PLAINS MARKETING, L.P. — Notice of Probable Violation

party submissionOfficial PDF220166003_Operator Response to Notice_11112016.pdf#

220166003_Closure Letter_06082018_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED June 8, 2018 Mr. Dean Gore Vice President, Environmental & Regulatory Compliance Plains Marketing, L.P. 333 Clay Street, Suite 1600 Houston, TX 77002 CPF 2-2016-6003 Dear Mr. Gore: On May 10, 2018, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) issued Plains Marketing LP, a subsidiary of Plains All American Pipeline, LP (“Plains”), a Final Order with a Civil Penalty and Compliance Order (CO). The CO required Plains to undertake certain actions to ensure compliance with the federal pipeline safety regulations. Plains paid the Civil Penalty on May 25, 2018, and OPS Southern Region received multiple communications documenting Plains’ response to the CO. Based upon payment of the Civil Penalty and our review of documentation of the actions taken by Plains, we have determined that Plains has complied with the terms of the CO and the Final Order. This case is now closed and no further action is necessary with respect to the matters involved in this case. Please be advised that this letter refers only to the above referenced order (CPF 2-2016-6003) and not to any other PHMSA cases, if any. Sincerely, James A. Urisko Director, Office of Pipeline Safety PHMSA Southern Region#

220166003_NOPV PCP PCO_08122016_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED August 12, 2016 Mr. Dean Gore Vice President, Environmental & Regulatory Compliance Plains Marketing, L.P. 333 Clay Street, Suite 1600 Houston, TX 77002 CPF 2-2016-6003 Dear Mr. Gore: From August 31 to September 3, and September 21 to 23, 2015, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Southern Region, Office of Pipeline Safety (OPS), inspected the Plains Marketing, L.P. (Plains) written procedures and records at Plains’ offices in Houston, Texas and York, South Carolina, and its liquefied petroleum gas pipeline facilities in South Carolina, pursuant to Chapter 601 of 49 United States Code. As a result of the inspection, it appears that Plains has committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are: 1. § 195.208 Welding of supports and braces. Supports or braces may not be welded directly to pipe that will be operated at a pressure of more than 100 p.s.i. (689 kPa) gage. Plains welded supports directly to pipe that operated at a pressure exceeding 100 p.s.i. (689 kPa) gage. During an on-site inspection of Plains’ Heath Spring facility, a PHMSA representative observed and photographed supports welded directly to truck prover#

220166003_NOPV PCP PCO_08122016_text.pdf, page 2connections that were designed to operate at pressures of more than 100 p.s.i. (689 kPa) gage. 2. § 195. 228 Welds and welding inspection: Standards of acceptability. (a) … (b) The acceptability of a weld is determined according to the standards in Section 9 of API 1104. However, if a girth weld is unacceptable under those standards for a reason other than a crack, and if Appendix A to API 1104 (incorporated by reference, see § 195.3) applies to the weld, the acceptability of the weld may be determined under that appendix. Plains did not determine the acceptability of welds, in its Heath Springs facility, according to the standards in Section 9 of API 1104. Plains’ construction records for the nondestructive testing (NDT) examination of the welds in its Heath Springs facility referenced The American Society of Mechanical Engineers (ASME) Standard B31.3 as the standard used to determine the acceptability of the welds, not Section 9 of API 1104 as required by the regulation. The weld acceptability standards in API 1104 differ from those in ASME Standard B31.3. 3. § 195.266 Construction Records A complete record that shows the following must be maintained by the operator involved for the life of each pipeline facility: (a) The total number of girth welds and the number nondestructively tested, including the number rejected and the disposition of each rejected weld. Plains did not maintain a complete record that showed the disposition of each rejected weld for the life of each pipeline facility. Radiography Examination Reports, from the construction of Plains’ Heath Springs facility, indicated that weld W-61 on line segment D-C3-132 and weld W-266 on a mainline pump, 2-inch relief line at Tirzah Terminal had been rejected. However, The Radiography Examination Reports did not include sufficient detail to determine the disposition of each rejected weld. Plains did not provide any additional documentation to show the disposition of the rejected welds. 4. § 195. 304 Test Pressure. The test pressure for each pressure test conducted under this subpart must be maintained throughout the part of the system being tested for at least 4 continuous hours at a pressure equal to 125 percent, or more, of the maximum operating pressure and, in the case of a pipeline that is not visually inspected for leakage during the test, for at least an additional 4 continuous hours at a pressure equal to 110 percent, or more, of the maximum operating pressure. Plains did not pressure test the piping at its Heath Springs facility for at least 4 continuous hours at a pressure equal to 125 percent, or more, of the maximum operating pressure. A June 4, 2015 Pressure test record, for aboveground piping at the Heath 2#

