{"operation":"document","citation":"CPF 320135009","title":"EXPLORER PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2013-03-26","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.264(a), 195.569, 195.573(e), 195.589(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135009.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135009.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135009","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320135009","body":"Notice of Probable Violation involving EXPLORER PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.264(a),  195.569,  195.573(e),  195.589(c). The case was opened on 2013-03-26 and is reported as closed as of 2017-01-31. Proposed civil penalty: $91,900. Assessed civil penalty: $91,900. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320135009_Closure Letter_01312017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_Closure%20Letter_01312017.pdf\n\n320135009_Closure Letter_01312017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_Closure%20Letter_01312017_text.pdf\n\n320135009_Final Order_07092015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_Final%20Order_07092015.pdf\n\n320135009_Final Order_07092015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_Final%20Order_07092015_text.pdf\n\n320135009_NOPV PCP PCO_03262013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_NOPV%20PCP%20PCO_03262013.pdf\n\n320135009_NOPV PCP PCO_03262013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_NOPV%20PCP%20PCO_03262013_text.pdf\n\n320135009_Operator Response to Notice_05132014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_Operator%20Response%20to%20Notice_05132014.pdf\n\n320135009_Operator_Response_and_Request_for_Hearing_05012013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135009/320135009_Operator_Response_and_Request_for_Hearing_05012013.pdf\n\n320135009_NOPV PCP PCO_03262013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMarch 26, 2013\nDavid Ysebaert\nPresident and CEO\nExplorer Pipeline Company\nP.O. Box 2650\nTulsa, OK 74101\nCPF 3-2013-5009\nDear Mr. Ysebaert:\nOn November 7-10, 2011, representatives of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected\nExplorer Pipeline Company’s (EPC) pipeline system and associated operation and\nMaintenance records at your Tulsa, OK headquarters and Wood River, IL facility.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violations are:\n\n\n\n1. §195.589 What corrosion control information do I have to maintain?\n(c) You must maintain a record of each analysis, check, demonstration,\nexamination, inspection, investigation, review, survey, and test required by\nthis subpart in sufficient detail to demonstrate the adequacy of corrosion\ncontrol measures or that corrosion requiring control measures does not exist.\nYou must retain these records for at least 5 years…\nEPC did not maintain and upon request was unable to provide the atmospheric\ncorrosion monitoring documentation for those inspections required, pursuant to\n§195.583. Specifically, EPC did not maintain and was unable to provide records\ndocumenting its inspections of the Premcor Junction, Marathon 12” Junction, JD\nStreet, and Sun Mobil locations during the 2007 through 2010 inspection cycle.\nEPC provided the following written statement in response to a request from PHMSA’s\nCentral Region: “Atmospheric inspections were conducted in 2011. The supporting\ndocumentation for these 4 locations from the previous atmospheric 2007 to 2010\ninspections cycle is pending and is still being reviewed. As we discussed during the\naudit, a personnel change was made with the Corrosion Supervisor and now with our\nManager/Director of Asset Integrity. Supporting corrosion records are being reviewed\nand continue in effort to locate these 4 locations from the last inspection cycle.”\n2. §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 corrosion\nrequiring remedial action exists in the vicinity of the exposed portion.\nEPC did not perform an inspection of exposed buried pipeline in a creek bed that was\ndocumented by a contractor in a Close Interval Survey (CIS) report dated June 4,\n2008.\nCentral Region PHMSA inspectors requested documentation of performance for the\nexposed pipeline inspection as reported in June 4, 2008 CIS Report. EPC did not\nprovide documentation. At the time of visiting the reported location, at PHMSA’s\nrequest, PHMSA representatives and Explorer personnel verified that the exposed\npipeline exists as of November 9, 2011 at station number 13024+22.\n2\n\n\n\n3. 4. §195.573 What must I do to monitor external corrosion control?