TESORO HIGH PLAINS PIPELINE COMPANY LLC — Notice of Probable Violation

case documentOfficial PDFCPF No 3-2005-5006 Tesoro High Plains Pipeline Company.pdf#

320055006_final order_01112006_text.pdf, page 1Official PDFU 5 Department of Transportation Pipeline and Hazardous Materials Safety Administration 400 Seventh Street, S W Weehtngton, O C 20590 JAN 1 l 2X6 Mr John W Moore Vice President, Pipehnes and Terminals Tesoro High Plains Pipeline Company 1225 17th Street, Suite 1800 Denver, CO 80202 Re CPF No 3-2005-5006 Dear Mr Moore Enclosed is the Final Order issued by the Associate Administrator for Pipehne Safety m the above-referenced case It makes finchngs of violation and assesses a civil penalty of $15, 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 tr 190 5 Sincerely James Reynolds Pipeline Compltance Regtsny Office of Pipehne Safety Enclosure cc Mr Ivan Huntoon Director, Central Region, OPS CERTIFIED MAIL - RETURN RECEIPT RE UESTED#

320055006_final order_01112006_text.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D C. 20590 In the Matter of Tesoro High Plains Pipeline Company, Respondent. CPF No. 3-2005-5006 FINAL ORDER On July 19-23 and August 23-27, 2004, pursuant to 49 U S C 5 60117, a representative of the Pipehne and Hazardous Materials Safety Admimstration (PHMSA) conducted an on-site pipehne safety inspection of Respondent's facilities and records in North Dakota As a result of the inspection, the Director, Central Region, PHMSA, issued to Respondent, by letter dated January 20, 2005, a Notice of Probable Violation and Proposed Civd Penalty (Notice) In accordance with 49 C F R 5 190 207, the Notice proposed finding that Respondent had committed violations of 49 C F R Part 195 and proposed assessing a civil penalty of $15, 000 for the alleged violations Respondent responded to the Notice by letter dated February 17, 2005 (Response) Respondent contested the allegations, offered information to explain the allegations, provided information concerning the corrective actions it has taken, and requested that the proposed civd penalty be reduced or ehminated FINDINGS OF VIOLATION Item 2 in the Notice alleged that Respondent violated 49 C F R ts 195 440 by failing to demonstrate that a continuing pubhc education program to enable those who could be affected by its pipehne to recogiuze and report pipeline emergencies was ongoing dunng calendar years 2002 and 2003 Section 195 440 reqmres pipeline operators to address their pubhc education programs to the pubhc, government organizations, and fire, police, or other appropnate local officials hi its response, Respondent explained that it was the "relatively" new owner of the system, which it acquired in late 2001, but acknowledged that it failed to conduct any mailings to the pubhc untd 2004 Respondent also failed to demonstrate that its program was presented to any government organizations or pubhc officials dunng the relevant time period Accordingly, I find that Respondent violated lt 195 440 by failing to demonstrate that a continuing public#

320055006_final order_01112006_text.pdf, page 3education program to enable those who could be affected by its pipehne to recognize and report pipehne emergencies was ongoing dunng the relevant time period Item 3(a) m the Notice alleged that Respondent violated 49 C F R 5 195 442(c)(1) by faihng to demonstrate that dunng calendar years 2002 and 2003 it maintained an up-to-date hst identifying all persons who normally engage in excavation activities along its pipeline for the purpose of providing regular notification to such persons of its damage prevention program In its response, Respondent explained that it had initiated actions to identify excavators in connection with the development of its overall public education program in late 2003, but acknowledged that it was not in place until 2004 Accordingly, I find that Respondent violated 5 195 442(c)(1) by failing to fiuhng to demonstrate that dunng the relevant time penod it miuntained an up-to-date hst identifying all persons who normally engage in excavation activities along its pipehne Item 3(b) in the Notice alleged that Respondent violated 49 C F R 5 195 442(c)(2) by fatling to demonstrate that it provided notification of its damage prevention program to the pubhc in the vicinity of its pipeline or to persons who engage in excavation activities along its pipehne dunng calendar years 2002 and 2003 Section 195 442(c)(2) requires such nonce to be provided to such persons as often as needed to make them aware of the damage prevention program In its response, Respondent acknowledged that it did not implement a damage prevention notification program until 2004 Accordingly, I find that Respondent violated 5 195 442(c)(2) by failing to demonstrate that dunng the relevant time penod it provided notification of its damage prevention program to the public in the vicmity of its pipehne or to persons who engage in excavation activities along its pipehne These findmgs of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent ASSESSMENT OF PENALTY Under 49 U S C 5 60122, Respondent is sub)ect to a civil penalty not to exceed $100, 000 per violation for each day of the violation up to a maximum of $1, 000, 000 for any related senes of viol atloils 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 cntena nature, circumstances, and gravity of the violation, degree of Respondent's culpability, history of Respondent's pnor offenses, Respondent's abdity 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 lusttce may require With respect to Item 2, the Notice proposed a civil penalty of $5, 000 for Respondent's failure to demonstrate that a continuing pubhc education program to enable those who could be affected by its pipeline to recognize and report pipeline emergencies was ongoing during the relevant time period Developing and implementing an effective pubhc education program is an important part of operating a pipehne safely Stakeholders need to know how to recognize pipehne location#