220166003_NOPV PCP PCO_08122016_text.pdf, page 3Springs facility, showed that the piping was pressure tested for 1 hour, not for a minimum of 4 hours as required by this section. 5. §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. Plains failed to maintain current maps and records of its pipeline systems that included the maximum operating pressure (MOP) of each pipeline segment at its Tirzah Terminal. During the inspection, a PHMSA representative requested documentation showing the MOP of the pipeline segments at the Tirzah Terminal. Plains did not produce any maps or records showing the MOP of the pipelines segments at its Tirzah Terminal. 6. § 195.410 Line Markers (a) Except as provided in paragraph (b) of this section, each operator shall place and maintain line markers over each buried pipeline in accordance with the following: (1) … (2) The marker must state at least the following on a background of sharply contrasting color: (i) The word “Warning,” “Caution,” or “Danger” followed by the words “Petroleum (or the name of the hazardous liquid transported) Pipeline,” or “Carbon Dioxide Pipeline,” all of which, except for markers in heavily developed urban areas, must be in letters at least 1 inch (25 millimeters) high with an approximate stroke of ¼-inch (6.4 millimeters). Plains did not place and maintain line markers over each buried pipeline, on a background of sharply contrasting color, that stated the word “Warning,” “Caution,” or “Danger” followed by the words “Petroleum (or the name of the hazardous liquid transported) Pipeline.” During the field inspection, a PHMSA representative identified and photographed several locations with pipeline markers which appeared to be missing the word “Warning,” “Caution,” or “Danger.” Closer inspection of the pipeline markers revealed that the word “Warning” on the pipeline markers had faded, so as to be indistinguishable from the background color. Plains personnel stated that the wording was originally red. After the inspection, Plains contacted the region indicating that it had replaced the faded pipeline markers. 7. § 195.434 Signs. Each operator must maintain signs visible to the public around each pumping station and breakout tank area. Each sign must contain the name of the operator and a telephone number (including area code) where the operator can be reached at all times. 3#

220166003_NOPV PCP PCO_08122016_text.pdf, page 4Plains did not maintain signs visible to the public around each pumping station. During the inspection of Plains’ Heath Springs facility, a pumping station, a PHMSA representative observed a sign at the facility entrance that contained the name of the operator and a telephone number (including area code) where the operator could be reached at all times. While there were other signs around the perimeter of the pumping station, the signs did not contain the name of the operator and a telephone number (including area code) where the operator could be reached at all times. Plains personnel acknowledged that there were not additional signs containing the name of the operator and a telephone number (including area code) where the operator could be reached at all times posted around the perimeter of the station. 8. § 195.507 Recordkeeping. Each operator shall maintain records that demonstrate compliance with this subpart. (a) … (b) Records supporting an individual’s current qualification shall be maintained while the individual is performing the covered task. Records of prior qualification and records of individuals no longer performing covered tasks shall be retained for a period of five years. Plains did not demonstrate compliance with Subpart G by maintaining records supporting that an individual was qualified when the individual performed covered tasks. Plains and Dominion Carolina Gas Transmission (DCGT) share a rectifier that provides cathodic protection current to two pipelines, one operated by Plains and one operated by DCGT. Plains’ rectifier inspection records showed that a DCGT employee performed rectifier inspections for Plains in 2013, 2014, and 2015. A PHMSA representative requested OQ documentation showing that the DCGT employee was qualified to perform rectifier inspections, a covered task. Plains did not produce any records to demonstrate that this employee was qualified to perform rectifier inspections in 2013, 2014, or 2015. 9. 195.507 Recordkeeping. Each operator shall maintain records that demonstrate compliance with this subpart. (a) … (b) Records supporting an individual’s current qualification shall be maintained while the individual is performing the covered task. Records of prior qualification and records of individuals no longer performing covered tasks shall be retained for a period of five years. Plains did not demonstrate compliance with Subpart G by maintaining records supporting that an individual was qualified when the individual performed covered tasks. Plains’ Aerial patrolling records showed that Plains used Lenhart Aerial Patrol to perform weekly aerial patrols of its pipeline right-of-way. After reviewing aerial patrolling4#