\n(e) Corrective action. You must correct any identified deficiency in corrosion\ncontrol as required by Sec. 195.401(b).\nEPC did not correct deficiencies identified from the Close Interval Surveys (CIS)\nperformed in 2008 on the Rolla to Gerald Station and Gerald Station to Weldon\nSprings line sections. Central Region PHMSA inspectors requested documentation of\nperformance for the correction of the deficiencies identified in reports resulting from\nmultiple Close Interval Surveys conducted in 2008. EPC personnel were unaware of\ncorrosion control deficiencies until documentation of performance was requested by\nPHMSA inspectors.\nA probable violation that cites the same conduct as the finding of violation in a Final\nOrder for the referenced case is considered a repeat offense. This probable violation is\na repeat violation of Item 2, CPF# 3-2009-5018.\n§195.264 Impoundment, protection against entry, normal/emergency venting or\npressure/vacuum relief for aboveground breakout tanks.\n(a) A means must be provided for containing hazardous liquids in the event of\nspillage or failure of an aboveground breakout tank.\nEPC did not provide a means for containing hazardous liquids in the event of spillage\nor failure of one aboveground breakout tank. PHMSA inspectors observed the\nconstruction configuration of the tank at Gerald pump station and requested\ndocumentation supporting the authorization of operating under the current\nconfiguration. EPC did not provide documentation.\nEPC provided the following written statement in response to a request from PHMSA’s\nCentral Region, “The 470-barrel tanks at the Gerald and Lebanon Pump Stations are\nassociated with the original 1970-1971 construction of the pipeline system.” In\naddition the response stated that “…the product in the tanks can re-inject into the\npipeline.”\nEffective April 1, 1970, Part 195 Original Document, states the following:\n§ 195.264 Above ground tanks.\n(a) A means must be provided for containing liquids in the event of spillage or tank\nfailure.\nEPC constructed the line in 1970 and 1971 with its first shipment October 25, 1971.\nTherefore, EPC did not provide the required containment per the regulation in effect.\n3\n\n\n\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a\nrelated series of violations. For violations occurring prior to January 4, 2012, the maximum\npenalty may not exceed $100,000 per violation per day, with a maximum penalty not to\nexceed $1,000,000 for a related series of violations. The Compliance Officer has reviewed the\ncircumstances and supporting documentation involved in the above probable violation(s) and\nhas recommended that you be preliminarily assessed a civil penalty of $91,900 as follows:\nItem number PENALTY\n1 $17,600\n2 $22,500\n3 $51,800\nProposed Compliance Order\nWith respect to items 2, 3, and 4 pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to Explorer\nPipeline Company. Please refer to the Proposed Compliance Order, which is enclosed and\nmade 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 response\noptions. Be advised that all material you submit in response to this enforcement action is\nsubject to being made publicly available. If you believe that any portion of your responsive\nmaterial qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete\noriginal document you must provide a second copy of the document with the portions you\nbelieve qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue a Final\nOrder.\nIn your correspondence on this matter, please refer to CPF 3-2013-5009 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\n4\n\n\n\nSincerely,\nDavid Barrett\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n5\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 Explorer Pipeline Company a Compliance\nOrder incorporating the following remedial requirements to ensure the compliance of Explorer\nPipeline Company with the pipeline safety regulations:\n1. 2. 3. 4. 5. In regard to Item Number 2 of the Notice pertaining to EPC not performing an\ninspection of exposed buried pipeline in a creek bed that was documented by a\ncontractor in a Close Interval Survey (CIS) report dated June 4, 2008 (24”\nLebanon to Rolla Station), Explorer must examine the exposed portion of\npipeline for evidence of deteriorated or bare pipe. In the event the operator\nfinds external corrosion requiring corrective action under Sec. 195.585, the\noperator must investigate circumferentially and longitudinally beyond the\nexposed portion (by visual examination, indirect method, or both) to determine\nwhether additional corrosion requiring remedial action exists in the vicinity of\nthe exposed portion.