FARMLAND INDUSTRIES INC — Notice of Probable Violation

case documentOfficial PDFcpf_320035015.pdf#

320035015_Final Order_03042005.pdf, page 1Official PDF) ?} U.S.Deportment of Tronsportotion Reseorch qnd SpeciolPrcgroms Administrotion 400 $eventh S r . S W Washington. D C 20590 I MAR - 4 2AA5 Mr. Keith D. Osbom Executive Vice President and Refinery General Manager Co ffeyville Resourc es Crude Transportation, LLC North and Linden Streets Coffeyville,Ks 67337 Re: CPF No. -q-2003-5015 Dear Mr. Osborn: Enclosed is the Final Order issued bv the Associate Administrator for above-referenced case. It makes findings of violation and specifies actions to with the pipeline safety regulations. When the terms of the Compliance Order determined bythe Director, Central Region, this enforcement action will be c this Final Order constitutes service of that document under 49 C.F.R. $ 190.5. Sincerely, \, t'n $w,o v L__ James Reynolds Pipeline Compliance Registry Office of Pipeline Safety line Safety in the taken to comply completed, as . Your receipt of Enclosure CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

320035015_Final Order_03042005.pdf, page 2DEPARTMENT OF TRANSPORTATION RESEARCH AND SPECIAL PROGRAMS ADMINISTRATI OFFICE OF PIPELINE SAFETY WASHINGTON. DC 20590 In the Matter of Coffeyville Resources Crude Transportation, LLC, Respondent. CPF No. 3- ) FINAL ORDER On March 3-6,2003,pursuant to 49 U.S.C. $ 60117, representatives ofthe Office o (OpS) conducted an on-site pipeline safety inspection in Bartlesville, Oklahoma and maintenance procedures for certain hazardous liquid pipeline facilities local Coffeyville and Wichita, Kansas then operated byFarmland Industries. As a result the Director, Central Region, OPS, by letter dated May 27,2003, issued to Farn Notice of Probable Violation and Proposed Compliance Order (Notice). ln 49 C.F.R. 5 Ig0.207 ,the Notice proposed finding that Farmland Industries had of 49 C.F.R. Part 195 by failing to adequately establish and follow written maintenance, and emergencies. The Notice also proposed that Farmland measures to correct the alleged violations. By letter dated lune 27 ,20A3 ,Farmland Industries initially responded to the Notir Farmland acknowledged inadequacies in the written procedures and proposed a revising its procedurai manual to address the inadequacies. On November 19, the revised procedural manual and reviewed it to determine whether all of the i the Notice were addressed. By letter dated February 3,2004, the Director, Cen informed Farmland's vice President of Petroleum Operations that after tevir manual, the Director had determined that the revisions did not address all 0f the t in the Notice, and that some of these revisions had introduced additional inadeqt 3, 2004, Coffeyville Resources Crude Transportation, LLC succeeded Farmland operator of the subject pipeline facilities (as used in this order, "Respondent" r( Industries and/or coffeyvitte Resources crude Transportation, LLC)' By letter d zl} ,Respondent submitted further responsive materials including a binder cor revised operations anti mainienailce nianiial. Respondent also prot"ided a ti conducting the employee training associated with implementing the revised mar did not request aheanng, and therefore has waived its right to one' Pipeline Safety f the operations in the areas of the inspection, itted violations for operations, take certain In its response, schedule for OPS received , ies cited in l Region, OPS, ing the revised ies. On March brs to Farmland ining a further e schedule for al. Respondent#

320035015_Final Order_03042005.pdf, page 3: FINDINGS OF VIOLATION In its responses, Respondent did not contest the alleged violations in the Notice. Accordingly, I find that Respondent violated the following sections of 49 C.F.R. Part 195, as more fully described in the Notice: 49 C.F.R. § 195.402(a) - failing to adequately prepare and follow a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies in accordance with the applicable requirements; 49 C.F.R. § 195.402(c) - failing to include procedures for conducting pipeline maintenance and repairs in accordance with the applicable requirements. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a Compliance Order with respect to the above referenced violations of §§ 195.402(a) and 195.402(c). 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. Within 30 days following receipt of this order, Respondent must: Amend the written procedures to include: (A) Procedures for mapping pipeline facilities located in areas where emergency response could be required in the event of a release or other safety-related incident, and procedures for minimizing the likelihood of accidental ignition of vapors in these facilities, in accordance with § 195.402(c)(4) and (c)(11); (B) Procedures for analyzing failures to determine their causes and to identify measures to prevent reoccurrences in accordance with § 195.402(c)(5) and (c)(6); ©) Procedures for establishing and maintaining liaison with fire, police, and other public officials in accordance with § 195.402(c)(12); (D) Procedures for the abandonment of pipeline facilities in accordance with §195.402(c)(10); (E) Procedures for addressing the hazardous accumulation of vapors in a trench in accordance with § 195.402(c)(14);#

