{"operation":"document","citation":"CPF 320125012","title":"ONEOK NGL PIPELINE, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2012-06-15","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(c)(13), 195.402(d)(1), 195.406(b), 195.422(a), 195.428(a), 195.49, 195.569.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320125012.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320125012.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320125012","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320125012","body":"Notice of Probable Violation involving ONEOK NGL PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulations as 195.402(c)(13),  195.402(d)(1),  195.406(b),  195.422(a),  195.428(a),  195.49,  195.569. The case was opened on 2012-06-15 and is reported as closed as of 2016-12-29. Proposed civil penalty: $78,600. Assessed civil penalty: $78,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320125012_Closure Letter_12292016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320125012/320125012_Closure%20Letter_12292016.pdf\n\n320125012_Closure Letter_12292016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320125012/320125012_Closure%20Letter_12292016_text.pdf\n\n320125012_Final Order_06122014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320125012/320125012_Final%20Order_06122014.pdf\n\n320125012_Final Order_06122014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320125012/320125012_Final%20Order_06122014_text.pdf\n\n320125012_NOPV PCP PCO_06152012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320125012/320125012_NOPV%20PCP%20PCO_06152012.pdf\n\n320125012_NOPV PCP PCO_06152012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320125012/320125012_NOPV%20PCP%20PCO_06152012_text.pdf\n\n320125012_Operator Response to Notice_08202012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320125012/320125012_Operator%20Response%20to%20Notice_08202012.pdf\n\n320125012_NOPV PCP PCO_06152012_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 15, 2012\nMr. Wes Christensen\nSr. Vice President, Operations\nONEOK NGL Pipeline L.P.\n100 West 5th Street\nTulsa, Oklahoma 74103\nCPF 3-2012-5012\nDear Mr. Christensen:\nOn July 24-29, August 15-18, and 22-25, 2011, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49\nUnited States Code inspected your records for the Medford area in Medford, Oklahoma,\nand the facilities in Kansas and Oklahoma. For the North System, facilities and records\nwere inspected in Des Moines and Iowa City, Iowa.\nAs a result of the inspection, it appears that you have committed probable violations of\nthe Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items\ninspected and the probable violation(s) are:\n1. §195.49 Annual report\nEach operator must annually complete and submit DOT Form PHMSA F 7000-\n1.1 for each type of hazardous liquid pipeline facility operated at the end of the\nprevious year. An operator must submit the annual report by June 15 each\nyear, except that for the 2010 reporting year the report must be submitted by\nAugust 15, 2011. A separate report is required for crude oil, HVL (including\nanhydrous ammonia), petroleum products, carbon dioxide pipelines, and fuel\n\n\n\ngrade ethanol pipelines. For each state a pipeline traverses, an operator must\nseparately complete those sections on the form requiring information to be\nreported for each state.\nFor the North System, ONEOK NGL Pipeline L.P. (ONEOK) did not submit\nseparate annual reports for the refined products and diesel that are transported in\naddition to the HVL transported. All the mileage for these pipelines has been\nsubmitted under the HVL annual report.\nSince 2007, ONEOK has not been correctly submitting the annual report for the\nNorth System. ONEOK’s North System transports refined products and diesel on\nLines 113, 114, 119, 112, 101, and 103. However, these lines are being reported in\nthe HVL annual report. No separate reports for the refined products are being\nsubmitted. ONEOK resubmitted the annual reports for 2010 after this was brought\nto their attention during PHMSA’s inspection.\n2. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(d) Abnormal operation. The manual required by paragraph (a) of this section\nmust include procedures for the following to provide safety when operating\ndesign limits have been exceeded;\n(1) Responding to, investigating, and correcting the cause of;\n(i) Unintended closure of valves or shutdowns;\n(ii) Increase or decrease in pressure or flow rate outside normal operating\nlimits;\n(iii) Loss of communications;\n(iv) Operation of any safety device;\n(v) Any other malfunction of a component, deviation from normal\noperation, or personnel error which could cause a hazard to persons or\nproperty.