# ERGON TERMINALING, INC. — Notice of Probable Violation

- **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:** Not available
- **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).
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- **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.

Official case documents:

120185006_Closure Letter_03022020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Closure%20Letter_03022020.pdf

120185006_Closure Letter_03022020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Closure%20Letter_03022020_text.pdf

120185006_Final Order_05312019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Final%20Order_05312019.pdf

120185006_Final Order_05312019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Final%20Order_05312019_text.pdf

120185006_NOPV PCP PCO_01182018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_NOPV%20PCP%20PCO_01182018.pdf

120185006_NOPV PCP PCO_01182018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_NOPV%20PCP%20PCO_01182018_text.pdf

120185006_Operator Response to Notice_07052018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185006/120185006_Operator%20Response%20to%20Notice_07052018.pdf

120185006_Final Order_05312019_text.pdf

May 31, 2019
Mr. Emmitte Haddox
President & Chief Executive Officer
Ergon, Inc.
P. O. Box 1639
Jackson, Mississippi 39215
Re: CPF No. 1-2018-5006
Dear Mr. Haddox:
Enclosed please find the Final Order issued in the above-referenced case to your subsidiary,
Ergon Terminaling, Inc. It makes findings of violation, assesses a reduced civil penalty of
$108,500, and specifies actions that need to be taken by Ergon 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, 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. Joel Pastorek, President, Ergon Terminaling, Inc., 2829 Lakeland Drive, Jackson,
MS 39215
Mr. Steve Clark, CHMM, CPEA, Regional Compliance, Ergon Terminaling, Inc.
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 )
Ergon Terminaling, Inc., ) CPF No. 1-2018-5006
a subsidiary of Ergon, Inc., )
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
From September 14 through September 18, 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 Ergon Terminaling, Inc. (Ergon or Respondent) in Magnolia, Ohio. Ergon, a
subsidiary of Ergon, Inc., owns and leases pipeline and gathering systems to transport, store, and
distribute crude oil and finished products.1 Ergon’s single pipeline transports crude oil
approximately 38 miles throughout the states of Ohio and West Virginia.2
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 Ergon had committed seven violations of 49 C.F.R. Part 195 and proposed
assessing a civil penalty of $134,200 for the alleged violations. The Notice also proposed
ordering Respondent to take certain measures to correct the alleged violations.
After requesting and receiving three extensions of time to respond, as well as meeting informally
with the Director, Ergon responded to the Notice by letter dated July 5, 2018 (Response). The
company did not contest the allegations of violation but provided information concerning the
violations and corrective actions it had taken and requested that the proposed civil penalty be
reduced. Respondent did not request a hearing and therefore has waived its right to one.
1 Ergon, Inc., website, available at https://ergon.com/transportation-terminaling (lasted accessed April 22, 2019).
2 Pipeline Safety Violation Report (Violation Report), (Jan. 18, 2018) (on file with PHMSA), at 1.



CPF No. 1-2018-5006
Page 2
FINDINGS OF VIOLATION
In its Response, Ergon 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. § 195.402(c)(3), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) General. Each operator shall prepare and follow for each pipeline
system a manual of written procedures for conducting normal operations
and maintenance activities and handling abnormal operations and
emergencies . . . .
(c) Maintenance and normal operations. The manual required by
paragraph (a) of this section must include procedures for the following to
provide safety during maintenance and normal operations:
(1) . . . .
(3) Operating, maintaining, and repairing the pipeline system in
accordance with each of the requirements of this subpart and subpart H of
this part.
The Notice alleged that Respondent violated 49 C.F.R. § 195.402(c)(3) by failing to prepare and
follow for each pipeline system a manual of written procedures that includes procedures for
operating, maintaining, and repairing the pipeline system in accordance with each of the
requirements of Subpart F and Subpart H of Part 195. Specifically, the Notice alleged that
Ergon’s “Magnolia Pipeline Operations Manual,” dated January 2015 (O&M Manual), Section
3.13 - Firefighting Equipment, does not provide procedures on how to maintain adequate
firefighting equipment at each pump station and breakout-tank area to ensure that it is in proper
operating condition at all times, in accordance with § 195.430.3
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. § 195.402(c)(3) by failing to prepare
and follow for each pipeline system a manual of written procedures that includes procedures for
operating, maintaining, and repairing the pipeline system in accordance with each of the
requirements of Subpart F and Subpart H of Part 195.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), which states:
§ 195.404 Maps and records.
(a) . . . .
specified:
(1) . . . .
(c) Each operator shall maintain the following records for the periods
3 Section 195.430 requires each operator to maintain adequate firefighting equipment at each pump station and
breakout-tank area. Among other things, the equipment must be in proper operating condition at all times.



