{"operation":"document","citation":"CPF 320135014","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":"2013-05-13","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.401(b), 195.402(a), 195.406(a)(2), 195.408(a), 195.420(a), 195.428(a), 195.52(a)(2), 195.54(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135014.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135014.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320135014","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320135014","body":"Notice of Probable Violation involving ONEOK NGL PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulations as 195.401(b),  195.402(a),  195.406(a)(2),  195.408(a),  195.420(a),  195.428(a),  195.52(a)(2),  195.54(a). The case was opened on 2013-05-13 and is reported as closed as of 2026-05-19. Proposed civil penalty: $559,100. Assessed civil penalty: $550,400. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320135014_Consent Agreement and Order_10232018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Consent%20Agreement%20and%20Order_10232018.pdf\n\n320135014_Consent Agreement and Order_10232018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Consent%20Agreement%20and%20Order_10232018_text.pdf\n\n320135014_Final Order_10122016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Final%20Order_10122016.pdf\n\n320135014_Final Order_10122016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Final%20Order_10122016_text.pdf\n\n320135014_NOPV PCP PCO_05132013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_NOPV%20PCP%20PCO_05132013_text.pdf\n\n320135014_NOPV_PCP_PCO_05132013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_NOPV_PCP_PCO_05132013.pdf\n\n320135014_Operator_Request_for_Hearing_07122013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Operator_Request_for_Hearing_07122013.pdf\n\n320135014_Operator_Response_to_Notice_07122013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Operator_Response_to_Notice_07122013.pdf\n\n320135014_Region Closure Letter-Consent Agreement Termination_05192026_(08-121917S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Region%20Closure%20Letter-Consent%20Agreement%20Termination_05192026_(08-121917S).pdf\n\n320135014_Region Closure Letter-Consent Agreement Termination_05192026_(08-121917S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Region%20Closure%20Letter-Consent%20Agreement%20Termination_05192026_(08-121917S)_text.pdf\n\n320135014_NOPV PCP PCO_05132013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nVIA FACSIMILE and UPS NEXT DAY AIR\nMay 13, 2013\nMr. Wes Christensen\nSenior Vice President of Operations\nONEOK NGL Pipeline, L.P.\nONEOK NGL Pipeline, L.L.C.\nONEOK Underground Storage Company, L.L.C.\n100 West Fifth Street\nTulsa, OK 74102\nCPF 3-2013-5014\nDear Mr. Christensen:\nRepresentatives from the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), pursuant to Chapter 601 of 49 United States Code, conducted an investigation\nof repeated overpressure events that occurred on May 17, 2008, at ONEOK’s natural gas\nliquids (NGLs) facility in Bushton, Kansas (the Bushton facility). Initial site investigations\nwere conducted on May 22, 2008, and May 23, 2008. Site investigation activities were also\nconducted the week of April 11, 2011. During the period from May 2008 and April 2011\nPHMSA and ONEOK had additional communications and correspondence involving\nengineering modeling and evaluation of the circumstances and contributing factors\ninvolved in the accident. ONEOK NGL Pipeline, L.P., ONEOK NGL Pipeline, L.L.C., and\nONEOK Underground Storage Company, L.L.C. are subsidiaries of ONEOK Partners, L.P.\nThe Bushton facility includes among other types of pipeline facilities, storage fields used to\nstore liquid hydrocarbons, a dedicated control room, piping manifold systems and a\nfractionation plant that separates Y-grade NGLs into purity products such as liquid\npropane, butane, ethane-propane mix, and natural gasoline. The products received from the\n\n\n\nincoming pipelines include both Y-grade NGL mix and purity products. The incoming\npurity products are either sent to storage wells or are sent on to other outgoing pipelines.\nThe incoming Y-grade NGL mix is sent either to the fractionation plant for processing, to\nthe storage wells for storage, or are sent on to outgoing pipelines through pipeline\nmanifolds. NGLs can be moved directly through the Bushton facility in continued\ntransportation by pipeline.\nThe accident involved repeated overpressure events during which a mixture of NGLs and\nwater were forced through the facility’s flare accumulator tank and through the flare stack.