{"operation":"document","citation":"CPF 320116001","title":"SUPERIOR REFINING COMPANY LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-07-25","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.234(e)(4), 195.404(a)(2), 195.412(a), 195.428(a), 195.442(c)(1), 195.505(b), 195.581(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320116001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320116001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320116001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320116001","body":"Notice of Probable Violation involving SUPERIOR REFINING COMPANY LLC. PHMSA's enforcement data identifies the cited regulations as 195.234(e)(4),  195.404(a)(2),  195.412(a),  195.428(a),  195.442(c)(1),  195.505(b),  195.581(a). The case was opened on 2011-07-25 and is reported as closed as of 2014-01-13. Proposed civil penalty: $157,900. Assessed civil penalty: $151,250. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320116001_Closure_01132014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320116001/320116001_Closure_01132014.pdf\n\n320116001_Closure_01132014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320116001/320116001_Closure_01132014_text.pdf\n\n320116001_Decision on Petition For Reconsideration_03152013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320116001/320116001_Decision%20on%20Petition%20For%20Reconsideration_03152013.pdf\n\n320116001_Decision on Petition For Reconsideration_03152013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320116001/320116001_Decision%20on%20Petition%20For%20Reconsideration_03152013_text.pdf\n\n320116001_Final Order_10122012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320116001/320116001_Final%20Order_10122012.pdf\n\n320116001_Final Order_10122012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320116001/320116001_Final%20Order_10122012_text.pdf\n\n320116001_Operator Response Notice_08252011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320116001/320116001_Operator%20Response%20Notice_08252011.pdf\n\n320116001_Closure_01132014_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 13, 2014\nMr. Steve Cossè\nPresident and Chief Executive Officer\nMurphy Oil Corporation\n200 Peach Street\nEl Dorado, Arizona 71730\nMr. F. William Grube\nChief Executive Officer\nCalumet Specialty Products Partners, LP\n2780 Waterfront Parkway East Drive, Suite 200\nIndianapolis, Indiana 46214\nRe: CPF 3-2011-6001\nGentlemen:\nOn October 12, 2012, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) issued to Murphy Oil Corporation and Calumet Specialty Products Partners, LP\na Final Order in the above-referenced case. This Order included a Compliance Order and\nCivil Penalty assessment. Based on our review of the documentation you provided and\nconfirmation of payment of the civil penalty, it has been determined that you have\ncomplied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to\nthe matters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nLinda Daugherty\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\n\n320116001_Final Order_10122012_text.pdf\n\nOCTOBER 12, 2012\nMr. Steve Cossé\nPresident and Chief Executive Officer\nMurphy Oil Corporation\n200 Peach Street\nEl Dorado, AR 71730\nMr. F. William Grube\nChief Executive Officer\nCalumet Specialty Products Partners, LP\n2780 Waterfront Parkway East Drive, Suite 200\nIndianapolis, IN 46214\nRe: CPF No. 3-2011-6001\nGentlemen:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $157,900 against Murphy Oil Corporation. It also\nspecifies actions that need to be taken by Calumet Specialty Products Partners, LP, the current\nowner, to comply with the pipeline safety regulations. The penalty payment terms are set forth\nin the Final Order. When the civil penalty has been paid, this enforcement action will be closed.\nService of the Final Order by certified mail is deemed effective upon the date of mailing, or as\notherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator for Pipeline Safety\nEnclosure\ncc: Mr. David Barrett, Director, Central Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Steve Hunkus, Vice President, World Wide Refining, Murphy Oil Corporation,\n200 Peach Street, El Dorado, Arkansas 71731\nMr. David J. Podratz, Manager, Superior Refinery, Calumet Specialty Products Partners,\nLP, 2407 Stinson Avenue, Superior, Wisconsin 54880\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 )\nMurphy Oil Corporation, )\nRespondent, )\nand )\n)\n)\nCalumet Specialty Products Partners, LP. )\n__________________________________________)\n) CPF No. 3-2011-6001\nFINAL ORDER\nOn May 18-21 and June 2-5, 2010, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Murphy Oil\nCorporation’s (Murphy or Respondent) Superior Unit in Superior, Wisconsin.1 The Superior\nUnit consists of the Superior Refinery, three breakout tanks, and approximately 6.5 miles of\npipeline within residential and industrial areas near Superior, Wisconsin.2 The pipeline is\nlocated in a High Consequence Area (HCA).3\nAs a result of the inspection, the Director, Central Region, PHMSA (Director), issued to\nRespondent, by letter dated July 25, 2011, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to\n49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nMurphy had committed various violations of 49 C.F.R. Part 195 and proposed assessing a civil\npenalty of $157,900 for the alleged violations. The Notice also proposed ordering Respondent to\ntake certain measures to correct the alleged violations. The warning item required no further\naction but warned the operator to correct the probable violation or face potential enforcement\naction.