CPF No. 1-2018-5006
Page 3
(3) A record of each inspection and test required by this subpart shall
be maintained for at least 2 years or until the next inspection or test is
performed, whichever is longer.
The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain a
record of each inspection and test required by Subpart F of Part 195 for at least two years or until
the next inspection or test is performed, whichever is longer. Specifically, the Notice alleged
that Ergon failed to maintain records of the review and inspection of its O&M Manual at
intervals not exceeding 15 months, but at least once each calendar year, in accordance with
§ 195.402(a).4 During the inspection, Ergon did not have records indicating it had completed an
annual review of its O&M Manual for 2013 or 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. § 195.404(c)(3) by failing to maintain
a record of each inspection and test required by Subpart F of Part 195 for at least 2 years or until
the next inspection or test is performed, whichever is longer.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(3), which states:
§ 195.404 Maps and records.
(a) Each operator shall maintain current maps and records of its
pipeline systems that include at least the following information:
(1) . . . .
(3) The maximum operating pressure of each pipeline.
The Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(3) by failing to maintain
current maps and records of its pipeline systems that include the maximum operating pressure
(MOP) of each pipeline. Specifically, the Notice alleged that Ergon had two records with
conflicting information regarding the MOP of the Magnolia Pipeline as determined in
accordance with § 195.406.5 The 2005 hydrostatic test record indicates the MOP for the pipeline
is 1,219 psig, but the O&M Manual indicates the MOP for the pipeline is 1,423 psig.
Additionally, Section 3.1 of Ergon’s O&M Manual states: “the weakest component in the system
is the pipe,” and in an email dated October 26, 2016, Ergon stated that “other components were
not considered in this calculation as the weakest component in the system is the pipe.” Ergon’s
records do not include any information on other system components, such as flanges and valves,
to substantiate the company’s conclusion that the pipe is the weakest component.
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. § 195.404(a)(3) by failing to maintain
current maps and records of its pipeline systems that include the maximum operating pressure of
each pipeline.
4 Section 195.402(a) requires an operator to review its manual “at intervals not exceeding 15 months, but at least
once each calendar year” and to make “appropriate changes . . . as necessary” to ensure the manual is effective.
5 Section 195.406 requires an operator to establish the maximum operating pressure for each pipeline using certain
methods.



CPF No. 1-2018-5006
Page 4
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), as quoted above,
by failing to maintain a record of each inspection and test required by Subpart F of Part 195 for
at least two years or until the next inspection or test is performed, whichever is longer.
Specifically, the Notice alleged that Ergon did not maintain records of inspections conducted to
demonstrate there is adequate firefighting equipment at each pump station and breakout-tank
area and the equipment is in proper operating condition at all times, in accordance with
§ 195.430. During PHMSA’s review of Ergon’s procedures and records relating to inspection of
firefighting equipment at the Magnolia, Ohio facility from 2013 to 2015, PHMSA discovered
records that did not include sufficient information to demonstrate that the firefighting equipment
was in proper operating condition at all times. This included work orders that failed to include
such information as the scope of the inspection, the firefighting equipment number, device, or
tag, the names of the individuals conducting the inspection and test, and documentation of any
repairs required.
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. § 195.404(c)(3) by failing to maintain
a record of each inspection and test required by Subpart F of Part 195 for at least two years or
until the next inspection or test is performed, whichever is longer.
Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:
§ 195.428 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.
The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and test
each pressure-limiting device, relief valve, pressure regulator, or other item of pressure-control
equipment, at intervals not exceeding 15 months but at least once each calendar year, 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.
Specifically, the Notice alleged that from 2013 to 2015, Ergon failed to conduct nine inspections
and tests of pressure-relief valves. During the PHMSA inspection, Ergon provided the agency
with a list of nine relief valves on the Magnolia Pipeline and admitted to not inspecting or testing
them.
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 each pressure-limiting device, relief valve, pressure regulator, or other item of pressure-



