{"operation":"document","citation":"CPF 220175004","title":"HUNT CRUDE OIL SUPPLY CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-08-11","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.436, 195.438, 195.555, 195.573(a)(1), 195.573(d), 195.573(e), 195.581(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-220175004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-220175004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-220175004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/220175004","body":"Notice of Probable Violation involving HUNT CRUDE OIL SUPPLY CO. PHMSA's enforcement data identifies the cited regulations as 195.436,  195.438,  195.555,  195.573(a)(1),  195.573(d),  195.573(e),  195.581(a). The case was opened on 2017-08-11 and is reported as closed as of 2018-12-17. Proposed civil penalty: $19,600. Assessed civil penalty: $19,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n220175004_Final Order_12102018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175004/220175004_Final%20Order_12102018.pdf\n\n220175004_Final Order_12102018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175004/220175004_Final%20Order_12102018_text.pdf\n\n220175004_NOPV_PCP_08112017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175004/220175004_NOPV_PCP_08112017.pdf\n\n220175004_NOPV_PCP_08112017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175004/220175004_NOPV_PCP_08112017_text.pdf\n\n220175004_Operator Response to Notice_09112017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175004/220175004_Operator%20Response%20to%20Notice_09112017.pdf\n\n220175004_Final Order_12102018_text.pdf\n\nDecember 10, 2018\nMr. Tom Schmitt\nPresident\nHunt Refining Company\n2200 Jack Warner Parkway, Suite 400\nTuscaloosa, AL 35401\nRe: CPF No. 2-2017-5004\nDear Mr. Schmitt:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nHunt Crude Oil Supply Company, LLC. It makes one finding of violation and assesses a civil\npenalty of $19,600. The penalty payment terms are set forth in the Final Order. This\nenforcement action closes automatically upon receipt of payment. Service of the Final Order by\ncertified mail 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. James Urisko, Director, Southern Region, Office of Pipeline Safety, PHMSA\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n__________________________________________\nIn the Matter of )\n)\n)\nHunt Crude Oil Supply Company, LLC, )\na subsidiary of Hunt Refining Company, )\nRespondent. )\n__________________________________________)\n) CPF No. 2-2017-5004\nFINAL ORDER\nFrom March 27 through March 31, 2017, pursuant to 49 U.S.C. § 60117, representatives of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Hunt Crude\nOil Supply Company, LLC, a wholly-owned subsidiary of Hunt Supply Company (Hunt or\nRespondent) in Alabama and Mississippi. Hunt operates a million-barrel crude-oil and product\nstorage facility, pipelines and terminals in Alabama and Mississippi, a barge fleet servicing the\nmid-continent and Gulf Coast and a fleet of more than 1,000 rail cars to deliver crude oil from\nCanada and the mid-continent.1\nAs a result of the inspection, the Director, Southern Region, OPS (Director), issued to\nRespondent, by letter dated August 11, 2017, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice), which also included warnings pursuant to 49 C.F.R. § 190.205. In accordance\nwith 49 C.F.R. § 190.207, the Notice proposed finding that Hunt had violated 49 C.F.R.\n§ 195.573 and proposed assessing a civil penalty of $19,600 for the alleged violation. The\nwarning items required no further action but warned the operator to correct the probable\nviolations or face possible future enforcement action.\nHunt responded to the Notice by letter dated September 11, 2017 (Response). The company did\nnot contest the allegations of violation but provided additional information regarding the\nallegations and the corrective actions it had taken. Respondent did not request a hearing and\ntherefore has waived its right to one.\nFINDING OF VIOLATION\nIn its Response, Hunt did not contest the allegation in the Notice that it violated 49 C.F.R. Part\n195, as follows:\n1 See http://www.huntrefining.com/crude-oil-supply.aspx. Current as of 9/14/2018.\n\n\n\nCPF No. 2-2017-5004\nPage 2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states:\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. However, if tests at those\nintervals are impractical for separately protected short sections of bare or\nineffectively coated pipelines, testing may be done at least once every 3\ncalendar years, but with intervals not exceeding 39 months.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct\ntests at least once each calendar year, but with intervals not exceeding 15 months, on its 10-inch\nline to ensure that cathodic protection (CP) complied with 49 C.F.R. § 195.571. Specifically, the\nNotice alleged that Hunt’s 10-inch Soso-to-Heidelberg line (a 21-mile idled pipeline) is under\nCP from an impressed current system, but that Hunt failed to conduct measurements of pipe-to-\nsoil potentials in 2014, 2015 and 2016. The entries in Hunt’s records of the annual surveys for\nthose years indicated “No CP” for all CP test stations included in the survey. PHMSA did\nrecognize that multiple pipe-to-soil potential readings taken during the PHMSA inspection\nindicated adequate levels of CP under the -850mV “instant-off” criteria adopted by Hunt.