\nMurphy responded to the Notice by letter dated August 25, 2011 (Response). The company did\n1 The Superior Unit was purchased by Calumet Specialty Products Partners, LP (Calumet), on September 30, 2011.\nSee Murphy Oil Corporation, Quarterly Report (Form 10-Q), at 8 and Exhibit 2.1 (filed November 4, 2011).\n2 Pipeline Safety Violation Report (Violation Report), dated July 25, 2011 (on file with PHMSA) at 1.\n3 “High Consequence Areas” are defined as commercially navigable waterways, high population areas, other\npopulated areas, and unusually sensitive areas. See 49 C.F.R. § 195.450.\n\n\n\n2\nnot contest the allegations of violation but provided an explanation of its corrective actions and\nrequested that several of the proposed civil penalties be reduced. Respondent did not request a\nhearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195 as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.234(e)(4), which states:\n§ 195.234 Welds: Nondestructive testing.\n(a) . . .\n(e) All girth welds installed each day in the following locations must\nbe nondestructively tested over their entire circumference, except that\nwhen nondestructive testing is impracticable for a girth weld, it need not\nbe tested if the number of girth welds for which testing is impracticable\ndoes not exceed 10 percent of the girth welds installed that day:\n(1) . . .\n(4) Within the limits of any incorporated subdivision of a State\ngovernment; . . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.234(e)(4) by failing to\nnondestructively test over their entire circumference all girth welds located within the limits of\nan incorporated subdivision of a State government. Specifically, the Notice alleged that while\nMurphy had made 62 girth welds within city limits of Superior, Wisconsin, in October 2008,\nMurphy had nondestructively tested only seven.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.234(e)(4) by failing to\nnondestructively test over their entire circumference all girth welds located within the limits of\nan incorporated subdivision of a State government.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(2), which states:\n§ 195.404 Maps and records.\n(a) Each operator shall maintain current maps and records of its\npipeline systems that include at least the following information:\n(1) . . .\n(2) All crossings of public roads, railroads, rivers, buried utilities, and\nforeign pipelines.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(2) by failing to maintain\ncurrent maps or records of its pipeline system indicating crossings of buried utilities.\nSpecifically, the Notice alleged that Murphy’s maps and records contained no information about\nburied utility crossings, despite the fact that the pipelines were located entirely within the city\n\n\n\n3\nlimits of Superior, Wisconsin, and therefore likely to have a significant number of buried utility\ncrossings.\nRespondent did not contest this allegation of violation, and indicated in its Response that it had\nbegun to update the company’s maps with the required information. Accordingly, based upon a\nreview of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.404(a)(2) by\nfailing to maintain current maps or records of its pipeline system indicating crossings of buried\nutilities.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.412(a) which states:\n§ 195.412 Inspection of rights-of-way and crossings under navigable\nwaters.\n(a) Each operator shall, at intervals not exceeding 3 weeks, but at least\n26 times each calendar year, inspect the surface conditions on or adjacent\nto each pipeline right-of-way. Methods of inspection include walking,\ndriving, flying or other appropriate means of traversing the right-of-way.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.412(a) by failing to inspect its\npipeline right-of-way at intervals not exceeding three weeks, but at least 26 times each calendar\nyear. Specifically, the Notice alleged that Respondent did not conduct pipeline right-of-way\npatrols between April 24 and May 20, 2008, exceeding the maximum interval by six days, or\nbetween November 16 and December 15, 2008, exceeding the maximum interval by eight days.