# EXPLORER PIPELINE CO — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 320095018
- **title:** EXPLORER PIPELINE CO — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2009-10-21
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.573(a)(1), 195.573(e).
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-320095018.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-320095018
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/320095018
**body:**

Notice of Probable Violation involving EXPLORER PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.573(a)(1),  195.573(e). The case was opened on 2009-10-21 and is reported as closed as of 2012-03-06. Proposed civil penalty: $78,800. Assessed civil penalty: $78,800. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

320095018_Decision on the Petition_ 01252012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320095018/320095018_Decision%20on%20the%20Petition_%2001252012_text.pdf

320095018_Decision on the Petition_01252012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320095018/320095018_Decision%20on%20the%20Petition_01252012.pdf

320095018_Final Order_07222011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320095018/320095018_Final%20Order_07222011.pdf

320095018_Final Order_07222011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320095018/320095018_Final%20Order_07222011_text.pdf

320095018_NOPV PCP_10212009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320095018/320095018_NOPV%20PCP_10212009.pdf

320095018_NOPV PCP_10212009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320095018/320095018_NOPV%20PCP_10212009_text.pdf

320095018_Opr Request for Hearing_11192009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320095018/320095018_Opr%20Request%20for%20Hearing_11192009.pdf

320095018_Decision on the Petition_01252012.pdf

U.S. Department
of Transportation
Pipeline and Hazardous
Materials Safety
Administration
1200 New Jersey Avenue SE
Washington. DC 20590
JAN 2 5 2012
Mr. Rod E. Sands
President and Chief Executive Officer
Explorer Pipeline Company
Autumn Oaks Building, Suite 300
6846 South Canton A venue
Tulsa, OK 74136
CPF No. 3-2009-5018
Dear Mr. Sands:
Enclosed is the decision on the Petition for Reconsideration filed by Explorer Pipeline
Company, in the above-referenced case. For the reasons specified in the decision, the Petition
is denied and the Final Order is affirmed without modification. The penalty payment terms are
set forth in the Final Order. This enforcement action closes automatically upon payment.
Your receipt ofthis decision constitutes service under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter
Sincerely,
~; 4&:;.~
Associate Administrator
for Pipeline Safety
Enclosure:
cc: Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS
Mr. Dave Barrett, Director, Central Region, OPS
Mr. Curtis L. Craig, Vice President & General Counsel, Explorer Pipeline
Mr. T.J. "Tom" Jensen, Vice President of Operations, Explorer Pipeline
VIA CERTIFIED MAIL- RETURN RECEIPT REQUESTED( 71791000164203107005]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
In the Matter of
Explorer Pipeline Company,
Respondent.
)
)
)
)
)
)
CPF No. 3-2009-5018
DECISION ON PETITION FOR RECONSIDERATION
On July 22, 2011, pursuant to chapter 601, title 49, of the United States Code, the Associate
Administrator for Pipeline Safety (Associate Administrator), Pipeline and Hazardous Materials
Safety Administration (PHMSA), issued a Final Order (Order) in this case against Explorer
Pipeline Company (Explorer or Petitioner), finding that Petitioner had committed two violations
of the Pipeline Safety Regulations, codified at 49 C.F .R. Part 195, and assessed a civil penalty in
the amount of $78,800 for both external corrosion control violations.
On August 16, 2011, Explorer submitted a Petition for Reconsideration (Petition) of the Final
Order. In its Petition, Explorer explained that it has completed the corrective cathodic protection
actions associated with its pipeline and is willing to pay the $78,800 civil penalty. However,
Petitioner requested reconsideration of the Final Order and additional time to obtain industry
input on the exception indentified as 49 C.F.R. 195.l(b)(4). Petitioner also repeated its
arguments that the line segments at issue are not subject to Part 195, arguments made in its
Responses to the Notice of Probable Violation. 1
Because the evidence of record supports the findings in question, I am denying this Petition and
affirming the Final Order without modification.
Standard of Review
A respondent is afforded the right to petition the Associate Administrator for reconsideration of a
final order. However, that right is not an appeal or an opportunity to seek a de novo review of
the record. It is a venue for presenting the Associate Administrator with information that was
not previously available or requesting that any errors in the final order be corrected. Requests
for consideration of additional facts or arguments must be supported by a statement of reasons as
to why those facts or arguments were not presented prior to the issuance of the final order.
Repetitious information or arguments will not be considered.
1 In the Matter of Explorer Pipeline Company, Final Order, dated July 22, 2011, CPF No. 3-2009-5018, Responses
dated November 19, 2009, February 5, 2010 and March 17, 2010.