320035015_Final Order_03042005.pdf, page 42. 3. ^ L+. 5. 6. 8. 9. 10. 11. t.L. Amend the written procedures to include procedures for the review of in the emergency response training program, procedures for identifying changes to the emergency response training program to ensure its e procedures for ensuringthat supervisors maintain a thorough knowledge performance implementing bctiveness, and f the emergency response procedures forwhich they are responsible, in accordance with $ 1 .403(b) and (c); Amend the written procedures to include procedures for repairing pipeli with $ 195.422; accordance Amend the written procedures to include procedures for moving or accordance with $ 195.424(a); lines in Amend the written procedures to include procedures for safely opening receivers in accordance with 5 195.426; launchers and Amend the written procedures to include procedures for the placement of igns near pump stations and breakout tanks including guidance on the content of the signs i accordance with 5 r95.434; Amend the written procedures to include procedures for providing securi unauthorized entry of pump station and breakout tank areas in accordanc and preventing with $ 195.436; Amend the written procedures for the damage prevention program to inc notifying potential excavators of the existence of pipeline facilities aI responding to notifications of intended excavation activity including det and how to conduct temporary marking, and procedures for insuring pipeline when the excavation involves blasting including leak testing aft conducted, in accordance with $ 195.a42(c); procedures for procedures for ining whether integrity of the the blasting is Amend the written procedures to include procedures for ensuring that ISOrS marntarn a thorough knowledge of corrosion control measures in accordance with 195.555; Amend the written procedures to include procedures for ensuring that all replaced pipe must be externally coated upon installation in accordance , relocated, or ith $ 195.557; Amend the written procedures to include procedures for specifying the external coatings in accordance with $ 195'559; owable tlpes of ^*^- a +1^^ ",*i++on ^rnnedrrres fo inclrrrle orocedures for specifying AIngIlU LIltr wrlt[s,rl PlvvvuurwD rv 'rrvrs*- r' inspections of coatings must be done and how any identified coating remediated in accordance with $ 195'561; how frequently age is to be#

320035015_Final Order_03042005.pdf, page 513. 14. 15. 16. 17. 18. t9. 20, 21. 22, 23" 24. 25. Amend the written procedures to include procedures for ensuring that installed on new pipeline within one year, procedures for cathodicall unprotected pump station and breakout tank areapiping, and procedures buried pipe is cathodically protected, in accordance with $ 195.563; ic protection is protecting any ensurins that all Amend the written procedures to include procedures for installing and mai protection test leads in accordance with $ 195'567; ning cathodic Amend the written procedures to include procedures for identifying the cri iato be utilized for determining the adequacy of cathodic protection in accordance with $ t95.57r; Amend the written procedures to include procedures for determining require a clcse-inten"al electrical sur-'re5', and procedt-res fbr ensuring that are inspected annually and any deficiencies identified are promptly co with $ 195.573(a),(c), and (e); Amend the written procedures to include procedures for electrjcal iso inspections in accordance with $ 195.575; Amend the written procedures to include procedures for ensuring that i are identified and alleviated in accordance with 5 I95.577; Amend the written procedures to include procedures for determining the transported products such as sour crude, and procedures for mitigating i aceordance with $ 195.579(a) and (b); Amend the written procedures to include procedures for protecting ex pipeline system from atmospheric corrosion in accordance with $ 195'58 Amend the written procedures to include procedures for monitoring control in accordance with $ 195.583; Amend the written procedures to include procedures for correcting accordance with $ 195.585; Amend the written procedures to include the method for determintng remal of corroded pipe in accordance with $ 195.587; Amend the written procedures to include up-to-date procedures for ^^.^+-^r -^^^-r^ i^ ^^nn-Aon^e rrrith A '! OS 5Rq' CUIIt-tUi rtruutLlJ llt ovwvruorrwv vv^Lrr J '2J'rv') Amend the written procedures to include procedures for ensuring that valve, fitting, or other component is designed to accommodate the pat inspection tool in accordance with $ 195'120(a); hich areas mav in accordance and required erence currents iveness of l corrosion in portions of the corrosl0n ingwall strength aining corrosion new line pipe, e of an internal#

