{"operation":"document","citation":"CPF 320135011","title":"JAYHAWK PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2013-04-05","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(i)(3), 195.452(i)(4), 195.452(j)(2), 195.452(l)(1)(ii).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135011.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135011.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135011","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320135011","body":"Notice of Probable Violation involving JAYHAWK PIPELINE LLC. PHMSA's enforcement data identifies the cited regulations as 195.452(i)(3),  195.452(i)(4),  195.452(j)(2),  195.452(l)(1)(ii). The case was opened on 2013-04-05 and is reported as closed as of 2014-03-18. Proposed civil penalty: $82,400. Assessed civil penalty: $82,400. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320135011_Closure_03182014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135011/320135011_Closure_03182014.pdf\n\n320135011_Closure_03182014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135011/320135011_Closure_03182014_text.pdf\n\n320135011_Final Order_06282013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135011/320135011_Final%20Order_06282013.pdf\n\n320135011_Final Order_06282013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135011/320135011_Final%20Order_06282013_text.pdf\n\n320135011_NOPV PCP PCO_04052013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135011/320135011_NOPV%20PCP%20PCO_04052013.pdf\n\n320135011_NOPV PCP PCO_04052013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135011/320135011_NOPV%20PCP%20PCO_04052013_text.pdf\n\n320135011_Operator Response_05032013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135011/320135011_Operator%20Response_05032013.pdf\n\n320135011_Closure_03182014_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMarch 18, 2014\nMr. James S. Loving\nPresident\nNational Cooperative Refinery Association\nJayhawk Pipeline LLC\nKaw Pipe Line Company\n2000 South Main Street\nMcPherson, Kansas 67460\nCPF 3-2013-5011\nDear Mr. Loving:\nOn June 28, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to National Cooperative Refinery Association, Jayhawk Pipeline, L.L.C., and Kaw\nPipe Line Company a Final Order in the above-referenced case. This Order included a\nCompliance 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\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\ncc: Mr. Richard S. Petersen, Vice President, Transportation,\nNational Cooperative Refinery Association\n\n320135011_NOPV PCP PCO_04052013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nApril 5, 2013\nMr. Rick Petersen\nPresident\nJayhawk Pipeline\n1391 Iron Horse Road\nMcPherson, KS 67460\nCPF 3-2013-5011\nDear Mr. Petersen:\nOn December 5-8, 2011, representatives of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code conducted an\ninspection of your Integrity Management Program (IMP) and procedures at your facilities in\nMcPherson, KS.\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 violation(s) are:\n1. §195.452 Pipeline integrity management in high consequence areas.\n(j) What is a continual process of evaluation and assessment to maintain a pipeline's\nintegrity?\n(2) Evaluation. An operator must conduct a periodic evaluation as frequently as\nneeded to assure pipeline integrity. An operator must base the frequency of\n\n\n\nevaluation on risk factors specific to its pipeline, including the factors specified in\nparagraph (e) of this section. The evaluation must consider the results of the baseline\nand periodic integrity assessments, information analysis (paragraph (g) of this\nsection), and decisions about remediation, and preventive and mitigative actions\n(paragraphs (h) and (i) of this section).\nJayhawk did not follow their process for conducting periodic evaluation of pipeline\nintegrity, including review of integrity assessment results and information analysis for five\n(5) of their liquid pipeline segments.\nJayhawk uses the form “Individual Line Review Form” to integrate all assessment\ninformation. However, five (5) individual line segments were missing the assessment\nevaluation form. The five (5) line segments that did not have the review form are as\nfollows:\nJayhawk Meade to Chase\nJayhawk Valley Center to McPherson\nNCRA Conway 8” Gas\nNCRA Conway 8” Nat Gasoline\nNCRA Conway 6” Pentane\n2. §195.452 Pipeline integrity management in high consequence areas.\n(i) What preventive and mitigative measures must an operator take to protect the\nhigh consequence area?