\nONEOK did not follow up and correct the cause of an abnormal operation that\noccurred in the Des Moines area in 2010.\nONEOK’s procedures specify certain actions that must be taken when abnormal\noperations occur. On the North System, ONEOK personnel indicated that all\nabnormal operations are documented in the SHAVRs program. However, review of\nthe records found that the recommended actions noted during the investigation were\nnot addressed or followed up on. For example, SHAVR Report 2494 had a\nrecommendation of investigating why a HI pressure switch remained on SCADA for\nmore than an entire shift without being investigated. At the time of PHMSA’s\n2\n\n\n\ninspection, there was no documentation indicating that this was completed.\nONEOK’s response to the Letter for Request for Specific Information indicated that\nthey did look into it, but no further action was taken to remedy the situation and to\nprevent this from happening again.\n3. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(c) Maintenance and normal operations. The manual required by paragraph\n(a) of this section must include procedures for the following to provide safety\nduring maintenance and normal operations:\n(13) Periodically reviewing the work done by operator to determine the\neffectiveness of the procedures used in normal operation and maintenance and\ntaking corrective action where deficiencies are found.\nFor the Medford area and the North System, ONEOK personnel did not periodically\nreview the work done by personnel to determine the effectiveness of their\nprocedures.\nONEOK was not able to demonstrate that they periodically reviewed work done by\npersonnel to determine the effectiveness of the procedures. Furthermore, ONEOK’s\nprocedures indicated that the “ONP Business manager or designee shall be\nresponsible for conducting a review of the work done by personnel, incident, and\nnear miss reports to determine the effectiveness of operating procedures at intervals\nnot exceeding15 months, but at least once each calendar year.” ONEOK did not\nhave any records that indicated that this was being completed.\n4. §195.422 Pipeline Repairs.\n(a) Each operator shall, in repairing its pipeline systems, insure that the repairs\nare made in a safe manner and are made so as to prevent damage to persons\nor property.\nIn the Medford area, ONEOK is not making repairs in a safe manner that will\nprevent damage to persons or property.\nONEOK utilized composite sleeves to repair crack-like indications. Review of\ninline inspection dig repair reports found one report where a composite sleeve was\nused as a temporary repair on some crack-like features in the pipe seam in 2008.\nConsistent with industry standards such as ASME B31.4, the composite sleeve\nmanufacturer’s technical guidance specifically states that the composite sleeve is not\nto be used to repair cracks without grinding out the crack defect. The use of a repair\n3\n\n\n\nmethod on a defect for which its use is not permitted by the manufacturer and\nreferenced industry standards is insufficient to safely prevent damage to persons or\nproperty.\n5. §195.406 Maximum operating pressure.\n(b) No operator may permit the pressure in a pipeline during surges or other\nvariations from normal operations to exceed 110 percent of the operating\npressure limit established under paragraph (a) of this section. Each operator\nmust provide adequate controls and protective equipment to control the\npressure within this limit.\nONEOK did not provide adequate controls and protective equipment at Winterset\nStation on the North System to ensure that the pressure in the pipeline would not\nexceed the maximum operating pressure (MOP).\nOn May 23, 2008, a management-of-change (MOC) memorandum was issued to\nreduce the pressure on the Massena to Des Moines section of Line 102 because\nMOP-reducing anomalies were present. This line section included the Winterset\npump station and required that the over-pressure protection be reset to 1930 psig for\nprotection a lower MOP of 1950 psig from the original 2160 psig. On June 6, 2008,\na second MOC was issued on Line 102 after a failure occurred on May 31, 2008.\nThe June 6th MOC affected the line segment from Massena to Tabor (downstream of\nthe Massena to Des Moines section) and lowered the MOP to 1704 psig. On June\n13, 2008, a third MOC was issued to reduce the maximum operating pressure for the\nentire Line 102 from Des Moines, Iowa, to Bushton, Kansas. The June 13th MOC\nwas in addition to the June 6th MOC, and superseded the May 23, 2008, MOC.