220166003_NOPV PCP PCO_08122016_text.pdf, page 5records from January 2011, a PHMSA representative requested the operator qualification records for the aerial patrol pilot, an employee of Lenhart Aerial Patrol, to establish that he was qualified to perform the covered task in January 2011. Plains did not produce any records to demonstrate that the Lenhart employee was qualified to perform the aerial patrols in January 2011. At the time of the inspection, the requested records were within the five year record retention period required by this section. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a related series of violations. For violations occurring prior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for a related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $47,500 as follows: Item Number PENALTY 3 $20,200 8 $27,300 Warning Items With respect to items 1, 6, 7, and 9 we have reviewed the circumstances and supporting documents involved in this case and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to promptly correct these items. Failure to do so may result in additional enforcement action. Proposed Compliance Order With respect to items 2, 4, and 5, pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Plains Marketing, L.P. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. All material you submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the 5#

220166003_NOPV PCP PCO_08122016_text.pdf, page 6allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. In your correspondence on this matter, please refer to CPF 2-2016-6003 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, James A. Urisko Director, Office of Pipeline Safety PHMSA Southern Region Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 6#

220166003_NOPV PCP PCO_08122016_text.pdf, page 7PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue, to Plains Marketing, L.P. (Plains), a Compliance Order incorporating the following remedial requirements to ensure the compliance of Plains with the pipeline safety regulations: 1. 2. 3. 4. 5. 6. In regard to Item Number 2 of the Notice, pertaining to Plains not determining the acceptability of welds, in its Heath Springs facility, according to the standards in Section 9 of API 1104, Plains must review welding records for its Heath Springs facility to identify all welds for which the acceptability of the welds was not determined according to the standards in Section 9 of API 1104. For welds for which the acceptability of the welds was not determined in accordance with the standards in Section 9 of API 1104, Plains must evaluate the acceptability of the weld according to the standards in Section 9 of API 1104. In regard to Item Number 4 of the Notice, pertaining to Plains not pressure testing piping at its Heath Springs facility for at least 4 continuous hours at a pressure equal to 125 percent, or more, of the maximum operating pressure, Plains must conduct a pressure test, meeting the Subpart E requirements, of the piping at its Heath Springs facility. In regard to Item Number 5 of the Notice, pertaining to Plains failure to maintain current maps and records of its pipeline systems that included the maximum operating pressure (MOP) of each pipeline segment at its Tirzah Terminal, Plains must reevaluate the MOP of each pipeline segment at its Tirzah Terminal, and update its maps and records to accurately reflect the results of the MOP evaluation. Plains must complete the above items and prepare records to document the results within 90 days after the receipt of the Final Order. Plains must provide the Director, Pipeline and Hazardous Materials Safety Administration, Southern Region, Office of Pipeline Safety, records demonstrating completion of the Compliance Order items, within 120 days after the receipt of the Final Order. It is requested (not mandated) that Plains maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director, Pipeline and Hazardous Materials Safety Administration, Southern Region, Office of Pipeline Safety. 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. 7#