CPF No. 1-2018-5006
Page 5
control equipment, at intervals not exceeding 15 months but at least once each calendar year, 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.
Item 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states, in
relevant part:
§ 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. . . .
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct
tests on a protected pipeline at least once each calendar year, but with intervals not exceeding 15
months, to determine whether the cathodic protection on its pipeline and required by Subpart H
of Part 195 complies with § 195.571. Specifically, the Notice alleged that Ergon failed to
conduct 73 structure pipe-to-soil readings each year from 2013 to 2014, for a total of 146 missed
readings. During the inspection, Ergon could not produce records of the cathodic-protection
readings from the tests for 2013 and 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. § 195.573(a)(1) by failing to conduct
tests on a protected pipeline at least once each calendar year, but with intervals not exceeding 15
months, to determine whether the cathodic protection on its pipeline and required by Subpart H
of Part 195 complies with § 195.571.
Item 7: 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 Ergon failed to take 51 casing pipe-to-soil readings each year from 2013 to
2014, for a total of 102 missed readings on its 8-inch NPS crude oil pipeline.
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.
These findings of violation will be considered prior offenses in any subsequent enforcement



CPF No. 1-2018-5006
Page 6
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.6 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 $134,200 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $11,500 for Respondent’s violation of 49 C.F.R.
§ 195.402(c)(3), for failing to prepare and follow for each pipeline system a manual of written
procedures that includes procedures for operating, maintaining, and repairing the pipeline system
in accordance with each of the requirements of Subpart F and Subpart H of Part 195. As
discussed in the June 6, 2018 meeting with PHMSA, and as submitted with Ergon’s Response,
Ergon has updated its O&M Manual, Section 3.13 - Firefighting Equipment. Ergon argued that
the culpability component of the proposed penalty for this item should be reduced because
Section 3.13 of its procedures applies to a single fire extinguisher associated with its pipeline. I
find that a civil penalty reduction for this item is not warranted because the reasons why Ergon
failed to achieve compliance were not unforeseeable or wholly outside its control. Further, I find
no basis to reduce the penalty based on gravity because the penalty amount already reflects that
the violation minimally affected pipeline safety. Lastly, I find that a civil penalty reduction is
not warranted based on the “good faith” component because the actions Respondent took to
comply with the requirement occurred after PHMSA learned of the violation. Based upon the
foregoing, I assess Respondent a civil penalty of $11,500 for violation of 49 C.F.R.
§ 195.402(c)(3).
Item 2: The Notice proposed a civil penalty of $13,000 for Respondent’s violation of 49 C.F.R.
§ 195.404(c)(3), for failing to maintain a record of each inspection and test required by Subpart F
of Part 195 for at least two years or until the next inspection or test is performed, whichever is
longer. In its Response, Ergon noted it uses an online task-tracking system to monitor and track
compliance tasks, and submitted a report from the system. This report shows facility plans were
reviewed in November 2013 and November 2014. I find that a civil penalty reduction for this
item is not warranted because Respondent did not provide the missing O&M Manual annual
review records for 2013 or 2014. The inspection records submitted are not related to conducting
the O&M Manual annual review. Therefore, Respondent has provided no justification for
6 These amounts are adjusted annually for inflation. See, 49 C.F.R. § 190.223; Revisions to Civil Penalty Amounts,
83 Fed. Reg. 60732, 60744 (Nov. 27, 2018).