\n(3) Leak detection. An operator must have a means to detect leaks on its pipeline\nsystem. An operator must evaluate the capability of its leak detection means and\nmodify, as necessary, to protect the high consequence area. An operator's evaluation\nmust, at least, consider, the following factors–length and size of the pipeline, type of\nproduct carried, the pipeline's proximity to the high consequence area, the swiftness\nof leak detection, location of nearest response personnel, leak history, and risk\nassessment results.\nJayhawk/NCRA did not perform a leak detection capability evaluation on any of the\nJayhawk, KAW, or NCRA systems. An evaluation is required to determine the leak\ndetection system capability, and if modifications are necessary. This was identified in the\nlast IMP inspection.\n3. §195.452 Pipeline integrity management in high consequence areas.\n(i) What preventive and mitigative measures must an operator take to protect the\n2\n\n\n\nhigh consequence area?\n(4) Emergency Flow Restricting Devices (EFRD). If an operator determines that an\nEFRD is needed on a pipeline segment to protect a high consequence area in the\nevent of a hazardous liquid pipeline release, an operator must install the EFRD.\nIn making this determination, an operator must, at least, consider the following\nfactors–the swiftness of leak detection and pipeline shutdown capabilities, the\ntype of commodity carried, the rate of potential leakage, the volume that can be\nreleased, topography or pipeline profile, the potential for ignition, proximity to\npower sources, location of nearest response personnel, specific terrain between\nthe pipeline segment and the high consequence area, and benefits expected by\nreducing the spill size.\nJayhawk did not conduct an EFRD analysis of the KAW pipeline system.\nThe KAW system and the El Dorado to Halstead line were brought into the IMP program\nin 2009 subsequent to the last PHMSA IMP inspection. The El Dorado to Halstead\nsegment was evaluated and results concluded that no EFRDs were needed. However, the\nKAW system was overlooked and was not evaluated.\n4. §195.452 Pipeline integrity management in high consequence areas.\n(l) What records must be kept?\n(1) An operator must maintain for review during an inspection:\n(ii) Documents to support the decisions and analyses, including any modifications,\njustifications, variances, deviations and determinations made, and actions taken, to\nimplement and evaluate each element of the integrity management program listed in\nparagraph (f) of this section.\nJayhawk did not keep records or properly fill out the forms per their IMP Plan for multiple\nIMP processes. The following deficient or missing records were noted:\na) Jayhawk had insufficient records showing that new HCA’s were identified and\nconfirmed since 2006. Jayhawk’s process for identifying newly Identified HCA’s\nclearly require that this review be documented. Review of the Jayhawk’s Annual\nIntegrity Management Review records which is used to document the HCA review\nwas last completed in 2006. Jayhawk personnel were able to provide internal email\ncorrespondence showing that the company was actively trying to identify new HCA’s\nthrough the use of NPMS from 2010 to present; however, this is not consistent with\nthe record keeping process.\n3\n\n\n\nb) c) d) e) f) g) h) Records were not available that documented the Communication of Evaluation for\n2010. Jayhawk documents the Communication of Evaluation meetings through sign-\nup sheets at their annual IMP committee meeting. However, the sign-up sheet and\nagenda for the 2010 meeting was missing.\nRecords that indicated that a baseline assessment was done on the KAW system were\nnot available. Jayhawk utilizes a Pipe Summary Assessment E Form to evaluate and\ndocument what baseline assessment is going to be performed. No record of that form\ncould be found that showed that the assessment was conducted on the KAW system.\nJayhawk could not produce any record that showed that a continual assessment and\nevaluation was conducted on the NCRA system. They could not find a completed\nrecord for the NCRA system for 2008 and 2009.\nJayhawk could not produce any records showing that an analysis was conducted to\ndetermine the reassessment interval. Jayhawk/NCRA personnel indicated that the\nanalysis was documented on the Mitigation Information Analysis, and Reassessment\nInterval Review documentation. However, the documentation presented to PHMSA\nduring the inspection found that the forms were not filled out for the NCRA, KAW,\nand Jayhawk systems.\nJayhawk did not have records of any effectiveness reviews for the NCRA system.