CHS MCPHERSON REFINERY INC. — Notice of Probable Violation

320025010_Final Order_11132002.pdf, page 1Official PDFt: I i @ U.S.Deportrnent of lionsportotion Reseorcfiond Speciol Progrums Adn$nisffiion 400 Sevenlh Street, S.W. Washington, D.C. 20590 Noy I 3 20s2 Mr. Myron B. Hoover Vice-President of Transportation National Cooperative Refinery Association 1391 Iron Horse Road P.O. Box 1404 McPherson, KS 67460 Re: CPF No. 3-2002-5010 Dear Mr. Hoover: Enclosed is the Final Order issued by the Associate Adminisfiator.for,Pipeline Safety in the above-referenced case. It makes a finding of violation and assesses a civil:penalty of $5,000. The penalty payment terms are set forth in the Final Order. This enforcement action closes automatically upon payment. Your receipt of the Final Order constitutes service of that document under 49:C.F;R . $1'90.5. ': I Sincerely, il,jt Pipeline Compliance Registry Office of Pipeline Safety Enclosure CERTIFIED MAIL - RETURN RECEIPT REOUESTED#

320025010_Final Order_11132002.pdf, page 2DEPARTMENT OF TRANSPORTATION RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON. DC 20594 In the Matter of National Cooperative Refinery Association, Respondent. CPF No. 3-2002-5014 FTIIAL ORDER On January 23-24,2002,pursuant to 49 U.S.C. $ 60117, representatives of the.Central and Eastern Regions, Office ofPipeline Safety (OPS), conducted an integrity managernentsegment identifioation and completeness check of National Cooperative Refinery Associationis-,(Respondentls):integrity management prograrri,in McPherson, Kansas. As a result of the inspeclion;:the:Direc-tor,.C-entral Region, OPS, issued to:Respondent, by letter dated May 23,2002, aNoticerof,P.robable Violation, Proposed Civil Penalty;:and Proposed Compliance Order (Notice). In aceordanee with 49 CIF.R. $ 190.207, the Notice.proposed finding that Respondent had violated,49 GF;R. $ 195452 and proposed assessing a civil penalty of $10,000 for the alleged violation. The Notice also proposed that Respondent take certain measures to correct the alleged violation. Respondent responded to the Notice by letter dated June 19, 2002 (Response). Respondent did not contest the allegation of violation but offered an explanation and provided information in mitigation of the proposed civil penalty. Respondent did not request a hearing; consequently, Respondent waived its right to one. FINDING OF VIOLATION Uncontested Violation Respondent did not contest the alleged violation in the Notice. Accordingly, I. find that Respondent violated the following section of 49 C.F.R. Part 195, as more fully described in the Notice: 49 C.F.R. $ 195.452(bXD - failure to identiff all pipeline segments that could affect a high consequence area by December 31, 2001. This frnding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent.#

320025010_Final Order_11132002.pdf, page 3'f ',j, . . i " ' f . t , ,r! i . r i 2 ASSESSMENT OF PENALTY Under 49 U.S.C. g 60122, Respondent is subject to a civil penalty not to exceed $25,000 per violation for each day of the violation up to a maximum of $500,000 for any related series of violations. 49 U.S.C. S 60122 and 49 C.F.R. $ 190.225 require that, in determining the amount of the civil penalty, I consider the following criteria: naflire, circumstances, and gravity ofthe violation, degree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's ability to continue in business, and such other maffers as justice may require. The Notice proposed a civil penalty of $10,000 for violation of 49 C.F.R. 195.452(bxi). The Respondent explained that it had initially misinterpreted the application of the regulation to its system. Respondent also demonstrated that it had taken timely corrective action and completed the process of identiffing pipeline segments which could affect high consequence areas. Accordingly, having reviewed the record and considered the assessment criteria, areduction will be made in the amount of the proposedpenalty. I assess Respondent a civil penalryof.$5,000for.failingto comply with the requirements.of 49 C.F.R, $ 195.452(bXD. ,. : : l ., Payment of the civil penalty must be made within 20 days of serviqg. Payment, oan.be made by sending a certified check.ot money order (containing the CPF Number,fol this case) payab,le to llU. S. DepartmentofTransportation'itqtheFederalAviationAdministration;MikeJvl'onrone Aeronautical Center, Financial Operations Division (Al\[Z-320), P.O.Box25770; Oklahoma City, OK,73125. Federal regulations (49 C.F.R. $ S9.21(bX3)) also permit this payment to be made by wire transfer, throughthe Federal Reserve Communications System(Fedwire),tothe accountofthe U.S. Treasury. Detailed instructions are contained in the enclosure. After completing the wire transfer, send a copy of the electronic funds fansfer receipt to the Office of the Chief Counsel (DCC-l), Research and Special Programs Administation, Room 8407, U.S. Department of Transportation, 400 Seventh Street, SW, Washington, DC 20590-0001. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ- 120), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25770, Oklahoma City, OK 73125; (405) 954-4719. Failure to pay the $5,000 civil penalty will result in accrual of interest at the current annual rate in accordancewith3l U.S.C. 93717,31 C.F.R. $901.9 and49 C.F.R. $ 89.23. Pursuanttothosesame authorities, alate penalty charge of six percent (6Yo) perannum will be charged if payment is not made within I l0 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 an United States District Court.#

320025010_Final Order_11132002.pdf, page 43 COMPLIANCE ORDER The Notice proposed a compliance order. Respondent has demonstrated corrective action addressing the item in the proposed compliance order. Respondent has completed the process of identiffing its pipeline segments which could affect high consequence areas and performed a risk analysis. Because Respondent's actions satisfied the proposed compliance terms, no need exists to issue a compliance order. Under 49 C.F.R. $ 190.215, Respondent has a right to petition for reconsideration of this Final Order. However, upon payment of the civil penalty, the case closes automatically and Respondent waives the right to petition for reconsideration. The filing of a petition automatically stays the payment of any civil penalty assessed. The petition must be received within 20 days of Respondent's receipt of this Final Order and must contain a brief statement of the issue(s). The terms and conditions of this Final Order are effective on receipt. 4r Asso ciate Administrator for Pipeline Safety ' ' : : l - _ '';,1,, ; . i . , . ' ",t;, ilov I 3 2002 Date Issued#