CPF No. 1-2018-5006
Page 7
reducing or eliminating the penalty. Based upon the foregoing, I assess Respondent a civil
penalty of $13,000 for violation of 49 C.F.R. § 195.404(c)(3).
Item 4: The Notice proposed a civil penalty of $14,400 for Respondent’s violation of 49 C.F.R.
§ 195.404(c)(3), for failing to maintain a record of each inspection and test required by Subpart F
of Part 195 to demonstrate that the operator’s firefighting equipment is adequate and in proper
working condition in accordance with § 195.430. During its informal meeting with PHMSA,
Ergon noted that § 195.430(a) does not include a specified frequency for the inspection of
firefighting equipment and, therefore, the number of instances of violation should be reduced.
Respondent also produced information showing that the monthly inspections of firefighting
equipment did occur, but those records did not include sufficient information to show the
equipment was in proper operating condition at all times. For example, the records did not
include the names of people who conducted the inspections and equipment numbers. However,
because the documentation provided to PHMSA showed that some inspections were performed, I
find that a civil penalty reduction is warranted based on the number of instances relating to the
nature of the violation. Based upon the foregoing, I assess Respondent a reduced civil penalty of
$12,900 for violation of 49 C.F.R. § 195.404(c)(3).
Item 5: The Notice proposed a civil penalty of $27,700 for Respondent’s violation of 49 C.F.R.
§ 195.428(a), for failing to inspect and test nine relief valves, at intervals not exceeding 15
months but at least once each calendar year, to determine that each valve 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. In its Response, Ergon submitted a revised
Piping and Instrumentation Diagram (P&ID), showing there are only two jurisdictional pressure-
relief devices on the pipeline, as opposed to the nine devices originally identified. Respondent
also submitted documentation showing its pressure-relief devices were operating properly during
actual pressure-relief events. Based on this information, I find that a civil penalty reduction is
warranted based on a lower number of instances of violation. I also find that the gravity
component of the penalty should be reduced because pipeline safety was minimally affected.
Based upon the foregoing, I assess Respondent a reduced civil penalty of $19,300 for violation
of 49 C.F.R. § 195.428(a).
Item 6: The Notice proposed a civil penalty of $34,500 for Respondent’s violation of 49 C.F.R.
§ 195.573(a)(1), for failing to conduct 73 structure pipe-to-soil readings each year from 2013 to
2014, for a total of 146 missed readings, to determine whether cathodic protection required by
Subpart H of Part 195 complies with § 195.571. In its Response, Ergon provided additional
2013 survey data and argued that a reduction in the gravity component of the civil penalty is
warranted because the 2013 cathodic-protection survey submitted showed that some components
were checked properly, even though it was not a complete survey due to construction. Based on
this information, I find that a civil penalty reduction is warranted because the number of
instances of violation is reduced from 73 to 39 missed test station readings for 2013.7
Additionally, I find that the gravity component of the penalty criteria should be reduced based on
pipeline safety being minimally affected because Respondent demonstrated that adequate
7 Respondent did not submit any documentation regarding the 73 cathodic protection surveys for 2014.



CPF No. 1-2018-5006
Page 8
cathodic protection was applied in 2012 and 2015. Ergon also demonstrated adequate cathodic
protection was applied in 2013 to at least a portion of its pipeline system. Based upon the
foregoing, I assess Respondent a reduced civil penalty of $25,900 for violation of 49 C.F.R.
§ 195.573(a)(1).
Item 7: The Notice proposed a civil penalty of $33,100 for Respondent’s violation of 49 C.F.R.
§ 195.575(c), for failing to inspect and electrically test 51 locations of electrical isolation each
year from 2013 to 2014, for a total of 102 missed readings, to ensure that the isolation is
adequate. In its Response, Ergon provided additional 2013 data and argued that a penalty
reduction is warranted because the 2013 cathodic-protection survey showed that some
components were checked properly, even though it was not a complete survey due to ongoing
construction. Based on this information, I find that a penalty reduction is warranted because the
number of instances of violation is reduced from 51 to 27 missed casing-to-soil readings for
2013.8 Additionally, I find that the gravity component of the civil penalty should be reduced
based on pipeline safety being minimally affected because Respondent demonstrated adequate
isolation in 2012 and 2015. Ergon also demonstrated adequate isolation in 2013 for at least part
of its pipeline system. Based upon the foregoing, I assess Respondent a reduced civil penalty of
$25,900 for violation of 49 C.F.R. § 195.575(c).
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total reduced civil penalty of $108,500.
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 $108,500 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 Items 1, 3, and 5 in the Notice for
violations of 49 C.F.R. §§ 195.402(c)(3), 195.404(a)(3), and 195.428(a), respectively. 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
8 Respondent did not submit any documentation regarding the 51 casing-to-soil reads for 2014.



