# ONEOK NGL PIPELINE, LLC — Notice of Probable Violation

- **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:** Not available
- **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).
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- **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.

Official case documents:

320135014_Consent Agreement and Order_10232018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Consent%20Agreement%20and%20Order_10232018.pdf

320135014_Consent Agreement and Order_10232018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Consent%20Agreement%20and%20Order_10232018_text.pdf

320135014_Final Order_10122016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Final%20Order_10122016.pdf

320135014_Final Order_10122016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Final%20Order_10122016_text.pdf

320135014_NOPV PCP PCO_05132013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_NOPV%20PCP%20PCO_05132013_text.pdf

320135014_NOPV_PCP_PCO_05132013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_NOPV_PCP_PCO_05132013.pdf

320135014_Operator_Request_for_Hearing_07122013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Operator_Request_for_Hearing_07122013.pdf

320135014_Operator_Response_to_Notice_07122013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320135014/320135014_Operator_Response_to_Notice_07122013.pdf

320135014_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

320135014_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

320135014_NOPV PCP PCO_05132013_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
VIA FACSIMILE and UPS NEXT DAY AIR
May 13, 2013
Mr. Wes Christensen
Senior Vice President of Operations
ONEOK NGL Pipeline, L.P.
ONEOK NGL Pipeline, L.L.C.
ONEOK Underground Storage Company, L.L.C.
100 West Fifth Street
Tulsa, OK 74102
CPF 3-2013-5014
Dear Mr. Christensen:
Representatives from the Pipeline and Hazardous Materials Safety Administration
(PHMSA), pursuant to Chapter 601 of 49 United States Code, conducted an investigation
of repeated overpressure events that occurred on May 17, 2008, at ONEOK’s natural gas
liquids (NGLs) facility in Bushton, Kansas (the Bushton facility). Initial site investigations
were conducted on May 22, 2008, and May 23, 2008. Site investigation activities were also
conducted the week of April 11, 2011. During the period from May 2008 and April 2011
PHMSA and ONEOK had additional communications and correspondence involving
engineering modeling and evaluation of the circumstances and contributing factors
involved in the accident. ONEOK NGL Pipeline, L.P., ONEOK NGL Pipeline, L.L.C., and
ONEOK Underground Storage Company, L.L.C. are subsidiaries of ONEOK Partners, L.P.
The Bushton facility includes among other types of pipeline facilities, storage fields used to
store liquid hydrocarbons, a dedicated control room, piping manifold systems and a
fractionation plant that separates Y-grade NGLs into purity products such as liquid
propane, butane, ethane-propane mix, and natural gasoline. The products received from the



incoming pipelines include both Y-grade NGL mix and purity products. The incoming
purity products are either sent to storage wells or are sent on to other outgoing pipelines.
The incoming Y-grade NGL mix is sent either to the fractionation plant for processing, to
the storage wells for storage, or are sent on to outgoing pipelines through pipeline
manifolds. NGLs can be moved directly through the Bushton facility in continued
transportation by pipeline.
The accident involved repeated overpressure events during which a mixture of NGLs and
water were forced through the facility’s flare accumulator tank and through the flare stack.
1
The hydrocarbon liquids were forced upwards through the flare stack and were ignited by
the flare tip burners. The burning hazardous material reached the ground and fires
developed around the base of the flare stack. The releases resulted in multiple evacuations
of ONEOK and contractor personnel from the facility as well as evacuations of nearby
residences in the area.
As a result of the investigation, it appears that you have committed probable violations of
the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The probable
violations are:
1. § 195.52 Telephonic Notice of certain accidents.
(a) At the earliest practicable moment following discovery of a release of the
hazardous liquid or carbon dioxide transported resulting in an event described
in §195.50 the operator of the system shall give notice, in accordance with
paragraph (b) of this section, of any failure that:
(2) Resulted in either a fire or explosion not intentionally set by the
operator.
ONEOK did not make a telephonic report to the National Response Center at the
earliest practicable moment following the initial unintentional release and fire at
7:41 a.m. CDT on May 17, 2008. ONEOK did not make the required telephonic
report until 12:08 p.m. CDT which was over four hours after the initial ignition and
evacuation occurred.
2. § 195.54 Accident reports.
(a) Each operator that experiences an accident that is required to be reported
under § 195.50 must, as soon as practicable, but not later than 30 days after
1 The facilities at Bushton were configured at the time of the May 17, 2008, accident such that the flare stack
involved with the release served as part of the overpressure protection system connected to the piping.
ONEOK has since made modifications to this flare stack portion of the system and rerouted the outlet of the
accumulator tank to a common flare stack located in a different area of the facility.2