220166003_Final Order_05102018_text.pdf, page 1Official PDFMr. Greg L. Armstrong, CEO Plains All American Pipeline, LP 333 Clay Street, Suite 1600 Houston, Texas 77002 Re: CPF No. 2-2016-6003 Dear Mr. Armstrong: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a reduced civil penalty of $47,400 and specifies actions that need to be taken by Plains Marketing, LP, a subsidiary of Plains All American Pipeline, LP, 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, Southern 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. James Urisko, Director, Southern Region, Office of Pipeline Safety, PHMSA Mr. Wm. Dean Gore, Jr., Vice President, Environmental and Regulatory Compliance, Plains Marketing, LP, 333 Clay Street, Suite 1600, Houston, Texas 77002 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

220166003_Final Order_05102018_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ________________________________________________ In the Matter of Plains Marketing, LP, a subsidiary of Plains All American Pipeline, LP Respondent. _______________________________________________ ) ) ) ) ) ) ) ) CPF No. 2-2016-6003 FINAL ORDER From August 31 through September 3, 2015, and September 21 through September 23, 2015, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the written procedures and records of Plains Marketing, LP (Plains), in Houston, Texas and York, South Carolina, and its liquefied petroleum gas pipeline facilities in South Carolina. Plains is an operating subsidiary of Plains All American Pipeline, LP, (PAA).1 PAA engages in the pipeline transportation of crude oil, refined products, natural gas, and natural gas liquids in the United States and Canada.2 As a result of the inspection, the Director, Southern Region, OPS (Director), issued to Respondent, by letter dated August 12, 2016, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice), which also included warnings pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Plains had committed five violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of $47,500 for the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. The warning items required no further action, but warned the operator to correct the probable violations or face possible future enforcement action. Plains responded to the Notice by letter dated November 11, 2016 (Response). The company contested some of the allegations, offered additional information in response to the Notice, and 1 US SEC Form 10-K, Plains All American Pipeline, LP, available at http://www.edgarexplorer.com/EFX dll/EdgarPro.dll?FetchFilingHTML1?SessionID=H4jwq3gtDXw9Z- 9&ID=11876486 (last accessed October 11, 2017). 2 Plains All American Pipeline, LP, website, available at https://www.plainsallamerican.com/what-we-do (last accessed October 11, 2017).#

220166003_Final Order_05102018_text.pdf, page 3CPF 2-2016-6003 Page 2 requested that the proposed civil penalty be reduced. Subsequently, on August 3, 2017, Respondent provided additional information in response to the Notice. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows: Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.228(b), which states: § 195.228 Welds and welding inspection: Standards of acceptability. (a) … (b) The acceptability of a weld is determined according to the standards in section 9 of API 1104. However, if a girth weld is unacceptable under those standards for a reason other than a crack, and if Appendix A to API 1104 (incorporated by reference, see § 195.3) applies to the weld, the acceptability of the weld may be determined under that appendix. 3 The Notice alleged that Respondent violated 49 C.F.R. § 195.228(b) by failing to determine the acceptability of welds at its Heath Springs facility, according to the standards in Section 9 of API 1104. Specifically, the Notice alleged that Plains’ construction records for the nondestructive testing examination of the welds in its Heath Springs facility referenced the American Society of Mechanical Engineers standard B31.3 as the standard used to determine the acceptability of the welds, not Section 9 of API 1104. 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. § 195.228(b) by failing to determine the acceptability of welds at its Heath Springs facility, according to the standards in Section 9 of API 1104. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.266(a), which states: § 195.266 Construction records. A complete record that shows the following must be maintained by the operator involved for the life of each pipeline facility: (a) The total number of girth welds and the number nondestructively tested, including the number rejected and the disposition of each rejected weld. The Notice alleged that Respondent violated 49 C.F.R. § 195.266(a) by failing to maintain a complete record that showed the disposition of each rejected girth weld for the life of each 3 This was the version of § 195.228(b) in effect at the time of the inspection. Section 195.228(b) was amended on October 1, 2015, and currently reads, “The acceptability of a weld is determined according to the standards in section 9 or Appendix A of API Std 1104 (incorporated by reference, see §195.3). Appendix A of API Std 1104 may not be used to accept cracks.”#