2
Analysis
In its Petition, Explorer did not submit any new arguments or information but reiterated the
arguments made in its previous Responses. Explorer continued to argue against PHMSA's
reading of the agency's 1992 interpretation that for the low-stress exception to apply, the entire
pipeline system has to operate at less than 20 percent SMYS. Explorer also recited a PHMSA
Memorandum dated March 2, 1995 in support of its argument that Part 195 does not define the
beginning and end of a pipeline but it does place the burden of compliance on the operator based
on the characteristics of the operator's individual installation.
In the Final Order, I found that the low stress definition criteria are clear. I also found that the
definition and methodology used by Explorer with respect to the delivery line segments were
narrowly tailored to the exceptions in Section 195.1(b)(4). Petitioner's methodology considered
the length and SMYS of the two pipeline segments but failed to factor in the continuation of its
entire 14-inch pipeline system. I further found that each of the pipeline segments is a part of a
larger system, serving either to introduce products into the system or take products from it. If
part of the line is operated above 20 percent SMYS, then the line does not satisfy the requirement
that the pipeline be operated in its entirety at a stress level of20 percent or less of the SMYS.
Explorer's explanation of industry understanding is not relevant to the configuration and
characteristics of the subject pipeline or the enforcement of pipeline safety regulations. Such a
characterization suggests a one size fits all application of the regulations when each pipeline
system is not the same. Inadequate review and understanding of the regulations by an operator
can have significant compliance ramifications. With respect to Explorer's contention that its 14-
inch pipeline and the two pipeline segments in question are represented as separate line segments
in its National Pipeline Mapping System (NPMS) and that historically, Petitioner has handled
these line segments as low-stress, in the Final Order, I found that there is a distinction between
compliance with the NPMS and annual reporting requirements and whether a pipeline is in fact a
low stress pipeline. The information from annual reports is used to more effectively compile
national statistics on system inventory, analyze accidents, identify safety problems and potential
solutions, and target inspections. I also found that instructions to complete forms are guidance,
not binding regulation. I found that the annual report instructions provide guidance on how to
respond to the questions on the form. As for Explorer's position that the line segments had been
reported to PHMSA separately in the NPMS, I found that the NPMS is a pipeline data repository
and the manner in which operators subdivide their systems for submission to NPMS is irrelevant
to determining whether PHMSA regulates a pipeline.
Conclusion
Based on a review of the record and the information provided in the Petition, I hereby deny the
Petition and affirm the Final Order without modification, for the reasons set forth above.
Payment of the $78,800 civil penalty assessed in the Final Order is now due and must be made
within 20 days of service of this Decision. The payment instructions were set forth in detail in



3
the Final Order. Failure to pay the $78,800 civil penalty will result in accrual of interest at the
current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R.
§89.23. 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, failure to pay
the civil penalty may result in referral of the matter to the Attorney General for appropriate
action in a United States District Court.
This Decision on Reconsideration is the final administrative action in this proceeding.
JAN J 5 2012
Date Issued
~·-

