{"operation":"document","citation":"CPF 120185006","title":"ERGON TERMINALING, INC. — 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":null,"summary":"CLOSED notice of probable violation citing 195.402(c)(3), 195.404(a)(3), 195.404(c)(3), 195.428(a), 195.573(a)(1), 195.575(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120185006.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120185006.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120185006","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120185006","body":"Notice of Probable Violation involving ERGON TERMINALING, INC.. PHMSA's enforcement data identifies the cited regulations as 195.402(c)(3),  195.404(a)(3),  195.404(c)(3),  195.428(a),  195.573(a)(1),  195.575(c). The case was opened on 2018-01-18 and is reported as closed as of 2020-03-02. Proposed civil penalty: $134,200. Assessed civil penalty: $108,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120185006_Closure Letter_03022020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Closure%20Letter_03022020.pdf\n\n120185006_Closure Letter_03022020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Closure%20Letter_03022020_text.pdf\n\n120185006_Final Order_05312019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Final%20Order_05312019.pdf\n\n120185006_Final Order_05312019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Final%20Order_05312019_text.pdf\n\n120185006_NOPV PCP PCO_01182018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_NOPV%20PCP%20PCO_01182018.pdf\n\n120185006_NOPV PCP PCO_01182018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_NOPV%20PCP%20PCO_01182018_text.pdf\n\n120185006_Operator Response to Notice_07052018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Operator%20Response%20to%20Notice_07052018.pdf\n\n120185006_Final Order_05312019_text.pdf\n\nMay 31, 2019\nMr. Emmitte Haddox\nPresident & Chief Executive Officer\nErgon, Inc.\nP. O. Box 1639\nJackson, Mississippi 39215\nRe: CPF No. 1-2018-5006\nDear Mr. Haddox:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nErgon Terminaling, Inc. It makes findings of violation, assesses a reduced civil penalty of\n$108,500, and specifies actions that need to be taken by Ergon to comply with the pipeline safety\nregulations. The penalty payment terms are set forth in the Final Order. When the civil penalty\nhas been paid and the terms of the compliance order completed, as determined by the Director,\nEastern Region, this enforcement action will be closed. Service of the Final Order by certified\nmail is effective 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, Office of Pipeline Safety, PHMSA\nMr. Joel Pastorek, President, Ergon Terminaling, Inc., 2829 Lakeland Drive, Jackson,\nMS 39215\nMr. Steve Clark, CHMM, CPEA, Regional Compliance, Ergon Terminaling, Inc.\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 )\nErgon Terminaling, Inc., ) CPF No. 1-2018-5006\na subsidiary of Ergon, Inc., )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom September 14 through September 18, 2015, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of Ergon Terminaling, Inc. (Ergon or Respondent) in Magnolia, Ohio. Ergon, a\nsubsidiary of Ergon, Inc., owns and leases pipeline and gathering systems to transport, store, and\ndistribute crude oil and finished products.1 Ergon’s single pipeline transports crude oil\napproximately 38 miles throughout the states of Ohio and West Virginia.2\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated January 18, 2018, 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 Ergon had committed seven violations of 49 C.F.R. Part 195 and proposed\nassessing a civil penalty of $134,200 for the alleged violations. The Notice also proposed\nordering Respondent to take certain measures to correct the alleged violations.\nAfter requesting and receiving three extensions of time to respond, as well as meeting informally\nwith the Director, Ergon responded to the Notice by letter dated July 5, 2018 (Response). The\ncompany did not contest the allegations of violation but provided information concerning the\nviolations and corrective actions it had taken and requested that the proposed civil penalty be\nreduced. Respondent did not request a hearing and therefore has waived its right to one.\n1 Ergon, Inc., website, available at https://ergon.com/transportation-terminaling (lasted accessed April 22, 2019).\n2 Pipeline Safety Violation Report (Violation Report), (Jan. 18, 2018) (on file with PHMSA), at 1.\n\n\n\nCPF No. 1-2018-5006\nPage 2\nFINDINGS OF VIOLATION\nIn its Response, Ergon did not contest the allegations in the Notice that it violated 49 C.F.R. Part\n195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(c)(3), which states:\n§ 195.402 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations\nand maintenance activities and handling abnormal operations and\nemergencies . . . .