220166003_Final Order_05102018_text.pdf, page 4CPF 2-2016-6003 Page 3 pipeline facility. Specifically, the Notice alleged that Plains’ Radiography Examination Reports from the construction of Plains’ Heath Springs facility failed to include sufficient detail to determine the disposition of rejected welds W-61 on line segment D-C3-132 and W-266 on a mainline pump, 2-inch relief line at Tirzah Terminal. In its Response, Plains acknowledged that it did not have documentation of the disposition of rejected weld W-61 and noted that line segment D-C3-132 was completely replaced during a maintenance project in 2016. However, Plains contested the allegation as it applied to weld W-266. Plains provided the Radiography Examination Report demonstrating that weld W-266 was replaced by weld W-303 on June 5, 2015. This record was not available during the inspection, but Plains argued that it demonstrates that Plains, as it relates to failed weld W-266, was indeed in compliance with § 195.266(a) as of the date of the inspection. I agree. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.266(a) by failing to maintain a complete record that showed the disposition of weld W-61 on line segment D-C3-132, for the life of the pipeline facility. The allegation relating to failed weld W-266 on a mainline pump, 2-inch relief line at Tirzah Terminal, is withdrawn. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.304, which states: § 195.304 Test pressure. The test pressure for each pressure test conducted under this subpart must be maintained throughout the part of the system being tested for at least 4 continuous hours at a pressure equal to 125 percent, or more, of the maximum operating pressure and, in the case of a pipeline that is not visually inspected for leakage during the test, for at least an additional 4 continuous hours at a pressure equal to 110 percent, or more, of the maximum operating pressure. The Notice alleged that Respondent violated 49 C.F.R. § 195.304 by failing to pressure-test the piping at its Heath Springs facility for at least four continuous hours at a pressure equal to 125 percent of the maximum operating pressure (MOP) of the pipeline. Specifically, the Notice alleged that Plains’ pressure-test records for above-ground piping at the Heath Springs facility showed that the piping was pressure-tested for one hour, not the minimum four continuous hours required by § 195.304. 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. § 195.304 by failing to pressure-test the piping at its Heath Springs facility for at least four continuous hours at a pressure equal to 125 percent of the MOP. Item 5: 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:#

220166003_Final Order_05102018_text.pdf, page 5CPF 2-2016-6003 Page 4 (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 MOP of each pipeline at its Tirzah Terminal. Specifically, the Notice alleged that Plains could not produce any maps or records showing the MOP of the pipeline segments at its Tirzah Terminal during the 2015 inspection. In its Response, Plains argued that it did not violate § 195.404(a)(3) and submitted three sets of documents, titled “Tirzah Terminal Facility Maximum Operating Pressure Determinations,” “Line Schedule,” and “Piping Bill Material.” Plains acknowledged that these records were not immediately available during the 2015 inspection. The MOP determinations table, which had been undated, provided the MOP of each pipeline within the Tirzah Terminal pipeline system. The Tirzah Terminal line schedule and piping bill material construction records included design pressures and materials used during construction and were dated from 1978. Plains also noted that it had begun “walking down” the piping at the facility and planned to update the MOP determinations table, as necessary, by December 31, 2016. Section 195.404(a)(3) requires an operator to “maintain current maps and records...of the maximum operating pressure of each pipeline” (emphasis added). The MOP table and historical records provided by Plains in its Response fail to demonstrate that it maintained current maps and records of the MOP of each pipeline as of the date of the 2015 PHMSA inspection. Specifically, the MOP determinations table is undated but does not have a time stamp; therefore, it is impossible to tell if the MOP determinations table was created before or after the inspection or whether it was current. The historical line schedule and construction records from 1978 support the data provided in the MOP determinations table, but do not alone satisfy the requirement of § 195.404(a)(3) because those records do not contain the MOP of each pipeline. In its Response, Plains acknowledged that it was in the process of walking down the piping at the facility and would be updating the MOP determinations table as necessary. Accordingly, after considering 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 included the maximum operating pressure (MOP) of each pipeline at its Tirzah Terminal. Item 8: The Notice alleged that Respondent violated 49 C.F.R. § 195.507(b), which states: § 195.507 Recordkeeping. Each operator shall maintain records that demonstrate compliance with this subpart. (a) … (b) Records supporting an individual’s current qualification shall be maintained while the individual is performing the covered task. Records of prior qualification and records of individuals no longer performing covered task shall be retained for a period of five years.#