\n1\nThe hydrocarbon liquids were forced upwards through the flare stack and were ignited by\nthe flare tip burners. The burning hazardous material reached the ground and fires\ndeveloped around the base of the flare stack. The releases resulted in multiple evacuations\nof ONEOK and contractor personnel from the facility as well as evacuations of nearby\nresidences in the area.\nAs a result of the investigation, it appears that you have committed probable violations of\nthe Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The probable\nviolations are:\n1. § 195.52 Telephonic Notice of certain accidents.\n(a) At the earliest practicable moment following discovery of a release of the\nhazardous liquid or carbon dioxide transported resulting in an event described\nin §195.50 the operator of the system shall give notice, in accordance with\nparagraph (b) of this section, of any failure that:\n(2) Resulted in either a fire or explosion not intentionally set by the\noperator.\nONEOK did not make a telephonic report to the National Response Center at the\nearliest practicable moment following the initial unintentional release and fire at\n7:41 a.m. CDT on May 17, 2008. ONEOK did not make the required telephonic\nreport until 12:08 p.m. CDT which was over four hours after the initial ignition and\nevacuation occurred.\n2. § 195.54 Accident reports.\n(a) Each operator that experiences an accident that is required to be reported\nunder § 195.50 must, as soon as practicable, but not later than 30 days after\n1 The facilities at Bushton were configured at the time of the May 17, 2008, accident such that the flare stack\ninvolved with the release served as part of the overpressure protection system connected to the piping.\nONEOK has since made modifications to this flare stack portion of the system and rerouted the outlet of the\naccumulator tank to a common flare stack located in a different area of the facility.2\n\n\n\ndiscovery of the accident, file an accident report on DOT Form 7000-1.\nONEOK did not file an accident report on DOT Form 7000-1 within 30 days after\nthe unintentional release and ignition of hydrocarbon liquids on the ground at the\nBushton Pipeline Facility on May 17, 2008. As of the date of this Notice of\nProbable Violation, ONEOK has not filed a DOT Form 7000-1 report in connection\nwith the accident. The May 17, 2008, release resulted in a fire per 195.50(a);\ntherefore, a DOT Form 7000-1 is required.\n3. § 195.401 General requirements.\n(b) Whenever an operator discovers any condition that could adversely affect\nthe safe operation of its pipeline system, it shall correct the condition within a\nreasonable time. However, if the condition is of such a nature that it presents\nan immediate hazard to persons or property, the operator may not operate the\naffected part of the system until it has corrected the unsafe condition.\nOn the day of the accident, ONEOK failed to correct an unsafe condition which\npresented an immediate hazard to persons and property prior to resuming operation\nof the affected part of the system. On four separate occasions at 7:41 a.m., 8:05\na.m., 8:49 a.m. and 9:53 a.m., a mixture of water and liquid hydrocarbons was\nforced through the accumulator tank (which was full) to the flare stack. On each\noccasion, the liquid mixture was forced through the system when pipeline pressure\nrelief valves opened and the liquid mixture flowed through the accumulator tank\nand to the tip of the flare stack where the hydrocarbon mixture was ignited at the\nburner tips. These conditions presented an immediate hazard to persons and\nproperty, yet ONEOK allowed personnel to reenter the area and resumed operation\nof the system without identifying the primary cause of the releases (the full\naccumulator tank) and correcting the unsafe condition.\n4. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system\na manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies.\nThis manual shall be reviewed at intervals not exceeding 15 months, but at\nleast once each calendar year, and appropriate changes made as necessary to\ninsure that the manual is effective. This manual shall be prepared before initial\noperations of a pipeline system commence, and appropriate parts shall be kept\nat locations where operations and maintenance activities are conducted.\nONEOK did not follow its procedure for limiting the amount of product in the flare\nsystem accumulator tank. A June 2011 Data Submission shows ONEOK’s\nprocedure entitled “SF Flare / Drain” limits the volume of liquid in the accumulator\ntank (SFT-702) to 85% of the total volume as follows:3\n\n\n\nONEOK’s Root Cause Analysis stated, “The flare system piping and accumulator\nwere setting full of liquids from blowing down storage field piping in preparation\nfor hydro testing. …. Failure to recognize that the flare system was full of liquids\nand not immediately identifying the sources relieving into the systems compounded\nthe flare incident.”2 A total of 242 barrels (10,164 gallons) of hydrocarbon/water\nmixture was removed from the accumulator which has a capacity of 10,500 gallons.