CPF No. 1-2018-5006
Page 9
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 § 195.402(c)(3) (Item 1), Respondent must
develop procedures for maintaining adequate firefighting equipment in accordance
with § 195.430 and implement the procedures at Ergon’s Magnolia, Ohio facility.
Respondent must have completed records, including, but not limited to, records
verifying that all firefighting equipment at the Magnolia, Ohio facility is in proper
operating condition.
2. With respect to the violation of § 195.404(a)(3) (Item 3), Respondent must
provide records demonstrating that the MOP of all jurisdictional pipeline segments at
the Magnolia, Ohio facility meet the requirements of § 195.406(a).
3. With respect to the violation of § 195.428(a) (Item 5), Respondent must inspect
and test all overpressure safety devices at the Magnolia, Ohio facility, per
§ 195.428(a) and Ergon’s procedures.
4. Submit to the Director, Eastern Region, OPS, within 60 days following receipt of
the Final Order, written documentation to satisfy Compliance Order Items 1 through
3 above.
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 (not mandated) 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. 1-2018-5006
Page 10
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
May 31, 2019
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

120185006_Closure Letter_03022020_text.pdf

OVERNIGHT EXPRESS DELIVERY
March 2, 2020
Mr. Emmitte Haddox
President & Chief Executive Officer
Ergon, Inc.
P.O. Box 1639
Jackson, Mississippi 39215
CPF 1-2018-5006
Dear Mr. Haddox:
On May 31, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued
to Ergon Terminaling, Inc. (Ergon) 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

120185006_NOPV PCP PCO_01182018_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
OVERNIGHT EXPRESS DELIVERY
January 18, 2018
Joel Pastorek, President
Ergon Terminaling, Inc.
2829 Lakeland Drive
Jackson, MS 39215
CPF 1-2018-5006
Dear Mr. Pastorek:
From September 14, 2015 to September 18, 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 the Ergon Terminaling, Inc. (Ergon) pipeline facility in
Magnolia, Ohio.
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. §195.402(c)(3) Procedural manual for operations, maintenance, and emergencies.
(c) Maintenance and normal operations. The manual required by paragraph (a) of
this section must include procedures for the following to provide safety during
maintenance and normal operations:
(3) Operating, maintaining, and repairing the pipeline system in accordance with
each of the requirements of this subpart…
Ergon’s firefighting equipment procedure failed to include guidance on operating, maintaining,
and repairing the pipeline system in accordance with each of the requirements of this subpart.
Specifically, Ergon’s Magnolia Pipeline Operations Manual, Ergon Terminaling Inc., dated