220166003_Final Order_05102018_text.pdf, page 6CPF 2-2016-6003 Page 5 The Notice alleged that Respondent violated 49 C.F.R. § 195.507(b) by failing to maintain records supporting an individual’s current qualification to perform a covered task while that individual is performing the covered task. Specifically, the Notice alleged that Plains could not provide records supporting a certain individual’s qualifications who had performed rectifier inspections, which is a covered task. The individual was a Dominion Carolina Gas Transmission (DCGT) employee who performed rectifier inspections for a shared rectifier that provided cathodic protection to one pipeline operated by Plains and one pipeline operated by DCGT. The Notice alleged that Plains’ rectifier-inspection records showed that the DCGT employee performed rectifier inspections for Plains in 2013, 2014, and 2015. However, the Notice alleged, Plains was unable to provide that individual’s qualification records. In its Response, Plains noted that during the inspection, DCGT was reluctant to provide Plains with the operator qualification (OQ) records for the DCGT employee. Plains also argued that the individual did not perform a covered task and that the bulk of the rectifier data it received from the DCGT employee was downloaded via a remote data-acquisition system rather than being directly read from the rectifier in the field. Plains argued that downloading rectifier data does not constitute or equate to actual inspection of a rectifier. Therefore, Plains argued, the DCGT employee who sent Plains the rectifier-inspection data was not performing a covered task because downloading the rectifier data was an administrative and ministerial task. Furthermore, Plains argued, no special training is required to perform the task of downloading rectifier data, and anyone with access to the remote system can download the data. Plains argued further that inspection of the rectifier would occur when a qualified individual reviewed the rectifier data. Plains noted that during the inspection, it provided the OQ records for the Plains employees who reviewed the rectifier data during the 2013-2015 period. In a subsequent filing, dated August 3, 2017, Plains ultimately provided the OQ records for the DCGT employee at issue.4 I disagree. Section 195.507(b) requires an operator to maintain records supporting an individual’s current qualification to perform a covered task for as long as they are performing that covered task. As defined under the four-part test in § 195.501(b), a “covered task” is an activity identified by the operator that is performed on a pipeline facility, is an operations or maintenance task, is performed as a requirement of 49 C.F.R. Part 195, and affects the operation or integrity of the pipeline. Plains does not dispute that it relied upon a DCGT employee to inspect the rectifier it shared with DCGT nor does it dispute that inspecting a rectifier is a covered task.5 Rather, Plains argues that since the bulk of the rectifier data was downloaded remotely, the covered task of inspecting a rectifier did not occur until Plains reviewed the rectifier data. I am unpersuaded by Plains’ argument that the rectifier inspections at issue here were limited to reviewing the rectifier inspection data it received from DCGT. Section 195.573(c) requires an 4 Response, at 4. Plains submitted the OQ records for the DCGT employee in a supplemental submission, dated August 3, 2017. 5 Note: Part 195 does not require rectifier “inspections;” the term “inspection” is a colloquialism. Section 195.573(c) requires rectifiers to be electrically checked for proper performance at least six times a year, but with intervals not exceeding two-and-a-half months.#