\nJayhawk personnel conduct annual reviews to determine the effectiveness of the IMP\nprogram. Jayhawk personnel document the reviews through typed agendas and their\nIMP Audit and Industry Benchmarking forms. No forms could be produced to show\nthat the NCRA system was evaluated during these meetings.\nJayhawk did not have records of any evaluation of performance measures for either the\nNCRA or Jayhawk systems. Jayhawk personnel indicated that the performance\nmeasures were typically documented on the Annual Integrity Form. However, they\nwere not able to provide any of those forms from 2006 to current.\nJayhawk did not document the mitigative review form for the Roth to Sullivan line\nsegment. Per Section 7 (Preventitative and Mitigative Measures of the IMP program)\nof Jayhawk/NCRA’s IMP manual, a mitigative review form should have been filled\nout for the Roth to Sullivan line segment. Company personnel could not find any\nfollow-up documentation after being risk ranked in April 2010.\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\n4\n\n\n\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 $82,400 as follows:\nItem number PENALTY\n1 $ 29,300\n2 $ 33,100\n4 $ 20,000\nProposed Compliance Order\nWith respect to item(s) 2, 3, and 4 pursuant to 49 United States Code § 60118, the Pipeline\nand Hazardous Materials Safety Administration proposes to issue a Compliance Order to\nJayhawk Pipeline. 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. All material you submit in response to this enforcement action may be made publicly\navailable. If you believe that any portion of your responsive material qualifies for confidential\ntreatment under 5 U.S.C. 552(b), along with the complete original document you must provide\na second copy of the document with the portions you believe qualify for confidential treatment\nredacted and an explanation of why you believe the redacted information qualifies for\nconfidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt\nof this Notice, this constitutes a waiver of your right to contest the allegations in this Notice\nand authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this\nNotice without further notice to you and to issue a Final Order.\nIn your correspondence on this matter, please refer to CPF 3-2013-5011 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\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 Jayhawk Pipeline a Compliance Order\nincorporating the following remedial requirements to ensure the compliance of Jayhawk\nPipeline with the pipeline safety regulations:\n1. 2. 3. 3. 4. In regard to Item Number 2 of the Notice pertaining to Jayhawk not performing\na leak detection capability analysis on any of the pipeline segments,\nJayhawk/NCRA must conduct the leak detection capability analysis on the\nJayhawk, KAW, and NCRA systems.\nIn regard to Item Number 3 of the Notice pertaining to Jayhawk not conducting\nan EFRD analysis of the KAW system. Jayhawk must perform the EFRD\nanalysis on the KAW pipeline system.\nIn regard to Item 4 of the Notice pertaining to Jayhawk not maintaining\nnumerous required Integrity Management documents and records, a document\nmanagement and records retention system must be established within 90 days\nof the Final Order. Submit the proposed document management process to the\nRegion Director within 30 days of the Final order for the Director’s approval.\nThe evaluations required in 1 and 2 of this Proposed Compliance Order must\nbe completed within 60 days of the date of the Final Order. Submit to the\nRegion Director documentation of the evaluations within 30 days of\ncompletion.\nIt is requested (not mandated) that Jayhawk Pipeline maintain documentation\nof the safety improvement costs associated with fulfilling this Compliance\nOrder and submit the total to David Barrett, Director, Central Region, Pipeline\nand Hazardous Materials Safety Administration. It is requested that these costs\nbe reported in two categories: 1) total cost associated with preparation/revision\nof plans, procedures, studies and analyses, and 2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n6\n\n320135011_Final Order_06282013_text.pdf\n\nJUNE 28, 2013\nMr. James S. Loving\nPresident\nNational Cooperative Refinery Association\n2000 South Main Street\nMcPherson, Kansas 67460\nRe: CPF No. 3-2013-5011\nDear Mr. Loving:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $82,400, and specifies actions that need to be taken by\nNational Cooperative Refinery Association and its affiliates, Jayhawk Pipeline, LLC, and Kaw\nPipe Line Company, to comply with the pipeline safety regulations. This letter acknowledges\nreceipt of payment of the full penalty amount, by wire transfer dated May 6, 2013. When the\ncompliance order