{"operation":"document","citation":"CPF 320115005","title":"NUSTAR PIPELINE OPERATING PARTNERSHIP L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-04-21","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.404, 195.412(a), 195.50, 195.573.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320115005.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320115005.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320115005","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320115005","body":"Notice of Probable Violation involving NUSTAR PIPELINE OPERATING PARTNERSHIP L.P.. PHMSA's enforcement data identifies the cited regulations as 195.404,  195.412(a),  195.50,  195.573. The case was opened on 2011-04-21 and is reported as closed as of 2013-07-09. Proposed civil penalty: $112,000. Assessed civil penalty: $101,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320115005_Closure_07092013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_Closure_07092013.pdf\n\n320115005_Closure_07092013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_Closure_07092013_text.pdf\n\n320115005_Decision On Reconsideration_06142012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_Decision%20On%20Reconsideration_06142012.pdf\n\n320115005_Decision on Reconsideration_06142012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_Decision%20on%20Reconsideration_06142012_text.pdf\n\n320115005_FinalOrder_12292011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_FinalOrder_12292011.pdf\n\n320115005_FinalOrder_12292011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_FinalOrder_12292011_text.pdf\n\n320115005_NOPV PCP PCO_04212011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_NOPV%20PCP%20PCO_04212011.pdf\n\n320115005_NOPV PCP PCO_04212011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_NOPV%20PCP%20PCO_04212011_text.pdf\n\n320115005_Operator Response to NOPV PCP PCO_05202011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_Operator%20Response%20to%20NOPV%20PCP%20PCO_05202011.pdf\n\n320115005_Petition_for_Reconsideration_01182012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320115005/320115005_Petition_for_Reconsideration_01182012.pdf\n\n320115005_FinalOrder_12292011_text.pdf\n\nDEC 29 2011\nMr. Todd Denton\nVice President Pipelines & Terminal Operations\nNuStar Pipeline Operating Partnership, L.P.\n2330 N. Loop 1604 West\nSan Antonio, TX 78248\nRe: CPF No. 3-2011-5005\nDear Mr. Denton:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $101,200, and specifies actions that need to be\ntaken by NuStar Pipeline Operating Partnership, L.P. to comply with the pipeline safety\nregulations. The penalty payment terms are set forth in the Final Order. When the civil penalty\nhas been paid and the terms of the compliance order completed, as determined by the Director,\nCentral Region, this enforcement action will be closed. Service of the Final Order by certified\nmail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R.\n§ 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, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [71791000164202982016]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nNuStar Pipeline Operating ) CPF No. 3-2011-5005\nPartnership, L.P., )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nBetween April 5-9, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of NuStar Pipeline\nOperating Partnership, L.P. in Wichita, Kansas. NuStar Pipeline Operating Partnership, L.P.\n(NuStar or Respondent) is a subsidiary of NuStar Energy, L.P., which owns and operates 5,605\nmiles of refined product pipelines, 2,000 miles of anhydrous ammonia pipelines, and 812 miles\nof crude oil pipelines.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated April 21, 2011, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that NuStar had violated 49 C.F.R. §§ 195.50, 195.412, 195.573 and 195.404\nand assessing a civil penalty of $112,000 for the alleged violations. The Notice also proposed\nordering Respondent to take certain measures to correct the alleged violations. The warning item\nrequired no further action, but warned the operator to correct the probable violation.\nNuStar responded to the Notice by letter dated May 20, 2011 (Response). The company\ncontested the allegations of violation, provided an explanation of its actions, and requested that\nthe proposed civil penalty be reduced. Respondent did not request a hearing and therefore has\nwaived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195.50, as follows:\n1 See http://www.nustarenergy.com/COMPANY/Pages/default.aspx (last accessed November 7, 2011).\n\n\n\n2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.50, which states in relevant\npart:\n§ 195.50 -- Reporting accidents.