect and
electrically test each electrical isolation to assure the isolation is adequate.
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.589(c), which states:
§ 195.589 What corrosion control information do I have to maintain?
(a) ….
(c) You must maintain a record of each analysis, check, demonstration,
examination, inspection, investigation, review, survey, and test required by
this subpart in sufficient detail to demonstrate the adequacy of corrosion
control measures or that corrosion requiring control measures does not
exist. You must retain these records for at least 5 years, except that records
related to §§ 195.569, 195.573(a) and (b) and 195.579(b)(3) and (c) must
be retained for as long as the pipeline remains in service.
The Notice alleged that Respondent violated 49 C.F.R. § 195.589(c) by failing to maintain a
record of each analysis, check, demonstration, examination, inspection, investigation, review,
survey, and test required by Subpart H of 49 C.F.R. Part 195 in sufficient detail to demonstrate
the adequacy of corrosion-control measures or that corrosion requiring control measures did not
exist. Specifically, the Notice alleged that KMLT failed to maintain records of annual
inspections of cathodic-protection systems used to control corrosion on the bottom of
aboveground breakout tanks 100-6, 100-7, 100-9, and 120 to ensure that operation and
maintenance of the system were in accordance with API Recommended Practice 651, pursuant to
§ 195.573(d).
Respondent did not contest this allegation of violation, but did request that it be reduced to a
Warning Item with no associated civil penalty. While KMLT admitted that it had failed to
maintain records of inspections of the cathodic-protection systems for four breakout tanks for



CPF No. 1-2018-5005
Page 4
2013, it argued that extenuating circumstances weighed in favor of reducing this Item to a
Warning Item, with no penalty.2 Specifically, Respondent identified steps it had taken since the
inspection to improve its document-retention procedures and noted that PHMSA’s own Violation
Report indicated that pipeline safety was minimally affected by this alleged violation.
Respondent’s request for a reduction of this Item to a Warning Item is based on corrective
actions the company took after PHMSA discovered the violation. Corrective actions taken after
a violation is discovered, while commendable, do not serve as a basis to reduce a finding of
violation to a Warning Item. KMLT admitted the violation for this Item and reduction to a
Warning Item is not warranted. As for Respondent’s alternative argument that the proposed civil
penalty be reduced because pipeline safety was minimally affected, this argument is more
appropriately addressed below in the Assessment of Penalty section. Accordingly, based upon a
review of all the evidence, I find that Respondent violated 49 C.F.R. § 195.589(c) by failing to
maintain a record of each analysis, check, demonstration, examination, inspection, investigation,
review, survey, and test required by Subpart H of Part 195 in sufficient detail to demonstrate the
adequacy of corrosion-control measures or that corrosion requiring control measures did not
exist.
These findings of violations will be considered prior offenses 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
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.3 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; 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 $217,400 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $60,100 for Respondent’s violation of 49 C.F.R.
§ 195.428(a), for failing to inspect and test, at the required intervals, the relief devices located on
2 Response, at 4.
3 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum
Civil Penalties, 82 Fed. Reg. 19325 (Apr. 27, 2017).