\n5. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system\na manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies.\nThis manual shall be reviewed at intervals not exceeding 15 months, but at\nleast once each calendar year, and appropriate changes made as necessary to\ninsure that the manual is effective. This manual shall be prepared before initial\noperations of a pipeline system commence, and appropriate parts shall be kept\nat locations where operations and maintenance activities are conducted.\nONEOK did not follow its procedure for isolating equipment when removing part of\nthe flare/drain system from service. Specifically, the isolation valve for 108\npipeline thermal relief valve was closed while the pipeline remained in operation.\nONEOK’s emergency shutdown procedures state “4. Isolate affected equipment.\n(Do not by-pass safety equipment)” as shown in item 4 below. On the accident date\nthe thermal relief isolation valve was closed on pipeline 108 which subjected the\nline to possible over pressurization.\n2 Violation Report Exhibit E; ONEOK NGL Follow up to April 2011 Meeting containing Root Cause\nAnalysis.\n4\n\n\n\nEMERGENCY SHUTDOWN\nEmergency shutdown of the storage field flare/drain system\nsystem from service, follow the steps that are appropriate for the condition.\nWhen a emergency condition exists and it becomes necessary to remove part or all of the flare/drain\n2. Notify appropriate personnel of operational changes.\n1. Initiate control procedures to ensure the safety of personnel, the environment and equipment.\n4. Isolate affected equipment. (Do not by-pass safety equipment)\n3. Reference the emergency response plan and take appropriate actions.\n6. Generate a MO (maintenance order) for repairs.\n5. Perform lockout/tagout procedures as needed.\n6. $195.408 Communications.\n(a) Each operator must have a communication system to provide for the\ntransmission of information needed for the safe operation of its pipeline\nsystem.\nONEOK did not have a functioning communication system for monitoring the fluid\nlevel in the accumulator tank involved in controlling receipt of hazardous liquid as\nnecessary for the safe operation of the pipeline system. ONEOK's investigation\nreport stated, \"Accumulator tank level alarm was still connected into old control\nroom, Operator had relocated to new control, alarm had not been moved to new\ncontrol room.\" The control room had been recently moved in connection with a\nfacility expansion project. The electronic level monitor which had been connected\nto the accumulator tank was disconnected from the control room alarm and ONEOK\nhad failed to manually monitor the liquid level in the accumulator tank.\n7. § 195.406 Maximum operating pressure.\n(a) Except for surge pressures and other variations from normal operations, no\noperator may operate a pipeline at a pressure that exceeds any of the\nfollowing:\n(2) The design pressure of any other component of the pipeline.\nONEOK operated its pipeline facilities at a pressure that exceeded the design\npressure of Dehydrator Vessel #1. Prior to the accident, Dehydrator Vessel #1 had a\nreduced design pressure of 328 psig due to decreased wall thickness. The design\npressure of this vessel had been reduced to 328 psig in 1988. A review of Line 800\noperation which flowed product to the dehydration isolation valve showed its range\nfrom 395 to 460 psig within 24 hours prior to the release with no surges. On May\n17, 2008, ONEOK operated the vessel at a pressure as high as 350 psig when the\nisolation valve did not fully prevent product from entering the vessel. The set-point\nof its overpressure protection device was 350 psig.\n5\n\n\n\n8. § 195.420 Valve maintenance.\n(a) Each operator shall maintain each valve that is necessary for the safe\noperation of its pipeline systems in good working order at all times.\nONEOK failed to maintain Valve 182 and Valve 152 in good working order at all\ntimes as is necessary for the safe operation of its pipeline system. These two valves\nwere the main isolation valves to propane dehydrator systems #1 and #2. Both of\nthese valves were in the closed position but at the time of the accident\nmalfunctioned in a manner that allowed high pressure product to flow into their\ndehydration systems which overpressured the dehydration vessels. When the\ndehydration vessels were overpressured, the relief valves on these vessels opened\nand product was sent to the accumulator tank and on through the flare stack.