\nThe MOC issued on June 13, 2008, did not address resetting the pipeline over-\npressure protection at Winterset pump station. As a result, from the time of the June\n13, 2008, MOC to the time of the PHMSA inspection, the set points of the over\npressure protection at Winterset remained at 1930 psig, which exceeded the\nmaximum operating pressure. Review of the discharge records during this time\nperiod found that the line did not operate at pressures above 1704 psig, but did spike\nabove the 1704 psig MOP for short periods of time during pump start up and shut\ndowns. The line pressures never exceeded the 1704 psig plus 10% (1874psi).\n6. §195.428 Overpressure safety devices and overfill protection systems.\n(a) Except as provided in paragraph (b) of this section, each operator shall, at\nintervals not exceeding 15 months, but at least once each calendar year, or in\nthe case of pipelines used to carry highly volatile liquids, at intervals not to\nexceed 7½ months, but at least twice each calendar year, inspect and test each\n4\n\n\n\npressure limiting device, relief valve, pressure regulator, or other item of\npressure control equipment to determine that it is functioning properly, is in\ngood mechanical condition, and is adequate from the standpoint of capacity and\nreliability of operation for the service in which it is used.\nFor the Winterset pump station on the North System, ONEOK did not adequately\ncheck the overpressure protection device for reliability of operation at 1930 psig for\nthe service in which it is used from October 2008 to the time of PHMSA’s\ninspection.\nIn May of 2008, a Management of Change (MOC) was issued on the Des Moines to\nMassena section of Line 102 to change the over-pressure protection set points to\n1930 psig. This set-point remained in effect until the PHMSA inspection in 2011.\nThe semi-annual inspection of the transmitter utilized as the over-pressure protection\nof the new maximum operating pressure (MOP) simply documented that the\ntransmitters were calibrated and spanned, but there was no indication that the device\nactivated at the set point (1930 psig) at which the transmitters send the signals to\nshut down the pumps.\nAfter PHMSA’s onsite inspection, in September of 2011, ONEOK personnel reset\nthe physical shut down switch to protect at a MOP of 1704 psig.\n7) §195.569 Do I have to examine exposed portions of buried pipelines?\nWhenever you have knowledge that any portion of a buried pipeline is exposed,\nyou must examine the exposed portion for evidence of external corrosion if the\npipe is bare, or if the coating is deteriorated. If you find external corrosion\nrequiring corrective action under Sec. 195.585, you must investigate\ncircumferentially and longitudinally beyond the exposed portion (by visual\nexamination, indirect method, or both) to determine whether additional\ncorrosion requiring remedial action exists in the vicinity of the exposed portion.\nONEOK is not inspecting their pipelines when they utilize a vacuum excavation\nprocess to expose their lines for the purposes of confirming pipeline location.\nDuring the review of locate records and Inspect and Investigate (INI) forms, it was\nnoted that ONEOK utilizes an excavation process that vacuums out soil to locate\npipelines. This is performed to confirm the location and depth of the pipelines when\na foreign utility is intended to cross ONEOK’s pipelines. The pipeline does become\nexposed during this process; however, the exposed pipe section where the condition\nof the pipe is supposed to be recorded on the INI form was left blank. Further\ndiscussion with ONEOK personnel indicated that they were not doing the\ninspections.\n5\n\n\n\nProposed Civil Penalty\nUnder 49 United States Code, §60122, you are subject to a civil penalty not to exceed\n$100,000 for each violation for each day the violation persists up to a maximum of\n$1,000,000 for any related series of violations. The Compliance Officer has reviewed the\ncircumstances and supporting documentation involved in the above probable violation(s)\nand has recommended that you be preliminarily assessed a civil penalty of $78,600 as\nfollows:\nItem number PENALTY\n3 $32,100\n6 $46,500\nWarning Items\nWith respect to items 1, 2, 4, and 7, we have reviewed the circumstances and supporting\ndocuments involved in this case and have decided not to conduct additional enforcement\naction or penalty assessment proceedings at this time. We advise you to promptly correct\nthese items. Be advised that failure to do so may result in ONEOK NGL Pipeline L.P.