{"operation":"document","citation":"CPF 320075007","title":"CYPRESS INTERSTATE PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2007-03-06","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b), 195.432(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320075007.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320075007.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320075007","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320075007","body":"Notice of Probable Violation involving CYPRESS INTERSTATE PIPELINE LLC. PHMSA's enforcement data identifies the cited regulations as 195.432(b),  195.432(c). The case was opened on 2007-03-06 and is reported as closed as of 2012-07-25. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320075007_Closure_07252012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075007/320075007_Closure_07252012.pdf\n\n320075007_Closure_07252012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075007/320075007_Closure_07252012_text.pdf\n\n320075007_FinalOrder_11162010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075007/320075007_FinalOrder_11162010.pdf\n\n320075007_FinalOrder_11162010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075007/320075007_FinalOrder_11162010_text.pdf\n\n320075007_Notice letter_03062007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075007/320075007_Notice%20letter_03062007.pdf\n\n320075007_operator response to notice_04122007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075007/320075007_operator%20response%20to%20notice_04122007.pdf\n\n320075007_Closure_07252012_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJuly 25, 2012\nMr. Wes Christensen\nSenior Vice President of Operations\nONEOK North System, LLC\n100 West Fifth Street\nTulsa, Oklahoma 74102\nCPF 3-2007-5007\nDear Mr. Christensen:\nOn November 16, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Kinder Morgan Energy Partners and ONEOK North System, LLC (ONEOK) a Final\nOrder in the above-referenced case. This Order included a Compliance Order specifying actions\nto be taken by ONEOK as the pipeline’s current owner and operator. On March 23, 2011,\nONEOK submitted documentation addressing the requirements of the Compliance Order.\nBased on our review of the documentation you provided, it has been determined that you have\ncomplied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nDavid Barrett\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\n\n320075007_Notice letter_03062007.pdf\n\nMA,. 0 7 \";il?\n@\nU.S. Deportment\nof Tronsporlqllon\nPlpellne ond\nHozordous l oterlob Sotely\nAdmlnbtrofion\n901 Locust Street, Suite 462\nKansas CiN. MO 64106-264'l\nNOTICE OF' PROBABLE VIOLATION\nAND\nPROPOSED COMPLIAIICE ORDER\nCERTIF'IED MAIL - RETURN RECEIPT REOUESTED\nMarch 6, 2007\nMr. Ron McClain\nVice President Operations\nKinder Morgan Energy Partners, L.P.\n500 Dallas Street, Suite 1000\nHouston, TX77002\ncPF 3-2007-5007\nDearMr. McClain:\nOn April 4-8, April I l-15, April 25-29, and May 9-13, 2005, a representative of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA) pursuant to chapter 601 of 49\nUnited states code inspected your pipeline facilities in lllinois, Iowa, Kansas, Missouri,\nIndiana, and Nebraska.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violations are:\n1. $195.432 Breakout tanks.\n(b) Each operator shall inspect the physical integrity of in-service atmospheric\nand low-pressure steel aboveground breakout tanks according to section 4\nof API Standard 653, However, if structural conditions prevent access to the\ntank bottom, the bottom integrity may be assessed according to a plan\nincluded in the operations and maintenance manual under $195.402(c)(3).\nKinder Morgan has not conducted inspections of breakout tanks according to the\nrequirements of API Standard 653. The Lemont, IL and Monis, IL facilities have one\nbreakout tank each, spherical tanks with a maximum operating pressrue (MOP) of 10\npsig. The tank at Lemont was built in1967 and the tank at Morris was built in1975,\n\n\n\n\n\n\n\n7\nwith both tanks constructed to API Standard 620, \"Design and Construction of Large,\nWelded, Low-Pressure Storage Tanks.