\nONEOK also failed to maintain the Buckeye Y-grade system water dump level\ncontrol valve in good working order necessary for the safe operation of its pipeline\nsystem. This valve was found “blocked” in the open position which allowed liquid\nto be fed to the flare system without necessary control.3\n9. §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\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\nand reliability of operation for the service in which it is used.\nONEOK failed to test certain pressure relief valves to determine their adequacy\nfrom the standpoint of capacity and reliability in providing overpressure protection.\nSpecifically, ONEOK failed to determine that three relief valves on propane\ndehydration units #1 and #2 were adequate from the standpoint of capacity to\nprovide overpressure protection for their respective vessels. ONEOK’s Propane\nDehydration PSV Study conducted by ENGlobal reported on pages 1 and 5 that for\ndehydration unit #1, “The relief valves (PSV-DA-167/168) on dehydration towers\n(SFT-112A/113A) will not protect towers from blocked flow outlet or failure of\ninlet pressure control valve (PCV-163).” The study also stated for dehydration unit\n#2, “PSV-DA-142 has adequate orifice area to protect dehydration tower (SFT-\n113B) from blocked flow or failure of inlet control valve (PCV-104) for supply\npressures up to 395 psig.” ONEOK’s supply pressure was 450 to 550 psig. The\nPSV-DA-142 did not have adequate orifice area to handle blocked flow or failure of\n3 Violation Report, Exhibit _D ONEOK NGL Follow up April to 2011 –Root Cause Analysis Section\n6\n\n\n\nPCV-104 for supply pressure greater than 395 psig. Therefore, ONEOK has not\nmet the requirement of §195.428(a).\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$200,000 for each violation for each day the violation persists up to a maximum of\n$2,000,000 for a related series of violations. For violations occurring prior to January 4,\n2012, the maximum penalty may not exceed $100,000 per violation per day, with a\nmaximum penalty not to exceed $1,000,000 for a related series of violations. The\nCompliance Officer has reviewed the circumstances and supporting documentation\ninvolved in the above probable violation(s) and has recommended that you be preliminarily\nassessed a civil penalty of $559,100 as follows:\nItem number\nPENALTY\n1\n$13,700\n2\n$28,700\n$92,500\n$100,000\n$43,700\n$100,000\n$46,200\n8\n$100,000\n9\n$34,300\nProposed Compliance Order\nWith respect to item 2, pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous 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 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\nthe redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you\ndo not respond within 30 days of receipt of this Notice, this constitutes a waiver of your\nright to contest the allegations in this Notice and authorizes the Associate Administrator for\nPipeline Safety to find facts as alleged in this Notice without further notice to you and to\nissue a Final Order.\n7\n\n\n\nIn your correspondence on this matter, please refer to CPF 3-2013-5014 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\n8\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 Pipeline, L.P. (ONEOK) a\nCompliance Order incorporating the following remedial requirements to ensure the\ncompliance of ONEOK with the pipeline safety regulations:\n1. 2. In regard to Item 2 of the Notice, submit DOT Form 7000-1 Accident Report within\n30 days of issuance of the Final Order.\nIt is requested that ONEOK NGL Pipeline, LP maintain documentation of the\nsafety improvement costs associated with fulfilling this Compliance Order and\nsubmit the total to David Barrett, Director, Central, Pipeline and Hazardous\nMaterials Safety Administration. It is requested that these costs be reported in two\ncategories: 1) total cost associated with preparation/revision of plans, procedures,\nstudies and analyses, and 2) total cost associated with replacements, additions and\nother changes to pipeline infrastructure.\n9\n\n320135014_Final Order_10122016_text.pdf\n\nOctober 12, 2016\nMr. Terry K. Spencer\nPresident and CEO\nONEOK NGL Pipeline, L.P.\n100 W. Fifth Street\nTulsa, Oklahoma 74103\nRe: CPF No. 3-2013-5014, CPF No. 3-2013-5015, CPF No. 3-2013-5020\nDear Mr. Spencer:\nEnclosed please find the three Final Orders issued in the above-referenced cases. The Final\nOrder in CPF No. 3-2013-5014 makes findings of violation, assesses a reduced civil penalty of\n$550,400, and specifies actions that need to be taken by ONEOK NGL Pipeline, L.P., ONEOK\nNGL Pipeline, L.L.C., and ONEOK Underground Storage Company, L.L.C. (collectively,\nONEOK) to comply with the pipeline safety regulations.