320035015_Final Order_03042005.pdf, page 626. 27. 28. 29. 30. 31. J L . a a J J . 34. 35. 36. J t . 5 welding will be and that rdance with Amend the written procedures to include procedures for ensuring that all performed by a qualified welder in accordance with qualified welding pr iecords of all procedures and qualifying tests will be retained, in $19s.21a(a) and (b); Amend the written procedures to include procedures for ensuring t qualified under API 1104 or Section IX of the ASME Boiler and Press accordance with $ 195'222; Amend the written procedures to include procedures for ensuring the arc burns, and for ensuring that a ground is never welded to a pipe or fi welded. in accordance with 5195'226(b) and (c); Amend the written procedures to include procedures for'inspections of with $ 195.228: Amend thewrittenprocedures to includeprocedures forthe removal or in accordance with $ 195.230; Amend the written procedures to include procedures for nondestructive with $ 19s.Ba@); Amend the written procedures to include procedures for ensuring that the h requirements for new or relocated pipeline facilities are met in accordance v Amend the written procedures to include procedures for ensuring that the requirements for all fittings are met in accordance with $ 195.305; Amend the written procedures to include procedures for determining the used during pressure testing in accordance with $ 195'306; Amend the written proc edures to inc lude proc edures for ensuring that all pi tie-ins is pressure tested in accordance with $ 195'308; within 30 days following receipt of this order, submit a copy of the amen the Director, central Region, oPs, 901 Locust Street, Suite 462, Kansas 2641. !!r:1!-:- .-t^. A--,- r.^.!t^.'.:rinc rcneinf nf t\ig crder, complete all necessary I wlmln L lv uidys lutruwruB rwwwrP! vr Lrr on the revised operations and maintenance procedures- Retain recor( including the names of the people trained and the dates the training occu all welders are Vessel Code in ete removal of that is being s in accordance r ofweld defects g ln accorclance atic testing ith $ 19s.302(a); tatic testing medium to be associatedwith procedures to ity, MO 64106- nnel training of the training#

320035015_Final Order_03042005.pdf, page 7The Regional Director may extend the period for complying with any of the Respondent requests an extension and adequately justifies the reasons for the ex Failure to comply with this Final $100,000 per violation per day, or Order may result in the assessment of civil alties of up to in the referral of the case for judicial enfo Under 49 C.F.R. $ 190.215, Respondent has a right to submit a petition for Final Order. Should Responiient eiect to do so, the petition must be received ithin 20 davs of Respondent's receipt ofthis Final Order and must contain abrief statement of the i of the order, including any required corrective action, remain in full effect un Administrator, upon written request, grants a stay. The terms and conditions of thr on of this s). The terms the Associate Final Order are effective on receipt. ftn?r-aa Stacey Gerard Associate Administrator for Pipeline Safety - 4 2005 Issued#

LLC Amendment to the Final Order CPF No 3-2003-5015.pdf, page 1Official PDFU.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration #DV 2 9 a005 400 Seventh Street, S.W. Washington, D.C. 20590 Mr. Keith D. Osborn Executive Vice President and Refinery General Manager Coffeyville Resources Crude Transportation, LLC P.O. Box 570 Coffeyville, KS 67337 Re: CPF No. 3-2003-501 5 Dear Mr. Osborn: Enclosed is an Amendment to the Final Order issued by the Associate Administrator for Pipeline Safety in the above-referenced case. It removes any reference to Coffeyville Resources Crude Transportation, LLC (CRCT) as a Respondent on the grounds that all actions required by the Order to comply with the pipeline safety regulations have been completed rendering the Final Order moot as to CRCT. The case is now closed. The decision on the petition for reconsideration you filed in connection with this case is being issued simultaneously with this Amendment to the Final Order. Your receipt of this Amendment to the Final Order constitutes service of that document under 49 C.F.R. $ 190.5. Sincerely, James Reynolds Pipeline Compliance Registry Office of Pipeline Safety Enclosure cc: Melissa Anne Heme, Esq. DLA Piper Rudnick Gray Cary US LLP The Marbury Building 6225 Smith Avenue Baltimore, MD 2 1209-3600 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