\n(c) Maintenance and normal operations. The manual required by\nparagraph (a) of this section must include procedures for the following to\nprovide safety during maintenance and normal operations:\n(1) . . . .\n(3) Operating, maintaining, and repairing the pipeline system in\naccordance with each of the requirements of this subpart and subpart H of\nthis part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.402(c)(3) by failing to prepare and\nfollow for each pipeline system a manual of written procedures that includes procedures for\noperating, maintaining, and repairing the pipeline system in accordance with each of the\nrequirements of Subpart F and Subpart H of Part 195. Specifically, the Notice alleged that\nErgon’s “Magnolia Pipeline Operations Manual,” dated January 2015 (O&M Manual), Section\n3.13 - Firefighting Equipment, does not provide procedures on how to maintain adequate\nfirefighting equipment at each pump station and breakout-tank area to ensure that it is in proper\noperating condition at all times, in accordance with § 195.430.3\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.402(c)(3) by failing to prepare\nand follow for each pipeline system a manual of written procedures that includes procedures for\noperating, maintaining, and repairing the pipeline system in accordance with each of the\nrequirements of Subpart F and Subpart H of Part 195.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), which states:\n§ 195.404 Maps and records.\n(a) . . . .\nspecified:\n(1) . . . .\n(c) Each operator shall maintain the following records for the periods\n3 Section 195.430 requires each operator to maintain adequate firefighting equipment at each pump station and\nbreakout-tank area. Among other things, the equipment must be in proper operating condition at all times.\n\n\n\nCPF No. 1-2018-5006\nPage 3\n(3) A record of each inspection and test required by this subpart shall\nbe maintained for at least 2 years or until the next inspection or test is\nperformed, whichever is longer.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain a\nrecord of each inspection and test required by Subpart F of Part 195 for at least two years or until\nthe next inspection or test is performed, whichever is longer. Specifically, the Notice alleged\nthat Ergon failed to maintain records of the review and inspection of its O&M Manual at\nintervals not exceeding 15 months, but at least once each calendar year, in accordance with\n§ 195.402(a).4 During the inspection, Ergon did not have records indicating it had completed an\nannual review of its O&M Manual for 2013 or 2014.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain\na record of each inspection and test required by Subpart F of Part 195 for at least 2 years or until\nthe next inspection or test is performed, whichever is longer.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(3), which states:\n§ 195.404 Maps and records.\n(a) Each operator shall maintain current maps and records of its\npipeline systems that include at least the following information:\n(1) . . . .\n(3) The maximum operating pressure of each pipeline.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(3) by failing to maintain\ncurrent maps and records of its pipeline systems that include the maximum operating pressure\n(MOP) of each pipeline. Specifically, the Notice alleged that Ergon had two records with\nconflicting information regarding the MOP of the Magnolia Pipeline as determined in\naccordance with § 195.406.5 The 2005 hydrostatic test record indicates the MOP for the pipeline\nis 1,219 psig, but the O&M Manual indicates the MOP for the pipeline is 1,423 psig.\nAdditionally, Section 3.1 of Ergon’s O&M Manual states: “the weakest component in the system\nis the pipe,” and in an email dated October 26, 2016, Ergon stated that “other components were\nnot considered in this calculation as the weakest component in the system is the pipe.” Ergon’s\nrecords do not include any information on other system components, such as flanges and valves,\nto substantiate the company’s conclusion that the pipe is the weakest component.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.404(a)(3) by failing to maintain\ncurrent maps and records of its pipeline systems that include the maximum operating pressure of\neach pipeline.\n4 Section 195.402(a) requires an operator to review its manual “at intervals not exceeding 15 months, but at least\nonce each calendar year” and to make “appropriate changes . . . as necessary” to ensure the manual is effective.\n5 Section 195.406 requires an operator to establish the maximum operating pressure for each pipeline using certain\nmethods.\n\n\n\nCPF No. 1-2018-5006\nPage 4\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), as quoted above,\nby failing to maintain a record of each inspection and test required by Subpart F of Part 195 for\nat least two years or until the next inspection or test is performed, whichever is longer.