\nAn accident report is required for each failure in a pipeline system\nsubject to this part in which there is a release of the hazardous liquid or\ncarbon dioxide transported resulting in any of the following…\n(b) Release of 5 gallons (19 liters) or more of hazardous liquid or\ncarbon dioxide, except that no report is required for a release of less than 5\nbarrels (0.8 cubic meters) resulting from a pipeline maintenance activity if\nthe release is:\n(1) Not otherwise reportable under this section\n(2) Not one described in § 195.52(a)(4);\n(3) Confined to company property or pipeline right-of-way; and\n(4) Cleaned up promptly…\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.50(b) by failing to file an accident\nreport for three hazardous liquid releases that occurred between 2007-2010. Section 195.50\nrequires an operator to file a report for all releases of 5 gallons or more unless the spill meets the\nexception listed in § 195.50(b). On December 1, 2007, NuStar experienced a release of 50\ngallons at its Geneva Station during a tank switching operation. The second release occurred on\nOctober 6, 2009 at the Elm Creek Pump station in which a sump overflowed releasing 89 gallons\nof fuel oil. The third release occurred on January 22, 2010 at the El Dorado Station during the\nstart up of the mainline pump, resulting in a release of 50 gallons. OPS argued in the Notice that\nall three releases occurred during pipeline system operations and therefore should have been\nreported.\nResponse\nNuStar argued that each of the three spills met the exception listed under § 195.50(b) since each\nrelease resulted from pipeline maintenance activity and was less than 5 barrels (210 gallons). In\nsupport of this argument, NuStar filed a statement summarizing the three spills and relied on the\nrelevant rulemaking documents establishing these exceptions.\nWith regard to the first spill, NuStar argued that it occurred during a maintenance activity on the\npipeline manifold area which involved tying in all block and bleed valves to a common header\nintended to carry product to a sump if the valves were left open. However, according to NuStar,\nthe maintenance activity was not completed at the time of the release and the header pipe\ndischarged product into a 5 gallon bucket rather than the sump. In its explanation of the release,\nNuStar stated that the operator of the station failed to close the block and bleed valve allowing\nproduct to escape the valve body. NuStar stated that the product was carried a distance into the 5\ngallon bucket and therefore the release went unnoticed until 50 gallons had spilled into the\nmanifold area. NuStar stated that clean up was completed immediately.2\n2 Response, Exhibit A.\n\n\n\n3\nThe second release occurred when a sump overflowed. NuStar stated in its Response that after\nrestarting the pipeline, the control center detected a high level sump alarm. NuStar determined\nthat a valve had been left partially opened during maintenance inspections which caused the\nrelease. NuStar stated in its Response that the released product was immediately cleaned up.3\nThe third release occurred when NuStar personnel were repairing the motor to the #2 mainline\npumping unit. According to NuStar, as part of the maintenance procedures, the unit was started\nup to test for proper installation and alignment. During this test, the release occurred. NuStar\nstated in its Response that the product was immediately cleaned up.4\nFinally, NuStar asserted that PHMSA did not define the meaning of “resulting from a pipeline\nmaintenance activity” in the Final Rule and therefore operators must interpret for themselves\nwhich spills meet the exception.5 NuStar also argued that collecting information for spills\nattributable to maintenance would “taint the data analysis efforts of PHMSA”.6\nAnalysis\nSection 195.50 requires all operators to report spills of 5 gallons or more. The reporting\nrequirement dates back to July 27, 1981 when the Materials Transportation Bureau, a\npredecessor to PHMSA, amended the pipeline safety regulations in Part 195 to conform to\nterminology used in the Hazardous Liquid Pipeline Safety Act of 1979.7 improve the quality of accident data, the agency amended the requirement to reduce the\nthreshold for reporting from 50 barrels to 5 gallons. At that time, the agency also included an\nexception for spills under 5 barrels resulting from pipeline maintenance activities. At the time\nthe rule was issued, RSPA, the predecessor to PHMSA, directly addressed this exception.\nIn 2002, in an effort to\nOur information is that such spills occur regularly upon the opening of\npipelines for insertion of spheres, smart pigs, or for routine inspections.\nThe spills are usually caught in a berm or other containment device; are\ncleaned up immediately; and have little to no impact on the environment.\nWe believe information on such releases would not be helpful in accident\ntrending analysis. Maintenance spills must be promptly cleaned up to\navoid the reporting requirement. Any non-maintenance spill of 5 gallons\nor more must be reported.8\n3 Id.\n4 Id.\n5 Id.\n6 Id.\n7 “Transportation of Liquids by Pipeline”, 46 Fed. Reg. 38357, 38363 (July 27, 1981).\n8 “Pipeline Safety: Hazardous Liquid Pipeline Accident Reporting Revisions”, 67 Fed. Reg. 831 (January 8, 2002).