LLC Amendment to the Final Order CPF No 3-2003-5015.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of 1 Farmland Industries, 1 1 1 Respondent. 1 CPF NO. 3-2003-5015 AMENDMENT TO THE FINAL ORDER Based on information demonstrating that all actions required by this Order to comply with the pipeline safety regulations have been completed, I find that the Order is moot as to Coffeyville Resources Crude Transportation, LLC (CRCT) and remove any reference to CRCT as a Respondent.' Accordingly, pursuant to 49 U.S.C. 601 12, I hereby amend the above caption and amend body of this Final Order to read as follows: On March 3-6,2003, pursuant to 49 U.S.C. $601 17, representatives of the Office of Pipeline Safety (OPS) conducted an on-site pipeline safety inspection in Bartlesville, Oklahoma of the operations and maintenance procedures for certain hazardous liquid pipeline facilities located in the areas of Coffeyville and Wichita, Kansas then operated by Farmland Industries (Respondent). As a result of the inspection, the Director, Central Region, OPS, by letter dated May 27,2003, issued to Farmland Industries a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. 5 190.207, the Notice proposed finding that Farmland Industries had committed violations of 49 C.F.R. Part 195 by failing to adequately establish and follow written procedures for operations, maintenance, and emergencies. The Notice also proposed that Farmland Industries take certain measures to correct the alleged violations. By letter dated June 27,2003, Farmland Industries initially responded to the Notice. In its response, Farmland acknowledged inadequacies in the written procedures and proposed a time schedule for revising its procedural manual to address the inadequacies. On November 19,2003, OPS received the revised procedural manual and reviewed it to determine whether all of the inadequacies cited in the Notice were addressed. By letter dated February 3,2004, the Director, Central Region, OPS, informed Farmland's Vice President of Petroleum Operations that after reviewing the revised manual, the Director had determined that the revisions did not address all In a separate document, a decision on the petition for reconsideration filed by CRCT in connection with this case was issued simultaneously with this Amendment to the Final Order.#

LLC Amendment to the Final Order CPF No 3-2003-5015.pdf, page 3of the inadequacies cited in the Notice, and that some of these revisions had introduced additional inadequacies. Respondent did not request a hearing, and therefore waived its right to one. On March 3,2004, CRCT succeeded Farmland Industries as the operator of the subject pipeline facilities. By letter dated October 28,2004, further responsive materials were submitted including a binder containing a further revised operations and maintenance manual and a time schedule for conducting the employee training associated with implementing the revised manual. FINDINGS OF VIOLATION In its responses, Respondent did not contest the alleged violations in the Notice. Accordingly, I find that Respondent violated the following sections of 49 C.F.R. Part 195, as more fully described in the Notice: 49 C.F.R. 5 195.402(a) - failing to adequately prepare and follow a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies in accordance with the applicable requirements; 49 C.F.R. 5 195.402(c) - failing to include procedures for conducting pipeline maintenance and repairs in accordance with the applicable requirements. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a Compliance Order with respect to the above referenced violations of $ 5 195.402(a) and 195.402(c). Under 49 U.S.C. 5 601 18(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. The Regional Director has indicated that Respondent has completed all of the actions specified in the proposed Compliance Order. Accordingly, since compliance has been achieved with respect to these violations, it is unnecessary to require Respondent to take further actions in this Order. The terms and conditions of this Final Order, as amended, are effective on receipt. This case is closed. A )oV 2 9 2905 Date Issued:#