has been 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: Mr. David Barrett, Director, Central Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Richard S. Peterson, Vice President, Transportation, National Cooperative Refinery\nAssociation\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 )\nNational Cooperative Refinery Association, ) CPF No. 3-2013-5011\na nonprofit corporation, )\n)\n)\n)\nRespondent. )\n_________________________________________ )\nFINAL ORDER\nOn December 5-8, 2011, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the records and integrity management program\n(IMP) of Jayhawk Pipeline, LLC (Jayhawk), in McPherson, Kansas. Jayhawk is a wholly-owned\nsubsidiary of National Cooperative Refinery Association (NCRA or Respondent).1 NCRA\noperates a refinery in McPherson and transports product from that refinery through pipelines in\nKansas, Nebraska, and Iowa.\n2 Jayhawk transports crude oil over more than 1,000 miles of\npipeline in Nebraska, Kansas, Oklahoma, and Texas.3 Jayhawk also operates pipelines for Kaw\nPipe Line Company (Kaw),4 which is majority-owned by NCRA.5 The IMP inspection covered\nthe NCRA, Jayhawk, and Kaw pipeline systems.6\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Jayhawk, by\nletter dated April 5, 2013, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed\nCompliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed\nfinding that Jayhawk had committed various violations of 49 C.F.R. § 195.452 and proposed\nassessing a civil penalty of $82,400 for the alleged violations. The Notice also proposed\n1 Jayhawk Pipeline, LLC, website (Jayhawk website), available at http://www.jayhawkpl.com/ (last accessed\nJune 6, 2013)\n2 NCRA website, available at http://www.ncra.coop/MediaCenter/Gettoknow.pdf (last accessed June 6, 2013).\n3 Jayhawk website, supra note 1.\n4 Id.\n5 NCRA website, supra note 2.\n6 Pipeline Safety Violation Report (Violation Report), (April 5, 2013) (on file with PHMSA), at 1.\n\n\n\n2\nordering Jayhawk to take certain measures to correct the alleged violations.\n7\nNCRA responded to the Notice on behalf of NCRA, Jayhawk, and Kaw, by letter dated\nMay 3, 2013 (Response). NCRA did not contest the allegations of violation and paid the\nproposed civil penalty of $82,400, as provided in 49 C.F.R. § 190.227. Payment of the penalty\nauthorizes the Associate Administrator to make findings of violation as to the uncontested items,\nwith prejudice to Respondent.\nFINDINGS OF VIOLATION\nIn its Response, NCRA did not contest the allegations in the Notice that it violated 49 C.F.R.\nPart 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)(2), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(j) What is a continual process of evaluation and assessment to\nmaintain a pipeline’s integrity?—(1) . . . .\n(2) Evaluation. An operator must conduct a periodic evaluation as\nfrequently as needed to assure pipeline integrity. An operator must base\nthe frequency of evaluation on risk factors specific to its pipeline,\nincluding the factors specified in paragraph (e) of this section. The\nevaluation must consider the results of the baseline and periodic integrity\nassessments, information analysis (paragraph (g) of this section), and\ndecisions about remediation, and preventive and mitigative actions\n(paragraphs (h) and (i) of this section).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)(2) by failing to conduct a\nperiodic evaluation of its line pipe as frequently as needed to assure pipeline integrity.\nSpecifically, the Notice alleged that NCRA’s evaluation process failed to consider the results of\nintegrity assessments and information analyses for two Jayhawk line segments and three NCRA\nline segments.\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. § 195.452(j)(2) by failing to conduct a\nperiodic evaluation of its line pipe as frequently as needed to assure pipeline integrity.\n7 Although the Notice was issued solely to Jayhawk, it alleged violations by NCRA, Jayhawk, and Kaw. Since\nNCRA controls all three entities, responded to the Notice on behalf of Jayhawk, and did not contest any of the\nviolations, this Final Order is being issued to NCRA, the parent organization.\n\n\n\n3\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(3), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(i) What preventive and mitigative measures must an operator take to\nprotect the high consequence area?—(1) . . . .