\nIn regard to Item Number 3 of the Notice pertaining to not demonstrating\nperformance for the correction of the deficiencies identified in multiple Close\nInterval Surveys reports, which were conducted in 2008., Explorer must correct\nall the “Off CP Levels Dip Below 850” deficiencies identified in the Coastal\nCorrosion Control, Inc.’s Close Interval Survey Reports dated June 26, 2008\n(24” Gerald to Weldon Springs), and July 21, 2008 (24” Rolla to Gerald\nStation) and demonstrate that cathodic protection is currently adequate.\nIn regard to Item Number 4 of the Notice pertaining to not providing a means\nfor containing liquids in the event of spillage or tank failure, within 30 days of\nissuance of the Final Order Explorer must submit a plan and schedule, for\napproval by the Director – Central Region, to install a method of containment\nfor all above ground breakout tanks.\nExplorer Pipeline Company shall within 90 days from the date of issuance of\nthe Final Order complete all remedial requirements of this Proposed\nCompliance Order and notify in writing the Director, Central Region of the\ncompletion of all remedial requirements along with documentation of\ncompletion.\nIt is requested (not mandated) that Explorer Pipeline Company maintain\ndocumentation of the safety improvement costs associated with fulfilling this\nCompliance Order and submit the total to Director, Central Region. It is\nrequested that these costs be reported in two categories: 1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses, and 2)\ntotal cost associated with replacements, additions and other changes to pipeline\ninfrastructure.\n6\n\n320135009_Closure Letter_01312017_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 31, 2017\nMr. Tom Jensen\nPresident and CEO\nExplorer Pipeline Company\nP.O. Box 2650\nTulsa, OK 74101\nCPF 3-2013-5009\nDear Mr. Jensen:\nOn July 9, 2015, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Explorer Pipeline Company a Final Order in the above-referenced case. This Order\nincluded a Compliance Order and Civil Penalty assessment. Based on our review of the\ndocumentation you provided and confirmation of payment of the civil penalty, it has been\ndetermined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\n\n320135009_Final Order_07092015_text.pdf\n\nJuly 9, 2015\nMr. Tom Jensen\nPresident and CEO\nExplorer Pipeline Company\nP.O. Box 2650\nTulsa, OK 74101\nRe: CPF No. 3-2013-5009\nDear Mr. Jensen:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $91,900, and specifies actions that need to be taken by\nExplorer Pipeline Company to comply with the pipeline safety regulations. The penalty payment\nterms are set forth in the Final Order. When the civil penalty has been paid and the terms of the\ncompliance order completed, as determined by the Director, Central Region, OPS, this\nenforcement action will be closed. Service of the Final Order is made pursuant to 49 C.F.R. §\n190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Allan Beshore, Director, Central Region, Office of Pipeline Office\nMr. Kevin Brown, DOT Administrator, Explorer Pipeline Company\nP.O. Box 2650, Tulsa, OK 74101\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 )\nExplorer Pipeline Company, ) CPF No. 3-2013-5009\n)\n)\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nOn November 7-10, 2011, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted a safety inspection of the pipeline system and associated records of Explorer Pipeline\nCompany (Explorer or Respondent) in Oklahoma and Illinois.\n1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued a Notice of\nProbable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice) on March\n26, 2013. In accordance with 49 C.F.R. § 190.207, the Notice alleged that Respondent had\ncommitted four violations of the pipeline safety regulations in 49 C.F.R. Part 195. The Notice\nproposed a civil penalty of $91,900 and proposed that corrective action be taken.\n2\nExplorer responded to the Notice by letter dated May 1, 2013 (Response). In its Response,\nExplorer contested one of the alleged violations and requested a hearing. Explorer provided a\nsummary of its position and additional materials in two pre-hearing submissions dated October 3,\n2013 (First Pre-hearing Submission), and January 17, 2014 (Second Pre-hearing Submission). In\naccordance with 49 C.F.R. § 190.211, a hearing was held April 16, 2014, in Kansas City,\nMissouri, before a Presiding Official from the Office of Chief Counsel, PHMSA. The Presiding\nOfficial attended by video teleconference pursuant to § 190.211(c). Explorer submitted a post-\nhearing summary on May 13, 2014 (Post-hearing Summary).