{"operation":"document","citation":"CPF 220197001","title":"VALERO PARTNERS OPERATING CO. LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-01-31","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.505, 195.505(a), 195.505(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-220197001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-220197001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-220197001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/220197001","body":"Notice of Probable Violation involving VALERO PARTNERS OPERATING CO. LLC. PHMSA's enforcement data identifies the cited regulations as 195.505,  195.505(a),  195.505(b). The case was opened on 2019-01-31 and is reported as closed as of 2021-06-15. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n220197001_Closure Letter_06152021_(18-159058S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/220197001/220197001_Closure%20Letter_06152021_(18-159058S).pdf\n\n220197001_Closure Letter_06152021_(18-159058S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220197001/220197001_Closure%20Letter_06152021_(18-159058S)_text.pdf\n\n220197001_Final Order_04302020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220197001/220197001_Final%20Order_04302020.pdf\n\n220197001_Final Order_04302020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220197001/220197001_Final%20Order_04302020_text.pdf\n\n220197001_NOPV PCO_01312019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220197001/220197001_NOPV%20PCO_01312019.pdf\n\n220197001_NOPV PCO_01312019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220197001/220197001_NOPV%20PCO_01312019_text.pdf\n\n220197001_Operator Response to Notice and Request Informal Meeting_03012019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220197001/220197001_Operator%20Response%20to%20Notice%20and%20Request%20Informal%20Meeting_03012019.pdf\n\n220197001_Closure Letter_06152021_(18-159058S)_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 15, 2021\nMr. Fred Hampton\nVice President Pipeline & Terminals\nValero Partners Operating Co.\nOne Valero Way\nSan Antonio, TX 78249\nCPF 2-2019-7001\nDear Mr. Hampton:\nOn April 30, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Valero a Final Order in the above-referenced case. The Final Order included a\nCompliance Order (CO) which required Valero to undertake certain actions to ensure compliance\nwith the federal pipeline safety regulations.\nIn response to the CO, Valero made submittals to OPS Southern Region, documenting its efforts\ntoward compliance.\nBased upon our review of documentation of actions taken, we have determined that Valero has\ncomplied with the terms of the CO and the Final Order. This case in now closed and no further\naction is necessary with respect to the matters involved in this case.\nPlease be advised that this letter refers only to the above referenced order (CPF 2-2019-7001)\nand not to any other PHMSA cases, if any.\nSincerely,\nJames A. Urisko\nDirector, Office of Pipeline Safety\nPHMSA Southern Region\n\n220197001_Final Order_04302020_text.pdf\n\nApril 30, 2020\nVIA ELECTRONIC MAIL TO: joe.gorder@valero.com\nMr. Joe Gorder\nChairman and Chief Executive Officer\nValero Energy Corporation\nOne Valero Way\nSan Antonio, Texas 78249\nRe: CPF No. 2-2019-7001\nDear Mr. Gorder:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and specifies actions that need to be taken by your subsidiary, Valero Partners\nOperating Company, LLC, to comply with the pipeline safety regulations. When the terms of the\nmodified compliance order have been completed, as determined by the Director, Southern\nRegion, this enforcement action will be closed. Service of the Final Order by electronic mail is\neffective upon the date of transmission 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\nMr. Fred Hampton, Vice President, Valero Partners Operating Company, LLC,\nfred.hampton@valero.com\nMr. James Trevino, Manager – Regulatory Programs and Permitting, Valero Partners\nOperating Company, LLC, james.trevino@valero.com\nCONFIRMATION OF RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\nIn the Matter of )\nValero Partners Operating Company, LLC, ) CPF No. 2-2019-7001\na subsidiary of Valero Energy Corporation, )\n)\n)\n)\nRespondent. )\n__________________________________________)\nFINAL ORDER\nFrom March through August 2018, 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 Valero\nPartners Operating Company, LLC (Valero or Respondent), a subsidiary of Valero Energy\nCorporation, in San Antonio, Texas. Valero Energy Corporation, through its subsidiaries, owns\n15 petroleum refineries in the United States, Canada, and the United Kingdom, with a capacity of\napproximately 3.1 million barrels per day.1\nAs a result of the inspection, the Director, Southern Region, Office of Pipeline Safety (Director),\nissued to Respondent, by letter dated January 31, 2019, a Notice of Probable Violation and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that Valero had committed four violations of 49 C.F.R. Part 195 and proposed\nordering Respondent to take certain measures to correct the alleged violations.