CPF 1-2018-5006
January 2015, Section 3.13– Firefighting Equipment does not provide guidance on how to maintain
adequate firefighting equipment at each pump station and breakout tank area to ensure that it is in
proper operating condition at all times as per §195.430.
The procedure lacks detail such as, but not limited to:
1. 2. 4. 5. 6. Applicable local, state and federal regulations
Equipment marking and labelling requirements
3. Required inspection intervals
Inspection and maintenance documentation requirements
Individuals responsible for conducting the inspection
Remedial issue followed-up and documentation
2. §195.404(c)(3) Maps and Records
(c) Each operator shall maintain the following records for the periods specified;
(3) A record of each inspection and test required by this subpart shall be maintained
for at least 2 years or until the next inspection or test is performed, whichever is
longer.
Ergon failed to maintain a record of each inspection and test required by this subpart. Specifically,
Ergon failed to maintain records of the review of its manual of written procedures for conducting
normal operations and maintenance (O&M) activities at intervals not exceeding 15 months, but at
least once each calendar year in accordance with §195.402(a).
During the inspection, the PHMSA inspector requested records related to annual reviews of Ergon
Trucking Inc.’s O&M manual. Ergon provided annual review records for calendar year 2015 for
the following manuals:
1. Operations and Maintenance Manual
2. Control Room Management
3. Integrity Management
4. Pipeline Response Plan
Ergon did not have records indicating an annual review was conducted of its O&M manual for
2013 or 2014. The PHMSA inspector asked for relevant records and Ergon stated, “We do not
have any record documenting the annual reviews, other than the most recent year 2015.” Ergon
also stated, “The O&M manual has been reviewed prior to 2015, but was not documented.” Ergon
failed to maintain records of an annual review of its written procedures during the years of 2013
and 2014.
3. §195.404(a)(3) Maps and Records
(a) Each operator shall maintain current maps and records of its pipeline systems that
include at least the following information; …
(3) The maximum operating pressure of each pipeline.
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CPF 1-2018-5006
Ergon failed to maintain detailed records to demonstrate that the maximum operating pressure
(MOP) of its jurisdictional pipeline segments were determined in accordance with §195.406(a).
Specifically, Ergon had two records with conflicting information of the MOP of the Magnolia
Pipeline.
During the inspection, the PHMSA inspector reviewed the following:
1. Ergon’s Certification of Pipeline Pressure Test, dated 9-20-71
2. MOP of Magnolia Pipeline record, based on Hydrostatic Test Performed in 2005.
3. Magnolia Pipeline Operations Manual Ergon Terminaling, Inc., dated January 2015
The hydrostatic test record from 2005 indicates that the MOP for the pipeline is 1,219 psig and the
Pipeline Operations Manual indicates that the MOP for the pipeline is 1,423 psig. The PHMSA
inspector asked Ergon to verify the correct MOP for the system. Ergon responded via email that:
1. “The Magnolia Pipeline was hydrostatically tested in 2005. Based on the results of this
hydro test, the MOP for the pipeline is 1,219 psig. We will amend Section 3.1 of the O&M
plan to reflect this MOP and include language that this MOP is based on the hydrostatic
test.
2. “The MOP listed in Section 3.1 of the O&M Plan is based on the calculation found at 49
CFR 195.106. It is not based on the original pressure test.”
In addition, Section 3.1 of the O&M plan states that “the weakest component in the system is the
pipe” and in an email dated 10/26/2016, Ergon stated that “other components were not considered
in this calculation as the weakest component in the system is the pipe.” Ergon’s records do not
include any information on other system components, such as flanges and valves, to substantiate
that the pipe is the weakest component.
Therefore, Ergon failed to maintain detailed records to demonstrate that the maximum operating
pressure (MOP) of its jurisdictional pipeline segments were determined in accordance with
§195.406(a).
4. § 195.404(c)(3) Maps and Records
(c) Each operator shall maintain the following records for the periods specified;
(3) A record of each inspection and test required by this subpart shall be maintained
for at least 2 years or until the next inspection or test is performed, whichever is
longer.
…
Ergon failed to maintain a record of each inspection and test required by this subpart for at least 2
years or until the next inspection or test is performed, whichever is longer. Specifically, Ergon did
not maintain records to demonstrate that there is adequate firefighting equipment at each pump
station and breakout tank area that is in proper operating condition at all times in accordance with
§195.430(a).
During the inspection, the PHSMA inspector reviewed Ergon’s procedures and records related to
inspection of firefighting equipment at the Ergon Magnolia, Ohio facility from 2013 to 2015.
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CPF 1-2018-5006
1. 2. In an email dated October 6, 2015, the PHMSA inspector asked Ergon “In review of O&M
Section 3.13 Firefighting Equipment, what frequency does Ergon use to inspect its
firefighting equipment at the facility?” Ergon responded in an email dated 10/13/2015, that
“Firefighting equipment is inspected monthly using an external third party contractor. . .”
Ergon provided records that did not include sufficient information to demonstrate that the
firefighting equipment was in proper operating condition at all times. For example, the
work orders did not include items such as:
a. Scope of the inspection
b. The firefighting equipment number, device, or tag
c. Names of people who conducted the inspection and test
d. Documentation of any repairs required
Therefore, Ergon failed to maintain records of each firefighting equipment inspection and/or test,
to ensure that it is in proper operating condition.
5. § 195.428(a) Overpressure safety devices and overfill protection system
(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.
Ergon failed to inspect and test each pre
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