\nbeing subject to additional enforcement action.\nProposed Compliance Order\nWith respect to items 3 and 5, pursuant to 49 United States Code §60118, the Pipeline\nand Hazardous Materials Safety Administration proposes to issue a Compliance Order to\nONEOK NGL Pipeline L.P. Please refer to the Proposed Compliance Order, which is\nenclosed and made a part of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the\nresponse options. Be advised that all material you submit in response to this enforcement\naction is subject to being made publicly available. If you believe that any portion of your\nresponsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with\nthe complete original document you must provide a second copy of the document with\nthe portions you believe qualify for confidential treatment redacted and an explanation of\nwhy you believe the redacted information qualifies for confidential treatment under 5\nU.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this\nconstitutes a waiver of your right to contest the allegations in this Notice and authorizes\nthe Associate Administrator for Pipeline Safety to find facts as alleged in this Notice\nwithout further notice to you and to issue a Final Order.\n6\n\n\n\nIn your correspondence on this matter, please refer to CPF 3-2012-5012 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nDavid Barrett\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n7\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to ONEOK NGL Pipelines L.P. a\nCompliance Order incorporating the following remedial requirements to ensure the\ncompliance of ONEOK NGL Pipelines L.P. with the pipeline safety regulations:\n1. In regard to Item Number 3 of the Notice pertaining to the periodic review\nof employees work to determine the effectiveness of the procedures,\nONEOK must revise O&M procedure PRC 1410.100 Section 3.1 to better\ndefine how ONEOK plans to review the work done by personnel.\nONEOK shall submit the revised procedure within 60 days of the date of\nthe Final Order.\n2. ONEOK shall immediately begin implementation of the new procedure\nand submit the records verifying compliance with the procedure within\none year after the effective date of the new procedure.\n3. In regard to Item Number 5 of the Notice pertaining to the set point of the\nover-pressure protection equipment at Winterset station, ONEOK shall\ninvestigate why the set point of the shut down devices were set too high\nand left at that set point for multiple years. This investigation shall\ninclude the review and revision (if necessary) to the Management of\nChange (MOC) procedures to determine why Winterset station was\nmissed in the MOC. The review shall also look into how ONEOK ensures\nthat the conditions of the MOC are implemented. The results of the\ninvestigation and the revised procedure must be submitted to PHMSA\nCentral Region within 180 days of the date of the Final Order.\n4. It is requested that ONEOK NGL Pipelines L.P. maintain documentation\nof the safety improvement costs associated with fulfilling this Compliance\nOrder and submit the total to David Barrett, Director, Central Region,\nPipeline and Hazardous Materials Safety Administration. It is requested\nthat these costs be reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses, and 2)\ntotal cost associated with replacements, additions and other changes to\npipeline infrastructure.\n8\n\n320125012_Final Order_06122014_text.pdf\n\nJUNE 12, 2014\nMr. Terry K. Spencer\nPresident\nONEOK NGL Pipeline, LP\n100 West 5th Street\nTulsa, Oklahoma 74103\nRe: CPF No. 3-2012-5012\nDear Mr. Spencer:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $78,600, and specifies actions that need to be taken by\nONEOK NGL Pipeline, LP, to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Central Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Linda Daugherty, Central Region Director, OPS\nMr. Wes Christensen, Sr. Vice President-Operations, ONEOK NGL Pipeline, LP\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 )\nONEOK NGL Pipeline, LP, ) CPF No. 3-2012-5012\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nBetween July 24 and August 25, 2011, 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 of ONEOK NGL Pipeline,\nLP (ONEOK or Respondent), in Kansas and Oklahoma and reviewed company records in\nMedford, Oklahoma. For the company’s North System, facilities and records were inspected in\nDes Moines and Iowa City, Iowa. ONEOK owns and operates over 2,440 miles of pipelines that\ntransport natural gas liquids from production areas throughout Oklahoma, Kansas and Texas.