\n\n\n\n4\nCertainly, the agency’s intention was to exclude planned or expected maintenance spills that\noccurred from opening the line. The instructions for the Accident Report (PHMSA Form 7000-\n1) explicitly state that “hazardous liquid releases during maintenance or other routine activities\nneed not be reported if the spill was less than 5 barrels, not otherwise reportable under\n49 C.F.R. § 195.50, and did not result in water pollution as described by\n49 C.F.R. § 195.52(a)(4).”9\nNuStar’s three spills were certainly not planned and did not occur during maintenance activities.\nRather, the spills occurred during a start up of the pipe and occurred as a result of personnel error\nafter the maintenance activity had concluded. NuStar admitted that the first spill occurred during\nnormal operational activities.10 The second release occurred “after the completion of the\nmaintenance inspections and restart of the pipeline”.11 The third release occurred during a start\nup test, which although is considered part of maintenance activities, the release was not planned\nakin to removing a pig, etc. As documented in the Violation Report, NuStar personnel\nconfirmed during the OPS inspection that this failure occurred due to equipment failure.12\nSpecifically, problems with the settings of the relief valve and case pressure during start up\noperations caused the release of product.13\nI do not find NuStar’s argument persuasive that requiring the reporting of these types of spills\nwould force operators to report all spills. Operators should be reporting all spills greater than 5\ngallons. The narrow exception only exempts reporting if the spill occurred during a maintenance\nactivity, did not cause an explosion, fire, death, or injury, and is cleaned up promptly. As stated\nabove, the exception is intended to capture only those spills that are planned or intended during\nmaintenance. If the Section 195.50(b) exception were intended to include all spills that were in\nany way related to maintenance, then numerous spills would go unreported.\nAccordingly, after considering all of the evidence, I find that NuStar violated the pipeline safety\nregulations by failing to report all three releases. The spills were not planned releases that\noccurred during maintenance activities but were rather caused by operator error or equipment\nfailure during pipeline system operations.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.573, which states in\nrelevant part:\n§ 195.573 -- What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with Sec.\n195.571:\n(1) Conduct tests on the protected pipeline at least once each calendar\n9 Instructions for Form PHMSA F 7000-1 (1-2001) (emphasis added) located at http://www.phmsa.dot.gov.\n10 Response, Exhibit A, page 2.\n11 Id. at 3.\n12 Violation Report, at 3.\n13 Id.\n\n\n\n5\nyear, but with intervals not exceeding 15 months. However, if tests at\nthose intervals are impractical for separately protected short sections of\nbare of ineffectively coated pipelines, testing may be done at least once\nevery 3 calendar years, but with intervals not exceeding 39 months….\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573 by failing to conduct corrosion\ncontrol monitoring tests at various test stations once each calendar year between 2006-2009.\nSpecifically, NuStar failed to conduct tests at stations on the 10-inch line for two years at MP\n154.31, MP 172.69, and MP 225.96. Further, NuStar failed to conduct tests on the 16-inch line\nat MP 165.94 for two years and MP 172.69 for four years. In its Response, NuStar only\ncontested the allegations as they applied to MP 154.31 and MP 172.69 on the 10–inch line. In\nsupport of its argument that these two stations were tested on an annual basis, NuStar provided\nclose interval survey records from 2009 for both test stations and explained that MP 154.31 was\nreplaced on October 24, 2009.\nI have reviewed these records and find them acceptable. Therefore, I am withdrawing these two\ntest stations from Item 3 but find a violation has occurred for the other three test stations.\nAccordingly, I find that Respondent violated 49 C.F.R. § 195.573 by failing to conduct tests at\nMP 225.96 on the 10-inch line and MPs 165.94 and 172.69 on the 16–inch line.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.404, which states in\nrelevant part:\n§ 195.404 -- Maps and Records.\n(c) Each operator shall maintain the following records for the period\nspecified;\n(3) A record of each inspection and test required by this subpart shall\nbe maintained for at least 2 years or until the next inspection or test is\nperformed, whichever is longer.