CPF No. 1-2018-5005
Page 5
surge tanks ST-3, ST-4, ST-5, ST-6, and 150-1 to determine that they were adequate from the
standpoint of capacity. As noted above, I found that KMLT’s records of capacity calculations
for the referenced relief devices did not identify the tanks, were not dated, and did not include
any information related to the capacity of the devices.
In its Response, KMLT requested that the proposed civil penalty be reduced because the
violation was a “missing records violation,” pipeline safety was minimally affected, the impacts
of Hurricane Sandy had affected KMLT’s ability to comply with the regulation, and KMLT had
taken steps to ensure compliance going forward.4 For the reasons detailed below, I am not
persuaded that any reduction of the proposed penalty for Item 1 is warranted.
Regarding the nature criterion in the Violation Report, PHMSA noted in the Violation Report
that the alleged violation related to a failure to perform a required activity. Respondent asserted
that the alleged violation was merely a records violation, not a failure to perform a required
activity, and the civil penalty should be reduced accordingly.5 KMLT noted that the “records
regarding engineering calculations of the PV [Pressure Vacuum] devices were lost and/or
destroyed” due to the impacts of Hurricane Sandy.6 However, KMLT failed to present any
evidence that the company had conducted the inspection and tests required by the regulation.
KMLT could have provided an affidavit or other credible evidence to support its claim that the
calculations were performed but that the records had been lost or destroyed because of a natural
disaster. KMLT failed to do so and the record before me contains nothing more than a mere
unsupported statement that the required inspections and calculations were performed, and an
admission that the records do not exist. The only records provided by KMLT showing that the
required inspections and tests were performed on the relevant facilities are dated October 9,
2015, May 28, 2016, and May 30, 2017. All of these inspections and tests occurred after the
date of the PHMSA inspection, August 31 through September 3, 2015, and are therefore
immaterial to the civil penalty associated with this violation.
Regarding the gravity criterion, PHMSA noted in the Violation Report that the alleged violation
compromised pipeline safety or integrity in a High Consequence Area (HCA). Respondent
asserted, again without supporting evidence, that pipeline safety was minimally affected, and the
civil penalty should therefore be reduced.7 As noted above, KMLT failed to inspect and test
relief devices located on five surge tanks in calendar years 2013 and 2014. As noted in the
Violation Report, “the entire pipeline and terminal facility is located in an HCA.”8 A failure to
inspect and test relief devices on surge tanks located in an HCA for a period of two years
necessarily compromises the integrity of such facilities by increasing the likelihood of a release
in an environmentally sensitive area. The absence of an actual incident during this period may
be evidence of good fortune, but it is not evidence sufficient to preclude a finding that the
4 Response, at 2.
5 Id. at 2-3.
6 Id. at 3.
7 Id.
8 Violation Report, at 9.



CPF No. 1-2018-5005
Page 6
integrity of a pipeline or pipeline facility was compromised by a failure to comply with a
regulation. The evidence in the record supports PHMSA’ assertion that pipeline safety or
integrity was compromised in an HCA.
Regarding the culpability and good faith criteria, PHMSA noted in the Violation Report that
KMLT had failed to comply with a requirement that was “clearly applicable,” and that KMLT
did not have a credible justification for its non-compliance. Respondent argued for a reduced
civil penalty because it claimed to have improved its document-management system by
implementing training and procedural revisions to its processes, as well as having created an
electronic records-management system to ensure compliance going forward.9 Further, KMLT
asserted, without any evidence, that the impacts of Hurricane Sandy prevented it from complying
with a clearly applicable regulation.10 Corrective actions taken subsequent to the identification
of a probable violation do not weigh in favor of a reduced penalty.11
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $60,100 for violation of 49 C.F.R. § 195.428(a).
Item 2: The Notice proposed a civil penalty of $73,000 for Respondent’s violation of 49 C.F.R.
§ 195.573(a)(1), for failing to conduct corrosion-control monitoring tests at least once per
calendar year, but not exceeding 15 months. As noted above, I found that KMLT’s records from
January 1, 2012, through December 31, 2014, show that KMLT failed to take 25 structure pipe-
to-soil readings from 2013 through 2014.
In its Response, KMLT requested that the proposed civil penalty be reduced because “at most
this is a records violation,” and KMLT’s newly-implemented testing procedures exceeded
PHMSA’s regulations regarding the number of test stations required.12 Specifically, KMLT
asserted “that these readings [the identified 25 missing monitoring tests in 2013 and 2014] were
taken….” However, as noted above, KMLT failed to provide any credible evidence to support
the conclusory statement that the tests were performed.
Regarding nature and gravity, PHMSA noted in the Violation Report that the alleged violation
related to a failure to perform a required activity, and that pipeline safety or integrity was
compromised in an HCA. Respondent asserted that the missing readings identified in the Notice
were taken, and this violation is, at most, a records violation with no impact on pipeline safety.13
As discussed above for Item 1, I am not persuaded by Respondent’s arguments because there is
9 Id.
10 Id.
11 See e.g., In the Matter of Texas Eastern Transmission, LP, a subsidiary of Spectra Energy Corp. (Texas Eastern),
Final Order, CPF No. 1-2015-1003, 2016 WL 1426021, at 4 (Feb. 26, 2016) (“Respondent's assertion of a general
good-faith effort to continuously improve is based on corrective actions taken after PHMSA learned of the violation,
and therefore does not warrant a reduction in the proposed penalty.”).
12 Response, at 4.
13 Id. at 4-5.