discovery of the accident, file an accident report on DOT Form 7000-1.
ONEOK did not file an accident report on DOT Form 7000-1 within 30 days after
the unintentional release and ignition of hydrocarbon liquids on the ground at the
Bushton Pipeline Facility on May 17, 2008. As of the date of this Notice of
Probable Violation, ONEOK has not filed a DOT Form 7000-1 report in connection
with the accident. The May 17, 2008, release resulted in a fire per 195.50(a);
therefore, a DOT Form 7000-1 is required.
3. § 195.401 General requirements.
(b) Whenever an operator discovers any condition that could adversely affect
the safe operation of its pipeline system, it shall correct the condition within a
reasonable time. However, if the condition is of such a nature that it presents
an immediate hazard to persons or property, the operator may not operate the
affected part of the system until it has corrected the unsafe condition.
On the day of the accident, ONEOK failed to correct an unsafe condition which
presented an immediate hazard to persons and property prior to resuming operation
of the affected part of the system. On four separate occasions at 7:41 a.m., 8:05
a.m., 8:49 a.m. and 9:53 a.m., a mixture of water and liquid hydrocarbons was
forced through the accumulator tank (which was full) to the flare stack. On each
occasion, the liquid mixture was forced through the system when pipeline pressure
relief valves opened and the liquid mixture flowed through the accumulator tank
and to the tip of the flare stack where the hydrocarbon mixture was ignited at the
burner tips. These conditions presented an immediate hazard to persons and
property, yet ONEOK allowed personnel to reenter the area and resumed operation
of the system without identifying the primary cause of the releases (the full
accumulator tank) and correcting the unsafe condition.
4. §195.402 Procedural manual for operations, maintenance, and emergencies.
(a) General. Each operator shall prepare and follow for each pipeline system
a manual of written procedures for conducting normal operations and
maintenance activities and handling abnormal operations and emergencies.
This manual shall be reviewed at intervals not exceeding 15 months, but at
least once each calendar year, and appropriate changes made as necessary to
insure that the manual is effective. This manual shall be prepared before initial
operations of a pipeline system commence, and appropriate parts shall be kept
at locations where operations and maintenance activities are conducted.
ONEOK did not follow its procedure for limiting the amount of product in the flare
system accumulator tank. A June 2011 Data Submission shows ONEOK’s
procedure entitled “SF Flare / Drain” limits the volume of liquid in the accumulator
tank (SFT-702) to 85% of the total volume as follows:3



ONEOK’s Root Cause Analysis stated, “The flare system piping and accumulator
were setting full of liquids from blowing down storage field piping in preparation
for hydro testing. …. Failure to recognize that the flare system was full of liquids
and not immediately identifying the sources relieving into the systems compounded
the flare incident.”2 A total of 242 barrels (10,164 gallons) of hydrocarbon/water
mixture was removed from the accumulator which has a capacity of 10,500 gallons.
5. §195.402 Procedural manual for operations, maintenance, and emergencies.
(a) General. Each operator shall prepare and follow for each pipeline system
a manual of written procedures for conducting normal operations and
maintenance activities and handling abnormal operations and emergencies.
This manual shall be reviewed at intervals not exceeding 15 months, but at
least once each calendar year, and appropriate changes made as necessary to
insure that the manual is effective. This manual shall be prepared before initial
operations of a pipeline system commence, and appropriate parts shall be kept
at locations where operations and maintenance activities are conducted.
ONEOK did not follow its procedure for isolating equipment when removing part of
the flare/drain system from service. Specifically, the isolation valve for 108
pipeline thermal relief valve was closed while the pipeline remained in operation.
ONEOK’s emergency shutdown procedures state “4. Isolate affected equipment.
(Do not by-pass safety equipment)” as shown in item 4 below. On the accident date
the thermal relief isolation valve was closed on pipeline 108 which subjected the
line to possible over pressurization.
2 Violation Report Exhibit E; ONEOK NGL Follow up to April 2011 Meeting containing Root Cause
Analysis.
4