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404 by failing to maintain records\nfor each inspection and test required by Subpart F. Specifically, NuStar failed to maintain\ninspection records for an overpressure safety device at the Arkansas Pump station for at least two\nyears. During the inspection, NuStar could not produce overpressure inspection records for the\nprevious two years. Although NuStar stated that the device was inspected and tested by a third\nparty, NuStar could not produce the records to meet its obligations under § 195.404. In its\nResponse, NuStar provided the records of the tests which were conducted by ConocoPhillips, the\nsupplier of the line. NuStar stated that it would immediately begin joint inspections with\nConocoPhillips so that NuStar could maintain its own documentation.\nSection 195.404 of the pipeline safety regulations requires the operator to maintain records of\neach inspection and test for at least two years. Even in situations where a third-party performs\nthe test, NuStar must maintain its own records for tests on its facilities to be in compliance with\nthe regulations. Accordingly, after considering all of the evidence, I find that Respondent\nviolated 49 C.F.R. § 195.404 by failing to maintain records for overpressure tests at the Arkansas\nPump station.\n\n\n\n6\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $112,000 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $64,100 for Respondent’s violation of\n49 C.F.R. § 195.50(b), for failing to file accident reports for three hazardous liquid pipeline\nreleases. In its Response, NuStar argued that the company should receive a credit for good faith\nsince the agency had not clearly defined what types of spills qualified for the maintenance\nactivity exception. As cited above, both the Final Rule and the Accident Report instructions\nhave clarified the narrow intent of this exception and that it only applies to releases that occur\nduring maintenance, not related to maintenance.\nThe proposed civil penalty is based on the civil penalty assessment factors listed in\n49 C.F.R. § 190.225. As stated in the Violation Report, the gravity for this violation was low\nsince it involved a failure to file a report; however, the operator did not file the accident report\nfor three different accidents which was factored into the proposed civil penalty.14 The violation\nwas discovered by PHMSA, not the operator. Finally, the operator’s prior history was a factor\ncivil penalty assessment factors and the evidence presented in this case, I find that the proposed\ncivil penalty of $64,100 is justified. Accordingly, I assess Respondent a civil penalty of $64,100\nfor violation of 49 C.F.R. § 195.50(b).\nsince NuStar had three Final Orders issued in the previous five years.15 Having reviewed the\nItem 3: The Notice proposed a civil penalty of $28,700 for Respondent’s violation of\n49 C.F.R. § 195.573, for failing to conduct corrosion control monitoring tests from calendar year\n2006 to 2009. As stated above, I have withdrawn the allegations related to MP 154.31 and MP\n172.69 on the 10-inch line. The civil penalty amount is reduced to reflect that only three test\nstations were missed instead of the proposed five. However, the foundation of the penalty\namount is based on the gravity of the violation, the circumstances surrounding the violation\nincluding the duration of the missed tests, and the prior history of the operator. NuStar’s failure\nto inspect three test stations for consecutive years was factored into the civil penalty amount.\nASSESSMENT OF PENALTY\n14 Violation Report, at 4.\n15 Violation Report, at 15.\n\n\n\n7\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $27,900 for violation of 49 C.F.R. § 195.573.\nItem 4: The Notice proposed a civil penalty of $19,200 for Respondent’s violation of\n49 C.F.R. § 195.404, for failing to maintain records for each inspection and test, as required\nunder Subpart F. PHMSA has examined the civil penalty assessment factors and determined that\nRespondent should receive a reduced civil penalty on account of its culpability. Although\nNuStar ensured that the required overpressure protection tests were conducted, it failed to\nmaintain inspection records for an overpressure safety device at the Arkansas Pump station for at\nleast two years. ConocoPhillips conducted the overpressure protection inspections on NuStar’s\ninlet piping and therefore NuStar was unaware that it was also required to maintain records of\nthese tests. NuStar has agreed to conduct joint inspection and testing of the overpressure\nprotection devices in the future. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a reduced civil penalty of $9,200 for violation of\n49 C.F.R. § 195.404.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $101,200.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $101,200 civil penalty will result in accrual of interest at the current annual\nrate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1 and 4 in the Notice for\nviolations of 49 C.F.R. §§ 195.50(b) and 195.404, respectively. Under 49 U.S.C. § 60118(a),\neach person who engages in the transportation of hazardous liquids or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601. The Director has indicated that Respondent has taken the following actions to\naddress some of the cited violations:\nItem 4: NuStar has documented the inspections of the overpressure device at the\nArkansas pump station and has entered an agreement with ConocoPhillips to conduct\njoint inspections of this facility in the future.