CYPRESS INTERSTATE PIPELINE LLC — Notice of Probable Violation

party submissionOfficial PDF320075020_Operator Response_08022007.pdf#

320075020_Final Order_12232009_text.pdf, page 1Official PDFDEC 23 2009 Mr. Dwayne M. Burton Vice President Gas Pipeline Operations and Engineering Kinder Morgan Energy Partners, L.P. One Allen Center 500 Dallas Street, Suite 1000 Houston, TX 77002 Re: CPF No. 3-2007-5020 Dear Mr. Burton: Enclosed is the Final Order issued in the above-referenced case. It makes a finding of violation and assesses a civil penalty of $133,000. I acknowledge receipt of your wire transfer of $133,000 on August 2, 2007, and accept it as payment in full of the civil penalty assessed herein. This case is now closed. Your receipt of the Final Order constitutes service of that document under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Ivan Huntoon, Director, Central Region, PHMSA CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5240]#

320075020_Final Order_12232009_text.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, DC 20590 ____________________________________ ) In the Matter of ) ) Kinder Morgan Energy Partners, L.P., ) CPF No. 3-2007-5020 ) Respondent. ) ____________________________________) FINAL ORDER On July 2, 2007, in accordance with 49 C.F.R. § 190.207, the Director, Central Region, Pipeline and Hazardous Materials Safety Administration (PHMSA), issued to Respondent a Notice of Probable Violation and Proposed Civil Penalty (Notice) following an investigation of the August 12, 2006 failure involving Kinder Morgan’s (Kinder Morgan or Respondent) 8” Pipeline 106W. The failure occurred at an above-ground crossing of the Des Plaines River near Lemont, Will County, Illinois. Kinder Morgan is one of the largest pipeline transportation companies in North America, with more than 37,000 miles of natural gas and hazardous liquid pipelines. The Notice proposed finding that Respondent committed a violation of 49 C.F.R. Part 195 and assessing a civil penalty of $133,000 for the alleged violation. Respondent responded to the Notice by letter dated August 2, 2007. Respondent submitted a wire transfer in the amount of the proposed civil penalty ($133,000), thereby waiving further rights to respond and authorizing the entry of this Final Order. Pursuant to 49 C.F.R. § 190.213 and 49 U.S.C. § 60122, I hereby find that Respondent violated the following section of 49 C.F.R. Part 195, as more fully described in the Notice: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.583(b), which states: § 195.583 What must I do to monitor atmospheric corrosion control? (a) …. (b) During inspections you must give particular attention to pipe at soil-to-air interfaces, under thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at deck penetrations, and in spans over water.#

320075020_Final Order_12232009_text.pdf, page 32 The Notice alleged that Respondent violated 49 C.F.R. § 195.583(b) by failing, during the company’s regular inspections for atmospheric corrosion, to give particular attention to spans over water. Specifically, it alleged that Kinder Morgan failed to identify corrosion pitting requiring repair during the March 7, 2006 atmospheric corrosion inspection at the pipe support on the Des Plaines River bridge. This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent. Although Respondent submitted a wire transfer in the amount of the proposed penalty thereby waiving its right to contest the Notice, the company still took issue with the amount of the penalty. It raised several questions regarding the criteria and data used by PHMSA to determine the penalty amount. First, it argued that PHMSA neither objected to the company’s procedures for assessing atmospheric corrosion nor cited it for failing to follow such procedures. Instead, PHMSA cited the company for failing to properly classify and correct the corrosion that had been discovered during a routine inspection. Second, Respondent contended that Kinder Morgan’s North System, where the failure occurred, had only been cited for one prior safety violation within the last five years. Third, it argued that while there was a release of product (i.e., 1,419 barrels of butane) as a result of the failure, there had been no ignition, personal injury, or property damage. I reject Respondent’s arguments that the penalty is excessive. On the contrary, the accident investigation and Violation Report make clear that Kinder Morgan’s own personnel failed in March 2006 to give particular attention to the corrosion discovered at the failure site and to properly classify it in accordance with the company’s own procedures. The fact that Kinder Morgan suffered a failure at this same location six months later demonstrates the need for operators to pay particular attention to the presence of corrosion on bridges and other spans over water. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $133,000, which amount has already been paid. The terms and conditions of this Final Order shall be effective upon receipt. ___________________________________ ____________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