EMERGENCY SHUTDOWN
Emergency shutdown of the storage field flare/drain system
system from service, follow the steps that are appropriate for the condition.
When a emergency condition exists and it becomes necessary to remove part or all of the flare/drain
2. Notify appropriate personnel of operational changes.
1. Initiate control procedures to ensure the safety of personnel, the environment and equipment.
4. Isolate affected equipment. (Do not by-pass safety equipment)
3. Reference the emergency response plan and take appropriate actions.
6. Generate a MO (maintenance order) for repairs.
5. Perform lockout/tagout procedures as needed.
6. $195.408 Communications.
(a) Each operator must have a communication system to provide for the
transmission of information needed for the safe operation of its pipeline
system.
ONEOK did not have a functioning communication system for monitoring the fluid
level in the accumulator tank involved in controlling receipt of hazardous liquid as
necessary for the safe operation of the pipeline system. ONEOK's investigation
report stated, "Accumulator tank level alarm was still connected into old control
room, Operator had relocated to new control, alarm had not been moved to new
control room." The control room had been recently moved in connection with a
facility expansion project. The electronic level monitor which had been connected
to the accumulator tank was disconnected from the control room alarm and ONEOK
had failed to manually monitor the liquid level in the accumulator tank.
7. § 195.406 Maximum operating pressure.
(a) Except for surge pressures and other variations from normal operations, no
operator may operate a pipeline at a pressure that exceeds any of the
following:
(2) The design pressure of any other component of the pipeline.
ONEOK operated its pipeline facilities at a pressure that exceeded the design
pressure of Dehydrator Vessel #1. Prior to the accident, Dehydrator Vessel #1 had a
reduced design pressure of 328 psig due to decreased wall thickness. The design
pressure of this vessel had been reduced to 328 psig in 1988. A review of Line 800
operation which flowed product to the dehydration isolation valve showed its range
from 395 to 460 psig within 24 hours prior to the release with no surges. On May
17, 2008, ONEOK operated the vessel at a pressure as high as 350 psig when the
isolation valve did not fully prevent product from entering the vessel. The set-point
of its overpressure protection device was 350 psig.
5