\n1 Explorer operates approximately 1,800 miles of pipeline transporting refined petroleum products from Texas to\nstates in the Midwest, as reported for calendar year 2013 pursuant to 49 C.F.R. § 195.49.\n2 The Notice was issued in conjunction with a separate Notice of Amendment (CPF No. 3-2013-5010M). An Order\nDirecting Amendment in that case is being issued separately.\n\n\n\nCPF No. 3-2013-5009\nPage 2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent committed four violations of the pipeline safety standards in\n49 C.F.R. Part 195. Respondent did not contest the violations alleged in Items 1, 2, and 4, which\nare discussed first. Item 3, which is contested, is discussed next.\nUncontested Items\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.589(c), which states:\n§ 195.589 What corrosion control information do I have to\nmaintain?\n(a) . . . .\n(c) You must maintain a record of each analysis, check, demonstration,\nexamination, inspection, investigation, review, survey, and test required\nby this subpart in sufficient detail to demonstrate the adequacy of\ncorrosion control measures or that corrosion requiring control measures\ndoes not exist. You must retain these records for at least 5 years, except\nthat records related to §§ 195.569, 195.573(a) and (b), and 195.579(b)(3)\nand (c) must be retained for as long as the pipeline remains in service.\nThe Notice alleged that Respondent violated § 195.589(c) by failing to maintain a record of each\natmospheric corrosion inspection for at least 5 years. Respondent did not have records\ndocumenting certain atmospheric corrosion inspections performed between 2007 and 2010.\nRespondent did not contest the alleged violation and explained that it has made improvements to\nits recordkeeping system. Having reviewed the record, PHMSA finds Respondent violated\n§ 195.589(c) as alleged in the Notice.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.569, which states:\n§ 195.569 Do I have to examine exposed portions of buried\npipelines?\nWhenever you have knowledge that any portion of a buried pipeline is\nexposed, you must examine the exposed portion for evidence of external\ncorrosion if the pipe is bare, or if the coating is deteriorated. If you find\nexternal corrosion requiring corrective action under § 195.585, you must\ninvestigate circumferentially and longitudinally beyond the exposed\nportion (by visual examination, indirect method, or both) to determine\nwhether additional corrosion requiring remedial action exists in the\nvicinity of the exposed portion.\nThe Notice alleged that Respondent violated § 195.569 by failing to examine an exposed portion\nof buried pipeline. Records from a close interval survey performed in June 2008 identified an\nexposed portion of pipeline in a creek. During the OPS inspection in November 2011, the same\n\n\n\nCPF No. 3-2013-5009\nPage 3\nportion of pipeline was still exposed. Respondent could not demonstrate that it had conducted a\ndocumented examination of the exposed pipeline as required.\nRespondent did not contest the alleged violation and explained that it has made improvements to\nits communication processes. Under the new procedures, corrosion control personnel will be\nalerted when examinations are needed for exposed pipelines. Having reviewed the record,\nPHMSA finds Respondent violated § 195.569 as alleged in the Notice.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.264(a), which states:\n§ 195.264 Impoundment, protection against entry, normal/\nemergency venting or pressure/vacuum relief for\naboveground breakout tanks.\n(a) A means must be provided for containing hazardous liquids in the\nevent of spillage or failure of an aboveground breakout tank.\nThe Notice alleged that Respondent violated § 195.264(a) by failing to provide impoundment for\none breakout tank at the Gerald Pump Station so that spillage or failure of the tank would be\ncontained.\nRespondent did not contest the alleged violation and explained that it has installed dikes at the\nfacility. Having reviewed the record, PHMSA finds Respondent violated § 195.264(a) as alleged\nin the Notice.\nContested Item\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e), which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) . . . .\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the deficiency\ninvolves a pipeline in an integrity management program under § 195.452,\nyou must correct the deficiency as required by § 195.452(h).\n§195.401 General requirements.\n(a) . . . .