\nSpecifically, the Notice alleged that Ergon did not maintain records of inspections conducted to\ndemonstrate there is adequate firefighting equipment at each pump station and breakout-tank\narea and the equipment is in proper operating condition at all times, in accordance with\n§ 195.430. During PHMSA’s review of Ergon’s procedures and records relating to inspection of\nfirefighting equipment at the Magnolia, Ohio facility from 2013 to 2015, PHMSA discovered\nrecords that did not include sufficient information to demonstrate that the firefighting equipment\nwas in proper operating condition at all times. This included work orders that failed to include\nsuch information as the scope of the inspection, the firefighting equipment number, device, or\ntag, the names of the individuals conducting the inspection and test, and documentation of any\nrepairs required.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain\na record of each inspection and test required by Subpart F of Part 195 for at least two years or\nuntil the next inspection or test is performed, whichever is longer.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:\n§ 195.428 Overpressure safety devices and overfill protection systems.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall, at intervals not exceeding 15 months, but at least once each calendar\nyear, or in the case of pipelines used to carry highly volatile liquids, at\nintervals not to exceed 7½ months, but at least twice each calendar year,\ninspect and test each pressure limiting device, relief valve, pressure\nregulator, or other item of pressure control equipment to determine that it is\nfunctioning properly, is in good mechanical condition, and is adequate from\nthe standpoint of capacity and reliability of operation for the service in\nwhich it is used.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and test\neach pressure-limiting device, relief valve, pressure regulator, or other item of pressure-control\nequipment, at intervals not exceeding 15 months but at least once each calendar year, to\ndetermine that it is functioning properly, is in good mechanical condition, and is adequate from\nthe standpoint of capacity and reliability of operation for the service in which it is used.\nSpecifically, the Notice alleged that from 2013 to 2015, Ergon failed to conduct nine inspections\nand tests of pressure-relief valves. During the PHMSA inspection, Ergon provided the agency\nwith a list of nine relief valves on the Magnolia Pipeline and admitted to not inspecting or testing\nthem.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and\ntest each pressure-limiting device, relief valve, pressure regulator, or other item of pressure-\n\n\n\nCPF No. 1-2018-5006\nPage 5\ncontrol equipment, at intervals not exceeding 15 months but at least once each calendar year, to\ndetermine that it is functioning properly, is in good mechanical condition, and is adequate from\nthe standpoint of capacity and reliability of operation for the service in which it is used.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states, in\nrelevant part:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with\n§ 195.571:\n(1) Conduct tests on the protected pipeline at least once each calendar\nyear, but with intervals not exceeding 15 months. . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct\ntests on a protected pipeline at least once each calendar year, but with intervals not exceeding 15\nmonths, to determine whether the cathodic protection on its pipeline and required by Subpart H\nof Part 195 complies with § 195.571. Specifically, the Notice alleged that Ergon failed to\nconduct 73 structure pipe-to-soil readings each year from 2013 to 2014, for a total of 146 missed\nreadings. During the inspection, Ergon could not produce records of the cathodic-protection\nreadings from the tests for 2013 and 2014.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct\ntests on a protected pipeline at least once each calendar year, but with intervals not exceeding 15\nmonths, to determine whether the cathodic protection on its pipeline and required by Subpart H\nof Part 195 complies with § 195.571.\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.575(c), which states:\n§ 195.575 Which facilities must I electrically isolate and what\ninspections, tests, and safeguards are required?\n(a) . . . .\n(c) You must inspect and electrically test each electrical isolation to\nassure the isolation is adequate.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.575(c) by failing to inspect and\nelectrically test each electrical isolation to assure the isolation is adequate. Specifically, the\nNotice alleged that Ergon failed to take 51 casing pipe-to-soil readings each year from 2013 to\n2014, for a total of 102 missed readings on its 8-inch NPS crude oil pipeline.