\" Since the tanks were constructed per API\n620,they are low-pressure breakout tanks that require inspection according to API\n653 as stated in $195.432(b). Kinder Morgan inspected these two tanks according to\nits breakout tank inspection procedure, \"Operating Manual Maintenance Inspection of\nStorage Tanks and Vessels, Section III, number 03-02,\" which does not address all the\nrequirements listed under Section 4 ofAPI 653. For example, as referenced by\n$195.432(b), API 653 specifies tank shell evaluation including shell wall thickness\nmeasurements, corrosion rate calculations, and intemal tank inspections, but these\nitems were not addressed in Kinder Morgan's procedures. Therefore, the two low-\npressure breakout tanks at Lemont, IL and Monis, IL have not been inspected\naccording to API 653 as required by $ 195.a320). See Exhibit # I for the\nidentification of the two breakout tanks.\n$195.432 Breakout tanks.\n(c) Each operator shall inspect the physical integrity of in-service steel\naboveground breakout tanks built to API Standard 2510 according to\nsection 6 of API510.\nKinder Morgan has not conducted inspections of breakout tanks according to the\nrequirements of API 510. The Lemont, IL facility has one breakout tank, a spherical\ntank with a MOP of 125 psig. The Morris, IL facility has 27 breakout tanks as\nfollows: three spherical tanks with MOP's ranging from 50 to 80 psig, and 24 bullet-\ntype tanks each with a MOP of 250 psig. The Des Moines, IA facility has one\nbreakout tank, a bullet-type tank with a MOP of 3 12 psig. The Wichita, KS facility\nhas four breakout tanks, spherical tanks with MOP's ranging from 40 to 60 psig.\nEach of these 33 breakout tanks were constructed per the ASME pressure vessel code,\nfrom the years 1963 to 1990.\nEditions of the API Standard 2510, \"Design and Construction of LPG Installations,\"\nincluding the ls edition of June 1957, state that tanks constructed per API 2510 shall\nmeet the requirements of the ASME Boiler and Pressure Vessel Code. Since these 33\nbreakout tanks are ASME pressure vessels, they meet the tank design and\nconstruction standards ofthe prior editions ofAPI Standard 2510, and require\ninspection per API 510 as stated in $195.432(c).\nKinder Morgan inspects these 33 breakout tanks according to its breakout tank\ninspection procedure, \"Operating Manual Maintenance Inspection of Storage Tanks\nand Vessels, Section III, number 03-02,\" which does not address all the requirements\nlisted under secfion 6 of API 5 10. For example, as referenced by $ I 95.432(c), API\n510 specifies tank shell evaluation including shell wall thickness measutements,\ncorrosion rate calculations, and intemal tank inspection, but these items were not\naddressed in Kinder Morgan's procedures. Therefore, the 33 breakouttanks located\nat Lemont, Morris, Des Moines, and Wichita have not been inspected according to\nAPl5l0asrequiredby$195.a32(c). SeeExhibit#2fortheidentificationofthe33\nbreakout tanks.\n\n\n\n\n\n\n\nProposed Compliance Order\nPursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety\nAdministration proposes to issue a Compliance Order to Kinder Morgan Energy Partners,\nL.P. Please refer to the Proposed Compliance Order thatis enclosed and made a part of this\nNotice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response options for pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the response\noptions. Be advised that all material you submit in response to this enforcement action is\nsubject to being made publicly available. Ifyou believe that any portion ofyour responsive\nmaterial qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete\noriginal document you must provide a second copy of the document with the portions you\nbelieve qualift for confidential heatment redacted and an explanation of why you believe the\nredacted infotmation qualifies for confidential treatment under 5 U.S.C. 552@). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue j finA\nOrder.\nIn your correspondence on this matter, please refer to cPF 3-2007-5007 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nffi.ws-\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n\n\n\n\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Kinder Morgan Energy partners, L.p.\na compliance order incorporating the following remedial requirements to ensure the\ncompliance of Kinder Morgan Energy parnrers, L.p. with the pipeline safety regulations:\n1- In regard to Item Number I of the Notice pertaining to the inspection of two low-\npressure steel aboveground breakout tanks per section 4 of ApI 653, provide pHMSA\nwith a plan, schedule, and procedures to inspect these tanks. At a minimum the plan\nshall include performing an intemal inspect'ron for each tank. The procedures that\nwill be utilized to inspect the tanks shall be fully documented and provide a\ndescription of how each element required by API 653 is to be accomplished. Submit\nthe plan, schedule, and procedures to the Director, central Region, pipeline and\nHazardous Materials safety Administration, 901 Locust streel Room 462, Kansas\nCity, MO 64t06.