320035015_Amended Final Order_11292005.pdf, page 1Official PDFo U.S. Deportment of Tronsportotion Plpellne ond Hozordous mqtedqts Sofety lomlnisrotlon ml|2sffi Mr. Keith D. Osborn Executive Vice President and Refinery General Manager Coffeyville Resources Crude Transportation, LLC P.O. Box 570 Coffeyville,KS 67337 Re: CPF No. 3-2003-5015 Dear Mr. Osborn: Enclosed is an Amendment to the Final Order issued by the Associate for Pipeline Safety in the above-referenced case. It removes any reference to inistrator ille Resources Crude Transportation, LLC (CRCT) as a Respondent on the grounds all actions required by the Order to comply with the pipeline safety regulations have been rendering the Final Order moot as to CRCT. The case is now closed. The deci on on the petition for reconsideration you filed in connection with this case is being i simultaneously with this Amendment to the Final Order. Your receipt of this the Final Order constitutes service of that document under 49 C.F.R. $ 190.5. Sincerely, +* {l-- James Reynolds Pipeline Compliance Registry Office of Pipeline Safety Enclosure Melissa Anne Hearne, Esq. DLA Piper Rudnick Gray Cary US LLP The Marbury Building 6225 Smith Avenue Baltimore, MD 21209-3600 CERTIFIED MAIL - RETURN RECEIPT REOUESTED#

320035015_Amended Final Order_11292005.pdf, page 2DEPARTMENT OX' TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINI OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of Farmland fndustries, Respondent. CPF No.3-2003-501 AMENDMENT TO THE FINAL ORDER Based on information demonstrating that all actions required by this Order to pipeline safety regulations have been completed, I find that the Order is moot as Resources Crude Transportation, LLC (CRCT) and remove any reference to CR Respondent.r Accordingly, pursuant to 49 U.S.C. 60112,I hereby amend the amend body of this Final Order to read as follows: On March 3-6,2003, pursuant to 49 U.S.C. $ 60117, representatives of the Office Safety (OPS) conducted an on-site pipeline safety inspection in Bartlesville, operations and maintenance procedures for certain hazardous liquid pipeline the areas of Coffeyville and Wichita, Kansas then operated by Farmland As a result of the inspection, the Director, Central Region, OPS, by letter dated issued to Farmland Industries a Notice of Probable Violation and Proposed Compl (Notice). In accordance with 49 C.F.R. S 190.207, the Notice proposed finding Industries had committed violations of 49 C.F.R. Part 195 by failing to adequately follow written procedures for operations, maintenance, and emergencies. The Not proposed that Farmland Industries take certain measures to correct the alleged vi By letter dated lune 27 2003 , , Farmland Industries initially responded to the No response, Farmland acknowledged inadequacies in the written procedures and schedule for revising its procedural manual to address the inadequacies. On OPS received the revised procedural manual and reviewed it to determine whether inadequacies cited in the Notice were addressed. By letter dated February 3,2004, Central Region, OPS, informed Farmland's Viee Presidcnt of Petroleum reviewing the revised manual, the Director had determined that the revisions did (Respondent). 27,2003, a time 19,2003, 1 In a separate document, a decision on the petition for reconsideration filed by CRCT in this case was issued simultaneously with this Amendment to the Final Order.#

320035015_Amended Final Order_11292005.pdf, page 3I I of the inadequacies cited in the Notice, and that some of these revisions had i additional inadequacies. Respondent did not request a hearing, and therefore wai one. On March 3,2004, CRCT succeeded Farmland Industries as the operator of the facilities. By letter dated October 28,2004, further responsive materials were including a binder containing a further revised operations and maintenance schedule for conducting the employee training associated with implementing the FINDINGS OF VIOLATION In its responses, Respondent did not contest the alleged violations in the Notice. fin<i that Respondent violated the following sections of 49 C.F.R. Part 195, as described in the Notice: 49 C.F.R. $ 195.402(a) - failing to adequately prepare and follow aman procedures for conducting normal operations and maintenance activities abnormal operations and emergencies in accordance with the applicable 49 C.F.R. $ 195.402(c) - failing to include procedures for conducting pi maintenance and repairs in accordance with the applicable requirements. These findings of violation will be considered prior offenses in any subsequent action taken against Respondent. I its right to ect pipeline COMPLIANCE ORDER The Notice proposed a Compliance Order with respect to the above referenced vi l95.a02@) and 195.402(c). Under 49 U.S.C. $ 601l8(a), each person who transportation of hazardous liquids or who owns or operates a pipeline facility is comply with the applicable safety standards established under Chapter 601. The Director has indicated that Respondent has completed all of the actions specified Cornpliance Order. Accordingly, since compliance has been achieved with violations, it is unnecessary to require Respondent to take further actions in this and conditions of this Final Order, as amended, are effective on receipt. This n the proposed rder. The terms is closed. mv 29 m5 h^ rard . , \ Administrator For Pipeline Safety Date issued:#