\nRespondent did not contest this allegation of violation and stated that it had changed its\ninspection interval and its operations and maintenance manual to reflect the regulatory\nrequirement.4 Accordingly, based upon a review of all of the evidence, I find that Respondent\nviolated 49 C.F.R. § 195.412(a) by failing to inspect its pipeline right-of-way at intervals not\nexceeding three weeks, but at least 26 times each calendar year.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:\n§ 195.428 Overpressure safety devices and overfill protection systems.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall, at intervals not exceeding 15 months, but at least once each calendar\nyear, or in the case of pipelines used to carry highly volatile liquids, at\nintervals not to exceed 7½ months, but at least twice each calendar year,\ninspect and test each pressure limiting device, relief valve, pressure\nregulator, or other item of pressure control equipment to determine that it\nis functioning properly, is in good mechanical condition, and is adequate\nfrom the standpoint of capacity and reliability of operation for the service\nin which it is used.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.428(a) by failing to test each item\nof pressure control equipment at intervals not exceeding 15 months, but at least once each\n4 Response at 1.\n\n\n\n4\ncalendar year. Specifically, the Notice alleged that Respondent could not produce\ndocumentation that it had tested five thermal relief valves for the five years prior to the 2010\nPHMSA inspection.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.428(a) by failing to test each\nitem of pressure control equipment at intervals not exceeding 15 months, but at least once each\ncalendar year.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.442(c)(1), which states:\n§ 195.442 Damage prevention program.\n(a) Except as provided in paragraph (d) of this section, each operator\nof a buried pipeline must carry out, in accordance with this section, a\nwritten program to prevent damage to that pipeline from excavation\nactivities. For the purpose of this section, the term “excavation activities”\nincludes excavation, blasting, boring, tunneling, backfilling, the removal\nof aboveground structures by either explosive or mechanical means, and\nother earthmoving operations.\n(b) . . .\n(c) The damage prevention program required by paragraph (a) of this\nsection must, at a minimum:\n(1) Include the identity, on a current basis, of persons who normally\nengage in excavation activities in the area in which the pipeline is located.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.442(c)(1) by failing to include in\nits written damage prevention program the identity of persons who normally engage in\nexcavation activities in the area in which the pipeline is located. Specifically, the Notice alleged\nthat Murphy’s list of excavators did not include ones from Duluth, Minnesota, and surrounding\nareas who engaged in excavation activity near Superior, Wisconsin. The Notice gave one\nspecific example of an excavator who had actually been hired by Murphy in the past but who did\nnot appear on the company’s list of excavators.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.442(c)(1) by failing to include\nin its written damage prevention program the identity of persons who normally engage in\nexcavation activities in the area in which the pipeline is located.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) . . .\n(b) Ensure through evaluation that individuals performing covered\ntasks are qualified; . . . .\n\n\n\n5\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure through\nevaluation that individuals performing covered tasks were qualified. Specifically, the Notice\nalleged that Murphy identified the performance of rectifier inspections as a covered task, but that\nsuch task had been performed by an individual not qualified under Respondent’s written operator\nqualification program. The Notice alleged that this individual had inspected each of Murphy’s\ntwo rectifiers 27 times since November 2007.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure\nthrough evaluation that individuals performing covered tasks were qualified.\nItem 8: The Notice alleged that Respondent violated 49 C.F.R. § 195.581(a), which states:\n§ 195.581 Which pipelines must I protect against atmospheric\ncorrosion and what coating material may I use?\n(a) You must clean and coat each pipeline or portion of pipeline that is\nexposed to the atmosphere, except pipelines under paragraph (c) of this\nsection.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.581(a) by failing to clean and coat\neach pipeline or portion of pipeline that was exposed to the atmosphere. Specifically, the Notice\nalleged that much of Murphy’s regulated piping at the Superior Refinery and the exposed piping\nassociated with the breakout tanks near Lake Superior were not protected from atmospheric\ncorrosion.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.581(a) by failing to clean and\ncoat each pipeline or portion of pipeline that was exposed to the atmosphere.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\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 $157,900 for the violations cited above.