320075020_notice letter_07022007_text.pdf, page 1Official PDFU. S. Department of Transportation t lpetine and Hazardous Materials Safety Administration 901 Locust Street, Suite 462 Kansas City, MO 64106-2641 NOTICE OF PROBABLE VIOLATION AND PROPOSED CIVIL PENALTY CERTIFIED MAIL - RETURN RECEIPT RE UESTED July 2, 2007 Mr. M. Dwayne Burton V. P. Gas Pipeline Operations and Engineering Kinder Morgan Energy Partners, Inc. 500 Dallas St. (One Allen Center) Houston, TX 77002 CPF 3-2007-5020 Dear Mr. Burton: On August 14, 2006, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, conducted an investigation of the August 12, 2006 failure involving the 8" Pipeline 106W operated by Kinder Morgan Energy Partners, L. P. (KMEP). The failure occurred in the pipeline as a rupture at a pipe support in an above-ground bridge crossing of the Des Plaines River near Lemont in Will County, Illinois. As a result of the investigation, it appears that you have committed a probable violation, as noted below, of pipeline safety regulations Title 49, Code of Federal Regulations, Part 195. The item investigated and the probable violation is: 1. $195. 583 What must I do to monitor atmospheric corrosion? (b) During inspections you must give particular attention to pipe at soil-to-air interfaces, under thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at deck penetrations, and in spans over water.#

320075020_notice letter_07022007_text.pdf, page 2KMEP did not identify corrosion pitting requiring repair on the pipeline that failed in the above-ground bridge crossing of the Des Plaines River during its March 7, 2006 inspection for atmospheric corrosion. Although the inspection of, this overhead span crossing was within the inspection time-interval allowed by $195. 583, paragraph (b) of that section requires pipeline operators to "give particular attention to pipe. . . at pipe supports. . . and in spans over water" when inspecting for evidence of atmospheric corrosion. The failure investigation included the collection and review of various records and information obtained from KMEP. The cause of the failure was localized general external corrosion and severe pitting at the pipe support, specifically at the site of an 8" long wear pad tack welded to the pipe in the 6 0'clock position. The remaining wall thickness along the wear pad was so thin that remaining pipe wall thickness measurements were not made. The failure resulted in the release of 1, 419 barrels of butane into an HCA. The March 7, 2006 inspection of the pipeline crossing had been erroneously graded "fair" by KMEP personnel using KMEP operations and maintenance procedures. In the paragraph entitled, "Methodology" on page 4 of 5 of Section III of KMEP's Atmospheric Corrosion Procedures, revised date of 12-21-04, the procedure states that: "Each defined area should be graded according to the worst atmospheric condition(s) that exist(s) within a defined area. For example, severe-localized pitting on an isolated section of piping would be graded as poor atmospheric condition as defined by the grading scales listed below. While the remainder of the piping may be in good condition, the piping with the localized pitting serves as the "weakest link" or the point at which MOP could be compromised if not mitigated by re-coating ". The March 7, 2006 inspection by the operator graded the complete overhead span crossing the Des Plaines River as "fair". The section quoted &om KMEP's procedures, above, should have led to a "poor" grading of the overhead crossing due to the portion of pipe at the pipe support with localized atmospheric corrosion and severe pitting being the "weakest link". Pro s Civi Pen t Under 49 United States Code, g 60122, you are subject to a civil penalty not to exceed $100, 000 for each violation for each day the violation persists up to a maximum of $1, 000, 000 for any related series of violations. The Compliance Of5cer has reviewed the circumstances and supporting documents involved in this case and it is his recommendation that you be preliminarily assessed a civil penalty as follows: Item ~PE ALA( $133, 000#

320075020_notice letter_07022007_text.pdf, page 3es o seto No 'ce Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U. S. C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U. S. C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. In your correspondence on this matter, please refer to CPF 3-2007-5020 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Ivan A. Huntoon Director, Central Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Options for Pipeline Operators in Compliance Proceedings#