\n2' In regard to Item Number 2 of theNotice periaining to the inspection of 33 breakout\ntanks per section 6 of ApI 510, provide PHMSA with a plan, schedule, and\nprocedures to inspect tl-rese tanks. The plan shall includi performing an intemal\ninspection of each tank. The procedures that will be utilized to insp'ect the tanks shall\nbe fully documentedand prwide a descripfion of how each element required by ApI\n510 is to be accomplished. Submit the plan, schedule, and procedwes to the Director,\nCentral Region, Pipeline and Hazardous Materials Safef Alministration, 901 Locust\nStreet, Room 462, Kansas City, MO 64106.\n3. The proposed inspection plans, schedules, and procedures in ltems I and 2 ofthe\ncompliance order shall be submitted to the Diiector, central Region, pipeline and\nHazardous Materials saf€ty Administration within 60 days folloiing Kinder\nf4ol8an's receipt of the Final Order. The proposed intemal inspectilns in Items I and\n2 of the compliance order shall be compreted within 2 y\"*, oiyo* r\"ceipt of the\nFinal Order.\n4' As intemal inspections are completed for each tank, a report for each tank shall be\nprepared and submitted to the Director, central Region that includes, but is not\nlimited to, the following: records of the inspection results, third party inspection\nrecommendations, any resulting repairs or alterations, and other irndings and\noutcomes of the inspections. When all appropriate actions have been completed in\nregard to the above-items in this compliance order, submit a surnmary report and\nnotice of completed actions to the Director, Central Region, Pipeline and Hazardous\nMalerials safety Administration, 901 Locust street, Room 462, Kansas city, Mo\n64106.\n5' Kinder Morgan shall maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director,\n\n\n\n\n\n\n\nCenhal Region, Pipeline and Hazardous Materials Safety Administration. Costs shall\nbe reported in two categories: 1) total cost associated with preparationirevision of\nplans, procedures, studies and analyses, and 2) total cost ofreplacement, additions,\nand other changes to the pipeline iafrastructure\n\n\n\n\n\n\n\nExhibit # I\n2005 PHMSA Standard lnsoection\nKinder Morgan Breakout Tanks thai require inspection\nin according to the requirements ofAPl Standard 653\nItem LOCATION\nNAME/TAG # Type of Tank\nLEMONT\n1 GASOLINE TK.\nMORRIS\nGASOLINE TK.\nSphere\nSphere\nExhibil # 2\n2005 PHMSA Standard InsDection\nKinder Morgan Breakout Tanks that require inspection\nin according to the requirements ofAPl 510\nItem\n#\nLOCATION NAME/TAG # Type of Tank\n1 LEMONT SLOP TK, Sphere\n4\no\n7\nI\nU\n1 0\n1 1\n1 2\n1 a\n1 4\n1 6\n1 7\n1 8\n1 9\n20\n21\n22\n24\nZJ\n26\n27\n28\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nMORRIS\nTK. #1\nTK. #2\nTK. #3\nTK. #4\nTK. #5\nTK. #6\nTK. #7\nTK. #8\nTK. #9\nTK. #10\nrK. #11\nTK, #12\nTK. #13\nTK. #14\nTK. #15\nTK. #16\nTK. #17\nTK. #18\nISO BUTANE TK,\nBUTANE TK. #1\nBUTANE TK. #2\nPROPYLENE TK, #1\nPROPYLENE TK. #2\nPROPYLENE TK. #3\nPROPYLENE TK. #4\nPROPYLENE TK. #5\nPROPYLENE TK- #6\nBullet\nBullet\nBuliet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nBullet\nSphere\nSphere\nSphere\nBullet\nBullet\nBullet\nEullet\nBullet\nBullet\n29 DES MOINES BUTANE BLEND TK. Bullet\n30\n31\n32\n?a\nWICHITA\nWICHITA\nWICHITA\nWICHITA\nT-201A\nT-201 B\nT-204\nSphere\nSphere\nSphere\nSphere\nCharts made by Judy Johnson, PHMSA Cenhal Region's Staff Engineer, from dala provided by Kinder Morgan.\n\n\n\n\n\n\n\nResponse Options for Pipeline Operators in Compliance Proceedings\nThe requirements of 49C.F.R. Part 190, Subpart B ($$ 190.201-lg0-237) govem response ro\nIqli\":l issued by a Regional Director, Pipeline and Hazardous Materials Saffl Administration\n(PHMSA).\nI. Procedures for Respondins to a NOTICE OF PROBABLE VIOLATION:\nWithin 30 days of receipt of a Notice of Probable Violation, the respondent shall respond\nto the Regional Director who issued the Notice in the following way:\na. When the Notice contains a proposed CIVIL PENALTY* --\nl. Pay the proposed civil penalty and advise the Regional Director of the\npa),rnent. This authorizes PHMSA to make findings and to close the case\nwith prejudice to the respondent. Payment terms are outlined below;\n2. Submit written explanations, information, or other materials in response to\nthe allegations and/or seek eliminati6n or mitigation of the proposed civil\npenalty. Refer to 49 C.F.R. S 190.225 for assessment considerations,\nwhich include the respondent's ability to pay and the effect on the\nrespondent's ability to stay in business, upon which civil penalties are\nbased; or\n3. Request a hearing as described below to contest the allegations and/or\nproposed assessment ofa civil penalty.