\n(b) An operator must make repairs on its pipeline system according to\nthe following requirements:\n(1) Non Integrity management repairs. Whenever an operator\ndiscovers any condition that could adversely affect the safe operation of its\npipeline system, it must correct the condition within a reasonable time.\nHowever, if the condition is of such a nature that it presents an immediate\nhazard to persons or property, the operator may not operate the affected\npart of the system until it has corrected the unsafe condition.\n\n\n\nCPF No. 3-2013-5009\nPage 4\nThe Notice alleged that Respondent violated § 195.573(e) by failing to correct corrosion control\ndeficiencies identified by a close interval survey (CIS). The CIS was performed in 2008 on two\npipeline sections, the Rolla to Gerald Station section and the Gerald Station to Weldon Springs\nsection. The Notice alleged that Explorer was unaware of deficiencies identified by the 2008\nCIS until they were brought to the attention of the Company during the OPS inspection in\nNovember 2011. The Notice alleged this was a repeat violation.\n3\nAt the hearing and in its written submissions, Respondent stated that there were never any\ndeficiencies in cathodic protection. Respondent contended that each of its annual cathodic\nprotection surveys conducted from 2008 through 2012 met regulatory criteria.4 Respondent\nacknowledged that the 2008 CIS results identified some locations where instant off readings\nwere less negative than the -850mv criteria, but Respondent asserted that all of those locations\nstill met the -850mV criteria or, alternatively, the 100mV shift criteria.\nSpecifically, Respondent concluded that the locations met at least one of the applicable criteria\nbased on the following considerations: (1) the annual 2008 pipe-to-soil survey conducted\nfollowing the 2008 CIS indicated potentials were more negative than -850mV; (2) an historical\nreview of the cathodic protection records were conducted and evaluated; (3) dig reports on the\npipeline were conducted and evaluated; (4) potential measurements via dig reports were\nreviewed and evaluated; (5) 2007 inline inspection data was evaluated; and (6) depolarization\nsurvey on the annual survey and native readings were evaluated and confirmed to have 100mV\nof polarization.5 Respondent noted that another operator’s use of a similar methodology to\nverify the adequacy of cathodic protection was accepted by PHMSA in a 2004 enforcement\naction.\n6\nAt the hearing on April 16, 2014, OPS reiterated its position that Explorer committed a violation\nof § 195.573(e) by failing to promptly correct corrosion control deficiencies, noting that\nRespondent never performed any actions to verify the pipeline met criteria following the 2008\nCIS until more than three years later.\nA. Applicable Safety Standards for Addressing Cathodic Protection Deficiencies\nBuried pipelines that transport hazardous liquids must have cathodic protection systems installed\nto protect the pipelines from external corrosion.\n7 A cathodic protection system with an\nimpressed current prevents corrosion by applying direct electric current to the pipeline in an\n3 The prior violation referenced was CPF No. 3-2009-5018, Item 2, 2011 WL 4351591 (Jul. 22, 2011). Final orders\ncan also be viewed on PHMSA’s website at http://www.phmsa.dot.gov/pipeline/enforcement (follow links for\nenforcement since 2002 and then for final orders issued by year).\n4 Post-hearing Summary at 2-3.\n5 First Pre-hearing Submission at 4.\n6 Response at 6-7; Post-hearing Summary at 3.\n7 § 195.563.\n\n\n\nCPF No. 3-2013-5009\nPage 5\namount sufficient to prevent metal loss to the surrounding environment.8 Operators must\nmaintain a minimum level of cathodic protection, and they must monitor the protection to ensure\nit is adequate to prevent corrosion.9\nCriteria for determining the adequacy of cathodic protection are listed in NACE SP0169-2007, a\nconsensus standard incorporated by reference at §§ 195.571 and 195.3. One of the criteria is a\nnegative potential of at least 850mV with the cathodic protection applied, known as the -850mV\ncriterion.10 Another one is 100mV or more of cathodic polarization between the structure\nsurface and a stable reference electrode contacting the electrolyte.\n11 This is known as the\n100mV criterion.\nOperators must monitor cathodic protection to ensure it complies with one or more of the\napplicable criteria.\n12 Monitoring must be performed through annual tests of the cathodic\nprotection and by using CIS, where necessary.