320095018_Decision on the Petition_ 01252012_text.pdf

JAN 25 2012
Mr. Rod E. Sands
President and Chief Executive Officer
Explorer Pipeline Company
Autumn Oaks Building, Suite 300
6846 South Canton Avenue
Tulsa, OK 74136
CPF No. 3-2009-5018
Dear Mr. Sands:
Enclosed is the decision on the Petition for Reconsideration filed by Explorer Pipeline
Company, in the above-referenced case. For the reasons specified in the decision, the Petition
is denied and the Final Order is affirmed without modification. The penalty payment terms are
set forth in the Final Order. This enforcement action closes automatically upon payment.
Your receipt of this decision constitutes service 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. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS
Mr. Dave Barrett, Director, Central Region, OPS
Mr. Curtis L. Craig, Vice President & General Counsel, Explorer Pipeline
Mr. T.J. “Tom” Jensen, Vice President of Operations, Explorer Pipeline
VIA CERTIFIED MAIL – RETURN RECEIPT REQUESTED[ 71791000164203107005]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
______________________________
)
In the Matter of )
)
Explorer Pipeline Company , ) CPF No. 3-2009-5018
)
Respondent. )
______________________________)
DECISION ON PETITION FOR RECONSIDERATION
On July 22, 2011, pursuant to chapter 601, title 49, of the United States Code, the Associate
Administrator for Pipeline Safety (Associate Administrator), Pipeline and Hazardous Materials
Safety Administration (PHMSA), issued a Final Order (Order) in this case against Explorer
Pipeline Company (Explorer or Petitioner), finding that Petitioner had committed two violations
of the Pipeline Safety Regulations, codified at 49 C.F.R. Part 195, and assessed a civil penalty in
the amount of $78,800 for both external corrosion control violations.
On August 16, 2011, Explorer submitted a Petition for Reconsideration (Petition) of the Final
Order. In its Petition, Explorer explained that it has completed the corrective cathodic protection
actions associated with its pipeline and is willing to pay the $78,800 civil penalty. However,
Petitioner requested reconsideration of the Final Order and additional time to obtain industry
input on the exception indentified as 49 C.F.R. 195.1(b)(4). Petitioner also repeated its
arguments that the line segments at issue are not subject to Part 195, arguments made in its
Responses to the Notice of Probable Violation.1
Because the evidence of record supports the findings in question, I am denying this Petition and
affirming the Final Order without modification.
Standard of Review
A respondent is afforded the right to petition the Associate Administrator for reconsideration of a
final order. However, that right is not an appeal or an opportunity to seek a de novo review of
the record. It is a venue for presenting the Associate Administrator with information that was
not previously available or requesting that any errors in the final order be corrected. Requests
for consideration of additional facts or arguments must be supported by a statement of reasons as
to why those facts or arguments were not presented prior to the issuance of the final order.
Repetitious information or arguments will not be considered.
1 In the Matter of Explorer Pipeline Company, Final Order, dated July 22, 2011, CPF No. 3-2009-5018, Responses
dated November 19, 2009, February 5, 2010 and March 17, 2010.



2
Analysis
In its Petition, Explorer did not submit any new arguments or information but reiterated the
arguments made in its previous Responses. Explorer continued to argue against PHMSA’s
reading of the agency’s 1992 interpretation that for the low-stress exception to apply, the entire
pipeline system has to operate at less than 20 percent SMYS. Explorer also recited a PHMSA
Memorandum dated March 2, 1995 in support of its argument that Part 195 does not define the
beginning and end of a pipeline but it does place the burden of compliance on the operator based
on the characteristics of the operator’s individual installation.
In the Final Order, I found that the low stress definition criteria are clear. I also found that the
definition and methodology used by Explorer with respect to the delivery line segments were
narrowly tailored to the exceptions in Section 195.1(b)(4). Petitioner’s methodology considered
the length and SMYS of the two pipeline segments but failed to factor in the continuation of its
entire 14-inch pipeline system. I further found that each of the pipeline segments is a part of a
larger system, serving either to introduce products into the system or take products from it. If
part of the line is operated above 20 percent SMYS, then the line does not satisfy the requirement
that the pipeline be operated in its entirety at a stress level of 20 percent or less of the SMYS.
Explorer’s explanation of industry understanding is not relevant to the configuration and
characteristics of the subject pipeline or the enforcement of pipeline safety regulations. Such a
characterization suggests a one size fits all application of the regulations when each pipeline
system is not the same. Inadequate review and understanding of the regulations by an operator
can have significant compliance ramifications. With respect to Explorer’s contention that its 14-
inch pipeline and the two pipeline segments in question are represented as separate line segments
in its National Pipeline Mapping System (NPMS) and that historically, Petitioner has handled
these line segments as low-stress, in the Final Order, I found that there is a distinction between
compliance with the NPMS and annual reporting requirements and whether a pipeline is in fact a
low stress pipeline. The information from annual reports is used to more effectively compile
national statistics on system inventory, analyze accidents, identify safety problems and potential
solutions, and target inspections. I also found that instructions to complete forms are guidance,
not binding regulation. I found that the annual report instructions provide guidance on how to
respond to the questions on the form. As for Explorer’s position that the line segments had been
reported to PHMSA separately in the NPMS, I found that the NPMS is a pipeline data repository
and the manner in which operators subdivide their systems for submission to NPMS is irrelevant
to determining whether PHMSA regulates a pipeline.
Conclusion
Based on a review of the record and the information provided in the Petition, I hereby deny the
Petition and affirm the Final Order without modification, for the reasons set forth above.
Payment of the $78,800 civil penalty assessed in the Final Order is now due and must be made
within 20 days of service of this Decision. The payment instructions were set forth in detail in