\n\n\n\n6\nItem 1: The Notice proposed a civil penalty of $49,600 for Respondent’s violation of\n49 C.F.R. § 195.234(e)(4), for failing to nondestructively test over their entire circumference all\ngirth welds located within the limits of an incorporated subdivision of a State government. As\nnoted above, I found that Murphy failed to nondestructively test 55 girth welds meeting these\ncriteria. Murphy did not contest the allegation. Respondent argued, however, that the penalty\nshould be reduced by 50% because Respondent immediately came into compliance upon being\ninformed of the violation and because there was no adverse impact on the environment.5\nInspection and testing of girth welds is required in the sensitive areas listed in § 195.234(e), so\nthat an operator may be able to identify integrity problems before they cause accidents.\nPresumably, this is the very reason Murphy conducted nondestructive testing on seven of the\ngirth welds. However, Murphy failed to inspect a large majority of its other girth welds. The\ngravity of the violation and culpability for the violation of an unambiguous regulation is not\nmitigated by later attempts to achieve compliance. I see no basis for reduction of the proposed\npenalty. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $49,600 for violation of 49 C.F.R. § 195.234(e)(4).\nItem 3: The Notice proposed a civil penalty of $13,300 for Respondent’s violation of\n49 C.F.R. § 195.412(a), for failing to inspect its pipeline right-of-way at intervals not exceeding\nthree weeks, but at least 26 times a calendar year. As noted above, I found that Murphy had\nexceeded the maximum inspection interval on two occasions in 2008. Murphy did not contest\nthe allegation but requested a reduction of the proposed penalty by 50%, in light of the fact it had\nconducted bi-monthly inspections in 2008 and had immediately conducted additional inspections\nafter discovery of the violation.6 Respondent also argued that no adverse effect on the\nenvironment resulted from the longer inspection interval.\nThe proposed penalty for this Item already took into account that no pipeline failure or spill had\nresulted from the violation. Furthermore, the gravity of the violation was increased due to the\nproximity of the pipeline right-of-way to environmentally sensitive HCAs. Regular inspections\nof pipeline rights-of-way enable operators to identify integrity threats before they result in\npipeline failures. Respondent is fully culpable for its documented delays in conducting\ninspections. The nature, circumstances and gravity of the violation warrant the proposed penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $13,300 for violation of 49 C.F.R. § 195.412(a).\nItem 4: The Notice proposed a civil penalty of $62,100 for Respondent’s violation of\n49 C.F.R. § 195.428(a), for failing to test each item of pressure control equipment at intervals not\nexceeding 15 months, but at least once each calendar year. Murphy neither contested the\nallegation nor presented any evidence or argument justifying a reduction in the proposed penalty.\nPressure limiting devices are critical for preventing pressure-related pipeline failures; regular\nmaintenance of such devices helps to ensure that facilities are adequately protected. Respondent\n5 Id.\n6 Id.\n\n\n\n7\nwas fully culpable for the violation, apparently operating under the impression that thermal relief\nvalves were not subject to this inspection and testing requirement. This omission lasted for at\nleast five years and could have had significant consequences if an overpressure event had\noccurred. Given the potential threat posed by the violation, I find that the nature, gravity,\ncircumstances, and duration of the violation support the proposed penalty amount. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $62,100 for violation of 49 C.F.R. § 195.428(a).\nItem 6: The Notice proposed a civil penalty of $32,900 for Respondent’s violation of\n49 C.F.R. § 195.505(b), for failing to ensure through evaluation that individuals performing\ncovered tasks were qualified. Respondent did not contest the allegation but requested a 50%\nreduction in the proposed civil penalty, in light of the fact that the individual performing the\ncovered task was competent and capable, that there had been no “adverse impacts” from the\nindividual’s lack of qualification, and that the individual was subsequently qualified to perform\nthe task immediately after Murphy’s discovery of the violation.7\nI find these arguments unpersuasive. The purpose of the qualification program is to ensure that\nindividuals performing critical safety-related tasks on pipelines are properly qualified to perform\nthose tasks. In this instance, Respondent identified the task in question as one that was required\nby Part 195 and that would affect the operation or integrity of the pipeline; therefore, the failure\nto ensure the task was performed by a properly qualified individual was a significant oversight,\nno matter how competent the individual may have actually been. The failure to ensure that an\nindividual performing covered tasks was properly qualified was in direct violation of both the\nregulation and Respondent’s own written procedures. Corrective actions taken after the violation\nwas discovered are commendable but do not warrant a reduction in the proposed penalty. I find\nthat the nature, gravity, circumstances, and duration of the violation support the proposed penalty\namount. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $32,900 for violation of 49 C.F.R. § 195.505(b).\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 $157,900.\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 $157,900 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\n7 Id. at 2.\n\n\n\n8\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 2, 4, 5, 6, and 8 in the Notice for\nviolations of 49 C.F.R. §§ 195.404(a)(2), 195.428(a), 195.442(c)(1), 195.505(b), and 195.581(a),\nrespectively. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of\nhazardous liquids or who owns or operates a pipeline facility is required to comply with the\napplicable safety standards established under chapter 601. The Director has indicated that\nMurphy took certain actions to address some of the cited violations but has not yet produced any\ndocumentation of these actions. Since Murphy no longer operates the Superior Unit and\nCalumet is now responsible for the safe operations of its pipeline facilities, PHMSA expects\nCalumet to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.404(a)(2) (Item 2), Calumet is expected to\nupdate its maps and records to reflect pipeline crossings of all buried utilities and\nmake them available to appropriate personnel.\n2. With respect to the violation of § 195.428(a) (Item 4), Calumet is expected to\ninspect and test each pressure-limiting device to determine that it is functioning\nproperly, is in good mechanical condition, and is adequate from the standpoint of\ncapacity and reliability of operation.\n3. With respect to the violation of § 195.442(c)(1) (Item 5), Calumet is expected to\nupdate its damage prevention program to include the identities of all parties that\nnormally conduct excavation activities in the area in which the pipeline is located.\n4. With respect to the violation of § 195.505(b) (Item 6), Calumet is expected to\ntrain and qualify the individuals responsible for performing the rectifier inspections\nrequired by § 195.573(c).\n5. With respect to the violation of § 195.581(a) (Item 8), Calumet is expected to\nclean and coat each pipeline or portion of pipeline that is exposed to atmospheric\ncorrosion. Respondent must develop a plan and schedule for protection of exposed\npiping.\n6. PHMSA requests that Calumet submit documentation demonstrating compliance\nwith each of these items to David Barrett, Director, Central Region, Pipeline and\nHazardous Materials Safety Administration, 901 Locust Street, Kansas City, MO\n64106, within 30 days after their completion.\n\n\n\n9\nWARNING ITEM\nWith respect to Item 7, the Notice alleged probable violations of Part 195.505(b) but did not\npropose a civil penalty or compliance order for this item. Therefore, this is considered to be a\nwarning item. The warning was for:\n49 C.F.R. § 195.505(b) (Item 7) ─ Respondent’s alleged failure to ensure through\nevaluation that individuals performing covered tasks were qualified. Specifically,\nRespondent failed to ensure that personnel installing Tapecoat – 20 coating were\nproperly qualified.\nMurphy presented information in its Response showing that it had taken certain actions to\naddress this Item.8 However, if PHMSA finds a violation of this provision, Respondent may be\nsubject 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\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\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n8 Id. at 2.\n\n320116001_Decision on Petition For Reconsideration_03152013_text.pdf\n\nMARCH 15, 2013\nMr. Steve Cossé\nPresident and Chief Executive Officer\nMurphy Oil Corporation\n200 Peach Street\nEl Dorado, AR 71730\nMr. F. William Grube\nChief Executive Officer\nCalumet Specialty Products Partners, LP\n2780 Waterfront Parkway East Drive, Suite 200\nIndianapolis, IN 46214\nRe: CPF No. 3-2011-6001\nGentlemen:\nEnclosed please find the Decision issued by PHMSA on the Petition for Reconsideration filed by\nMurphy Oil Corporation in the above-referenced case. For the reasons set forth in the Decision,\nthe petition is granted in part, denied in part, and the total civil penalty reduced to $151,250.\nPayment of the civil penalty is due within 20 days of service. When the civil penalty has been\npaid and the terms of the compliance order completed, as determined by the Director, Central\nRegion, Office of Pipeline Safety, PHMSA, this enforcement action will be closed.