220166003_Final Order_05102018_text.pdf, page 7CPF 2-2016-6003 Page 6 operator to “electrically check for proper performance” each rectifier at least six times each calendar year, but with intervals not exceeding 2½ months. PHMSA has provided fair notice of how it interprets this regulatory requirement where remote monitoring devices are used. In its Enforcement Guidance on Corrosion, it has noted that “remote monitoring devices which are used to read rectifiers, bonds, or test stations, must be periodically calibrated or checked for accuracy if the readings are used to meet compliance requirements and time frames.”6 Consequently, inspection of a rectifier does not simply consist of obtaining and reviewing rectifier data sent remotely; it requires an operator to periodically check and calibrate the rectifier to ensure the accuracy of the data the remote monitoring device it is providing. It is clear that Plains’ rectifier-inspection records from 2013-2015 show that the individual performing the covered task of performing certain rectifier inspections for Plains was a DCGT employee. The record demonstrates that Plains did not have the OQ records for this employee while the individual was performing the covered task. Thus, I find that Plains was not in compliance with the requirement in § 195.507(b) from 2013-2015. While Plains eventually obtained such records, and submitted them to PHMSA in August 2017, the failure by Plains to obtain the records for an additional two years following the 2015 PHMSA inspection further demonstrates Plains’ failure to maintain the records as specified in § 195.507(b) while the individual was performing the covered task from 2013-2015. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.507(b) by failing to maintain records supporting an individual’s current qualification to perform rectifier inspections, a covered task. These findings of violation 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.7 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; and 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 6 PHMSA Enforcement Guidance, Corrosion Part 195, available at https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/Corrosion Enforcement Guidance Part195 6 22 2016. pdf (last accessed January 17, 2018) 7 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).#

220166003_Final Order_05102018_text.pdf, page 8CPF 2-2016-6003 Page 7 without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $47,500 for the violations cited above. Item 3: The Notice proposed a civil penalty of $ 20,200 for Respondent’s violation of 49 C.F.R. § 195.266(a), for failing to maintain a complete record that showed the disposition of each rejected girth weld for the life of each pipeline facility. Plains argued that a penalty reduction was warranted because the repair records were provided for weld W-266 and because weld W-61 no longer exists since line segment D-C3-132 was replaced in 2016. With respect to the nature and circumstances of the violation for failing to maintain a complete record showing the disposition of each rejected girth weld for the life of each pipeline facility, OPS alleged that the violation involved a failure to properly maintain a record and that had been discovered by PHMSA. With respect to gravity, OPS alleged that there were two instances of violation but that the violation minimally affected pipeline safety or integrity. The two instances of violation were the two rejected welds for which the final disposition could not be determined from Respondent’s records. However, since the allegation regarding weld W-266 has been withdrawn, I find that a reduction in the number of instances from two to one is appropriate. This results in a marginal reduction of the penalty. Regarding weld W-61, however, I do not find its replacement in 2016 serves to further reduce the penalty because the line replacement only took place after PHMSA had already conducted the inspection and identified the violation. Regarding culpability, OPS noted that Respondent took action to comply with the regulation but failed to achieve compliance. Regarding history of prior offenses, the Violation Report notes that Respondent had had more than six violations in the five years preceding the issuance of the Notice. With respect to good faith, OPS did not propose a credit. Having reviewed the civil penalty assessment factors, I find the evidence supports assessment of a reduced civil penalty. Accordingly, Respondent is assessed a reduced civil penalty of $20,100 for the violation of 49 C.F.R. § 195.266(a). Item 8: The Notice proposed a civil penalty of $27,300 for Respondent’s violation of 49 C.F.R. § 195.507(b), for failing to maintain records supporting an individual’s current qualification to perform a covered task, during the time period when the individual is performing the covered task. As discussed above, I found that Plains failed to maintain records for a DCGT employee who performed rectifier inspections for a rectifier shared by Plains and DCGT. Aside from contesting the violation, Respondent did not present any civil penalty-specific evidence or argument justifying an elimination or reduction in penalty. With respect to the nature and circumstances of the violation, OPS alleged the violation involved a failure to maintain records and that had been discovered by PHMSA. With respect to gravity, OPS alleged that there was one instance of violation that minimally affected pipeline safety or integrity. Regarding culpability, OPS noted that Respondent had failed to take appropriate action to comply with a requirement that was clearly applicable. Regarding history of prior offenses, the Violation Report noted that Respondent had had more than six violations in the five years preceding the issuance of the Notice. With respect to good faith, OPS did not propose a credit.#