3
the Final Order. Failure to pay the $78,800 civil penalty will result in accrual of interest at the
current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R.
§89.23. 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, failure to pay
the civil penalty may result in referral of the matter to the Attorney General for appropriate
action in a United States District Court.
This Decision on Reconsideration is the final administrative action in this proceeding.
___________________________________ ____________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety

320095018_Final Order_07222011_text.pdf

JUL 22 2011
Mr. Rod E. Sands
President and Chief Executive Officer
Explorer Pipeline Company
Autumn Oaks Building, Suite 300
6846 South Canton Avenue
Tulsa, OK 74136
CPF# 3-2009-5018
Dear Mr. Sands:
Enclosed is the Final Order issued in the above-referenced case. It makes findings of violation
and assesses a civil penalty of $78,800. 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. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline Safety
Mr. Dave Barrett, Director, Central Region, PHMSA
Mr. Curtis L. Craig, Vice President & General Counsel, Explorer Pipeline
Mr. T.J. “Tom” Jensen, Vice President of Operations, Explorer Pipeline
Mr. Larry White, Counsel, PHMSA
CERTIFIED MAIL - RETURN RECEIPT REQUESTED[7005 1160 0001 0075 9701]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
___________________________________
In the Matter of )
)
Explorer Pipeline Company, ) CPF No. 3-2009-5018
)
Respondent. )
___________________________________ )
FINAL ORDER
From May 19-23, June 2-6, 2008, and June 9-12, 2008, pursuant to 49 U.S.C. § 60117, a
representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office
of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of Explorer Pipeline
Company’s (Respondent or Explorer) records and facilities in Missouri, Illinois, and Indiana.
Explorer Pipeline transports gasoline, fuel oil and jet fuel to 70 population centers in 16 states.
1
As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,
by letter dated October 21, 2009, a Notice of Probable Violation and Proposed Civil Penalty
(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Respondent
committed violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of $78,800 for
the alleged violations.
Respondent responded to the Notice by letter dated November 19, 2009 and February 5, 2010
(Response). The company contested the allegations, offered additional information regarding
mitigation of the proposed penalty, and requested a hearing. A hearing was subsequently held on
February 18, 2010, in Kansas City, Missouri with an attorney from the Office of Chief Counsel,
PHMSA, presiding. After the hearing, Respondent provided a post-hearing statement for the
record, by letter dated March 17, 2010 (Closing).
FINDINGS OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. §195.573(a) (1), which states:
1 http://www.expl.com/Company.aspx (last visited 5/7/2011).