CPF No. 1-2018-5005
Page 7
no evidence in the record that KMLT actually performed the required readings, and the violation
compromised pipeline safety or integrity in an HCA.
Regarding culpability and good faith, PHMSA noted in the Violation Report that KMLT failed
to comply with a requirement that was clearly applicable and KMLT did not have a credible
justification for its failure to comply. Although Respondent did not direct its arguments in
support of a reduced penalty for this Item to these specific factors, Respondent’s arguments
relate to its culpability and good faith. Respondent argued for a reduced civil penalty because
“the personnel previously responsible for cathodic protection (“CP”) are no longer with KMLT,
and the new CP lead is fully versed in the regulatory requirements for casing inspections,
including documentation requirements.”14
I am unaware that PHMSA has ever reduced a proposed civil penalty because a former employee
or employees possibly involved in the violation have subsequently been replaced by competent
personnel. On the contrary, pipeline operators are expected to use competent, qualified
personnel to perform safety-related tasks at all times. Finally, KMLT contended that it had
implemented new procedures that exceeded PHMSA’s regulatory requirements regarding test
stations.15 As noted above, actions taken subsequent to an inspection, no matter how
commendable or proactive, do not demonstrate compliance with the regulations at the time of the
inspection, nor do they weigh in favor of a reduced penalty.16
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $73,000 for violation of 49 C.F.R. § 195.573(a)(1).
Item 3: The Notice proposed a civil penalty of $56,800 for Respondent’s violation of 49 C.F.R.
§ 195.575(c), for failing to inspect and electrically test each electrical isolation to assure the
isolation is adequate. As noted above, I find that KMLT’s records from January 1, 2012, through
December 31, 2014, show that KMLT failed to take seven casing pipe-to-soil readings from
2013 through 2014.
In its Response, KMLT requested that this proposed penalty also be reduced because the
violation is merely a missing records violation, pipeline safety was minimally affected, and
KMLT had implemented a new “process to ensure compliance with inspection intervals and
maintenance of associated documentation.”17 For the reasons detailed below, I find that
KMLT’s arguments in support of a reduced penalty for Item 3 are unpersuasive.
Regarding nature and gravity, PHMSA noted in the Violation Report that the alleged violation
related to a failure to perform a required activity, and that pipeline safety or integrity was
compromised in an HCA. Respondent acknowledged that inspections of the seven casings
14 Id.
15 Id. at 5.
16 Texas Eastern, supra note 11.
17 Response, at 5.



CPF No. 1-2018-5005
Page 8
identified in the Notice “exceeded the required interval of once per calendar year not to exceed
15-months,” but contended that this was still “a records violation only.”18 KMLT’s admission
directly contradicts its assertion that the violation is not properly identified as a failure to
perform a required activity. Further, KMLT asserted that subsequent annual-inspection records
demonstrate that pipeline safety was minimally affected.19 However, as noted above, the records
on which KMLT relies to assert that pipeline safety was minimally affected relate to inspections
that took place after the date of the PHMSA inspection. Subsequent annual inspections do not
serve to mitigate the threat to pipeline safety posed by an earlier failure to comply.20
Regarding culpability and good faith, PHMSA noted in the Violation Report that KMLT failed
to comply with a requirement that was clearly applicable, and that KMLT did not have a credible
justification for its compliance failure. Although Respondent did not direct its arguments in
support of a reduced penalty for this Item to these specific factors, Respondent’s arguments
relate to its culpability and good faith. Respondent argued for a reduced civil penalty for this
Item for the same reasons noted above in Item 2 under these factors.21 Having previously
rejected KMLT’s arguments on this basis, I am not persuaded by KMLT’s arguments for a
reduced penalty here.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $56,800 for violation of 49 C.F.R. § 195.575(c).
Item 4: The Notice proposed a civil penalty of $27,500 for Respondent’s violation of 49 C.F.R.
§ 195.589(c), for failing to maintain a record of each analysis, check, demonstration,
examination, inspection, investigation, review, survey, and test required by Subpart H of 49
C.F.R. Part 195 in sufficient detail to demonstrate the adequacy of corrosion-control measures or
that corrosion requiring control measures did not exist. As noted above, I find that KMLT failed
to maintain records of annual inspections of cathodic protection systems used to control
corrosion on the bottom of aboveground breakout tanks 100-6, 100-7, 100-9, and 120 to ensure
that operation and maintenance of the system were in accordance with API Recommended
Practice 651, pursuant to § 195.573(d).
In its Response, KMLT requested that this Item be withdrawn and reduced to a Warning Item
with no associated civil penalty.22 As noted above, I previously rejected KMLT’s arguments and
found Respondent in violation of the regulation.23 KMLT admitted in its Response that it failed
18 Id.
19 Id.
20 See e.g., In the Matter of Coffeyville Resources Crude Transportation, LLC, a subsidiary of CVR Refining, LP,
Final Order, CPF No. 3-2016-5006, 2017 WL 7049530, at 11 (Oct. 31, 2017) (rejecting Respondent’s argument that
the gravity of the violation should be reduced to a characterization that pipeline safety was minimally affected
because subsequent inspection reports did not identify any imminent threats to the integrity of the pipeline facility).
21 Id. at 5-6.
22 Id. at 6.
23 Supra at 3-4.