\n13 After an operator performs a cathodic\nprotection test or survey, the operator is required to correct any “identified deficiency” under\n§ 195.573(e). In addition, § 195.401(b) states that whenever an operator discovers a condition\nthat could adversely affect safe operation, the operator must correct the condition “within a\nreasonable time.” PHMSA has previously stated that, generally, a reasonable time for an\noperator to correct an identified deficiency in cathodic protection is before the next annual\ninspection cycle.14\nB. Evidence in the Record\nPHMSA reviews the evidence to determine if Respondent violated § 195.573(e) by failing to\ncorrect within a reasonable time corrosion control deficiencies identified by the 2008 CIS.\nThe evidence in the record includes reports from the 2008 CIS. The report for the Gerald to\nWeldon Springs line section lists “Cathodic Protection Related Deficienc[ies]” at station\nnumbers 16940+35, 17816+07-17883+34, and 17916+42-17937+14.15 A separate report for the\n8 Kinder Morgan Energy Partners, L.P., CPF 4-2006-5023, Item 4 at p. 6-7, 2010 WL 6531634 (Aug. 31, 2010).\n9 §§ 195.571 and 195.573.\n10 NACE SP0169-2007, paragraph 6.2.2.1.1. An instant-off reading that is less negative than -850mV indicates\nthere is inadequate cathodic protection when using the -850mV criteria. Panhandle Energy, CPF No. 3-2010-\n1006M, Item 19 at p. 8-11, 2012 WL 7177132 (Dec. 31, 2012).\n11 NACE SP0169-2007, paragraph 6.2.2.1.3.\n12 §§ 195.571 and 195.573.\n13 § 195.573(a).\n14 See, e.g., Holly Energy Partners, L.P., CPF No. 4-2010-5007, Item 2, 2010 WL 6539186 (Oct. 18, 2010) (finding\na violation for inadequate cathodic protection readings during two consecutive years); Sunoco Logistics Partners,\nLP, CPF No. 3-2010-5012, Item 4, 2012 WL 4846329 (Aug. 30, 2012) (finding a violation for failing to address\ndeficiencies identified during CIS for more than three years).\n15 OPS Pipeline Safety Violation Report (Mar. 26, 2013), Exhibit A-3. The report also lists a number of “marginal”\ndeficiencies, but at the hearing OPS stated those deficiencies were not part of the alleged violation.\n\n\n\nCPF No. 3-2013-5009\nPage 6\nRolla to Gerald Station line section lists cathodic protection deficiencies at station numbers\n15364+02, 16087+00, 16091+00, and 16093+00.16 In total, seven deficiencies were identified.\nAccording to the reports, the deficiencies where identified due to instant off levels\nbelow -850mV.\nRespondent submitted additional cathodic protection records and other documentation. The\nrecords included: native and depolarized (or depol) readings from 1971 and 1998; annual survey\nreadings from 2008-2012; inline inspection dig reports; company procedures for cathodic\nprotection criteria; and past PHMSA enforcement cases.\n17 At the hearing, Respondent presented\na chart to show that the locations identified as deficient in the 2008 CIS report actually met the\nalternative 100mV criteria based on consideration of instant off values and the depol or native\nvalues derived in 1998.18\nC. Analysis and Findings\nHaving reviewed the evidence in the record, PHMSA finds that in 2008 Respondent performed a\nCIS of the cathodic protection system on its pipeline. As a result of the CIS, at least seven\nlocations were identified on the Rolla to Gerald Station and Gerald Station to Weldon Springs\npipeline sections that had interrupted survey readings of less than -850mV. Such readings\nindicate that cathodic protection did not meet the -850mV criteria for adequate cathodic\nprotection.\nThe seven locations identified as not meeting the -850mV criteria were “identified deficiencies”\nunder § 195.573(e). Under §§ 195.573(e) and 195.401(b), Respondent must address such\nconditions within a reasonable time by either taking corrective action to bring the cathodic\nprotection levels into compliance with the -850mV criteria, or if possible, by verifying that the\nlocations comply with a different criteria.\nThe evidence demonstrates that Respondent did neither until 2011. It was not until then that\nRespondent studied its records and concluded that in 2008 the seven locations would have met\nthe alternative 100mV criteria. Since Respondent did not verify whether the locations met an\nalternative criteria for more than three years, PHMSA finds Respondent did not fulfill its\nobligation to correct the identified deficiencies within a reasonable amount of time.\nIn its written submissions and at the hearing, Respondent argued that no deficiencies actually\nexisted because Respondent can demonstrate through an extrapolation of data performed in 2011\nthat the locations would have met the alternative 100mV criteria back in 2008.