\nb. When the Notice contains apronosed COMPLIANCE ORDER* -\n1. Notiff the Regional Director that you intend to take the steps in the\nproposed compliance order;\nSubmit written explanations, information, or other materials in answer to\nthe allegations in the Notice and object to or seek clarification of the\nproposed compliance order items in whole or in part; or\na\nRequest a hearing as described below to contest the allegations and/or\nproposed compliance order items;\nc.\nWhen the Notice contains a IYARITIING ITEM --\nNo written response is required. The respondent is warned that if it does not\ntake appropriate action to correct these items, enforcement action will be\ntaken ifa subsequent inspection reveals a violation.\n1of 5\n\n\n\n\n\n\n\nil.\nUL\nIV.\n* Failure of the respondent to respond to the Notice within 30 days of receipt\nconstitutes a waiver of the right to contest the allegations in the Notice and authorizes\nthe Associate Administrator for Pipeline Safety to find facts as alleged in the Notice\nwithout further notice to the respondent and to issue a Final Order.\n,,\nProcedures for Resnondine to a NOTICE OF AMENDMENT*-\nWithin 30 days of receipt of a Notice of Amendment, the respondent shall respond to the\nRegional Directorwho issued the Notice in the following way:\nNotifu the Regional Director of your plans to address the inadequacies\nidentified in the Notice;\nb.\nSubmit written explanations, information, or other materials in answer to the\nallegations in the Notice and/or object to or seek clarification ofthe proposed\namendment items in whole or in part; or\nc.\nRequest a hearing as described below to con{est the allegations in the Notice.\n* Failure of the respondent to respond to the Notice within 30 days of receipt\nconstitutes a waiver of the right to contest the allegations in the Notice and authorizes\nthe Associate Administrator for Pipeline Safety to find facts as alleged in the Notice\nwithout firrther notice to the respondent and to issue a Final Order.\nProcedure for Rpquestinq a Hearins\nA request for a hearing must be in writing and accompanied by a statement of the issues\nwhioh the respondent intends to raise at the hearing. The issues may relate to the\nallegations, new information, or to the proposed compliance order or proposed civil\npenalty amount. Refer to 49 C.F.R. $ 190.225 for assessment considerations upon which\ncivil penalties are based. A respondent's failure to specify an issue may result in waiver\nofthe right to raise that issue at the hearing. The respondent's request must also indicate\nwhether or not respondent will be represented by counsel at the hearing. Failure to\nrequest a hearing in writing within 30 days of receipt of a Notice waives the right to a\nhearing. In addition, if the amount of the proposed civil penalty or the proposed\ncorrective action is less than $10,000, the hearing will be held by telephone, unless the\nrespondent submits a written request for an in-person hearing. Complete hearing\nprocedwes can be found at 49 C.F.R. $ 190.21 l.\nExtensions of Time\nAn extension of time to prepare an appropriate resporuie to a Notice may be granted, at\nthe agency's discretion, following submittal of a written request to the Regional Director.\nThe request must indicate the amount of time needed and the reasons for the extension.\nThe request must be submitted within 30 days of receipt of the Notice.\n2of5\n\n\n\n\n\n\n\nV. Freedom of Information Act\nAny material prepared by PHMSA, including the violation report, the Notice, and any\norder issued in this case, and any material provided to PHMSA by the respondent, may\nbe considered public information and subject to disclosure under the Freedom of\nInformation Act (FOIA). If the information you provide. is security sefsitive, privileged,\nconfidential or may cause your company competitive disadvantages, please clearly\nidentiff the material and provide justification why the documents, or portions of a\ndocument, should not be released under FOIA. If we receive a request for your material,\nwe will notiSr you if PHMSA, after reviewing the materials and your provided\njustification, determines that withholding the materials does not meet any exemption\nprovided under the FOIA. You may appeal the agency's decision to release material\nunder the FOIA at that time. Your appeal will stay the release of those materials until a\nfinal decision is made.