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.575(c) by failing to inspect and\nelectrically test each electrical isolation to assure the isolation is adequate.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\n\n\n\nCPF No. 1-2018-5006\nPage 6\naction taken against Respondent.\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.6 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; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $134,200 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $11,500 for Respondent’s violation of 49 C.F.R.\n§ 195.402(c)(3), for failing to prepare and follow for each pipeline system a manual of written\nprocedures that includes procedures for operating, maintaining, and repairing the pipeline system\nin accordance with each of the requirements of Subpart F and Subpart H of Part 195. As\ndiscussed in the June 6, 2018 meeting with PHMSA, and as submitted with Ergon’s Response,\nErgon has updated its O&M Manual, Section 3.13 - Firefighting Equipment. Ergon argued that\nthe culpability component of the proposed penalty for this item should be reduced because\nSection 3.13 of its procedures applies to a single fire extinguisher associated with its pipeline. I\nfind that a civil penalty reduction for this item is not warranted because the reasons why Ergon\nfailed to achieve compliance were not unforeseeable or wholly outside its control. Further, I find\nno basis to reduce the penalty based on gravity because the penalty amount already reflects that\nthe violation minimally affected pipeline safety. Lastly, I find that a civil penalty reduction is\nnot warranted based on the “good faith” component because the actions Respondent took to\ncomply with the requirement occurred after PHMSA learned of the violation. Based upon the\nforegoing, I assess Respondent a civil penalty of $11,500 for violation of 49 C.F.R.\n§ 195.402(c)(3).\nItem 2: The Notice proposed a civil penalty of $13,000 for Respondent’s violation of 49 C.F.R.\n§ 195.404(c)(3), for failing to maintain a record of each inspection and test required by Subpart F\nof Part 195 for at least two years or until the next inspection or test is performed, whichever is\nlonger. In its Response, Ergon noted it uses an online task-tracking system to monitor and track\ncompliance tasks, and submitted a report from the system. This report shows facility plans were\nreviewed in November 2013 and November 2014. I find that a civil penalty reduction for this\nitem is not warranted because Respondent did not provide the missing O&M Manual annual\nreview records for 2013 or 2014. The inspection records submitted are not related to conducting\nthe O&M Manual annual review. Therefore, Respondent has provided no justification for\n6 These amounts are adjusted annually for inflation. See, 49 C.F.R. § 190.223; Revisions to Civil Penalty Amounts,\n83 Fed. Reg. 60732, 60744 (Nov. 27, 2018).\n\n\n\nCPF No. 1-2018-5006\nPage 7\nreducing or eliminating the penalty. Based upon the foregoing, I assess Respondent a civil\npenalty of $13,000 for violation of 49 C.F.R. § 195.404(c)(3).\nItem 4: The Notice proposed a civil penalty of $14,400 for Respondent’s violation of 49 C.F.R.\n§ 195.404(c)(3), for failing to maintain a record of each inspection and test required by Subpart F\nof Part 195 to demonstrate that the operator’s firefighting equipment is adequate and in proper\nworking condition in accordance with § 195.430. During its informal meeting with PHMSA,\nErgon noted that § 195.430(a) does not include a specified frequency for the inspection of\nfirefighting equipment and, therefore, the number of instances of violation should be reduced.\nRespondent also produced information showing that the monthly inspections of firefighting\nequipment did occur, but those records did not include sufficient information to show the\nequipment was in proper operating condition at all times. For example, the records did not\ninclude the names of people who conducted the inspections and equipment numbers. However,\nbecause the documentation provided to PHMSA showed that some inspections were performed, I\nfind that a civil penalty reduction is warranted based on the number of instances relating to the\nnature of the violation. Based upon the foregoing, I assess Respondent a reduced civil penalty of\n$12,900 for violation of 49 C.F.R. § 195.404(c)(3).\nItem 5: The Notice proposed a civil penalty of $27,700 for Respondent’s violation of 49 C.F.R.