\nThe Final Order issued in CPF No. 3-2013-5015 makes findings of violation, withdraws one\nalleged violation, assesses a civil penalty of $159,000, and specifies actions that need to be taken\nby ONEOK to comply with the pipeline safety regulations. Finally, the Final Order issued in\nCPF No. 3-2013-5020 makes one finding of violation, withdraws one alleged violation, and\nassesses a civil penalty of $22,500.\nThe penalty payment terms are set forth in each of the Final Orders. When the civil penalties\nhave been paid and the terms of the compliance orders completed, as determined by the Director,\nCentral Region, these enforcement actions will be closed. Service of the Final Orders is made\npursuant to 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nActing Associate Administrator\nfor Pipeline Safety\nEnclosure\n\n\n\ncc: Mr. Allan Beshore, Director, Central Region, OPS\nMr. Vince Murchison, Murchison Law Firm, PLLC\n325 North St. Paul Street, Suite 2700, Dallas, Texas 75201\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, L.P., )\nONEOK NGL Pipeline, L.L.C., and ) CPF No. 3-2013-5014\nONEOK Underground Storage )\nCompany, L.L.C., collectively, )\n)\n)\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nBetween May 2008 and April 2011, pursuant to 49 U.S.C. § 60117, representatives of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an investigation of a fire that occurred at a facility of ONEOK NGL\nPipeline, L.P., ONEOK NGL Pipeline, L.L.C., and ONEOK Underground Storage\nCompany, L.L.C. (collectively, ONEOK or Respondent) in Bushton, Kansas.1 ONEOK operates\n11,500 miles of pipeline transporting hazardous liquids, including approximately 11,000 miles\ntransporting highly volatile liquids in Texas, Oklahoma, Kansas and several other states.2\nAs a result of the investigation, the Director, Central Region, OPS (Director), issued a Notice of\nProbable Violation, Proposed Civil Penalty, and Proposed Compliance Order to Respondent on\nMay 13, 2013 (Notice).3 In accordance with 49 C.F.R. § 190.207, the Notice alleged that\nRespondent committed nine violations of the pipeline safety regulations in 49 C.F.R. Part 195\nand proposed a civil penalty of $559,100 for the alleged violations. The Notice also proposed\nthat corrective action be completed with respect to one of the alleged violations.\nAfter receiving an extension of time, ONEOK responded to the Notice on July 12, 2013.\nONEOK contested the jurisdiction of PHMSA, contested the merits of the alleged violations and\nrequested a hearing. Additional written materials were submitted by Respondent on January 6\n1 The three entities own and operate different portions of the Bushton facility. ONEOK Post-hearing\nJurisdictional Brief at 5 (Mar. 14, 2014).\n2 This information is reported by Respondent for calendar year 2015 pursuant to 49 C.F.R. § 195.49.\n3 Two additional notices of probable violation were issued by the Director to Respondent. They were\ndated May 13, 2013 (CPF No. 3-2013-5015) and July 3, 2013 (CPF No. 3-2013-5020). Separate Final\nOrders are being issued in those cases.\n\n\n\nCPF No. 3-2013-5014\nPage 2\nand 10, 2014. In accordance with 49 C.F.R. § 190.211, a hearing was held in Kansas City,\nMissouri on January 15, 2014, before a Presiding Official from the Office of Chief Counsel,\nPHMSA.4 After the hearing, Respondent submitted additional written materials dated April 1,\n2014, and May 6, 2016. Pursuant to § 190.209(b)(7), the Director submitted a written evaluation\nof Respondent’s response material on April 1, 2016.\nBACKGROUND\nThe facility at issue in this proceeding is located in a rural area near Bushton, Kansas. The\nBushton facility has inbound and outbound pipelines that transport natural gas liquids (NGLs).5\nIn addition to the inbound and outbound pipelines, the facility has underground storage caverns,\nfractionation equipment, and in-plant piping, including pipes, valves, pumps, meters and other\nequipment used to move NGLs. Central to the in-plant piping are manifolds that allow NGLs to\nbe directed between and among any of the inbound and outbound pipelines, storage caverns, and\nfractionation equipment.6\nOn the morning of May 17, 2008, four releases of NGLs occurred in succession at the Bushton\nfacility. The releases involved a mixture of NGL hydrocarbons and water being forced through\nand over the top of a flare stack connected to a flare/drain system. During at least three of the\nrelease events, liquid hydrocarbons were ignited by the flare tip burners and fell to the ground\nwhere fires ensued. The first event occurred at 7:41 a.m. The fourth and final event occurred at\napproximately 9:53 a.m.