\nRespondent did not contest this allegation of violation and acknowledged that the annual surveys\nfor 2014-2016 were not performed. Respondent explained, however, that this was due to\nmiscommunication with its contractor and that there was no safety risk because the pipeline had\nbeen purged of product and maintained with adequate cathodic protection. This mitigating\ninformation will be considered below with regard to the proposed civil penalty.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.573(a)(1) by failing to conduct tests at least once each calendar year, but with\nintervals not exceeding 15 months, on its 10-inch line to ensure that CP complied with 49 C.F.R.\n§ 195.571\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken 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.2 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\n2 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum\nCivil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).\n\n\n\nCPF No. 2-2017-5004\nPage 3\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $19,600 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $19,600 for Respondent’s violation of 49 C.F.R.\n§ 195.573(a)(1), for failing to conduct tests on its 10-inch line to ensure that the CP complied\nwith 49 C.F.R. 195.571. Hunt did not contest this allegation of violation but provided\ninformation to mitigate the civil penalty. Respondent noted that the violation occurred because\nof a series of internal communication errors and argued the danger was minimized by the fact\nthat the line had been purged of product and had cathodic protection continuously applied at all\ntimes. Respondent also noted that the company patrolled and maintained the right-of-way;\nresponded to one-call locate requests; and planned to perform a hydrostatic pressure test and\ninline inspection of the pipeline before returning it to service.\nThe information provided by Respondent is most relevant to the gravity of the violation. With\nregard to gravity, the Violation Report noted that Respondent’s violation of § 195.573(a)(1)\n“minimally affected” pipeline safety, which PHMSA considers the lowest level of gravity.\nWhile I agree with Respondent that the violation impacted safety to a lesser degree because the\npipeline had cathodic protection and was purged, this minimal effect on safety was already\nfactored into the penalty amount proposed by PHMSA. Therefore, I find no reason to reduce the\npenalty based on this information. In addition, the fact that the violation resulted from a\nmiscommunication does not warrant reducing the penalty because Respondent was responsible\nfor ensuring compliance and remains culpable even where a violation is due to an oversight.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $19,600 for violation of 49 C.F.R. § 195.573(a)(1).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.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 $19,600 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\n\n\n\nCPF No. 2-2017-5004\nPage 4\nWARNING ITEMS\nWith respect to Items 2 through 7, the Notice alleged probable violations of Part 195 but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 195.573(e) (Item 2) ─ Respondent’s alleged failure to correct\nidentified corrosion-control deficiencies, as required by § 195.401(b), at multiple\nlocations;\n49 C.F.R. § 195.573(d) (Item 3) ─ Respondent’s alleged failure to inspect the CP\nsystem used to control corrosion on the bottom of the aboveground breakout tanks\nat its Yellow Creek Station to ensure that operation and maintenance were done in\naccordance with API RP 651 (incorporated by reference, see § 195.3);\n49 C.F.R. § 195.555 (Item 4) ─ Respondent’s alleged failure to verify that its\ncorrosion-control supervisor maintained a thorough knowledge of that portion of\nthe corrosion control procedures established under § 195.402(c)(3) for which the\nsupervisor was responsible;\n49 C.F.R. § 195.438 (Item 5) ─ Respondent’s alleged failure to install signs\nprohibiting smoking and open flames at its Boligee booster station, as well as at\nits Quitman facility;\n49 C.F.R. § 195.436 (Item 6) ─ Respondent’s alleged failure to provide\nprotection from vandalism and unauthorized entry at its Quitman facility, where a\nportion of the fence was broken; and\n49 C.F.R. § 195.581(a) (Item 7) ─ Respondent’s alleged failure to clean and coat\neach pipeline or portion of pipeline that was exposed to the atmosphere at several\nlocations that exhibited signs of atmospheric corrosion on uncoated portions.\nHunt presented additional information in its Response regarding these items, including\ninformation showing that it had taken certain actions to address the cited items. If OPS finds a\nviolation of any of these items in a subsequent inspection, Respondent may be subject to future\nenforcement action.\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 the\nFinal Order by Respondent. Any petition submitted must contain a brief statement of the issue(s)\nand meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically\nstays the payment of any civil penalty assessed. The other terms of the order, including any\ncorrective action, remain in effect unless the Associate Administrator, upon request, grants a\nstay. If Respondent submits payment of the civil penalty, the Final Order becomes the final\n\n\n\nCPF No. 2-2017-5004\nPage 5\nadministrative decision and the right to petition for reconsideration is waived.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\nDecember 10, 2018\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":13974}