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated June 15, 2012, a Notice of Probable Violation and Proposed Compliance Order\n(Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with\n49 C.F.R. § 190.207, the Notice proposed finding that ONEOK had committed various violations\nof 49 C.F.R. Part 195 and ordering Respondent to take certain measures to correct the alleged\nviolations. The warning items required no further action, but warned the operator to correct the\nprobable violations or face possible enforcement action in the future.\nONEOK responded to the Notice by letter dated August 20, 2012 (Response). The company\ncontested the allegations for Items 2, 3, 5, 6, and 7 but not for Items 1 and 4. It offered\nadditional information in response to the Notice and requested that the proposed civil penalty be\nreduced. Respondent did not request a hearing 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:\n1 ONEOK Partners, LP, http://www.oneokpartners.com/Customers/NaturalGasLiquids/Pipelines/NGLPipeline.aspx\n(last accessed on February 19, 2014).\n\n\n\n2\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(c)(13), which states:\n§ 195.402 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations\nand maintenance activities and handling abnormal operations and\nemergencies. This manual shall be reviewed at intervals not exceeding 15\nmonths, but at least once each calendar year, and appropriate changes made\nas necessary to insure that the manual is effective. . . .\n(c) Maintenance and normal operations. The manual required by\nparagraph (a) of this section must include procedures for the following to\nprovide safety during maintenance and normal operations:\n(1) . . .\n(13) Periodically reviewing the work done by operator personnel to\ndetermine the effectiveness of the procedures used in normal operation and\nmaintenance and taking corrective action where deficiencies are found. . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.402(c)(13) by failing to follow, for\nthe company’s Medford area and North System, its own manual of written procedures for\nperiodically reviewing the work done by operator personnel to determine the effectiveness of the\nprocedures used in normal operation and maintenance. Specifically, the Notice alleged that\nONEOK’s procedures indicated the “[b]usiness manager or designee shall be responsible for\nconducting a review of the work done by personnel, incident, and near miss reports to determine\nthe effectiveness of operating procedures at intervals not exceeding 15 months, but at least once\neach calendar year.” According to the Notice, ONEOK failed to follow its own procedures\nrequiring such periodic reviews.\nIn its Response, ONEOK contested this allegation of violation, asserting that it conducts weekly\nmeetings with supervisors from across the operating organization to evaluate “near miss” events.\nAccording to ONEOK, the meetings are conducted to discuss and evaluate such events to\nidentify any necessary changes to operations, procedures, etc. When procedural deficiencies are\nidentified, the matter is entered into its near-miss database and tracked through to completion.\nONEOK also referred to PHMSA inspection guidance regarding documentation of accident and\nnear-miss data, submissions from employees, and meetings to discuss procedures as possible\nmeans of determining the adequacy of operator procedures.\nONEOK conceded that “execution of the procedure was not well-documented” but contended\nthat Part 195 did not require such documentation. “As such, failure to maintain documentation\ndoes not equate to failure to follow the procedure.”2\nI find Respondent’s arguments unpersuasive. First, it appears that the company’s weekly\nmeetings, as documented by “Weekly Event Review Reports,” are basically a routine means of\nnoting problems in the field and documenting discussions regarding “near miss” events. While\nsuch meetings are certainly important in identifying problem areas, they do not demonstrate\n2 Response at 5.\n\n\n\n3\ncompliance with the requirement that ONEOK have and follow a process for undertaking a\ncomprehensive or organized review of all company procedures to evaluate their overall\neffectiveness, nor do they constitute evidence of the results of such comprehensive reviews. For\nexample, ONEOK was unable to provide any annual review records from the company’s\nbusiness manager or his designee, nor any examples of suggested changes in company\nprocedures arising out of the reviews.