8. § 195.420 Valve maintenance.
(a) Each operator shall maintain each valve that is necessary for the safe
operation of its pipeline systems in good working order at all times.
ONEOK failed to maintain Valve 182 and Valve 152 in good working order at all
times as is necessary for the safe operation of its pipeline system. These two valves
were the main isolation valves to propane dehydrator systems #1 and #2. Both of
these valves were in the closed position but at the time of the accident
malfunctioned in a manner that allowed high pressure product to flow into their
dehydration systems which overpressured the dehydration vessels. When the
dehydration vessels were overpressured, the relief valves on these vessels opened
and product was sent to the accumulator tank and on through the flare stack.
ONEOK also failed to maintain the Buckeye Y-grade system water dump level
control valve in good working order necessary for the safe operation of its pipeline
system. This valve was found “blocked” in the open position which allowed liquid
to be fed to the flare system without necessary control.3
9. §195.428 Overpressure safety devices and overfill protection systems
(a) Except as provided in paragraph (b) of this section, each operator shall, at
intervals not exceeding 15 months, but at least once each calendar year, or in
the case of pipelines used to carry highly volatile liquids, at intervals not to
exceed 7½ months, but at least twice each calendar year, inspect and test each
pressure limiting device, relief valve, pressure regulator, or other item of
pressure control equipment to determine that it is functioning properly, is in
good mechanical condition, and is adequate from the standpoint of capacity
and reliability of operation for the service in which it is used.
ONEOK failed to test certain pressure relief valves to determine their adequacy
from the standpoint of capacity and reliability in providing overpressure protection.
Specifically, ONEOK failed to determine that three relief valves on propane
dehydration units #1 and #2 were adequate from the standpoint of capacity to
provide overpressure protection for their respective vessels. ONEOK’s Propane
Dehydration PSV Study conducted by ENGlobal reported on pages 1 and 5 that for
dehydration unit #1, “The relief valves (PSV-DA-167/168) on dehydration towers
(SFT-112A/113A) will not protect towers from blocked flow outlet or failure of
inlet pressure control valve (PCV-163).” The study also stated for dehydration unit
#2, “PSV-DA-142 has adequate orifice area to protect dehydration tower (SFT-
113B) from blocked flow or failure of inlet control valve (PCV-104) for supply
pressures up to 395 psig.” ONEOK’s supply pressure was 450 to 550 psig. The
PSV-DA-142 did not have adequate orifice area to handle blocked flow or failure of
3 Violation Report, Exhibit _D ONEOK NGL Follow up April to 2011 –Root Cause Analysis Section
6



PCV-104 for supply pressure greater than 395 psig. Therefore, ONEOK has not
met the requirement of §195.428(a).
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed
$200,000 for each violation for each day the violation persists up to a maximum of
$2,000,000 for a related series of violations. For violations occurring prior to January 4,
2012, the maximum penalty may not exceed $100,000 per violation per day, with a
maximum penalty not to exceed $1,000,000 for a related series of violations. The
Compliance Officer has reviewed the circumstances and supporting documentation
involved in the above probable violation(s) and has recommended that you be preliminarily
assessed a civil penalty of $559,100 as follows:
Item number
PENALTY
1
$13,700
2
$28,700
$92,500
$100,000
$43,700
$100,000
$46,200
8
$100,000
9
$34,300
Proposed Compliance Order
With respect to item 2, pursuant to 49 United States Code § 60118, the Pipeline and
Hazardous Materials Safety Administration proposes to issue a Compliance Order to
ONEOK NGL Pipeline, L.P. Please refer to the Proposed Compliance Order, which is
enclosed and made a part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline
Operators in Compliance Proceedings. Please refer to this document and note the response
options. Be advised that all material you submit in response to this enforcement action is
subject to being made publicly available. If you believe that any portion of your responsive
material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete
original document you must provide a second copy of the document with the portions you
believe qualify for confidential treatment redacted and an explanation of why you believe
the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you
do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your
right to contest the allegations in this Notice and authorizes the Associate Administrator for
Pipeline Safety to find facts as alleged in this Notice without further notice to you and to
issue a Final Order.
7



In your correspondence on this matter, please refer to CPF 3-2013-5014 and for each
document you submit, please provide a copy in electronic format whenever possible.
Sincerely,
David Barrett
Director, Central Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
8



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to ONEOK NGL Pipeline, L.P. (ONEOK) a
Compliance Order incorporating the following remedial requirements to ensure the
compliance of ONEOK with the pipeline safety regulations:
1. 2. In regard to Item 2 of the Notice, submit DOT Form 7000-1 Accident Report within
30 days of issuance of the Final Order.
It is requested that ONEOK NGL Pipeline, LP maintain documentation of the
safety improvement costs associated with fulfilling this Compliance Order and
submit the total to David Barrett, Director, Central, Pipeline and Hazardous
Materials Safety Administration. It is requested that these costs be reported in two
categories: 1) total cost associated with preparation/revision of plans, procedures,
studies and analyses, and 2) total cost associated with replacements, additions and
other changes to pipeline infrastructure.
9