\nu.\nSmall Business Resulatory Enforcement Fairness Act Information\nThe Small Business and Agricultural Regulatory Enforcement Ombudsman and l0\nRegional Fairness Boards were established to receive comments from small businesses\nabout federal_agency enforcement actions. The Onrbudsman will annually evaluate the\nenforcement activities and rate each agency's responsiveness to small business. Ifyou\nwish to comment on the enforcement actions of the Pipeline and Hazardous Materials\nSafety Administration, call 1-888-REG-FAIR (l-888-734-3247) or go to\nhttp ://www. sba. gov/ombudsman/dsp_faq.html.\n3 of 5\n\n\n\n\n\n\n\nVU. PAYMENTINSTRUCTIONS\nCivil Penatty Puyments of Less Than $10,000\n,,.\nPaynent ofa civil penalty ofless than $10,000 proposed or assessed, under Subpart B ofPart\n190 of the Pipeline Safety Regulations can be made by certified check, money order or wire\ntransfer. Payment by certified check or money order (containing the CPF Number for this case)\nshould be made payable to the \"Department of Transportation\" and should be sent to:\nFederal Aviation Administration\nMike Monroney Aeronautical Center\nFinancial Operations Division (AMZ-300) P.O. Box 25082\nOklahoma City, OK 73125-4915\nwire transfer payrnents of less than $10,000 may be made through the Federal Reserve\nCommunications System (Fedwire) to the account of the U.S. Treasury. Detailed instructions are\nprovided below. Questions concerning wire transfer should be directed to the Financial\nOperations Division at (405) 954-8893, or at the above address.\nCivil Penalty Payments of 910,000 or more\nPayment ofa civil penalty of$10,000 or more proposed or assessed under Subpart B ofPart 190\nof the Pipeline Safety Regulations must be made wire transfer (49 C.F.R. $ 89.21 (bX3),\nthrough the Federal Reserve Communications System (Fedwire) to the account of the U.S.\nTreasury. Detailed instructions are provided below. Questions concerning wire transfers should\nbe directed to the Financial Operations Division at (405) 954-8893, or at the above address.\nINSTRUCTIONS FOR ELECTRONIC T'UND TRANSFERS\n(1) RECEIVERABANO.\n021030004\n(2) TYPE/SUB-TYPE\n(Provided by sending bank)\n(3) SENpTNGBANKABANO.\n(Provided by sending bank) (4) SENDTNG BANK REF NO.\n@rovided by sending bank)\n(5)AMOUNT (6) SENDINGBANKNAME\n(Provided by sending bank)\n(7) RECEMRNAME\nTREASNYC\n(8) PROpUCT COpE\n(Normally CTR, or as provided by sending\nbank)\n(9) BENEFICIAL GNF) = AGENCY\nLOCATION CODE\nBNF = /ALC-69-14-0001\n(10) REASONS FOR PAYMENT\nExample: PHMSA - CPF # / Ticket\nNumber/Pipeline Assessment number\n4 of5\n\n\n\n\n\n\n\nINSTRUCTIONS: You, as sender of the wire transfer, must provide the sending bank with the\ninformation for blocks (1), (5), (7),(9), and (10). The information provided in Blocks (1), (7),\nand (9) are constant andremain the same for all wire transfers to the Pipeline and Hazardous\nMaterials Safety Administration, Department of Transportation.\n;\nBlock#1 - RECEIVER ABA NO. - \"021030004\". Ensure the sending bank enters this 9-digit\nidentification number; it represents the routing symbol for the U.S. Treasury at the Federal\nReserve Bank inNew York.\nBlock #5 - AMOUNT - You as the sender provide the amount of the transfer. Please be sure the\nffansfer amount is punctuated with commas and a decimal point. EXAMPLD: $10.000.00\nBlock #7 - RECEIVER NAME - \"TREAS NYC\", Ensure the sending bank enters this\nabbreviation. It must be used for all wire tansfers to the Treasury Departrnent.\nBlock#9 -BENEFICIAL - AGENCY LOCATION CODE - \"BNF=/ALC-69-14-0001\". Ensure\nthe sending bank enters this information. This is the Agency Location Code for the Pipeline and\nHazardous Materials Safety Administration, Department of Transportation,\nBlock #10 - REASON FOR PAYMENT - \"AC-payment for PHMSA Case # / To ensure your\nwire transfer is credited properly, enter the case number/ticket number or Pipeline Assessment number,\nand counfil.\"\nNOTE: A wire transfer must comply with the format and instructions or the Department cannot\naccept the wire transfer. You as the iender can assist this process by notifying the Financial\nOperations Division (405) 954-8893 at the time you send the wire transfer.\nNovember 2006\n) o I )\n\n320075007_FinalOrder_11162010_text.pdf\n\nNOV 16 2010\nMr. Ron McClain\nVice President, Operations\nKinder Morgan Energy Partners, L.P.