\nSecond, ONEOK was unable to provide any information demonstrating compliance with its own\nprocedure during the PHMSA inspection and was only able to provide supporting evidence (e.g.,\nthe compliance manager’s email explaining his role in the weekly meetings) as part of its\nResponse in this proceeding.3\nThird, PHMSA’s published guidance does not suggest that routine weekly meetings, such as\nthose held by ONEOK to discuss security incidents and “near miss” events, constitute the sort of\nprocedure review contemplated by the regulation. In fact, the guidance indicates that an operator\nshould be able to produce documentation showing that it had conducted an actual analysis of its\nprocedures used in normal operation and maintenance, that it had implemented a process by\nwhich it had determined whether its procedures were adequate or not, and that it had corrected\nany procedures found to be deficient.4 ONEOK was unable to document this sort of ongoing and\ncomprehensive process.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.402(c)(13) by failing to follow, for the company’s Medford area and North\nSystem, its own procedures for periodically reviewing the work done by operator personnel to\ndetermine the effectiveness of the procedures used in normal operation and maintenance.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.406(b), which states:\n§ 195.406 Maximum operating pressure.\n(a) …\n(b) No operator may permit the pressure in a pipeline during surges\nor other variations from normal operations to exceed 110 percent of the\noperating pressure limit established under paragraph (a) of this section.\nEach operator must provide adequate controls and protective equipment to\ncontrol the pressure within this limit.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.406(b) by failing to provide\nadequate controls and protective equipment to control the pressure in a pipeline during surges or\nother variations from normal operations exceeding 110 percent of the operating pressure limit\nestablished under paragraph (a) of § 195.406. Specifically, the Notice alleged that on\nMay 23, 2008, Respondent reduced the maximum operating pressure (MOP) on Line 102\nbetween Massena to Des Moines to 1950 psig. The overpressure protection was then reset to\n3 Response at Attachment F.\n4 PHMSA Operations and Maintenance Enforcement Guidance, Part 195. See\nhttp://www.phmsa.dot.gov/foia/e-reading-room, at 43-44.\n\n\n\n4\n1930 psig at the Winterset pump station. After a failure occurred on May 31, 2008, the MOP\nwas lowered downstream of this segment to 1704 psig, but the overpressure protection set-point\nat the Winterset pump station was never reset to reflect that the MOP had been lowered\ndownstream of this segment. It remained at 1930 psig until the time of the inspection.\nONEOK contested this violation, arguing that the pipeline pressure did not exceed 110% of the\nMOP of 1704; therefore, ONEOK argued that it had fulfilled its primary performance\nobligation.5 ONEOK also argued that even though it failed to reset the Winterset pump station’s\noverprotection device as part of the company’s Management of Change (MOC) process, there\nwas no violation because the company’s control center had adjusted programmable logic control\npoints in the company’s Supervisory Control and Data (SCADA) System, which served as the\n“primary” pressure control device for the Winterset pump station. According to ONEOK, such\nadministrative change control procedures are considered under PHMSA’s enforcement guidance\nto be part of an operator’s pressure control system. Therefore, the points set at the control center\nwere enough to satisfy the requirements of § 195.406(b).6\nI disagree. First, the issue at hand is not whether the pipeline exceeded the MOP by 110% but\nwhether ONEOK failed to provide adequate controls and protective equipment to control the\npressure within this limit. Second, ONEOK’s failure to re-set the local set-points at the\nWinterset pump station left that local station inadequately protected from an overpressure event\nover a long period of time that could not be properly monitored by SCADA personnel. Third,\nPHMSA’s enforcement guidance does not suggest that an operator’s SCADA system may serve\nas a substitute for proper local protective equipment.\nBy setting the local overpressure protection above 110% of MOP, ONEOK failed to meet the\nrequirement of § 195.406. Accordingly, based upon a review of all of the evidence, I find that\nRespondent violated 49 C.F.R. § 195.406(b) by failing to provide adequate controls and\nprotective equipment to control the pressure in a pipeline during surges or other variations from\nnormal operations not to exceed 110 percent of the operating pressure limit established under\nparagraph (a) of § 195.406.