320055006_final order_01112006_text.pdf, page 4markers and what kinds of precautions they should take, what kinds of properties the commodity being transported has, and how to recognize and respond to a pipeline emergency In its response to this item, Respondent contends that the change in ownership to some extent)ustified the delay In our view, however, it is actually more important after a change in ownership that pubhc education contacts are made in a tunely manner In the event of a pipeline emergency, the public and government officials must be able to reach the correct current operator of the system immediately and not waste time attempting to contact the former operator whde harm to the pubhc, property, or the environment may be occumng Respondent has presented no information that would warrant a reduction in the civil 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 $ 195 440 With respect to Item 3(a), the Notice proposed a civil penalty of $5, 000 foi Respondent's failure to demonstrate that during the relevant time penod it maintained an up-to-date hst identifying all persons who normally engage in excavation activities along its pipeline Preventing damage to pipehnes caused by excavation activity is an important part of operating a pipeline safely Matntatmng the list of excavators in a current and up-to-date manner is an important part of determining whether a pipehne operator is effectively communicating with excavators In response to this item, Respondent again contends that the change in ownership to some extent )ustified the delay As with pubhc education programs, however, it is actually more important after a change in ownership that excavator contacts are made in a timely manner Respondent has presented no information that would warrant a reduction in the civil 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 $ 195 442(c)(1) With respect to Item 3(b), the Notice proposed a civil penalty of $5, 000 for Respondent's failure to demonstrate that during the relevant time penod it provided notification of its damage prevention program to the pubhc in the vicinity of its pipehne or to persons who engage in excavation activities along its pipehne Excavators obviously need to be made aware of the existence of pipehnes in their area and how to utilize one-call damage prevention programs Moreover, excavators need to know who the current operator is and how to contact them if the pipehne is damaged at any time during excavation activities Respondent has presented no information that would warrant a reduction in the civil penalty amount proposea in the Nonce for this violation Accordingly, I assess Respondent a civil penalty of $5, 000 for violating 49 C F R g 195 442(c)(2) Accordingly, having reviewed the record and considered the assessment cntena, I assess Respondent a total civil penalty of $15, 000 Payment of the civil penalty must be made within 20 days of service Federal regulations (49 C F R 5 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 Detiuled instructions are contained in the enclosure Questions concerning wire transfers should be directed to Financial Operations Division (AMZ-120), Federal Aviation Administration, Mike#

320055006_final order_01112006_text.pdf, page 5Monroney Aeronautical Center, P 0 Box 25082, Oklahoma City, OK 73125, (405) 954-4719 Failure to pay the $15, 000 civil penalty will result in accrual of interest at the current annual rate inaccordance wtth31 US C 53717, 31 C FR 5901 9 and 49 C FR 58923 Pursuant to those same authonties, a late penalty charge of six percent (6%) per annum will be charged if payment is not made witlun 110 days of service Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action m a Uiuted States Distnct Court WARNING ITEMS The Notice did not propose a civil penalty or comphance order for Notice Items I or 4 Therefore, these are considered to be warnmg items The wanungs were for Respondent's failure to demonstrate that an annual review of its procedures for operations, maintenance and emergencies was conducted during calendar year 2003 in accordance with ) 195 402(a), and fadure to maintain records of atmospheric corrosion evaluations in accordance with $ 195 589(c) Respondent presented information its response showing 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 Under 49 C F R 5 190 215, Respondent has a right to submit a petition for reconsideration of this Final Order Should respondent elect to do so, the petition must be received wrttun 20 days of Respondent's receipt of this Final Order and must contain a brief statement of the issue(s) The filing of a petition automatically stays the payment of any civd penalty assessed However if Respondent submits payment for the civil penalty, the Final Order becomes the final administrative decision and the nght to petition for reconsideration is waived The terms and conditions of this Final Order are effective on receipt JAN !! 48 Date Issued S y erard As iate Administrator for ipeline Safety#