220166003_Final Order_05102018_text.pdf, page 9CPF 2-2016-6003 Page 8 Having reviewed the civil penalty assessment factors, I find the evidence supports assessment of the proposed civil penalty. Accordingly, I assess Respondent a civil penalty of $27,300 for violation of 49 C.F.R. § 195.507(b). 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 $47,400. 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 $47,400 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 Items 2, 4, and 5 in the Notice for violations of 49 C.F.R. §§ 195.228(b), 195.304, and 195.404(a)(3), 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 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 § 195.228(b) (Item 2), Respondent must review welding records for its Heath Springs facility to identify all welds for which the acceptability of the welds was not determined according to the standards in Section 9 of API 1104. For welds for which the acceptability of the welds was not determined in accordance with the standards in Section 9 of API 1104, Plains must evaluate the acceptability of the weld according to the standards in Section 9 of API 1104. 2. With respect to the violation of § 195.304 (Item 4), Respondent must conduct a pressure test meeting the requirements of 49 C.F.R. Part 195, Subpart E, of the piping at its Heath Springs facility. 3. With respect to the violation of § 195.404(a)(3) (Item 5), Respondent must reevaluate the MOP of each pipeline segment at its Tirzah Terminal and update its#

220166003_Final Order_05102018_text.pdf, page 10CPF 2-2016-6003 Page 9 maps and records to accurately reflect the results of the MOP evaluation. 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 it to the Director, Southern Region, Pipeline and Hazardous Materials Safety Administration. 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. WARNING ITEMS With respect to Items 1, 6, 7, and 9, the Notice alleged probable violations of Part 195 but did not propose a civil penalty or compliance order for these items. Therefore, these are considered to be warning items. The warnings were for: 49 C.F.R. § 195.208 (Item 1) ─ Respondent’s alleged violation of § 195.208 by welding supports directly to pipe that was operated at a pressure exceeding 100 p.s.i. (689 kPA) gage. 49 C.F.R. § 195.410(a)(2)(i) (Item 6) ─ Respondent’s alleged failure to place and maintain line markers over each buried pipeline, with a background of sharply contrasting color that stated the word “Warning,” “Caution,” or “Danger,” followed by the words “Petroleum (or the name of the hazardous liquid transported) Pipeline.” At several locations, the word “Warning” on the pipeline marker had faded and was illegible. 49 C.F.R. § 195.434 (Item 7) ─ Respondent’s alleged failure to maintain signs visible to the public at the Heath Springs pump station, containing the operator’s name and telephone number (including area code) where the operator could be reached at all times. 49 C.F.R. § 195.507(b) (Item 9) ─ Respondent’s alleged failure to maintain records showing that an individual who conducted aerial patrols, a covered task, was qualified.#

220166003_Final Order_05102018_text.pdf, page 11CPF 2-2016-6003 Page 10 Plains presented information in its Response showing that it had taken certain actions to address the cited items. Pursuant to § 190.205, an adjudication is not conducted for warnings to determine if a violation occurred. If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be subject to future enforcement action. 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. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#