\nItem 6: 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\n5 By email dated March 19, 2012, ONEOK provided PHMSA with records of the pipeline control-center discharge\npressures over the relevant time period, arguing that the records supported the conclusion that pipeline operating\npressure in the subject system did not exceed the MOP (except as allowed for surges) and at no time did it exceed\n110% of MOP.\n6 Response at 8.\n\n\n\n5\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 inspect and test\nits Winterset pump station overpressure protection device to determine that it was functioning\nproperly, was in good mechanical condition, and had adequate capacity and reliability for the\nservice in which it was used. Specifically, the Notice alleged, as discussed above in Item 5, that\nin May 2008 ONEOK issued an MOC directive regarding the Des Moines to Massena section of\nLine 102 to change the overpressure protection set-point to 1930 psig. This set-point remained\nin effect until the PHMSA inspection in 2011. According to the Notice, the semiannual\ninspection of the transmitter utilized as over-pressure protection of the new MOP simply\ndocumented that the transmitter had been calibrated and spanned, but did not establish that the\ndevice had been tested or activated at the actual set-point at which the programmable logic\ncontroller (PLC) would send the signal to shut down the pumps.\nRespondent contested this allegation of violation on two grounds. First, the company asserted\nthat PHMSA had failed to comply with the requirement in 49 C.F.R. § 190.207(b)(1) insofar as\nthe Notice did not include “a statement of the evidence upon which the allegations are based.”\nAccording to ONEOK, the Notice simply stated a “conclusion” but did not include a proper\nstatement of the evidence upon which the allegation was based.7\nI reject this argument. The Notice charged that the company’s records failed to indicate that the\noverpressure device had actually activated at the proper set-point. When read as a whole, Item 6\nof the Notice provides sufficient information to apprise Respondent of the nature of the\nallegation and the evidence upon which it is based, which meets the purpose and intent of\n§ 190.207(b)(1). In addition, detailed evidence and exhibits were attached to the supporting\nViolation Report,8 a copy of which was provided to Respondent and which provides all of the\nevidence upon which the Item is based.\nSecond, ONEOK contended that it had provided documentation to PHMSA showing the\ncompany had, in fact, inspected and tested the overpressure protection equipment to ensure it\nwas working properly. Specifically, it contended that:\n[a]t the time a technician performs the necessary inspection and test, the\ntechnician attaches a test set (an electronic instrument) to the local\nprogrammable logic controller (“PLC”) and causes the transmitter\nelectronically to detect a pressure that exceeds the maximum set point limits\n(HI and HIHI) during the process of checking the transmitter span.\nONEOK asserted that, depending on whether or not the system was in operation at the time,\n7 Response at 9.\n8 Pipeline Safety Violation Report (Violation Report), (June 15, 2012) (on file with PHMSA).\n\n\n\n6\nthese alarms would be recorded in the company’s PLC alarm log and uploaded to its SCADA\nSystem central alarm log. The company provided copies of several of these logs as examples,\nasserting that the alarms were logged at the same points at which the transmitter had been\ncalibrated and spanned. According to ONEOK, these records confirmed that the company had\nproperly inspected and tested the PLC in accordance with the regulation.\nAgain, I disagree. Under 49 C.F.R. § 195.428, every pressure regulator or other equipment\ndesigned to control pressure, including electronic equipment such as a PLC or a series of PLCs,\nmust be inspected and tested “to determine that it is functioning properly.” This means that the\ncommunication paths between the PLC and the end device (e.g., a mechanical pump or valve)\nand the pressure at which the pressure limiting device is set to activate must all be checked and\ndocumented to ensure that the PLC system is functioning properly. Although ONEOK may have\nprovided an explanation as to how its PLC system is supposed to function and may have properly\ntested the transmitter itself, there is still no indication at what pressure the PLC was tested and\nwhat, if any, readings or calibrations of pressure or signal transmittal were required to verify that\nthe PLC was properly limiting maximum operating pressure to satisfy 49 C.F.R. § 195.406.