\n500 Dallas Street, Suite 1000\nHouston, TX 77002\nMr. Wes Christensen\nSenior Vice President, NGL Operations\nONEOK North System, L.L.C.\n100 West 5th Street\nTulsa, Oklahoma 74103\nRe: CPF No. 3-2007-5007\nDear Mr. McClain and Mr. Christensen:\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 the pipeline’s current owner and operator,\nONEOK North System, L.L.C., to comply with the pipeline safety regulations. When the terms\nof the compliance order have been completed, as determined by the Director, Central Region,\nthis enforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. David Barrett, Director, Central Region, PHMSA\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 1160 0001 0041 0633 &\n0862]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nKinder Morgan Energy Partners, L.P. ) CPF No. 3-2007-5007\nand )\nONEOK North System, L.L.C., )\n)\n)\n)\n)\nRespondents. )\n____________________________________)\nFINAL ORDER\nOn April 4-8, 11-15, and 25-29, and May 9-13, 2005, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of the North System pipelines then operated by Kinder Morgan Energy Partners, L.P.\n(Kinder Morgan), in Illinois, Missouri, Indiana, Iowa, Kansas, and Nebraska, later acquired by\nONEOK North System, L.L.C.(ONEOK). The North System is comprised of approximately\n1629 miles of pipelines carrying refined petroleum products and highly volatile liquids.\n1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Kinder\nMorgan, by letter dated March 6, 2007, a Notice of Probable Violation and Proposed\nCompliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed\nfinding that Kinder Morgan had violated 49 C.F.R. § 195.432 and proposed ordering Kinder\nMorgan to take certain measures to correct the alleged violations.\nKinder Morgan responded by letter dated April 12, 2007 (Response). Kinder Morgan contested\nthe allegations, but submitted a plan for satisfying the Proposed Compliance Order. The Director\nreplied to Kinder Morgan on July 13, 2007, and rejected its proposed plan finding it inconsistent\nwith the terms of the Proposed Compliance Order.\nKinder Morgan notified PHMSA on August 10, 2007, of its plan to sell its North System pipeline\nfacilities to ONEOK and suggested that ONEOK, rather than Kinder Morgan, should have the\nopportunity to respond in relation to the Proposed Compliance Order in the Notice. PHMSA had\nno objection and provided ONEOK with the opportunity to respond to the Notice.\n1 On October 5, 2007, ONEOK North System, L.L.C. (ONEOK), acquired the North System from Kinder Morgan\nand became the operator of this system. ONEOK is a subsidiary of ONEOK Partners, L.P.\n\n\n\n2\nONEOK responded to the Notice by letter dated December 12, 2007, in which it confirmed its\nacquisition of Kinder Morgan’s North System and that it had received Notice of this ongoing\ncompliance proceeding in connection with the acquisition and reserved its right to a hearing.\nONEOK also provided information to PHMSA on its efforts to satisfy the terms of the Proposed\nCompliance Order and requested a meeting. OPS regional staff met with ONEOK on July 31,\n2009 at which time ONEOK submitted a proposed plan and schedule to satisfy the Proposed\nCompliance Order. ONEOK withdrew its request for a hearing by e-mail dated\nDecember 17, 2009, and thereby waived its right to a hearing.\nFINDINGS OF VIOLATION\nItem 1: The Notice alleged that Kinder Morgan violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 – Inspection of in-service breakout tanks.\n(a) . . . .\n(b) Each operator shall inspect the physical integrity of in-service\natmospheric and low-pressure steel aboveground breakout tanks according\nto section 4 of API Standard 653. However, if structural conditions\nprevent access to the tank bottom, the bottom integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3).\nThe Notice alleged that Kinder Morgan violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of two in-service low-pressure steel aboveground breakout tanks, one in\nLemont, Illinois, and the other in Morris, Illinois, in accordance with API Standard 653.2\nSpecifically, the Notice alleged that although inspections of these tanks were performed, the\nprocedure used to perform the inspections did not meet the requirements of API Standard 653.\nAPI Standard 653 requires shell wall thickness measurements every five years, routine monthly\nin-service inspections, and scheduled internal inspections, but Kinder Morgan’s internal\nprocedure, entitled “Operating Manual Maintenance Inspection of Storage Tanks and Vessels,\nSection III, number 03-02,” did not contain these requirements.