\nAn investigation by Respondent concluded that excessive amounts of hydrocarbon liquids and\nwater had accumulated in the flare/drain system. The flare/drain system is used to collect and\ndispose of liquid hydrocarbons, contaminated water, and vapor products from various sources at\nthe facility, such as relief valves, pressure vessels, and piping drains. The flare/drain system\nconsists of approximately 1050 feet of pipe, a 10,500-gallon accumulator tank and a 40-foot tall\nflare stack.\nThe four releases occurred when hydrocarbon products were discharged into the flare/drain\nsystem, which already contained an excessive amount of hydrocarbons and water. The\naccumulator tank had not been drained and an alarm that was designed to notify Respondent of\nhigh tank levels did not function. Approximately 250 personnel at the facility were evacuated.\nNearby residences were also evacuated. No injuries or fatalities were reported in connection\nwith the release and fires. After Respondent shut down the facility and emptied the flare/drain\nsystem, the Company resumed normal operations around 6:30 p.m. the same day.\n4 The hearing also concerned the notice of probable violation issued in CPF No. 3-2013-5020. A\nseparate hearing concerning the notice of probable violation in CPF No. 3-2013-5015 was held November\n14-15, 2013. That hearing also discussed the jurisdictional issues relevant to all the proceedings.\n5 NGLs are highly volatile liquids, which are hazardous liquids that form a vapor cloud when released to\nthe atmosphere and have a vapor pressure exceeding 276 kPa (40 psia) at 37.8 °C (100 °F). § 195.2.\n6 ONEOK Post-hearing Jurisdictional Brief at 6.\n\n\n\nCPF No. 3-2013-5014\nPage 3\nFollowing an OPS investigation, the Director, Central Region issued the present enforcement\naction alleging that Respondent committed nine safety violations in connection with the event.\nRespondent argued initially that PHMSA lacks authority under the Pipeline Safety Act to enforce\nsafety regulations at the Bushton facility. Specifically, ONEOK argued the facility is not subject\nto the Pipeline Safety Act because it is a “refining” facility used in the fractionation of NGLs. At\nthe hearing, OPS countered that the Act applies because the facility engages in the transportation\nof hazardous liquids by pipeline and NGL fractionation does not constitute refining. I consider\nthese jurisdictional arguments first before addressing the alleged violations.\nJURISDICTION\nThe Pipeline Safety Act, 49 U.S.C. chapter 601, charges PHMSA with prescribing and enforcing\nminimum safety standards for pipeline transportation and pipeline facilities.7 “Pipeline\ntransportation” is defined in the Act to include “the movement of hazardous liquid by pipeline”\nand “storage of hazardous liquid incidental to the movement of hazardous liquid by pipeline,”\nbut not the movement of hazardous liquids through “refining” facilities.8 PHMSA may enter the\npremises of an owner or operator to perform an inspection and may issue administrative orders\nand assess civil penalties to enforce its safety standards.9\nPHMSA has adopted minimum safety standards for hazardous liquid pipelines in 49 C.F.R.\nPart 195. The safety regulations apply to all parts of a pipeline facility through which hazardous\nliquids move in transportation, including but not limited to pipe, equipment, facilities and\nbreakout tanks.10 The regulations do not apply to refining facilities or storage or in-plant piping\nsystems associated with refining facilities.11\nRespondent argued the Bushton facility meets the exception in the Act for refining because it\n“employs a refining process called fractionation” that is “the same refining process that occurs at\na crude oil refinery.”12 Respondent explained that fractionation, also known as distillation,\nseparates raw NGL mixture into purity products, such as propane and butane, by applying\ndifferent temperatures and pressures. No chemical change takes place to the product, but\naccording to Respondent the separation constitutes a physical change. In this respect Respondent\nargued the Bushton facility is no different than a crude oil refinery.\n7 49 U.S.C. § 60102(a).\n8 § 60101(a)(22). A pipeline facility includes any pipeline, right-of-way, facility, building, or equipment\nused or intended to be used in pipeline transportation. § 60101(a)(5).\n9 §§ 60117(c), 60118(b) and 60122.\n10 49 C.F.R. §§ 195.1(a) and 195.2.\n11 § 195.1(b)(8).\n12 ONEOK Post-hearing Jurisdictional Brief at 9.