2
§195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine whether
cathodic protection required by this subpart complies with §195.571:
(1) Conduct tests on the protected pipeline at least once each calendar year,
but with intervals not exceeding 15 months. . . .
The Notice alleged that Respondent failed to conduct tests on cathodically protected pipeline
segments to monitor external corrosion control at least once each calendar year, but with
intervals not exceeding 15 months. PHMSA asserted that a review of Explorer’s cathodic
within the required intervals on the St. Louis Meter Station to J.D. Streett West Line for 4 years
(2004, 2005, 2006, and 2007) for test station 5+45 and 6 years (2002, 2003, 2004, 2005, 2006,
protection survey records2 showed tests were not conducted to monitor external corrosion control
and 2007) for test stations 9+53. The agency also asserted that Explorer’s records showed that
tests were not conducted to monitor external corrosion control on the St. Louis Meter Station to
JD Streett East Line for 3 years (2004, 2005, and 2006) for test station 5+45.
In its Response, Explorer did not dispute that it failed to perform the required testing to monitor
external corrosion control but contended that this regulation did not apply because the two
pipeline segments are exempt from 49 C.F.R. Part 195. First, it argued that the two pipeline
disputed PHMSA’s interpretation that the entire pipeline must be a low stress line for the
exception to apply. Third, the company contended that PHMSA’s interpretation is not consistent
with annual reporting requirements and the pipeline industry’s interpretation of the exception.
segments3 satisfy the 49 C.F.R. §195.1(b)(4) 4 low-stress exception from Part 195. Second, it
As for Explorer’s first argument that the two pipeline segments satisfy the low-stress exception
in 49 C.F.R. §195.1(b)(4), the company argued that the two pipeline segments are each 1,362
feet long, less than one-mile long, and the maximum operating pressure (MOP) of the “St. Louis
Meter Station to JD Streett” segments is 275 psig which is less than 20 percent of the specified
minimum yield strength (SMYS) of the pipeline.
5
Respondent explained that its 14-inch
pipeline originates at Explorer’s Wood River, Illinois Tank Farm and terminates at Explorer’s St.
Louis, Missouri Meter Station. Respondent described the station as equipped with a receiver and
a control valve that isolates the meter station’s in-plant piping from the 14-inch pipeline.
2 Violation Report, Exhibit A: E-mail with Explorer’s cathodic protection records from Kevin Brown, dated July 18,
2008.
3 The two 14-inch diameter pipeline segments are each 1,362 feet long and are identified by Explorer as the “St.
Louis Meter Station to JD Streett” delivery lines, Response dated November 19, 2009.
4 49 C.F.R. §195.1(b) (4) Excepted. This part does not apply to any of the following:
…(4) A low-stress pipeline that serves refining, manufacturing, or truck, rail, or vessel terminal facilities, if the
pipeline is less than one mile long (measured outside facility grounds) and does not cross an offshore area or a
waterway currently used for commercial navigation.
5 20% SMYS is 371 psig as calculated by Explorer. Respondent submitted a chart to support its contention that
these line segments satisfy all the criteria of §195.1(b)(4) and are excepted from regulation by PHMSA. Explorer
responses dated November 19, 2009 and February 5, 2010.