\n\n\n\n8\nAccordingly, I find that compliance has been achieved with respect to this violation. Therefore,\nthe compliance terms proposed in the Notice for Item 4 are not included in this Order.\nAs for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217, Respondent is ordered to take the following action to ensure compliance\nwith the pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.50(b) (Item 1), Respondent must submit to\nPHMSA within 30 days of issuance of the Final Order, an accident report on Form 7000-\n1 for each of the three accidents and any additional accidents not previously reported that\nmeet reporting criteria. NuStar must also notify the Director, Central Region that reports\nhave been submitted including the number of reports, accident dates, date submitted to\nPHMSA, and PHMSA report number.\n2. It is requested (not mandated) that NuStar maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total\nto David Barrett, Director, Central Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories: 1) total\ncost associated with preparation/revision of plans, procedures, studies and analyses, and\n2) total cost associated with replacements, additions, and other changes to pipeline\ninfrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to 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.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged probable violations of Part 195 specifically considered\nto be a warning item. The warning was for:\n49 C.F.R. § 195.412 (Item 2) ─ Respondent’s alleged failure to complete 26\npatrols of six of its pipeline right-of-ways during the 2009 calendar year. NuStar\ncompleted 25 patrols but its contractor failed to complete the final patrol due to\nweather related issues.\nNuStar presented information in its Response showing that it had taken certain actions to address\nthe cited items. If OPS finds a violation of this provision in a subsequent inspection, Respondent\nmay be subject to future enforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\n\n\n\n9\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of this Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all\nother terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n320115005_Decision on Reconsideration_06142012_text.pdf\n\nJUNE 14, 2012\nMr. Michael Truby\nVice President, Pipeline Operations\nNuStar Pipeline Operating Partnership, L.P.\n2330 N. Loop 1604 West\nSan Antonio, TX 78248\nRe: CPF No. 3-2011-5005\nDear Mr. Truby:\nEnclosed please find the Decision on Reconsideration issued in the above-referenced case. It\ndenies your Petition for Reconsideration. Service of the Decision 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, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nNuStar Pipeline Operating ) CPF No. 3-2011-5005\nPartnership, L.P., )\n)\nPetitioner. )\n____________________________________)\nDECISION ON RECONSIDERATION\nOn December 29, 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nOffice of Pipeline Safety (OPS), issued a Final Order in this matter to NuStar Pipeline Operating\nPartnership, L.P. (NuStar or Petitioner), finding that NuStar had committed several violations of\nthe hazardous liquid pipeline safety regulations. I assessed Petitioner a civil penalty of $101,200\nand ordered the company to complete certain corrective actions.\nOn January 18, 2012, NuStar submitted a timely Petition for Reconsideration (Petition) seeking\nreview of Items 1 and 3 of the Final Order and the associated civil penalties and compliance\nitems. First, NuStar argues that I erred in finding that the company violated 49 C.F.R. § 195.50\n(Item #1) by failing to report three releases of more than five gallons of product. Second, NuStar\nasserts that the civil penalty assessed for Item #3 of the Final Order should be reduced.\nStandard of Review\nA respondent may petition the Associate Administrator for reconsideration of a final order.\nReconsideration is not a right to appeal or seek a de novo review of the record.1\nIt is an\nopportunity to present the Associate Administrator with previously unavailable information or to\nrequest that any errors in the Final Order be corrected. Requests for consideration of new facts\nor arguments must be supported by a statement of reasons as to why those facts or arguments\nwere not presented prior to the issuance of the Final Order. Repetitious information or\narguments will not be considered.\n1 49 C.F.R. § 190.215(a)-(e).