\n\n\n\nCPF No. 3-2013-5014\nPage 4\nRespondent noted the term “refining” is not defined in the Act, but the Company suggested the\nterm “has a plain and unambiguous meaning.”13 An expert for Respondent cited dictionary\ndefinitions and other sources to support his opinion that a refinery is any facility where unwanted\nsubstances are removed to produce a higher grade or purified product.14 Respondent cited the\nwebsite of the U.S. Energy Information Administration (U.S. EIA), which defines a refinery as\nan “installation that manufactures finished petroleum products from crude oil, unfinished oils,\nnatural gas liquids, other hydrocarbons, and oxygenates.”15 Respondent also cited an industry\npublication that defines a refiner as someone involved in a process “by which the physical or\nchemical characteristics of petroleum or petroleum products are changed . . . .”16 Using all of\nthese definitions, Respondent insisted the term refining in the Act includes NGL fractionation\nperformed at the Bushton facility.\nRespondent argued further that legislative history and past practice of PHMSA demonstrate the\nrefining exception was intended to cover NGL fractionation. Respondent asserted that during the\nlegislative process leading to enactment of the refining exception, statements by members of\nCongress and the Department of Transportation demonstrated they understood the difference\nbetween transportation and refining and they intended the Act to exclude facilities like Bushton.\nRespondent noted that PHMSA has never adopted regulations for NGL fractionation. ONEOK\nreasoned that Congress must be content with the absence of regulations because Congress has\nnever amended the refining exception.17 Respondent also suggested that by not regulating\nfractionation, the Agency too must believe the Act does not apply.\nAt the hearing and in its written submission, OPS disagreed with these assertions. OPS argued\nthat since 2006, the Agency has communicated to Respondent that the Bushton facility is\ncovered by the Act. As a technical matter, OPS argued that refining involves more than just\nseparating an NGL mixture—it involves the conversion of a crude product into another\nsubstance, such as when crude oil is converted to gasoline. NGL fractionation, OPS argued,\nmerely involves the separation of a mixture and does not involve conversion of a product nor\ndoes it change the physical or chemical characteristics of the NGL. OPS noted the Department\nof Energy does not recognize the Bushton facility as a refinery.\n18 Finally, OPS argued that prior\nlitigation by the previous owner of the Bushton facility resulted in a federal court finding the\nBushton facility was not engaged in refining.\n13 ONEOK Post-hearing Jurisdictional Brief at 11.\n14 ONEOK Post-hearing Jurisdictional Brief at 11.\n15 U.S. EIA Definitions, Sources and Explanatory Notes, available at:\nhttp://www.eia.gov/dnav/pet/TblDefs/pet_pnp_capshell_tbldef2.asp (last accessed Aug. 10, 2016)\n(emphasis added).\n16 ONEOK Post-hearing Jurisdictional Brief at 12, quoting Manual of Oil and Gas Terms by Howard\nWilliams and Charles Meyers.\n17 ONEOK Post-hearing Jurisdictional Brief at 16.\n18 Central Region Recommendation at 5 (Apr. 1, 2016).\n\n\n\nCPF No. 3-2013-5014\nPage 5\nTo these points, Respondent responded that prior written interpretations by PHMSA demonstrate\n“shifting theories” of jurisdiction,19 the definition of refining offered by OPS is too narrow, and\nOPS improperly treats NGL fractionation facilities different than crude oil refineries.\nA. Preliminary Analysis\nWhen deciding issues of legal interpretation, such as the scope of the Pipeline Safety Act, I first\nlook to the plain language of the law.20 As noted above, the Act applies by its terms to facilities\nused in the “movement of hazardous liquid by pipeline” and “storage of hazardous liquid\nincidental to the movement of hazardous liquid by pipeline.”21\nThe record shows the Bushton facility has both inbound and outbound pipelines that transport\nNGLs, which are a hazardous liquid. The NGLs arrive as “Y-grade” (a raw mixture of NGLs) or\nas “purity products” (NGLs previously separated from a raw mixture). Purity products arrive by\ninbound pipeline and are then either transported through the facility to outbound pipelines for\ncontinued transportation or to storage caverns for later transportation by pipeline. Incoming\nY-grade NGLs are either sent to fractionation equipment for separation and stored or transported,\nsent to storage wells for fractionation or transportation at a later time, or transported directly to\noutbound pipelines. In summary, the Bushton facility receives hazardous liquids in\ntransportation by pipeline, stores hazardous liquids incidental to their movement by pipeline, and\ntransports hazardous liquids from the facility by pipeline. The facility is therefore engaged in\npipeline transportation subject to the Act unless an exception applies.\nBoth the Act and Part 195 except the movement of hazardous liquids through refining facilities\nand the storage or in-plant piping systems associated with refining facilities. The term “refining”\nis not defined in the Act or regulations, but as discussed in more detail below PHMSA has\npreviously interpreted the refining exception as it relates to NGL fractionation.