CPF No. 1-2018-5005
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to maintain records of inspections of the cathodic protection systems for four breakout tanks in
2013.24 Whether pipeline safety is minimally affected is relevant to the gravity of the violation,
which was discussed more fully in Item 1 above. I find that PHMSA properly identified the
violation as minimally affecting pipeline safety, and calculated the proposed civil penalty for this
Item properly.25
Regarding culpability and good faith, PHMSA noted in the Violation Report that KMLT failed
to comply with a requirement that was clearly applicable and that KMLT did not have a credible
justification for its noncompliance. Although Respondent did not direct its arguments in support
of a reduced penalty for this Item to these specific factors, Respondent’s arguments relate to its
culpability and good faith. Respondent argued for a reduced civil penalty for this Item for the
same reasons noted above in Items 2 and 3 under these factors.26 Having previously rejected
KMLT’s arguments on this basis, I am not persuaded by KMLT’s argument for a reduced
penalty for this Item.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $27,500 for violation of 49 C.F.R. § 195.589(c).
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $217,400.
Payment of the civil penalty must be made within 20 days of service. Federal regulations (49
C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.
The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the $217,400 civil penalty will result in accrual of interest at the current annual
rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a district
court of the United States.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49
24 Response, at 6.
25 Violation Report, at 30.
26 Id. at 5 - 6.



CPF No. 1-2018-5005
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C.F.R. § 195.428(a). 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 § 195.428(a) (Item 1), Respondent must:
a. Provide an analysis (or perform one if none exists) of the capacity
requirements of the relief devices on surge tanks ST-3, ST-4, ST-5, ST-6, and
150-1 within 120 days of receipt of the Final Order.
b. Remediate / adjust / replace devices that were determined to be inadequate by
the related analysis within 240 days of receipt of the Final Order.
c. All documentation demonstrating compliance with items 1a and 1b above
must be submitted to the Director, Eastern Region, Pipeline and Hazardous
Safety Materials Administration, 820 Bear Tavern Road, Suite 103, West
Trenton, NJ 08628, for review within 270 days of receipt of the Final Order.
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.
It is requested that Respondent maintain documentation of the safety improvement costs
associated with fulfilling this Compliance Order and submit the total to the Director. 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.
Failure to comply with this Order may result in the administrative assessment of civil penalties
not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), 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.
Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final
Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey
Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of
Chief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this
Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and
meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays
the payment of any civil penalty assessed. The other terms of the order, including corrective
action, remain in effect unless the Associate Administrator, upon request, grants a stay.



CPF No. 1-2018-5005
Page 11
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
March 8, 2019
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

120185005_NOPV PCP PCO_01182018_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
OVERNIGHT EXPRESS DELIVERY
January 18, 2018
Joshua Etzel
Vice President – Operations & Engineering
Kinder Morgan Liquid Terminals, LLC.
78 Lafayette Street
Carteret, NJ 07008
CPF 1-2018-5005
Dear Mr. Etzel:
From August 31 to September 3, 2015, a representative of the Pipeline and Hazardous Materials
Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of
49 United States Code inspected Kinder Morgan Liquid Terminals, LLC (KMLT) pipeline
terminal in Carteret, New Jersey.
As a result of the inspection, it is alleged that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the
probable violation(s) are:
1. §195.428(a) Overpressure safety devices and overfill protection systems
(a) Except as provided in paragraph (b) of this section, each operator shall, at
intervals not exceeding 15 months, but at least once each calendar year, or in the case
of pipelines used to carry highly volatile liquids, at intervals not to exceed 7½ months,
but at least twice each calendar year, inspect and test each pressure limiting device,
relief valve, pressure regulator, or other item of pressure control equipment to
determine that it is functioning properly, is in good mechanical condition, and is
adequate from the standpoint of capacity and reliability of operation for the service
in which it is used.