\n\n\n\n2\nAnalysis\nItem 1\nIn its Petition, NuStar argues that the finding made in Item #1 of the Final Order should be\ndismissed for two of the three releases. Specifically, NuStar argues that the second and third\nreleases met the maintenance exception to the reporting requirement and therefore were not\nviolations. NuStar does not request dismissal of the first release, a spill of 50 gallons at its\nGeneva station, which occurred after the operator failed to close the block and bleed valve prior\nto start up. NuStar admitted in its Response that this spill occurred during normal operational\nactivities.2\nIn its Petition, NuStar argues that the second release resulted from a maintenance activity\nbecause the valve that was left partially open occurred during normal maintenance inspections of\nthe equipment.3 This release occurred at the Elm Creek Pump station in which a sump\noverflowed releasing 89 gallons of fuel oil. NuStar argues that the third release also resulted\nfrom a maintenance activity since Respondent was testing newly installed equipment at the time\npump, resulting in a release of 50 gallons.\nof the release.4 This release occurred at the El Dorado Station during the start up of the mainline\nI have reviewed NuStar’s arguments in its Petition and I do not find them compelling. In the\nFinal Order, I made a finding that all three spills cited in the Notice, including the two referenced\nthat any information provided by NuStar in its Petition supports a reversal of my decision in the\nFinal Order.\nabove, did not meet the maintenance exception and should have been reported.5 I do not find\nAs stated in the Final Rule for § 195.50, the maintenance exception is intended to apply to\n“…spills [that] occur regularly upon the opening of the pipelines for insertion of spheres, smart\npigs, or for routine inspections.”6 “Any non-maintenance spill of five gallons or more must be\nreported.”7 The second release occurred when a sump overflowed and not during a maintenance\nactivity. In fact, NuStar acknowledged in its Response that the second release occurred “after\nthe completion of the maintenance inspections and restart of the pipeline”.8\nThis exception was\nnot intended to cover accidental valve closures that occur after a maintenance activity has\nconcluded. Failing to shut a valve at the conclusion of maintenance is not a maintenance activity\n2 Response, Exhibit A, page 2.\n3 Petition, at 5.\n4 Id.\n5 Final Order, at 4.\n6 Pipeline Safety: Hazardous Liquid Pipeline Accident Reporting Revisions”, 67 Fed. Reg. 831 (January 8, 2002).\n7 Id.\n8 Response, Exhibit A, page 3 (emphasis added).\n\n\n\n3\nbut rather an error on the part of the company and is the proximate cause of the release.\nTherefore, this spill should have been reported and the finding of violation issued in the Final\nOrder stands.\nAs for the third spill, the 50 gallon spill at the El Dorado Station occurred when NuStar\npersonnel were repairing the motor to the #2 mainline pumping unit. According to NuStar, the\nunit was started up to test for proper installation and alignment.9 During this test, the release\noccurred. In its Petition, NuStar maintains that this release occurred as result of maintenance\nbecause if the test for proper installation and alignment had not occurred, there would not have\nbeen a release. However, as noted in the Final Order, NuStar personnel confirmed during the\nOPS inspection that this release occurred due to the failure of unit #2, specifically the settings of\nthe relief valve and case pressure during startup operations.\n10\nThe OPS Central Region has established that this particular release met the requirements of §\n195.50 in that it was a release of hazardous liquid of five gallons or more. Certainly, the restart\nof a line can be related to maintenance in certain circumstances but NuStar has not provided\nenough information to support its argument that the maintenance exception applies in this\nspecific situation.\nNuStar makes several other arguments in support of its position including the reasonableness of\nthe agency’s interpretation, reliance on guidance material, and use of the word ‘intentional’.\nFirst, NuStar’s asserts that a Federal agency cannot issue interpretations within an enforcement\ndecision. To the contrary, an agency is “not precluded from announcing new principles in an\nadjudicative proceeding. ”11 PHMSA can and does develop such interpretations in its\nenforcement decisions.\n12 Federal courts have held that an order issued in an adjudicatory\nproceeding is not subject to the notice and comment procedures of the Administrative Procedure\nAct.13\nSecond, NuStar states in its Petition, that “[p]ast agency opinions related to § 195.50 have not\nmentioned, much less applied, these “planned or expected” or “intended” and “during a\nmaintenance or normal activities” requirements.\n” However, NuStar failed to cite to any specific\npipeline interpretation to support this statement.\n14\n9 Petition, at 5.\n10 Violation Report, at 3.\n11 NLRB v. Bell Aerospace Co., 416 U.S. 267, 292-94 (1974).\n12 See In the Matter of ANR Pipeline Company, Final Order, CPF No. 3-2007-1006)(available at\nwww.phmsa.dot.gov/pipeline/enforcement).\n13 R/T 182, LLC v. FAA, 519 F.3d 307, 310 (6th Cir. 2008) (emphasis added).