PREMCOR PIPELINE COMPANY — Notice of Probable Violation

case documentOfficial PDFCPF NO 3-2004-5008 THE PREMCOR REFINING GROUP INC .pdf#

320045008_final order_02162006_text.pdf, page 1Official PDFU 5 Department of Trarnportatron Pipeline and Hazardous Materials Safetti ftdminlstratton e00 Sevenrn Street, S W Weernngten D C 20590 Mr Edward Jacoby Vice President, Wholesale Marketing & Distabution The Premcor Refining Group, Inc 1700 East Putnam Avenue Old Greenwich, CT 06870 Re CPF No 3-2004-5008 Dear Mr Jacoby Enclosed is the Fmal Order issued by the Associate Administrator for Pipeline Safety in the above-referenced case It makes findings of violation and assesses a civil penalty of $22, 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 consntutes service of that document under 49 C F R tJ 190 5 Sincerely James Reynolds Pipehne Comphance Registry Office of Pipeline Safety Enclosure cc Mr Ivan Huntoon Director, Central Region, OPS CERTIFIED MAIL - RETURN RECFIPT RE UESTED#

320045008_final order_02162006_text.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D. C. 20590 In the Matter of ) ) The Premcor Refimng Group, Inc. , ) ) Respondent. ) CPF No. 3-2004-5008 FINAL ORDER On October 6-9, 2003, pursuant to 49 U S C ls 60117, a representative of the Pipehne and Hazardous Matenals Safety Administration (PHMSA), conducted an on-site pipehne safety inspection of Respondent's facihties and records in Ilhnois and Indiana As a result of the inspection, the Dtrector, Central Region, PHMSA, issued to Respondent, by letter dated March 23, 2004, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Comphance Order (Notice) In accordance with 49 C F R ls 190 207, the Notice proposed finding that Respondent had committed violations of 49 C F R Part 195 and proposed assessing a civil penalty of $22, 000 for the alleged violations The Notice also proposed that Respondent take certam measures to correct the alleged violations Respondent responded to the Notice by letter dated Apnl 27, 2004, as supplemented by letter dated March 7, 2005 (Response) In its response, Respondent offered information to explain the allegations, provided mformauon concerning the corrective actions it has taken, stated its intent to pay the proposed civil penalty for three of the alleged violations, and requested that the proposed civil penalty amount be reduced for one of the alleged violations and that another be withdrawn FINDINGS OF VIOLATION Item 1 in the Notice alleged that Respondent violated 49 C F R tr 195 310(b)(2) by fading to maintain records documentmg the calibration of its hydrostatic test instruments In its response, Respondent acknowledged that it had failed to locate the specified records Accordingly, I find that Respondent violated lr 195 310(b)(2) failing to maintain records documenting the calibration of its hydrostatic test instruments#

320045008_final order_02162006_text.pdf, page 3Item 2 in the Notice alleged that Respondent violated 49 C F R 5 195 402(a) by faihng to follow the procedures for maintainmg liaison with fire, police and other public officials that it established pursuant to tt 195 402(c)(12) dunng calendar year 2002 In its response, Respondent acknowledged that it had failed to locate any records demonstrating liaison activities for 2002 Accordmgly, I find that Respondent violated 5 195 402(a) by failmg to follow its procedures for maintaining liaison with fire, police and other public officials dunng 2002 Item 3 in the Notice alleged that Respondent violated 49 C F R 5 195 404(a)(2) by faihng to maintain up-to-date maps of foreign utihties crossing its pipehne Respondent did not provide any information contesting this allegation in its response Accordingly, I find that Respondent violated g 195 404(a)(2) by failing to maintain maps of foreign utilities crossing its pipehne Item 4a in the Notice alleged that Respondent violated 49 C F R 5 195 404(c)(3) by failing to maintain inspection records for the over-fill protection for the break-out tanks at its refinery for the two years preceding the inspection Respondent did not provide any information contesting this allegation in its response Accordmgly, I find that Respondent violated g 195 404(c)(3) by failing to maintain the specified inspection records dunng the relevant penod Item 5 in the Notice alleged that Respondent violated 49 C F R 5 195 420(b) by faihng to demonstrate that the main hne valve north of the Cal Sag Channel was inspected between 2001 and 2003 Respondent did not provide any information contesting this allegation in its response Accordingly, I find that Respondent violated g 195 420(b) by fading to demonstrate that the specified valve was inspected dunng the relevant penod These findings of violation will be considered pnor offenses m any subsequent enforcement action taken against Respondent ASSESSMENT OF PENALTY Under 49 U S C g 60122, Respondent is subIect 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 senes of violations 49 U S C 5 60122 and 49 C F R 5 190 225 require that, in determining the amount of the civil penalty, I consider the following criteria nature, circumstances, and gravity of the violation, degree of Respondent's culpability, history of Respondent's pnor offenses, Respondent's abihty to pay the penalty, good faith by Respondent m attempting to achieve compliance, the effect on Respondent's abihty to continue in business, and such other matters as )ustice may require With respect to Item 1, the Notice proposed a civil penaltv of $5, 000 for Respondent's failure to maintain records documenting the calibration of its hydrostatic test instruments Maintaining complete and accurate records of test equipment cahbrations is an important part of pipeline safety because this information facditates the vahdation of the results of tests used to evaluate the integrity of a pipehne and make appropriate operating decisions In its response, Respondent#