\nService of this decision by certified mail is deemed effective upon date of mailing, or as\notherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator for Pipeline Safety\nEnclosure\ncc: Mr. David Barrett, Director, Central Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Steve Hunkus, Vice President, World Wide Refining, Murphy Oil Corporation,\n200 Peach Street, El Dorado, Arkansas 71731\nMr. David J. Podratz, Manager, Superior Refinery, Calumet Specialty Products Partners,\nLP, 2407 Stinson Avenue, Superior, Wisconsin 54880\nKevin J. Lipson, Esquire, DLA Piper LLP\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__________________________________________\nIn the Matter of )\nMurphy Oil Corporation, ) CPF No. 3-2011-6001\nPetitioner, )\nand )\n)\n)\n)\n)\nCalumet Specialty Products Partners, LP. )\n_________________________________________ )\nDECISION ON PETITION FOR RECONSIDERATION\nOn October 12, 2012, pursuant to 49 U.S.C. § 60118 and 49 C.F.R. § 190.213, the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), issued a\nFinal Order in this proceeding, finding that Murphy Oil Corporation (Murphy or Petitioner) had\ncommitted various violations of 49 C.F.R Part 195. These findings of violation arose from an\non-site pipeline safety inspection of the facilities and records of Murphy’s Superior Unit in\nSuperior, Wisconsin.1 The Superior Unit consists of the Superior Refinery, three breakout tanks,\nand approximately 6.5 miles of pipeline within residential and industrial areas near Superior,\nWisconsin.2 The pipeline is located in a High Consequence Area (HCA).3\nThe Director, Central Region, OPS (Director), issued a Notice of Probable Violation, Proposed\nCivil Penalty, and Proposed Compliance Order (Notice) to the Petitioner by letter dated\nJuly 25, 2011. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nMurphy had committed various violations of 49 C.F.R. Part 195 and proposed assessing a civil\npenalty of $157,900 for the alleged violations. Murphy responded to the Notice by letter dated\nAugust 25, 2011 (Response). The company did not contest the allegations of violation but\nprovided an explanation of its corrective actions and requested that several of the proposed civil\npenalties be reduced.\nThe Final Order made findings of violation and assessed a total civil penalty of $157,900 for the\nviolations. The Final Order also specified actions that needed to be taken by Calumet, the\n1 The Superior Unit was purchased by Calumet Specialty Products Partners, LP (Calumet), on September 30, 2011.\nSee Murphy Oil Corporation, Quarterly Report (Form 10-Q), at 8 and Exhibit 2.1 (filed November 4, 2011)\n(available at http://www.murphyoilcorp.com/ir/filings.aspx?source=1002&fg=23, last accessed on March 11, 2013).\n2 Pipeline Safety Violation Report (Violation Report), dated July 25, 2011 (on file with PHMSA) at 1.\n3 “High Consequence Areas” are defined as commercially navigable waterways, high population areas, other\npopulated areas, and unusually sensitive areas. See 49 C.F.R. § 195.450.\n\n\n\ncurrent owner of the pipeline system, to comply with the pipeline safety regulations (Compliance\nOrder).\nPursuant to 49 C.F.R. § 190.215, a respondent may petition PHMSA for reconsideration of a\nfinal order. PHMSA does not consider repetitious information, arguments, or petitions, but may\nconsider additional facts or arguments, provided that the respondent submits a valid reason why\nsuch information was not presented prior to issuance of the final order. PHMSA may grant or\ndeny, in whole or in part, a petition for reconsideration without further proceedings, or may\nrequest additional information, data, and comment as deemed appropriate. The filing of a\npetition stays the payment of any civil penalty assessed, but does not stay any required corrective\naction.\nI. Decision\nIn its Petition, Murphy did not contest any of the findings of violation in the Final Order, but\nrequested reconsideration of the civil penalties assessed for Items 1, 3, and 6. As noted above,\n49 C.F.R. § 190.215 provides that PHMSA will not “consider repetitious information, arguments\nor petitions” in a petition for reconsideration. Upon careful review of Murphy’s petition for a\nreduction of the three penalties, I cannot discern any new information or arguments that were not\npreviously submitted in the company’s Response. Therefore, I find the Petition to be without\nmerit on procedural grounds.\nNotwithstanding the repetitious nature of the Petition, I have reviewed and reconsidered\nMurphy’s arguments for penalty reductions. As discussed more fully below, I affirm the\npenalties assessed for Items 1 and 6, but reduce the penalty for Item 3.\nII. Discussion\nIn assessing each of the civil penalties in the Final Order, I considered the nature, circumstances,\nand gravity of the violation, including adverse impacts on the environment; the degree of\nPetitioner’s culpability; the history of Petitioner’s prior offenses; Petitioner’s ability to pay the\npenalty and any effect that the penalty might have on its ability to continue doing business; and\nthe good faith of Petitioner in attempting to comply with the pipeline safety regulations. Each of\nthe three penalties is discussed in detail below.