320135014_Final Order_10122016_text.pdf

October 12, 2016
Mr. Terry K. Spencer
President and CEO
ONEOK NGL Pipeline, L.P.
100 W. Fifth Street
Tulsa, Oklahoma 74103
Re: CPF No. 3-2013-5014, CPF No. 3-2013-5015, CPF No. 3-2013-5020
Dear Mr. Spencer:
Enclosed please find the three Final Orders issued in the above-referenced cases. The Final
Order in CPF No. 3-2013-5014 makes findings of violation, assesses a reduced civil penalty of
$550,400, and specifies actions that need to be taken by ONEOK NGL Pipeline, L.P., ONEOK
NGL Pipeline, L.L.C., and ONEOK Underground Storage Company, L.L.C. (collectively,
ONEOK) to comply with the pipeline safety regulations.
The Final Order issued in CPF No. 3-2013-5015 makes findings of violation, withdraws one
alleged violation, assesses a civil penalty of $159,000, and specifies actions that need to be taken
by ONEOK to comply with the pipeline safety regulations. Finally, the Final Order issued in
CPF No. 3-2013-5020 makes one finding of violation, withdraws one alleged violation, and
assesses a civil penalty of $22,500.
The penalty payment terms are set forth in each of the Final Orders. When the civil penalties
have been paid and the terms of the compliance orders completed, as determined by the Director,
Central Region, these enforcement actions will be closed. Service of the Final Orders is made
pursuant to 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Acting Associate Administrator
for Pipeline Safety
Enclosure



cc: Mr. Allan Beshore, Director, Central Region, OPS
Mr. Vince Murchison, Murchison Law Firm, PLLC
325 North St. Paul Street, Suite 2700, Dallas, Texas 75201
CERTIFIED MAIL – RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
___________________________________
In the Matter of )
ONEOK NGL Pipeline, L.P., )
ONEOK NGL Pipeline, L.L.C., and ) CPF No. 3-2013-5014
ONEOK Underground Storage )
Company, L.L.C., collectively, )
)
)
)
Respondent. )
___________________________________ )
FINAL ORDER
Between May 2008 and April 2011, pursuant to 49 U.S.C. § 60117, representatives of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an investigation of a fire that occurred at a facility of ONEOK NGL
Pipeline, L.P., ONEOK NGL Pipeline, L.L.C., and ONEOK Underground Storage
Company, L.L.C. (collectively, ONEOK or Respondent) in Bushton, Kansas.1 ONEOK operates
11,500 miles of pipeline transporting hazardous liquids, including approximately 11,000 miles
transporting highly volatile liquids in Texas, Oklahoma, Kansas and several other states.2
As a result of the investigation, the Director, Central Region, OPS (Director), issued a Notice of
Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order to Respondent on
May 13, 2013 (Notice).3 In accordance with 49 C.F.R. § 190.207, the Notice alleged that
Respondent committed nine violations of the pipeline safety regulations in 49 C.F.R. Part 195
and proposed a civil penalty of $559,100 for the alleged violations. The Notice also proposed
that corrective action be completed with respect to one of the alleged violations.
After receiving an extension of time, ONEOK responded to the Notice on July 12, 2013.
ONEOK contested the jurisdiction of PHMSA, contested the merits of the alleged violations and
requested a hearing. Additional written materials were submitted by Respondent on January 6
1 The three entities own and operate different portions of the Bushton facility. ONEOK Post-hearing
Jurisdictional Brief at 5 (Mar. 14, 2014).
2 This information is reported by Respondent for calendar year 2015 pursuant to 49 C.F.R. § 195.49.
3 Two additional notices of probable violation were issued by the Director to Respondent. They were
dated May 13, 2013 (CPF No. 3-2013-5015) and July 3, 2013 (CPF No. 3-2013-5020). Separate Final
Orders are being issued in those cases.