\nIn its Response, Kinder Morgan acknowledged that it had not carried out internal inspections of\ntanks, which are required by API Standard 653, but contended that it was not out of compliance\nbecause the inspections of these tanks were governed by § 195.432(a) and its procedures\nconformed to § 195.432(a). I find this argument unpersuasive. Section 195.432(a) does not\napply to the breakout tanks at issue. These tanks are in-service low-pressure steel aboveground\nbreakout tanks and therefore must be inspected as provided in § 195.432(b) and (c). Thus,\n§ 195.432(a) is irrelevant.\n2 Section 195.432(b) provides that operators must inspect certain tanks according to section 4 of API Standard 653.\nHowever, Section 6, not Section 4, now contains the relevant provisions relating to inspections of the in-service\nbreakout tanks described in Item 1. As PHMSA explained in a letter to Kinder Morgan dated July 13, 2007, API\nStandard 653 was revised in 1999, and the revised version was subsequently incorporated by reference into the\nPipeline Safety Regulations. Section 4 of the earlier version addressed inspections, while inspections are covered by\nSection 6 of the revised standard.\n\n\n\n3\nKinder Morgan further argued that under API Standard 653 it was not required to carry out the\ntank inspections until 2009. It based this argument on § 195.432(d), which states that inspection\nintervals for inspections required under § 195.432(b) and (c) “begin on May 3, 1999, or on the\noperator’s last recorded date of inspection, whichever is earlier.” I find this argument\nunpersuasive. API Standard 653 requires internal inspections of tanks every ten years. The\nregulation thus requires an operator to identify the date of the last inspection and schedule\nanother inspection within ten years of that date. Unless the company can substantiate that the\ntanks were not previously inspected, the company is not permitted to calculate the inspection\ndeadline for its tanks simply by adding ten years to May 3, 1999. This approach would be\ninconsistent with the requirements of API Standard 653 and the regulations.\nFinally, Kinder Morgan argued that its procedures did require tank wall thickness to be measured\nevery five years consistent with API Standard 653. However, Kinder Morgan’s procedures\nrequired such measurements only for tanks in corrosive service, while API Standard 653 requires\nwall thickness measurements of all tanks, whether in corrosive service or not.\nAccordingly, based upon a review of all of the evidence, I find that Kinder Morgan violated 49\nC.F.R. § 195.432(b) by failing to inspect the physical integrity of the two specified in-service\nlow-pressure steel aboveground breakout tanks in accordance with API Standard 653.\nItem 2: The Notice alleged that Kinder Morgan violated 49 C.F.R. § 195.432(c), which states:\n§ 195.432 – Inspection of in-service breakout tanks.\n(a) . . . .\n(c) Each operator shall inspect the physical integrity of in-service steel\naboveground breakout tanks built to API Standard 2510 according to\nsection 6 of API 510.\nThe Notice alleged that Kinder Morgan violated 49 C.F.R. § 195.432(c) by failing to inspect the\nphysical integrity of certain in-service steel aboveground breakout tanks built to API Standard\n2510 according to section 6 of API Standard 510. Specifically, the Notice alleged that Kinder\nMorgan inspected 33 breakout tanks, in Lemont, Illinois; Morris, Illinois; Des Moines, Iowa; and\nWichita, Kansas, according to the company’s relevant internal procedure, and that this procedure\ndid not meet the requirements of API Standard 510. API Standard 510 provides that tank\ninspections should include shell wall thickness measurements, corrosion calculations, and\nscheduled internal inspections, but Kinder Morgan’s internal procedure, which is the same one\nreferenced in Item 1, did not include these requirements.