\n(3) Leak detection. An operator must have a means to detect leaks on\nits pipeline system. An operator must evaluate the capability of its leak\ndetection means and modify, as necessary, to protect the high consequence\narea. An operator’s evaluation must, at least, consider, the following\nfactors—length and size of the pipeline, type of product carried, the\npipeline's proximity to the high consequence area, the swiftness of leak\ndetection, location of nearest response personnel, leak history, and risk\nassessment results.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(3) by failing to evaluate the\ncapability of its pipeline leak detection system to detect leaks that could affect high consequence\nareas (HCAs).\n8 Specifically, the Notice alleged that Respondent did not perform a leak detection\ncapability evaluation on any segment in the NCRA, Jayhawk, or Kaw pipeline systems.\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. § 195.452(i)(3) by failing to evaluate\nthe capability of its pipeline leak detection system to detect leaks that could affect HCAs.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(4), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(i) What preventive and mitigative measures must an operator take to\nprotect the high consequence area?—(1) . . . .\n(4) Emergency Flow Restricting Devices (EFRD). If an operator\ndetermines that an EFRD is needed on a pipeline segment to protect a high\nconsequence area in the event of a hazardous liquid pipeline release, an\noperator must install the EFRD. In making this determination, an operator\nmust, at least, consider the following factors—the swiftness of leak\ndetection and pipeline shutdown capabilities, the type of commodity\ncarried, the rate of potential leakage, the volume that can be released,\ntopography or pipeline profile, the potential for ignition, proximity to\npower sources, location of nearest response personnel, specific terrain\nbetween the pipeline segment and the high consequence area, and benefits\nexpected by reducing the spill size.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(4) by failing to determine\nwhether an EFRD was needed on a pipeline segment. Specifically, the Notice alleged that\n8 “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\n4\nRespondent added the Kaw pipeline system to its IMP in 2009 but failed to evaluate whether that\nsystem needed one or more EFRDs.\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. § 195.452(i)(4) by failing to determine\nwhether an EFRD was needed on a pipeline segment.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(l)(1)(ii), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(f) What are the elements of an integrity management program? An\nintegrity management program begins with the initial framework. An\noperator must continually change the program to reflect operating\nexperience, conclusions drawn from results of the integrity assessments,\nand other maintenance and surveillance data, and evaluation of\nconsequences of a failure on the high consequence area. An operator must\ninclude, at minimum, each of the following elements in its written\nintegrity management program:\n(1) A process for identifying which pipeline segments could affect a\nhigh consequence area;\n(2) A baseline assessment plan meeting the requirements of paragraph\n(c) of this section;\n(3) An analysis that integrates all available information about the\nintegrity of the entire pipeline and the consequences of a failure (see\nparagraph (g) of this section);\n(4) Criteria for remedial actions to address integrity issues raised by\nthe assessment methods and information analysis (see paragraph (h) of this\nsection);\n(5) A continual process of assessment and evaluation to maintain a\npipeline’s integrity (see paragraph (j) of this section);\n(6) Identification of preventive and mitigative measures to protect the\nhigh consequence area (see paragraph (i) of this section);\n(7) Methods to measure the program’s effectiveness (see paragraph (k)\nof this section);\n(8) A process for review of integrity assessment results and\ninformation analysis by a person qualified to evaluate the results and\ninformation (see paragraph (h)(2) of this section).\n(g) . . . .\n(l) What records must be kept? (1) An operator must maintain for\nreview during an inspection:\n(i) . . . .\n(ii) Documents to support the decisions and analyses, including any\nmodifications, justifications, variances, deviations and determinations\nmade, and actions taken, to implement and evaluate each element of the\nintegrity management program listed in paragraph (f) of this section.