\n§ 195.428(a), for failing to inspect and test nine relief valves, at intervals not exceeding 15\nmonths but at least once each calendar year, to determine that each valve is functioning properly,\nis in good mechanical condition, and is adequate from the standpoint of capacity and reliability\nof operation for the service in which it is used. In its Response, Ergon submitted a revised\nPiping and Instrumentation Diagram (P&ID), showing there are only two jurisdictional pressure-\nrelief devices on the pipeline, as opposed to the nine devices originally identified. Respondent\nalso submitted documentation showing its pressure-relief devices were operating properly during\nactual pressure-relief events. Based on this information, I find that a civil penalty reduction is\nwarranted based on a lower number of instances of violation. I also find that the gravity\ncomponent of the penalty should be reduced because pipeline safety was minimally affected.\nBased upon the foregoing, I assess Respondent a reduced civil penalty of $19,300 for violation\nof 49 C.F.R. § 195.428(a).\nItem 6: The Notice proposed a civil penalty of $34,500 for Respondent’s violation of 49 C.F.R.\n§ 195.573(a)(1), for failing to conduct 73 structure pipe-to-soil readings each year from 2013 to\n2014, for a total of 146 missed readings, to determine whether cathodic protection required by\nSubpart H of Part 195 complies with § 195.571. In its Response, Ergon provided additional\n2013 survey data and argued that a reduction in the gravity component of the civil penalty is\nwarranted because the 2013 cathodic-protection survey submitted showed that some components\nwere checked properly, even though it was not a complete survey due to construction. Based on\nthis information, I find that a civil penalty reduction is warranted because the number of\ninstances of violation is reduced from 73 to 39 missed test station readings for 2013.7\nAdditionally, I find that the gravity component of the penalty criteria should be reduced based on\npipeline safety being minimally affected because Respondent demonstrated that adequate\n7 Respondent did not submit any documentation regarding the 73 cathodic protection surveys for 2014.\n\n\n\nCPF No. 1-2018-5006\nPage 8\ncathodic protection was applied in 2012 and 2015. Ergon also demonstrated adequate cathodic\nprotection was applied in 2013 to at least a portion of its pipeline system. Based upon the\nforegoing, I assess Respondent a reduced civil penalty of $25,900 for violation of 49 C.F.R.\n§ 195.573(a)(1).\nItem 7: The Notice proposed a civil penalty of $33,100 for Respondent’s violation of 49 C.F.R.\n§ 195.575(c), for failing to inspect and electrically test 51 locations of electrical isolation each\nyear from 2013 to 2014, for a total of 102 missed readings, to ensure that the isolation is\nadequate. In its Response, Ergon provided additional 2013 data and argued that a penalty\nreduction is warranted because the 2013 cathodic-protection survey showed that some\ncomponents were checked properly, even though it was not a complete survey due to ongoing\nconstruction. Based on this information, I find that a penalty reduction is warranted because the\nnumber of instances of violation is reduced from 51 to 27 missed casing-to-soil readings for\n2013.8 Additionally, I find that the gravity component of the civil penalty should be reduced\nbased on pipeline safety being minimally affected because Respondent demonstrated adequate\nisolation in 2012 and 2015. Ergon also demonstrated adequate isolation in 2013 for at least part\nof its pipeline system. Based upon the foregoing, I assess Respondent a reduced civil penalty of\n$25,900 for violation of 49 C.F.R. § 195.575(c).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total reduced civil penalty of $108,500.\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 $108,500 civil penalty will result in accrual of interest at the current annual\nrate in 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.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 3, and 5 in the Notice for\nviolations of 49 C.F.R. §§ 195.402(c)(3), 195.404(a)(3), and 195.428(a), respectively. Under 49\nU.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\n8 Respondent did not submit any documentation regarding the 51 casing-to-soil reads for 2014.\n\n\n\nCPF No. 1-2018-5006\nPage 9\nestablished under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R.\n§ 190.217, Respondent is ordered to take the following actions to ensure compliance with the\npipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.402(c)(3) (Item 1), Respondent must\ndevelop procedures for maintaining adequate firefighting equipment in accordance\nwith § 195.430 and implement the procedures at Ergon’s Magnolia, Ohio facility.\nRespondent must have completed records, including, but not limited to, records\nverifying that all firefighting equipment at the Magnolia, Ohio facility is in proper\noperating condition.\n2. With respect to the violation of § 195.404(a)(3) (Item 3), Respondent must\nprovide records demonstrating that the MOP of all jurisdictional pipeline segments at\nthe Magnolia, Ohio facility meet the requirements of § 195.406(a).