\nPHMSA finds this argument does not support dismissal of the violation. Respondent’s data\nanalysis was not performed within a reasonable amount of time as required under the\n16 Violation Report, Exhibit A-4.\n17 First Pre-hearing Submission, Exhibits.\n18 Respondent hearing exhibit (Apr. 15, 2014).\n\n\n\nCPF No. 3-2013-5009\nPage 7\nregulation.\n19 By failing to determine if the locations met an alternative criteria until 2011,\nRespondent did not comply with its regulatory obligation to address the -850mV deficiencies\nwhen they were reported in 2008.\nRespondent also argued that the extrapolation methodology it used in 2011 is similar to a\nmethodology PHMSA accepted in an earlier enforcement action involving another operator.20\nPHMSA finds the methodology Respondent used in 2011 is not dispositive, because it was not\nperformed within a reasonable amount of time as required under the code.\nD. Other Arguments Raised by Respondent\nIn addition to contesting the alleged violation, Respondent contested several factual assertions in\nthe Notice concerning the Company’s awareness of the CIS results and whether the violation\nconstituted a repeat offense.\nWith regard to the allegation in the Notice that “personnel were unaware of corrosion control\ndeficiencies,” Respondent explained that at the time of the OPS inspection, the company had just\nexperienced a change in personnel.21 The new employees within Respondent’s Asset Integrity\ngroup were not yet familiar with the CIS performed in 2008. Respondent also stated that\nperformance of the 2008 CIS was “voluntary,” so the employees might not have understood what\nthe OPS inspector was asking about.22\nReviewing the record, PHMSA finds there is a statement in evidence by the OPS inspector that\nExplorer personnel were “unaware that the 2008 CIS report deficiencies were not addressed.”23\nThis information was “attested by the following personnel . . . ” and the report listed the names\nof several employees. These statements constitute evidence that personnel did not know what, if\nany, actions were taken to address the identified deficiencies; but these statements do not support\nthe assertion that personnel were unaware of the deficiencies themselves. Since OPS did not\nproduce sufficient evidence to support the assertion in the Notice that personnel were unaware of\ncorrosion control deficiencies, PHMSA withdraws the assertion. Withdrawal of this statement\nhas no impact on the finding that Respondent failed to address identified deficiencies within a\nreasonable amount of time as required under the code.\nFinally, Respondent argued that even if PHMSA were to find a violation in this case, it would\nnot be a repeat offense. Respondent reasoned that when Explorer was previously found in\n19 At the hearing, OPS also questioned the validity of Respondent’s data analysis and extrapolation. Regardless of\nthe method’s validity, however, it was performed long after the regulation required.\n20 Response at 3-4; Post-hearing Summary at 3, citing ExxonMobil Pipeline Co., CPF No. 5-2003-5006, Item 3,\n2004 WL 6240956 (July 1, 2004).\n21 Notice at 3.\n22 Post-hearing Summary at 2.\n23 Violation Report at 13.\n\n\n\nCPF No. 3-2013-5009\nPage 8\nviolation of § 195.573(e), it was for two station delivery lines the company believed were\nunregulated.24\nIn the earlier case, Explorer was found to have violated § 195.573(e) by failing to correct\ndeficient cathodic protection on two separate pipelines with readings less than -850mV for many\nyears. Explorer had argued that the regulation did not apply to the two pipelines because they\nwere low-stress lines exempt from Part 195 under the exception in § 195.1(b)(4). PHMSA\ndisagreed in the final order, which was issued in July 2011, and explained that Explorer’s\nmisinterpretation of the low-stress exemption was not a valid reason for its failure to comply.\nExplorer then petitioned for reconsideration of the final order, but PHMSA did not find reason to\nwithdraw the violation or reduce the penalty.\nIn the present case, PHMSA again finds that Explorer violated § 195.573(e) by failing to take\naction to address deficient cathodic protection readings on its pipelines. This is essentially the\nsame violation as the prior case. Both cases involved a failure to timely address indications of\ndeficiencies. The fact that Respondent thought the pipelines in the prior case were low-stress\ndoes not distinguish these cases, because PHMSA rejected that interpretation. Accordingly,\nPHMSA finds the current violation is a repeat offense.