\nValero responded to the Notice by letter dated March 1, 2019 (Response). Valero contested one\nof the allegations and requested a hearing. Representatives of Valero and OPS held an informal\nmeeting on April 11, 2019. Subsequently, by letter dated October 1, 2019 (October Letter),\nRespondent withdrew its request for a hearing and thereby authorized the entry of this Final\nOrder without further notice.\n1 Valero Energy Corporation website, available at https://www.valero.com/en-us/AboutValero/refining-segment\n(last accessed April 21, 2020).\n\n\n\nCPF No. 2-2019-7001\nPage 2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(a), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) Identify covered tasks;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(a) by failing to identify\ncovered tasks in its written qualification program. Specifically, the Notice alleged that the\n“Covered Task List” included in Appendix B of Valero’s Operator Qualification Program did not\ninclude several covered tasks meeting the regulatory definition set forth in 49 C.F.R. § 195.501.\nThe Notice also alleged Valero’s Operator Qualification Program did not adequately address all\ncovered tasks performed by Valero.\nIn its Response, Valero did not contest this alleged violation. Accordingly, after considering all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.505(a) by failing to identify\ncovered tasks in its written qualification program.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) …\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure through\nevaluation that individuals performing covered tasks are qualified. Specifically, the Notice\nalleged that Valero’s records did not demonstrate that contract employees maintained\nqualifications in accordance with Valero’s Operator Qualification Program. The Notice\nexplained that Valero’s Program required all first re-qualifications to include either a knowledge\nor skill assessment while all second re-qualifications were required to include both knowledge\nand skill assessments. The Notice alleged that Valero had documentation showing compliance\nwith its Program for employees, but did not have documentation to show that contract employees\nhad completed first and second re-qualifications in accordance with the Program. The Notice\nalleged Valero’s documentation did not distinguish between first and second qualifications for\ncontract employees so there was no evidence showing contractors performed knowledge and\nskill assessments as prescribed in Valero’s Program.\nIn its Response, Valero stated it had amended its Operator Qualification Program in January\n2018 and notified PHMSA of the changes in April 2018. Valero stated that the revised Operator\n\n\n\nCPF No. 2-2019-7001\nPage 3\nQualification Program no longer distinguished between first and second re-qualifications.\nValero argued, therefore, there was no violation of the regulations because the documentation\ndid not need to distinguish between first and second re-qualifications for contractors in order to\nshow compliance with its Program.\nA review of Valero’s Operator Qualification Program shows the last revision to the Program was\nmade in December 2017, which was the version evaluated by OPS during the inspection.\nAppendix C of the 2017 Program, titled, “Qualification Methods and Span of Control,” specifies\nthat both employees and contractors may complete a knowledge or skills assessment when\ninitially re-qualifying, but must complete both a knowledge and skills assessment when\nperforming a second re-qualification. Valero did not submit a newly revised version of its\nProgram with its Response and did not submit documentation that a revised Program was\ntransmitted to OPS. Valero also did not submit supplementary documentation showing that\ncontractors performed first and second re-qualifications in accordance with their 2017 Program.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.505(b) by failing to ensure through evaluation that individuals performing covered tasks\nare qualified.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.505, which states, in\nrelevant part:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505 by failing to follow a written\nqualification program. Specifically, the Notice alleged that Appendix C, titled, “Qualification\nMethods and Span of Control,” of Valero’s Operator Qualification Program referenced several\nindustry certifications as acceptable evaluation methods for covered tasks that were not relevant\nto the given covered task or did not contain a knowledge or performance assessment that could\nbe used as qualification method.\nIn its Response, Valero did not contest this alleged violation. Accordingly, after considering all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.505 by failing to follow a\nwritten qualification program.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) …\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure through\nevaluation that individuals performing covered tasks are qualified. Specifically, the Notice\n\n\n\nCPF No. 2-2019-7001\nPage 4\nalleged that Valero failed to ensure that individuals were qualified to material relevant to each\ncovered task. The Notice also alleged several performance assessments did not require\nperformance of all the required steps of some covered tasks. The Notice also alleged that some\nperformance assessments were conducted orally with no actual performance of task at all.