\n3. With respect to the violation of § 195.428(a) (Item 5), Respondent must inspect\nand test all overpressure safety devices at the Magnolia, Ohio facility, per\n§ 195.428(a) and Ergon’s procedures.\n4. Submit to the Director, Eastern Region, OPS, within 60 days following receipt of\nthe Final Order, written documentation to satisfy Compliance Order Items 1 through\n3 above.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nIt is requested (not mandated) that Respondent maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total to the\nDirector. It is requested that these costs be reported in two categories: (1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated\nwith replacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\n\n\n\nCPF No. 1-2018-5006\nPage 10\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nMay 31, 2019\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n120185006_Closure Letter_03022020_text.pdf\n\nOVERNIGHT EXPRESS DELIVERY\nMarch 2, 2020\nMr. Emmitte Haddox\nPresident & Chief Executive Officer\nErgon, Inc.\nP.O. Box 1639\nJackson, Mississippi 39215\nCPF 1-2018-5006\nDear Mr. Haddox:\nOn May 31, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Ergon Terminaling, Inc. (Ergon) a Final Order in the above-referenced case. This Order included\na Compliance Order and Civil Penalty assessment. Based on our review of the documentation you\nprovided and confirmation of payment of the civil penalty, it has been determined that you have\ncomplied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nRobert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n\n120185006_NOPV PCP PCO_01182018_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nOVERNIGHT EXPRESS DELIVERY\nJanuary 18, 2018\nJoel Pastorek, President\nErgon Terminaling, Inc.\n2829 Lakeland Drive\nJackson, MS 39215\nCPF 1-2018-5006\nDear Mr. Pastorek:\nFrom September 14, 2015 to September 18, 2015, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter\n601 of 49 United States Code inspected the Ergon Terminaling, Inc. (Ergon) pipeline facility in\nMagnolia, Ohio.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the\nprobable violation(s) are:\n1. §195.402(c)(3) Procedural manual for operations, maintenance, and emergencies.\n(c) Maintenance and normal operations. The manual required by paragraph (a) of\nthis section must include procedures for the following to provide safety during\nmaintenance and normal operations:\n(3) Operating, maintaining, and repairing the pipeline system in accordance with\neach of the requirements of this subpart…\nErgon’s firefighting equipment procedure failed to include guidance on operating, maintaining,\nand repairing the pipeline system in accordance with each of the requirements of this subpart.\nSpecifically, Ergon’s Magnolia Pipeline Operations Manual, Ergon Terminaling Inc., dated\n\n\n\nCPF 1-2018-5006\nJanuary 2015, Section 3.13– Firefighting Equipment does not provide guidance on how to maintain\nadequate firefighting equipment at each pump station and breakout tank area to ensure that it is in\nproper operating condition at all times as per §195.430.\nThe procedure lacks detail such as, but not limited to:\n1. 2. 4. 5. 6. Applicable local, state and federal regulations\nEquipment marking and labelling requirements\n3. Required inspection intervals\nInspection and maintenance documentation requirements\nIndividuals responsible for conducting the inspection\nRemedial issue followed-up and documentation\n2. §195.404(c)(3) Maps and Records\n(c) Each operator shall maintain the following records for the periods specified;\n(3) A record of each inspection and test required by this subpart shall be maintained\nfor at least 2 years or until the next inspection or test is performed, whichever is\nlonger.\nErgon failed to maintain a record of each inspection and test required by this subpart. Specifically,\nErgon failed to maintain records of the review of its manual of written procedures for conducting\nnormal operations and maintenance (O&M) activities at intervals not exceeding 15 months, but at\nleast once each calendar year in accordance with §195.402(a).\nDuring the inspection, the PHMSA inspector requested records related to annual reviews of Ergon\nTrucking Inc.’s O&M manual. Ergon provided annual review records for calendar year 2015 for\nthe following manuals:\n1. Operations and Maintenance Manual\n2. Control Room Management\n3. Integrity Management\n4. Pipeline Response Plan\nErgon did not have records indicating an annual review was conducted of its O&M manual for\n2013 or 2014. The PHMSA inspector asked for relevant records and Ergon stated, “We do not\nhave any record documenting the annual reviews, other than the most recent year 2015.” Ergon\nalso stated, “The O&M manual has been reviewed prior to 2015, but was not documented.” Ergon\nfailed to maintain records of an annual review of its written procedures during the years of 2013\nand 2014.