\nWithout verification of this pathway and the pressure at which the PLC actually activated, there\nis no way to ensure that the PLC device was functioning properly. Accordingly, based upon a\nreview of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.428(a) by failing to\ninspect and test its Winterset pump station overpressure protection device to determine it was\nfunctioning properly, was in good mechanical condition, and had adequate capacity and\nreliability for the service in which it was used.\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 49 U.S.C.\n§ 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 $78,600 for the violations cited above.\nItem 3: The Notice proposed a civil penalty of $32,100 for Respondent’s violation of\n49 C.F.R. § 195.402(c)(13), for failing to follow its own procedure for periodically reviewing the\nwork done by operator personnel to determine the effectiveness of the procedures used in normal\noperation and maintenance. ONEOK argued that the civil penalty for Item 3 should be\n\n\n\n7\nwithdrawn on several grounds.\nFirst, it argued that no violation occurred. As discussed above, I found that ONEOK did not\nconduct the type of generalized review of normal operating procedures called for in the\nregulation. The purpose of this regulation is not only to ensure that an operator routinely review\n“near miss” events and incidents but also to periodically review and improve all of the\ncompany’s operation and maintenance procedures.\nSecond, ONEOK asserted that the penalty assessment considerations of 49 C.F.R. § 190.225\nwere unsubstantiated in both the Notice and the Violation Report. ONEOK argued that a simple\nconclusion was made in the Violation Report as to the consideration of the gravity assessment\ncriterion, stating that “the pipeline integrity or safe operation was potentially compromised in\nothers areas.”9 However, PHMSA did address the gravity factor when it stated in the Violation\nReport: “Failure to meet this requirement that refines and improves the procedure can lead to\nconsequences that endanger the lives of the public and company personnel.”\nONEOK further claimed that the culpability factor was only addressed by the conclusory\nstatement in the Violation Report that the “operator failed to take any action or made a minimal\nattempt to comply with a regulatory requirement that was clearly applicable.” Again, PHMSA\ndid support this allegation by stating in the Violation Report that ONEOK “specified what they\nwould do to meet the requirements of 195.402(c)(13) and they did not follow that for several\nyears.”\nIn other words, the Violation Report alleged that by adopting procedures for the periodic review\nof its normal operating procedures, ONEOK had demonstrated an awareness of the regulatory\nrequirements of § 195.402(c)(13) but then failed to take any meaningful steps to implement its\nown periodic review process. This means that under PHMSA’s penalty assessment criteria, the\ncompany is not entitled to a penalty reduction on the basis of diminished culpability. As for the\ngood-faith factor, the Violation Report stated that “ONEOK did not follow the requirements of\ntheir own [Operations & Maintenance] manual.” Again, this means that ONEOK is not entitled\nto a penalty reduction based upon a reasonable interpretation of the regulation or a credible belief\nthat it had faithfully met its regulatory obligations.\nRespondent has not presented any evidence or legal argument regarding any of these penalty\nfactors that would warrant a reduction. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $32,100 for violation of\n49 C.F.R. § 195.402(c)(13).\nItem 6: The Notice proposed a civil penalty of $46,500 for Respondent’s violation of\n49 C.F.R. § 195.428(a), for failing to inspect and test its Winterset pump station overpressure\nprotection device to determine it was functioning properly, was in good mechanical condition,\nand had adequate capacity and reliability for the service in which it was used. As discussed\nabove, I found that ONEOK failed to properly test its PLC system pathways to determine that the\ncompany’s overpressure protection equipment actually functioned properly. ONEOK objected\nto the proposed penalty, raising similar arguments as those discussed above in Item 3, including\n9 Response at 12-13.\n\n\n\n8\nthat the Violation Report m","truncated":true,"body_characters":50774}