3
Respondent further explained that the two pipeline segments are separate, low-stress, delivery
lines that serve a truck facility at the J.D. Streett Products Terminal. Respondent proffered that
in the absence of any established regulatory definition of a beginning and end of a pipeline, it
established a definition: The 14-inch pipeline facility from the Wood River Tank Farm to the St.
Louis Meter Station can operate independently of the St. Louis Meter Station to the J.D. Streett
Products Terminal.
In response to Respondent’s argument, PHMSA asserted that a pipeline is “low stress” if it is
segments are simply a continuation of a greater than 20 percent SMYS pipeline owned and
operated by Explorer that is regulated by PHMSA. The agency explained that the greater than
20 percent SMYS portion of Explorer’s14-inch diameter pipeline system begins at Wood River
Tank Farm (regulated breakout tankage) in Illinois, traverses south along the East side of the
Mississippi River, crosses the Mississippi River to where the St. Louis Meter Station is located
in Missouri; then using pressure control equipment at the St. Louis Meter Station (a metering
275 psig for ultimate delivery of product to the JD Streett terminal facility.
operated in its entirety at less than 20 percent SMYS.6 PHMSA further asserted that the two line
facility and part of the pipeline system per §195.2) the operating pressure is reduced to a MOP of
addressed similar facts and the regulatory status of two pipelines operating at less than 20
percent SMYS that were delivery lines. The 1992 interpretation described one of the pipelines
as, “…a 12-inch delivery line that operates at less than 20% SMYS, transports gasoline from an
Olympic pipeline, which runs between Washington State and Portland, to a Unocal facility in
Portland.” The 1992 interpretation concluded that “[n]either pipeline you asked about is a
unique system. Each one is merely a part of a larger system, serving either to introduce products
PHMSA submitted an agency interpretation7 dated August 24, 1992 (1992 interpretation), which
into the system or take products from it. Therefore, each pipeline is subject to Part 195.”
PHMSA maintained that the same is true in the instant case. Explorer’s two delivery lines are
merely a part of a larger system. The agency added that while PHMSA has not defined the
beginning and end of pipelines, Respondent’s attempt to create a new definition is misplaced.
As for Respondent’s argument that the two pipeline segments satisfy the low-stress exception in
49 C.F.R. §195.1(b)(4) as being less than one-mile long, serving a terminal facility, and not
crossing a waterway used for commercial navigation, the segments must first satisfy the
elements of the low-stress pipeline definition i.e., that it is a hazardous liquid pipeline that is
operated in its entirety at a stress level of 20 percent or less of the SMYS of the line pipe. I find
that Explorer’s 14-inch pipeline system includes the two pipeline segments at issue in the Notice;
and those two pipeline segments are less than one-mile long and serve a truck facility. I also find
that Respondent’s 14-inch regulated pipeline system carries product from Explorer’s Wood
River, Illinois Tank Farm, across the Mississippi River, and through the St. Louis Meter Station
to the JD Streett Terminal where the company reduces the operating pressure to less than 20
percent SMYS for ultimate delivery of product to the two pipeline segments in question in order
to serve a truck facility I also find that each of the pipeline segments are a part of a larger
6 “Low-stress pipeline” is defined as “a hazardous liquid pipeline that is operated in its entirety at a stress level of 20
percent or less of the specified minimum yield strength of the line pipe, 49 C.F.R. §195.2.
7 PHMSA Violation Report Exhibit E.



4
system, serving either to introduce products into the system or take products from it. If part of
the line is operated above 20 percent SMYS, then the line does not satisfy the requirement that
the pipeline be operated in its entirety at a stress level of 20 percent or less of the SMYS.
Second, the company disputed PHMSA’s reading of the agency’s 1992 interpretation that for the
exception to apply the entire pipeline system has to operate at less than 20 percent SMYS.
8
Explorer advised that its understanding of the agency’s reading of the interpretation is for the
exception to apply, “a stand-alone pipeline operator would need to operate its low-stress
interstate pipeline for less than one-mile and not cross navigable waters.
”9 The company also
cited a PHMSA Memorandum dated March 2, 1995,
Part 195 does not define the beginning and end of pipelines, it does place the burden of
compliance with the regulation on persons who own or operate pipelines.”
10 which states in relevant part, “Although
PHMSA maintained that the context of the interpretation in the memorandum was a question
regarding a previous version of Part 195 that applied to low stress pipelines. Part 195 has since
been amended (Amdt. 195-53, effective August 11, 1994).11 Prior to the amendment, with a
limited exception, many low stress pipelines were not subject to regulation.
hearing, PHMSA noted that Explorer focused on a single sentence within the memorandum and
reasoned that while PHMSA may not have defined the beginning and end of a pipeline, “placing
the burden of compliance on persons who operate…” does not assign the operator as the final
arbiter of what the rules mean. PHMSA asserted that the company’s definition for the beginning
and end of a pipeline is misplaced. PHMSA maintained that it regulates the safety of
transportation by pipeline from the point of gathering to the point of delivery including breakout
tanks. The exemptions to this broad authority are well defined and narrow. PHMSA further
maintained that exemptions cannot be over-interpreted in a manner that would undermine
PHMSA’s broad authority to regulate pipeline safety.
12 During the
8 Explorer referenced, “Unregulated Low-Stress Hazardous Liquid Pipelines,” by Mike Israni & John Gale dated
August 5, 2009.
9 Response dated March 17, 2010 at page1.
10 Closing.
11 Prior to 1992 the agency’s hazardous liquid pipeline safety regulations did not apply to pipelines operating at a
stress level of 20 percent or less of SMYS (hereafter “low-stress pipelines”') (see 49 CFR 195.1(b)(3)). DOT
excluded such pipelines from Part 195 when it first issued the regulations (34 FR 15473; October 4, 1969).
However, serious accidents occurred on low-stress pipelines, which led to a determination that the blanket exclusion
was no longer in the interest of public safety. Section 206 of the Pipeline Safety Act of 1992 (PSA) (Pub. L. 102-
508; October 24, 1992), amended Sec. 203(b) of the Hazardous Liquid Pipeline Safety Act of 1979 (HLPSA) (49
App. U.S.C. 2002(b)) to provide that “[i]n exercising any discretion under this Act, the Secretary shall not provide
an exception to regulation under this Act for any pipeline facility solely on the basis of the fact that such pipeline
facility operates at low internal stress”
.
12 See preamble for Amdt. 195-53.