\nIn its Response, Valero did not contest this alleged violation. Accordingly, after considering all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure\nthrough evaluation that individuals performing covered tasks are qualified.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, 3, and 4 in the Notice for\nviolations of 49 C.F.R. § 195.505. Under 49 U.S.C. § 60118(a), each person who engages in the\ntransportation of hazardous liquids or who owns or operates a pipeline facility is required to\ncomply with the applicable safety standards established under chapter 601.\nWith regard to the violations of § 195.505 (Items 1, 2, 3, and 4), Respondent argued in its\nResponse and October Letter that the terms should be modified to allow Valero to complete the\nremedial requirements within 15 months of the issuance of the Final Order. Respondent\nproposed to provide periodic updates to OPS every four months. OPS issued a Region\nRecommendation on October 10, 2019 (Recommendation). The Recommendation did not object\nto the Respondent’s proposed timeframes for completing the compliance terms or for providing\nperiodic updates to OPS.\nFor the above reasons, the Compliance Order is modified as set forth below.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.505(a) (Item 1), Respondent must, within\n15 months of the issuance of the Final Order, complete the following:\na. Review and update Appendix B of Valero’s Operator Qualification\nProgram, titled “Valero Covered Task List,” to ensure that all covered\ntasks performed on Valero’s pipeline facilities are included and accurately\nlisted.\nb. Ensure the review of Valero’s Covered Task List includes the\ndevelopment of a list of covered tasks specific to breakout tank\ninspections and maintenance activities.\nc. Provide OPS with periodic updates regarding the compliance of this Item\nevery four months.\n\n\n\n2. 3. 4. 5. CPF No. 2-2019-7001\nPage 5\nWith respect to the violation of § 195.505(b) (Item 2), Respondent must, within\n15 months of the issuance of the Final Order, complete the following:\na. Develop the capability to distinguish between the initial evaluation and all\nsubsequent re-evaluations for contractor personnel or revise the\nrequirements of Valero’s Operator Qualification Program to comply with\nthe capabilities of the referenced third-party operator qualification\ndatabase.\nb. Provide OPS with periodic updates regarding the compliance of this Item\nevery four months.\nWith respect to the violation of § 195.505 (Item 3), Respondent must, within 15\nmonths of the issuance of the Final Order, complete the following:\na. Review the evaluation requirements for all accepted industry and third-\nparty certifications to ensure compliance with the requirements of\nValero’s Operator Qualification Program and their validity as acceptable\nevaluation methods for their respective covered tasks.\nb. Review and update Appendix C of Valero’s Operator Qualification\nProgram to ensure all certifications listed are appropriate for each\nrespective covered task and contain a knowledge evaluation and a\nperformance evaluation that complies with the requirements of Valero’s\nOperator Qualification Program for initial certification, as well as\nsubsequent re-certifications.\nc. Provide OPS with periodic updates regarding the compliance of this Item\nevery four months.\nWith respect to the violation of § 195.505(b) (Item 4), Respondent must, within\n15 months of the issuance of the Final Order, complete the following:\na. Review all evaluation material referenced by both Valero and its operator\nqualification service providers to ensure compliance with Valero’s\nOperator Qualification Program.\nb. Review and update Appendix C of Valero’s Operator Qualification\nProgram to ensure all Valero and operator qualification service provider\nevaluation materials are appropriate for the given covered task and contain\na knowledge and performance evaluation that complies with the\nrequirements of Valero’s Operator Qualification Program.\nc. Provide OPS with periodic updates regarding the compliance of this Item\nevery four months.\nWithin 15 months of the issuance of the Final Order, Valero must submit\ndocumentation to the Director demonstrating completion of Items 1, 2, 3, and 4,\nincluding revised versions of Appendices B and C of Valero’s Operator\nQualification Program, and a list of all changes made to the Program.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\n\n\n\nCPF No. 2-2019-7001\nPage 6\nIt is requested (not mandated) that Respondent maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total to the\nDirector. It is requested that these costs be reported in two categories: (1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated\nwith replacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nUnder 49 C.F.R. § 190.243, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of this Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.243. The terms of the order, including corrective action, remain\nin effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nApril 30, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":18555}