\nIn its Response, Kinder Morgan acknowledged that it did not carry out internal inspections of the\ntanks but contended that it was not required to inspect the 33 specified tanks according to API\nStandard 510 because the tanks were not built to API Standard 2510. Kinder Morgan argued that\ntanks built in conformity with the ASME Boiler and Pressure Vessel Code (ASME Code) do not\nautomatically need to meet the requirements of API Standard 2510. I find this argument\nunpersuasive. Because the tanks were built according to ASME Code, and because API\nStandard 2510 requires that breakout tanks be built according to that code, the tanks at issue\nwere built according to API Standard 2510. There is no evidence that API Standard 2510\ncontains any requirements with respect to the construction of breakout tanks other than that they\n\n\n\n4\nbe built according to the ASME Boiler and Pressure Code. Therefore, any tank built according\nto the ASME Code was built in conformity with API Standard 2510. Accordingly, these tanks\nwere built in conformity with API Standard 2510 and were required to be inspected according to\nAPI Standard 510.\nKinder Morgan further argued that it was not required to carry out the tank inspections until\n2009. It presented the same argument it advanced in Item 1 with respect to the inspection\ndeadline. For the reasons discussed above, in the absence of evidence that the tanks were not\npreviously inspected, the regulations do not permit Kinder Morgan to calculate the inspection\ndeadline for its tanks simply by adding ten years to May 3, 1999.\nAccordingly, based upon a review of all of the evidence, I find that Kinder Morgan violated 49\nC.F.R. § 195.432(c) by failing to inspect the physical integrity of specific in-service steel\naboveground breakout tanks in accordance with section 6 of API Standard 510.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Kinder Morgan.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for the\nviolations of 49 C.F.R. § 195.432. 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. In its letter of July\n31, 2009, ONEOK expressed its intent to complete the actions set forth in the proposed\ncompliance order and described the actions it had initiated thus far. These actions included:\n1. ONEOK submitted a plan and schedule to inspect the tanks described in Items 1 and 2\n(Plan). As to the tanks discussed in Item 1, the Plan provided for inspections consistent\nwith API Standard 653. As to the tanks discussed in Item 2, the Plan provided for\ninspections consistent with API Standard 510.\n2. ONEOK has completed the tank inspections described in the Plan.\nONEOK has thus partially satisfied the proposed compliance order, but not all aspects of the\nproposed compliance order are fully completed. Accordingly, pursuant to the authority of 49\nU.S.C. § 60118(b) and 49 C.F.R. § 190.217, ONEOK is ordered to take the following actions to\nensure compliance with the pipeline safety regulations applicable to its operations3 :\n1. ONEOK must submit copies of the written procedures it used to conduct the tank\ninspections.\n3 As the current operator, it is now ONEOK’s responsibility to bring the facilities into compliance with the\nregulations and complete the terms of the Compliance Order.\n\n\n\n5\n2. ONEOK must submit to the Director, Central Region, tank inspection reports for the\ninspections that it carried out pursuant to the Plan. Such reports must include, at a\nminimum, records of inspection results, third-party inspection recommendations, any\nresulting repairs or alterations, and other findings and outcomes of the inspections.\n3. ONEOK must submit a summary report and notice of completed actions to the Director,\nCentral Region including all required documentation within 6 months of receipt of this\nFinal Order.\n4. ONEOK must maintain documentation of the safety improvement costs associated with\nfulfilling this Compliance Order and submit the total to the Director, Central Region.\nCosts must be reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies, and analyses, and 2) total cost\nassociated with replacements, additions, and other changes to pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request demonstrating good cause for an extension.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\nto exceed $100,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a petition for reconsideration of\nthis Final Order. Should Respondent elect to do so, the petition must be sent to: Associate\nAdministrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building,\n2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at\nthe same address. PHMSA will accept petitions received no later than 20 days after receipt of\nservice of this Final Order by the Respondent, provided they contain a brief statement of the\nissue(s) and meet all other requirements of 49 C.F.R. § 190.215. Unless the Associate\nAdministrator, upon request, grants a stay, the terms and conditions of this Final Order are\neffective upon service in accordance with 49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":38423}