\nItem 1\nIn its Petition, Murphy requested that the civil penalty associated with this violation of\n49 C.F.R. § 195.234(e)(4) be reduced by 50% to $24,500. Murphy did not submit any new\narguments for a reduction in penalty, but reiterated the arguments and explanations made in its\nResponse. Murphy pointed to its “lack of prior offenses” and stated that its “strong compliance\nprogram ensures that Murphy will not repeat this violation in the future.”4 However, as noted in\nthe Violation Report supporting the Notice, Murphy’s compliance history was already taken into\naccount in the proposed penalty,5 and the company’s intention to not commit the same offense in\nthe future is no reason to reduce a penalty for past conduct. As the Final Order explained, “[t]he\n4 Petition at 2.\n5 Violation Report at 38.\n\n\n\ngravity of the violation and culpability for the violation of an unambiguous regulation is not\nmitigated by later attempts to achieve compliance. I see no basis for reduction of the proposed\npenalty.”\nMurphy also argued that the failure of the Final Order to either reduce the civil penalty or to\narticulate why the lack of adverse impacts associated with this violation should not prompt a\nreduction in the civil penalty rendered the penalty arbitrary and capricious.6 I disagree. The\ncivil penalty proposed by the Notice had already taken into account the fact that no pipeline\nfailure or environmental consequences resulted from this regulatory violation.7 Therefore, it was\nneither arbitrary nor capricious for the Final Order to decline to further reduce the penalty. In\naddition, Petitioner neither explained nor provided any legal authority for its due process claim.\nI find that Murphy has not presented any new information or other basis in its Petition to support\na penalty reduction. The assessed civil penalty of $49,600 stands and Murphy’s petition on this\nItem is denied.\nItem 3\nIn its Petition, Murphy requested that the civil penalty associated with this violation of\n49 C.F.R. § 195.412(a) also be reduced by 50% to $6,650. In the Final Order, I found that\nMurphy failed to inspect its pipeline right-of-way at intervals not exceeding three weeks, but at\nleast 26 times each calendar year, on two occasions in 2008. Specifically, I found that\nRespondent did not conduct pipeline right-of-way patrols between April 24 and May 20, 2008,\nexceeding the maximum interval by six days, or between November 16 and December 15, 2008,\nexceeding the maximum interval by eight days.8\nAs in its discussion of the penalty assessed for Item 1, Murphy pointed to its “lack of prior\noffenses” and stated that its “strong compliance program will prevent any future violations of\nthis requirement.”9 However, Murphy’s compliance history was already taken into account in\nthe penalty proposed by the Notice,\n10 and the company’s intention to not commit the same\noffense in the future is no reason to reduce a penalty for past conduct.\nIn its Petition, Murphy argued that the penalty was unreasonably high in light of the\ncircumstances surrounding the violations. Murphy noted that the violations were limited in\nscope and duration, and that it had in fact performed regular bi-monthly inspections of its right-\nof-way.11 While it is true that Petitioner failed to meet the prescriptive requirement of the\nregulation on two occasions, it did nevertheless conduct the other 24 required inspections during\nthe rest of the year. Due to the limited scope and duration of the violation, and having reviewed\n6 Petition at 3.\n7 Violation Report at 5.\n8 Final Order at 3.\n9 Petition at 3.\n10 Violation Report at 38.\n11 Petition at 3.\n\n\n\nthe record and reconsidered the assessment criteria, I find that a 50 percent reduction in penalty\nfor Item 3 is warranted. Accordingly, I assess Petitioner a reduced civil penalty of $6,650 and\ngrant Murphy’s petition on this Item.\nItem 6\nIn its Petition, Murphy requested that the civil penalty associated with this violation of\n49 C.F.R. § 195.505(b) also be reduced by 50% to $16,450. Murphy argued that the penalty\nassessed for this violation was “unreasonably high” because the violation “was limited to one\nindividual who was, in fact, competent to perform rectifier inspections.”12 However, the\nviolation was for the failure to ensure through evaluation that individuals performing covered\ntasks were qualified. While this violation was limited to one person, it occurred 27 times over a\nperiod of 2½ years. As the Final Order explained:\n“The purpose of the qualification program is to ensure that individuals\nperforming critical safety-related tasks on pipelines are properly qualified\nto perform those tasks. In this instance, Respondent identified the task in\nquestion as one that was required by Part 195 and that would affect the\noperation or integrity of ","truncated":true,"body_characters":43353}