\n14 PHMSA’s interpretations are located at http://www.dot.gov/phmsa.\n\n\n\n4\nThird, in the Final Order, I reviewed the regulatory history of § 195.50 and referred to guidance\nmaterials including the instructions for the Accident Report to support the agency’s position.15\nNuStar argued in its Petition that this reference to the Accident Report instructions was improper\nand cited the Explorer Pipeline Company (CPF No. 3-2009-5018) case to discount this\ninformation.16 Specifically, NuStar cited to a statement in Explorer that the forms “are not\ninterpretations of the regulations and the instructions are simply provided to assist operators in\nfilling out the forms properly.”17 This quote is from the summary of the OPS Central Region’s\nargument and not my finding. The exact quote is that “PHMSA also contended that its annual\nreporting forms are not interpretations of the regulations and the instructions are simply provided\nto assist operators in filling out the form properly.”18 I stated in Explorer that “I find that\nof the OPS forms are guidance and not binding regulation. My reference to them in the Final\ninstructions to complete forms are guidance, not binding regulation.”19 The instructions to any\nOrder was consistent with this approach.\nFinally, NuStar objects to my use of the word “intentional” in the Final Order to describe the\ntype of spills that would be included under the maintenance exception. Specifically, I stated –\nCertainly, the agency’s intention was to exclude planned or expected\nmaintenance spills that occurred from opening the line. The\ninstructions for the Accident Report (PHMSA Form 7000-1) explicitly\nstate that “hazardous liquid releases during maintenance or other\nroutine activities need not be reported if the spill was less than 5\nbarrels, not otherwise reportable under 49 C.F.R. § 195.50, and did not\nresult in water pollution as described by 49 C.F.R. § 195.52(a)(4).”20\nNuStar’s three spills were certainly not planned and did not occur\nduring maintenance activities. Rather, the spills occurred during a\nstart up of the pipe and occurred as a result of personnel error after the\nmaintenance activity had concluded….. As stated above, the exception\nis intended to capture only those spills that are planned or intended\nduring maintenance. If the Section 195.50(b) exception were intended\nto include all spills that were in any way related to maintenance, then\nnumerous spills would go unreported.21\n15 Final Order, at 3-4.\n16 In the Matter of Explorer Pipeline, CPF No. 3-2009-5018 (July 22, 2011).\n17 Petition, at 3 (citing In the Matter of Explorer Pipeline, CPF No. 3-2009-5018, at 5).\n18 CPF No. 3-2009-5018, at 5.\n19 Id.\n20 Instructions for Form PHMSA F 7000-1 (1-2001) (emphasis added) located at http://www.phmsa.dot.gov.\n21 Final Order, at 4.\n\n\n\n5\nThe intent of the exception is to capture small spills that “occur upon the opening of the\npipeline”. These spills occur regularly during maintenance activities. Obviously, the agency is\nnot condoning intentional spills that do not fit this description.\nHaving reviewed the evidence provided in the Notice of Probable Violation, Violation Report,\nResponse and Petition, I find that the violation stands. NuStar’s petition for Item #1 is denied.\nItem 3\nNuStar also argues in its Petition that the $27,900 civil penalty assessed in Item #3 should be\nreduced to 3/5 of the proposed civil penalty or $17,220. NuStar states that two of the five test\nstations were previously dismissed; therefore, the civil penalty should be reduced to 3/5 of the\noriginal amount. As explained in the Final Order, the proposed civil penalty was reduced to\naccount for the removal of these test stations. Specifically, I stated that “the civil penalty amount\nis reduced to reflect that only three test stations were missed instead of the proposed five.”22 In\naddition, I stated that “…the foundation of the penalty amount is based on the gravity of the\nviolation, the circumstances surrounding the violation including the duration of the missed tests,\nand the prior history of the operator.”23 NuStar’s failure to inspect these three test stations for\namount was already reduced to reflect the removal of these two test stations from the finding of\nviolation, and NuStar has not presented any new information in its Petition to support its\nargument for a further reduction, the assessed civil penalty amount stands. NuStar’s petition on\nthis Item is denied.\nseveral consecutive years was factored into the civil penalty amount.24 Since the civil penalty\nPETITION DENIED\nBased on a review of the relevant portions of the record, and for the reasons stated above, I am\ndenying NuStar’s petition. The Final Order is affirmed without modification.\nThis Decision is the final administrative action in this proceeding.\n_____________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n22 Final Order, at 6.\n23 Id.\n24 Id.\n\n320115005_Closure_07092013_text.pdf\n\nCERTIFIED MAIL - RE","truncated":true,"body_characters":51258}