CPF 1-2018-5005
KMLT failed to inspect and test the relief devices located on surge tanks ST-3, ST-4, ST-5, ST-6,
and 150-1 to determine that they were adequate from the standpoint of capacity, at the intervals
required under §195.428(a).
During the inspection, the PHMSA inspector requested records for capacity calculations. KMLT
provided a document titled Valve Concepts, Inc. Sizing Report and a P&ID for ST-3 and ST-4.
The PHMSA inspector reviewed the records available since January 1, 2012, and noted that they
did not identify the tanks, were not dated, and did not include any information related to the
capacity of the relief devices. The PHMSA inspector requested additional information and KMLT
stated that, “The only relevant data to breakout tank venting records is found on the Sizing Report,
and Surge Tanks P&ID.”
Thus, KMLT did not provide documentation demonstrating that the capacities of the relief devices
were adequate to relieve the anticipated pressure and flow rates in the piping system in the event
of overpressure situation.
2. §195.573(a)(1) What must I do to monitor external corrosion control
(a) Protected pipelines. You must do the following to determine whether cathodic
protection required by this subpart complies with Sec. 195.571:
(1) Conduct tests on the protected pipeline at least once each calendar year, but with
intervals not exceeding 15 months. However, if tests at those intervals are impractical
for separately protected short sections of bare or ineffectively coated pipelines, testing
may be done at least once every 3 calendar years, but with intervals not exceeding 39
months.
KMLT failed to conduct corrosion control monitoring tests at least once per calendar year, but not
exceeding 15 months. During the inspection, the PHMSA inspector reviewed cathodic protection
records from January 1, 2012, through December 31, 2014. The records show that KMLT failed
to take 25 structure pipe-to-soil readings from 2013 through 2014. The PHMSA inspector asked
KMLT why there were missing test reads in the records. KMLT was unable to provide a reason.
Thus, KMLT failed to conduct tests on the protected pipeline at least once each calendar year, but
with intervals not exceeding 15 months.
3. § 195.575(c) Which facilities must I electrically isolate and what inspections, tests, and
safeguards are required
(c) You must inspect and electrically test each electrical isolation to assure the
isolation is adequate.
KMLT failed to inspect and electrically test each electrical isolation to assure the isolation is
adequate. During the inspection, the PHMSA inspector reviewed cathodic protection records from
January 1, 2012 through December 31, 2014. The records show that KMLT failed to take 7 casing
pipe-to-soil readings from 2013 through 2014. The PHMSA inspector asked KMLT why there
were missing test reads in the records. KMLT was unable to provide a reason.
Thus, KMLT failed to inspect and electrically test each electrical isolation to assure the isolation
is adequate.
120185005_NOPV PCP PCO_01182018_text Page 2 of 5



CPF 1-2018-5005
4. §195.589(c) What corrosion control information do I have to maintain
(c) You must maintain a record of each analysis, check, demonstration, examination,
inspection, investigation, review, survey, and test required by this subpart in
sufficient detail to demonstrate the adequacy of corrosion control measures or that
corrosion requiring control measures does not exist. You must retain these records
for at least 5 years, except that records related to Secs. 195.569, 195.573(a) and (b),
and 195.579(b)(3) and (c) must be retained for as long as the pipeline remains in
service.
KMLT failed to maintain a record of each analysis, check, demonstration, examination, inspection,
investigation, review, survey, and test required by this subpart in sufficient detail to demonstrate
the adequacy of corrosion control measures or that corrosion requiring control measures does not
exist.
Specifically, KMLT failed to maintain records of annual inspections of cathodic protection
systems used to control corrosion on the bottom of aboveground breakout tanks 100-6, 100-7, 100-
9, and 120, to ensure that operation and maintenance of the system are in accordance with API
Recommended Practice 651, as per §195.573(d).
During the inspection, the PHMSA inspector requested cathodic protection tanks inspection
records for 2012-2014 for the four tanks referenced above. KMLT was unable to provide records
which documented cathodic protection inspections for 2013. KMLT stated that tank construction
records were missing due to the devastation caused by Hurricane Sandy and that construction,
inspection, repair and alteration records were lost/destroyed) and could not be provided during the
inspection.
Superstorm Sandy occurred in October 2012. Inspections conducted in 2013 could not have been
missing due to the storm. KMLT could not provide 2013 inspection records.
Therefore, KMLT failed to maintain records of inspections of the cathodic protection system for
breakout tanks 100-6, 100-7, 100-9, and 120 in 2013.
Proposed Civil Penalty
Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed
$209,002 per violation per day the violation 
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