320045008_final order_02162006_text.pdf, page 4explamed that it believed that the cahbration of its hydrostatic test tnstrttments had been documented but that the records had been misplaced Respondent, however, has presented no mformation that would warrant a reduction m the civil penalty amount proposed in the Notice for this violahon Accordingly, I assess Respondent a civil penalty of $5, 000 for violatmg 49 C F R tt 195 310(b)(2) With respect to Item 2, the Notice proposed a civil penalty of $5, 000 for Respondent's fad ure to follow the procedures for maintaining haison with fire, police and other public officials that it established pursuant to tt 195 402(c)(12) dunng calendar year 2002 Maintainmg liaison with response officials on an ongoing basis is an important of pipelme safety because it ensures that the responsible officials are kept up-to-date on the operational status of pipelines tn their area and facihtates emergency response planning and the ability to rapidly establish commumcations in the event of an incident In its response, Respondent explained that it believed that some liaison activity did occur dunng the relevant penod Respondent, however, fmled to provide any documents or other evidence demonstrating that liaison was adequately conducted durtng 2002 Respondent has presented no information that would warrant a reduction in the civil penalty amount proposed in the Notice for ttus violation Accordingly, I assess Respondent a civil penalty of $5, 000 for violating 49 C F R tt 195 402(a) With respect to Item 4a, the Notice proposed a civil penalty of $5, 000 for Respondent's failure to mamtain inspection records for the over-fill protection for the break-out tanks at its refinery for the two years precedmg the inspection Maintaiiung complete and accurate records of facihty inspections is an important part of pipehne safety because it facilitates oversight and monitonng of maintenance and other activities required to operate a pipeline in a safe manner and m comphance with the applicable regulations Respondent has presented no mformation that would warrant a reduction in the ctvil penalty amount proposed in the Notice for this violation Accordingly, I assess Respondent a civil penalty of $5, 000 for violating 49 C F R tt 195 404(c)(3) With respect to Item 5, the Notice proposed a civil penalty of $7, 000 for Respondent's fadure to demonstrate that the mam hne valve north of the Cal Sag Channel was inspected between 2001 and 2003 The inspection of main hne valves within the required time intervals is an important part of pipeline safety because, among other reasons, proper operation of these valves is a key part of mitigating a release m the event of a failure Respondent has presented no information that would warrant a reduction in the civil penalty amount proposed m the Notice for this violation Accordingly, I assess Respondent a civil penalty of $7, 000 for violating 49 C F R t1' 195 420(b) Accordingly, havmg reviewed the record and considered the assessment crttena, I assess Respondent a total civil penalty of $22, 000 Payment of the civil penalty must be made witlun 20 days of service Federal regulations (49 C F R g 89 21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U S Treasury Detailed#

320045008_final order_02162006_text.pdf, page 5mstructions are contiuned in the enclosure Questions concerning wire transfers should be directed to Financial Operauons Division (AMZ-120), Federal Aviation Admmistration, Mike Monroney Aeronautical Center, P 0 Box 25082, Oklahoma City, OK 73125, (405) 954-4719 Failure to pay the $22, 000 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U S C 53717, 31 C F R 5901 9 and 49 C FR 58923 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, fiulure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action m a United States Distnct Court COMPLIANCE ORDER With respect to Item 3, the Notice proposed a Comphance Order for violating 49 C F R ll 195 404(a)(2) by failing to miuntiun maps of foreign utilities crossing its pipeline Under 49 U S C 5 60118(a), each person who engages m the transportation of hazardous liquids or who owns or operates a pipehne facility is required to comply with the applicable safety standards established under Chapter 601 The Regional Director has indicated that Respondent has now provided revised maps showing all utdity crossings m accordance with the terms of the Proposed Compliance Order Accordingly, since compliance has been achieved with respect to this violauon, it is unnecessary to include the compliance terms in this Order WARNING ITEMS The Notice did not propose a civil penalty or compliance order for Items 4b, 6, and 7 in the Notice Therefore, these are considered to be warning items The wammgs were for Respondent's failure to document the actions taken m response to concerns identified during patrols conducted in 2001 in accordance with $ 195 404(c)(3), failure to provide notification of its damage prevention program to excavators dunng 2001 and 2003 m accordance with ) 195 442(c)(2), and failure to provide protection against atmosphenc corrosion at the mlet piping to Tank 44 in accordance with $ 195 583(c) Respondent provided information in its response indicating that it has initiated actions to address these items Respondent is warned that if these items are not fully addressed, enforcement action will be taken if a subsequent inspection reveals a violation#

320045008_final order_02162006_text.pdf, page 6Under 49 C F R 5 190 215, Respondent has a nght to submit a petition for reconsiderauon of this Fmal Order Should Respondent elect to do so, the petition must be received withm 20 days of Respondent's receipt of this Fmal Order and must contain a bnef statement of the issue(s) The fihng of a petition automatically stays the payment of any civil penalty assessed However if Respondent submits payment for the civil penalty, the Final Order becomes the final adnunistrative decision and the nght to petition for reconsideration is wiuved The terms and conditions of this Final Order are effective on receipt I I Date Issued St ce Ge d A o tate Administrator for ipehne Safety#