\nB. Prior Interpretations\nAs a general matter, when deciding interpretive issues in an enforcement proceeding, I give prior\ndecisions by the Agency on that issue effect unless there is a compelling reason to change or\ndepart from the position previously adopted.22\nIn 2005, a representative of the Central Region, OPS attempted to perform a pipeline safety\ninspection of the Bushton facility. ONEOK personnel communicated their belief that the facility\n19 ONEOK Post-hearing Jurisdictional Brief at 6.\n20 Plains Pipeline, L.P., CPF No. 4-2013-5007, Item 5, 2015 WL 4397455 (May 22, 2015).\n21 49 U.S.C. § 60101(a)(22).\n22 See, e.g., Sunoco Pipeline, LP, CPF No. 1-2014-5005, Item 1, 2016 WL 770393, at *3 (Jan. 13, 2016)\n(finding a violation based on prior interpretations of a safety standard).\n\n\n\nCPF No. 3-2013-5014\nPage 6\nwas not subject to PHMSA jurisdiction. In a follow-up letter from the Central Region Director,\nONEOK was asked to provide the reasons why it believed the facility was not jurisdictional.23\nRespondent replied in March 2006 and explained the Bushton facility consists of underground\nstorage wells and associated facility piping. Product is brought into the facility by pipeline and\nstored until customers request delivery by pipeline or truck. Respondent contended at that time\nthat the facility was not subject to Agency regulations because movement of product inside the\nfacility involved in-plant piping systems associated with storage and because non-pipeline modes\nof transportation were used in some instances.24\nThe Director replied by letter dated June 27, 2006 (2006 Interpretation). The Director stated that\nafter reviewing the response, he disagreed with the Company’s assessment, finding the facility\nwas being used for the transportation of hazardous liquids. Specifically, he noted “the storage\nfields are utilized for storage of product delivered to the fields by pipeline, and product is\nre-injected into the pipeline for delivery to another destination by pipeline.”25 He advised\nONEOK that the Agency would be performing another scheduled inspection of the facility.\nRespondent replied on November 13, 2006, stating the Company would “implement a transition\nplan to convert certain of its storage assets . . . to a PHMSA/Part 195 driven hazard control\nsystem for facilities where PHMSA has jurisdiction.”26 Respondent requested clarification that\n“all pipes, valves, and other appurtenances connecting the cavern wellhead to the regulated\npipelines must comply with the PHMSA/Part 195 regulations for pipeline systems . . . but no\nPart 195 regulations specific to ‘caverns’ [underground storage] currently exist.”27 Respondent\nindicated it also planned to request a waiver to allow continued use of certain programs and\nrequested that PHMSA confirm or clarify the Company’s plan.\nAdditional discussions between Respondent and the Central Region demonstrated the Company\nintended to follow Part 195 regulations for the Bushton facility but wanted additional guidance\non issues such as where jurisdiction started and ended.28 In early 2007, Respondent confirmed\nPart 195 requirements were being integrated into its manual of written procedures for the\nBushton facility.29 By mid-2007, OPS had documented telephone and in-person conversations\nwith Respondent confirming the progress. Demarcation points for PHMSA-jurisdictional\nfacilities were completed.30 Respondent performed operator qualification (OQ) and maximum\n23 OPS letter (Feb. 15, 2006), OPS Violation Report, Exhibit A: Draft OPS Failure Investigation Report\n(FIR) (Apr. 29, 2013), Appendix C at 1.\n24 25 26 27 28 29 ONEOK letter (Mar. 27, 2006), FIR Appendix C at 5.\nOPS letter (Jun. 27, 2006), FIR Appendix C at 7.\nONEOK letter (Nov. 13, 2006), FIR Appendix C at 9.\nONEOK letter (Nov. 13, 2006), FIR Appendix C at 10.\nOPS memo (Dec. 20, 2006), FIR Appendix C at 15.\nONEOK email (Jan. 15, 2007), FIR Appendix C at 16.\n30 OPS memo (Apr. 16, 2007), FIR Appendix C at 20.\n\n\n\nCPF No. 3-2013-5014\nPage 7\noperating pressure (MOP) determination activities.31 In early 2008, Respondent called to\nconfirm that conversion to Part 195 regulations was complete with the exception of pressure\ntesting. In April 2011, Respondent confirmed that pressure testing had been completed.32\nFollowing a meeting between Respondent and OPS on August 4, 2011, the Company submitted a\nrequest for written interpretation concerning the jurisdictional status of the Bushton facility.\nRespondent asserted in its request that Bushton was “a processing (refining) facility” and","truncated":true,"body_characters":142065}