\n\n\n\n5\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(l)(1)(ii) by failing to maintain\nfor review during an OPS inspection the documents supporting the decisions and analyses made,\nand actions taken, to implement and evaluate each element of the operator’s IMP. Specifically,\nthe Notice alleged eight deficiencies in NCRA’s IMP recordkeeping: (a) insufficient\ndocumentation showing new HCAs identified after 2006; (b) missing documentation of the\nCommunication of Evaluation for 2010; (c) missing documentation of a baseline assessment on\nthe Kaw pipeline system; (d) missing documentation of a continual assessment and evaluation on\nthe NCRA pipeline system for 2008 and 2009; (e) missing documentation of a reassessment\ninterval analysis for the NCRA, Jayhawk, and Kaw pipeline systems; (f) missing documentation\nof effectiveness reviews for the NCRA system; (g) missing documentation of performance\nmeasure evaluations for the NCRA and Jayhawk pipeline systems from 2006 to the date of the\ninspection; and (h) missing documentation of a preventive and mitigation measure review for a\nKaw pipeline segment that was risk-ranked in April 2010.\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. § 195.452(l)(1)(ii) by failing to\nmaintain for review during an OPS inspection the documents supporting the decisions and\nanalyses made, and actions taken, to implement and evaluate each element of its IMP.\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 $82,400 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $29,300 for Respondent’s violation of\n49 C.F.R. § 195.452(j)(2), for failing to conduct a periodic evaluation of its line pipe as\nfrequently as needed to assure pipeline integrity. NCRA paid the proposed penalty, which serves\nto authorize the Associate Administrator to assess the proposed penalty, with prejudice to\nRespondent. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $29,300 for violation of 49 C.F.R. § 195.452(j)(2).\nItem 2: The Notice proposed a civil penalty of $33,100 for Respondent’s violation of\n\n\n\n6\n49 C.F.R. § 195.452(i)(3), for failing to evaluate the capability of its pipeline leak detection\nsystem to detect leaks that could affect HCAs. NCRA paid the proposed penalty, which serves\nto authorize the Associate Administrator to assess the proposed penalty, with prejudice to\nRespondent. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $33,100 for violation of 49 C.F.R. § 195.452(i)(3).\nItem 4: The Notice proposed a civil penalty of $20,000 for Respondent’s violation of\n49 C.F.R. § 195.452(l)(1)(ii), for failing to maintain for review during OPS inspections the\ndocuments supporting the decisions and analyses made, and actions taken, to implement and\nevaluate each element of its IMP. NCRA paid the proposed penalty, which serves to authorize\nthe Associate Administrator to assess the proposed penalty, with prejudice to Respondent.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $20,000 for violation of 49 C.F.R. § 195.452(l)(1)(ii).\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 $82,400.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 2, 3, and 4 in the Notice for\nviolations of 49 C.F.R. § 195.452(i)(3), (i)(4), and (l)(1)(ii), respectively. Under\n49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\nestablished under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance\nwith the pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.452(i)(3) (Item 2), Respondent must\nconduct a leak detection capability analysis on the NCRA, Jayhawk, and Kaw\npipeline systems.\n2. With respect to the violation of § 195.452(i)(4) (Item 3), Respondent must\nperform an EFRD analysis of the Kaw pipeline system.\n3. With respect to the violation of § 195.452(l)(1)(ii) (Item 4), Respondent must\nestablish a document management and retention system within 90 days of receipt of\nthis Final Order. Respondent must submit the proposed document management\nprocess to the Director within 30 days of receipt of this Final Order for the Director’s\napproval.\n4. Respondent must complete the evaluations required in paragraphs 1 and 2 of this\nCompliance Order within 60 days of receipt of this Final Order. Respondent must\nsubmit documentation of the evaluations to the Director within 30 days of\ncompletion.\n\n\n\n7\n5. PHMSA requests that Respondent maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the\ntotal to the Director. PHMSA requests that Respondent report these costs in two\ncategories: (1) total cost associated with preparation and revision of plans,\nprocedures, studies, and analyses; and (2) total cost associated with replacements,\nadditions, and other changes to pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $100,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nThe 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","truncated":false,"body_characters":33289}