5
As for Respondent’s dispute of PHMSA’s reading of the 1992 interpretation, I find that the low
stress definition criteria are clear and that the March 2, 1995 memorandum submitted by
Explorer to support its argument is obsolete. I also find that the definition and methodology used
by Explorer were narrowly tailored to exclusively compare the delivery line segments to the
exceptions in Section195.1(b)(4), considering the length and SYMS of the two pipeline segments
without factoring their continuation of its entire 14-inch pipeline system.
Third, the company argued that PHMSA’s reading of the interpretation is not consistent with the
intent of the legislature, risk measurement, or the annual reporting requirements and industry
interpretation of the exception.”13 Explorer contended that PHMSA’s annual report (and
associated instructions) does not provide definitions or instructions that contradict Explorer’s
understanding of the §195.1(b)(4) exception. Respondent also contended that its understanding
of the low-stress exception is common among other operators and provided a table from API
listing anonymous operators with the number of miles that are excepted per §195.1(b)(4).14
Respondent added that the 14-inch pipeline and the two pipeline segments in question are
represented as separate line segments in its National Pipeline Mapping System (NPMS); and that
historically, Respondent has handled these line segments as low-stress.15
As for industry interpretation of the exception and the annual report, PHMSA asserted that the
data submitted by Explorer provided no description of the pipelines and that the pipelines may or
may not be continuations of regulated pipelines. PHMSA also contended that its annual
reporting forms are not interpretations of the regulations and the instructions are simply provided
to assist operators in filling out the form properly. As for Explorer reporting the two pipeline
segments to PHMSA as separate line segments in the NPMS, the agency advised that the NPMS
is a pipeline data repository and the manner in which operators subdivide their systems for
submission to NPMS is immaterial to determining whether pipe is regulated or not.
Considering the arguments and evidence, I find that there is a distinction between compliance
with the NPMS and annual reporting requirements and whether a pipeline is in fact a low stress
pipeline. The information from annual reports is used to more effectively compile national
statistics on system inventory; analyze accidents; identify safety problems and potential
solutions; and target inspections. I also find that instructions to complete forms are guidance, not
binding regulation. I find that the annual report instructions provide guidance on how to respond
to the questions on the form. As for Explorer’s position that the line segments had been reported
to PHMSA separately in the NPMS, I find that the NPMS is a pipeline data repository and the
manner in which operators subdivide their systems for submission to NPMS is irrelevant to
determining whether PHMSA regulates a pipeline.
13 Response dated March 17, 2010 at page 2.
14 Closing at 3.
15 The company suggested that the reason for the Part 195 exception is that the particular type of pipeline operation
does not present a significant risk for regulatory oversight based on a 2008 Federal Register Notice. Federal Register
Vol. 73, No. 107, pg. 31640. (6/3/08).