\nE. Conclusion\nFor the reasons set forth above, PHMSA finds Respondent violated § 195.573(e) by failing to\ncorrect identified corrosion control deficiencies within a reasonable time on its Rolla to Gerald\nStation and Gerald Station to Weldon Springs pipeline sections.\nThe findings of violation in this Final Order will be considered prior offenses in any subsequent\nenforcement action taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122 (2011), Respondent is subject to an administrative civil penalty not to\nexceed $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for\nany related series of violations.25 The Notice proposed a total civil penalty of $91,900 for the\nviolations in Items 1, 2, and 3. The Notice did not proposed a civil penalty for Item 4.\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225,\nPHMSA must consider the following criteria: the nature, circumstances and gravity of the\n24 Response at 4 and Post-hearing Summary at 3-4, citing Explorer Pipeline Co., Final Order, CPF No. 3-2009-\n5018, Item 2, 2011 WL 4351591 (Jul. 22, 2011). See also Explorer Pipeline Co., Decision on Reconsideration, CPF\nNo. 3-2009-5018, 2012 WL 1065164 (Jan. 25, 2012).\n25 Subsequent to the actions that gave rise to this case, the Pipeline Safety, Regulatory Certainty, and Job Creation\nAct of 2011, Pub. L. No. 112-90, § 2(a), 125 Stat. 1905 (Jan. 3, 2012), increased the maximum civil penalty for a\npipeline safety violation to $200,000 per violation for each day up to a maximum of $2,000,000 for a related series.\n\n\n\nCPF No. 3-2013-5009\nPage 9\nviolation, including adverse impact on the environment; the degree of Respondent’s culpability;\nthe history of Respondent’s prior offenses; the good faith of Respondent in attempting to comply\nwith the pipeline safety regulations; and the effect on Respondent’s ability to continue in\nbusiness. In addition, PHMSA may consider the economic benefit gained from the violation and\nsuch other matters as justice may require.\nItem 1: The Notice proposed a civil penalty of $17,600 for the violation of § 195.589(c).\nRespondent did not contest the proposed penalty. Accordingly, having reviewed the record and\nconsidered the assessment criteria, Respondent is assessed a penalty of $17,600 for the violation\nof § 195.589(c).\nItem 2: The Notice proposed a civil penalty of $22,500 for the violation of § 195.569.\nRespondent did not contest the proposed penalty. Accordingly, having reviewed the record and\nconsidered the assessment criteria, Respondent is assessed a penalty of $22,500 for the violation\nof § 195.569.\nItem 3: The Notice proposed a civil penalty of $51,800 for Respondent’s violation of 49 C.F.R.\n§ 195.573(e). Respondent violated § 195.573(e) by failing to correct indications of corrosion\ncontrol deficiencies for more than three years following a CIS on its pipeline. The CIS identified\nseven deficiencies where cathodic protection did not comply with the -850mV criteria.\nRespondent did not address the identified deficiencies until 2011.\nThe proposed penalty amount was based on assertions in the Notice and Violation Report\nrelevant to the penalty assessment criteria in § 190.225. With regard to the nature, circumstances\nand gravity of the violation, the Violation Report suggested that the violation potentially\ncompromised pipeline integrity because failing to promptly address indications of inadequate\ncathodic protection may increase the likelihood of pipeline failure due to corrosion.\nWith regard to the degree of Respondent’s culpability and good faith, the Violation Report\nsuggested no reduction to the penalty under these factors because Respondent failed to take any\naction to address the identified deficiencies for more than three years.\nWith regard to the history of Respondent’s prior offenses, the Violation Report noted a total of\ntwo prior offenses in the five-year period prior to issuance of the Notice. This violation was also\na repeat offense.\nBased on a review of the evidence in the record, PHMSA finds the above information supports\nthe amount of the penalty proposed.\nAccordingly, having reviewed the record and considered the assessment criteria, PHMSA\nassesses a civil penalty of $51,800 for Respondent’s violation of § 195.573(e).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, Respondent is assessed a total civil penalty of $91,900.\n\n\n\nCPF No. 3-2013-5009\nPage 10\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.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 (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125-4915. The\nFinancial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $91,900 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nth","truncated":true,"body_characters":43939}