\n3. §195.404(a)(3) Maps and Records\n(a) Each operator shall maintain current maps and records of its pipeline systems that\ninclude at least the following information; …\n(3) The maximum operating pressure of each pipeline.\n120185006_NOPV PCP PCO_01182018_text Page 2 of 8\n\n\n\nCPF 1-2018-5006\nErgon failed to maintain detailed records to demonstrate that the maximum operating pressure\n(MOP) of its jurisdictional pipeline segments were determined in accordance with §195.406(a).\nSpecifically, Ergon had two records with conflicting information of the MOP of the Magnolia\nPipeline.\nDuring the inspection, the PHMSA inspector reviewed the following:\n1. Ergon’s Certification of Pipeline Pressure Test, dated 9-20-71\n2. MOP of Magnolia Pipeline record, based on Hydrostatic Test Performed in 2005.\n3. Magnolia Pipeline Operations Manual Ergon Terminaling, Inc., dated January 2015\nThe hydrostatic test record from 2005 indicates that the MOP for the pipeline is 1,219 psig and the\nPipeline Operations Manual indicates that the MOP for the pipeline is 1,423 psig. The PHMSA\ninspector asked Ergon to verify the correct MOP for the system. Ergon responded via email that:\n1. “The Magnolia Pipeline was hydrostatically tested in 2005. Based on the results of this\nhydro test, the MOP for the pipeline is 1,219 psig. We will amend Section 3.1 of the O&M\nplan to reflect this MOP and include language that this MOP is based on the hydrostatic\ntest.\n2. “The MOP listed in Section 3.1 of the O&M Plan is based on the calculation found at 49\nCFR 195.106. It is not based on the original pressure test.”\nIn addition, Section 3.1 of the O&M plan states that “the weakest component in the system is the\npipe” and in an email dated 10/26/2016, Ergon stated that “other components were not considered\nin this calculation as the weakest component in the system is the pipe.” Ergon’s records do not\ninclude any information on other system components, such as flanges and valves, to substantiate\nthat the pipe is the weakest component.\nTherefore, Ergon failed to maintain detailed records to demonstrate that the maximum operating\npressure (MOP) of its jurisdictional pipeline segments were determined in accordance with\n§195.406(a).\n4. § 195.404(c)(3) Maps and Records\n(c) Each operator shall maintain the following records for the periods specified;\n(3) A record of each inspection and test required by this subpart shall be maintained\nfor at least 2 years or until the next inspection or test is performed, whichever is\nlonger.\n…\nErgon failed to maintain a record of each inspection and test required by this subpart for at least 2\nyears or until the next inspection or test is performed, whichever is longer. Specifically, Ergon did\nnot maintain records to demonstrate that there is adequate firefighting equipment at each pump\nstation and breakout tank area that is in proper operating condition at all times in accordance with\n§195.430(a).\nDuring the inspection, the PHSMA inspector reviewed Ergon’s procedures and records related to\ninspection of firefighting equipment at the Ergon Magnolia, Ohio facility from 2013 to 2015.\n120185006_NOPV PCP PCO_01182018_text Page 3 of 8\n\n\n\nCPF 1-2018-5006\n1. 2. In an email dated October 6, 2015, the PHMSA inspector asked Ergon “In review of O&M\nSection 3.13 Firefighting Equipment, what frequency does Ergon use to inspect its\nfirefighting equipment at the facility?” Ergon responded in an email dated 10/13/2015, that\n“Firefighting equipment is inspected monthly using an external third party contractor. . .”\nErgon provided records that did not include sufficient information to demonstrate that the\nfirefighting equipment was in proper operating condition at all times. For example, the\nwork orders did not include items such as:\na. Scope of the inspection\nb. The firefighting equipment number, device, or tag\nc. Names of people who conducted the inspection and test\nd. Documentation of any repairs required\nTherefore, Ergon failed to maintain records of each firefighting equipment inspection and/or test,\nto ensure that it is in proper operating condition.\n5. § 195.428(a) Overpressure safety devices and overfill protection system\n(a) Except as provided in paragraph (b) of this section, each operator shall, at\nintervals not exceeding 15 months, but at least once each calendar year, or in the case\nof pipelines used to carry highly volatile liquids, at intervals not to exceed 7½ months,\nbut at least twice each calendar year, inspect and test each pressure limiting device,\nrelief valve, pressure regulator, or other item of pressure control equipment to\ndetermine that it is functioning properly, is in good mechanical condition, and is\nadequate from the standpoint of capacity and reliability of operation for the service\nin which it is used.\nErgon failed to inspect and test each pre","truncated":true,"body_characters":51373}