6
After considering all of the evidence and legal arguments presented, I find that the two pipeline
segments were not excepted from 49 C.F.R. Part 195, as low stress pipelines excepted under
§195.1(b)(4). I also find that each of the pipeline segments are a part of a larger system, serving
either to introduce products into the system or take products from it. Low-stress pipeline means
a hazardous liquid pipeline that is operated in its entirety at a stress level of 20 percent or less of
the SMYS of the line pipe, 49 C.F.R. §195.2. I find that at least some parts of Respondent’s 14-
inch pipeline system operated at a stress level in excess of 20 percent SMYS and therefore, the
two delivery pipeline segments are not a “low stress pipeline” as defined in 49 C.F.R. §195.2.
I also find that Explorer did not contest the allegations that it failed to perform the required
testing and take corrective actions related to the corrosion control requirements. After
considering all the evidence, I find Respondent violated 49 C.F.R. §195.573(a)(1) by failing to
conduct tests to monitor external corrosion control at least once each calendar year, but with
intervals not exceeding 15 months at the following locations: St. Louis Meter Station to J.D.
Streett West Line for 4 years (2004, 2005, 2006, and 2007) for test station 5+45 and 6 years
(2002, 2003, 2004, 2005, 2006 and 2007) for test stations 9+53; and on the St. Louis Meter
Station to JD Streett East Line 3 years (2004, 2005, and 2006) at test station 5+45.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. §195.573(e), which states:
§195.573 What must I do to monitor external corrosion control?
. . . (e) Corrective action. You must correct any identified deficiency in corrosion
control as required by §195.401(b). However, if the deficiency involves a
pipeline in an integrity management program under §195.452, you must correct
the deficiency as required by §195.452(h).
The Notice alleged that Respondent did not correct identified deficiencies during Explorer’s
annual monitoring of external corrosion control. PHMSA maintained that Explorer’s records16
indicated that Respondent did not take corrective action for deficient cathodic protections
readings that did not meet acceptance criteria, as indicated below:
The St. Louis Meter Station to J.D. Streett West Line for test stations 5+45 and 10+12:
• Test Station 5+45 had “0” readings, which indicates no readings were taken
for 4 years (2004, 2005, 2006, and 2007). In addition, at test station 5+45,
there were readings below the NACE acceptance criteria of -0.850 volts for 2
years (2002 and 2003). The records show that the West Line at test station
5+45 was deficient for 5 consecutive years after the deficiencies were
identified.
• Test Station 10+12 had readings below the NACE acceptance criteria of
-0.850 volts for 6 years (2002, 2003, 2004, 2005, 2006, and 2007).
16 Violation Report, Exhibit A: E-mail with Explorer’s cathodic protection records from Kevin Brown, dated July
18, 2008; Exhibit B: E-mail from Kevin Brown, dated January 8, 2009; Exhibit C: E-mail from Kevin Brown, dated
March 9, 2009; Exhibit D: E-mail from Kevin Brown, dated April 1, 2009.



7
The St Louis Meter Station to J.D. Streett East Line for test stations 5+45, 9+53,
and 10+12:
• Test Station 5+45 had “0” readings which indicate no readings were taken for
3 years (2004, 2005, and 2006). In addition, at test station 5+45, there were
readings below the NACE acceptance criteria of -0.850 volts for 3 years
(2002, 2003 and 2007). The records show that the East Line at test station
5+45 was deficient for 5 consecutive years after the deficiencies were
identified.
• Test Station 9+53 and 10+12 on the East Line had readings below the NACE
acceptance criteria of -0.850 volts for 6 years (2002, 2003, 2004, 2005, 2006,
and 2007).
In its Response and during the hearing, the company proffered that the regulation did not apply
because the two pipeline segments at issue are excepted from Part 195 and satisfy the low-stress
exception in 49 C.F.R. §195.1(b)(4).
I found in Item 1 of this Order that PHMSA regulates the two line segments in question and that
the line segments were not excepted from Part 195. Accordingly, after considering all of the
evidence, I find that Respondent failed to take corrective action for deficient cathodic protections
readings on its St. Louis Meter Station to JD Streett pipeline segments during Explorer’s annual
monitoring of external corrosion control. I find Respondent violated 49 C.F.R. §195.573(a)(1)
by failing to correct identified corrosion control deficiencies.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject 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 series of
violations.
49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of a civil
penalty, I consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that
the penalty may have on its ability to continue doing business; and the good faith of Respondent
in attempting to comply with the pipeline safety regulations. In addition, I may consider the
economic benefit gained from the violation without any reduction because of subsequent
damages, and such other matters as justice may require. The Notice proposed a total civil
penalty of $78,800 for the violations cited above.
The Notice in Item 1 p
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