CPF No. 3-2013-5014
Page 2
and 10, 2014. In accordance with 49 C.F.R. § 190.211, a hearing was held in Kansas City,
Missouri on January 15, 2014, before a Presiding Official from the Office of Chief Counsel,
PHMSA.4 After the hearing, Respondent submitted additional written materials dated April 1,
2014, and May 6, 2016. Pursuant to § 190.209(b)(7), the Director submitted a written evaluation
of Respondent’s response material on April 1, 2016.
BACKGROUND
The facility at issue in this proceeding is located in a rural area near Bushton, Kansas. The
Bushton facility has inbound and outbound pipelines that transport natural gas liquids (NGLs).5
In addition to the inbound and outbound pipelines, the facility has underground storage caverns,
fractionation equipment, and in-plant piping, including pipes, valves, pumps, meters and other
equipment used to move NGLs. Central to the in-plant piping are manifolds that allow NGLs to
be directed between and among any of the inbound and outbound pipelines, storage caverns, and
fractionation equipment.6
On the morning of May 17, 2008, four releases of NGLs occurred in succession at the Bushton
facility. The releases involved a mixture of NGL hydrocarbons and water being forced through
and over the top of a flare stack connected to a flare/drain system. During at least three of the
release events, liquid hydrocarbons were ignited by the flare tip burners and fell to the ground
where fires ensued. The first event occurred at 7:41 a.m. The fourth and final event occurred at
approximately 9:53 a.m.
An investigation by Respondent concluded that excessive amounts of hydrocarbon liquids and
water had accumulated in the flare/drain system. The flare/drain system is used to collect and
dispose of liquid hydrocarbons, contaminated water, and vapor products from various sources at
the facility, such as relief valves, pressure vessels, and piping drains. The flare/drain system
consists of approximately 1050 feet of pipe, a 10,500-gallon accumulator tank and a 40-foot tall
flare stack.
The four releases occurred when hydrocarbon products were discharged into the flare/drain
system, which already contained an excessive amount of hydrocarbons and water. The
accumulator tank had not been drained and an alarm that was designed to notify Respondent of
high tank levels did not function. Approximately 250 personnel at the facility were evacuated.
Nearby residences were also evacuated. No injuries or fatalities were reported in connection
with the release and fires. After Respondent shut down the facility and emptied the flare/drain
system, the Company resumed normal operations around 6:30 p.m. the same day.
4 The hearing also concerned the notice of probable violation issued in CPF No. 3-2013-5020. A
separate hearing concerning the notice of probable violation in CPF No. 3-2013-5015 was held November
14-15, 2013. That hearing also discussed the jurisdictional issues relevant to all the proceedings.
5 NGLs are highly volatile liquids, which are hazardous liquids that form a vapor cloud when released to
the atmosphere and have a vapor pressure exceeding 276 kPa (40 psia) at 37.8 °C (100 °F). § 195.2.
6 ONEOK Post-hearing Jurisdictional Brief at 6.



CPF No. 3-2013-5014
Page 3
Following an OPS investigation, the Director, Central Region issued the present enforcement
action alleging that Respondent committed nine safety violations in connection with the event.
Respondent argued initially that PHMSA lacks authority under the Pipeline Safety Act to enforce
safety regulations at the Bushton facility. Specifically, ONEOK argued the facility is not subject
to the Pipeline Safety Act because it is a “refining” facility used in the fractionation of NGLs. At
the hearing, OPS countered that the Act applies because the facility engages in the transportation
of hazardous liquids by pipeline and NGL fractionation does not constitute refining. I consider
these jurisdictional arguments first before addressing the alleged violations.
JURISDICTION
The Pipeline Safety Act, 49 U.S.C. chapter 601, charges PHMSA with prescribing and enforcing
minimum safety standards for pipeline transportation and pipeline facilities.7 “Pipeline
transportation” is defined in the Act to include “the movement of hazardous liquid by pipeline”
and “storage of hazardous liquid incidental to the movement of hazardous liquid by pipeline,”
but not the movement of hazardous liquids through “refining” facilities.8 PHMSA may enter the
premises of an owner or operator to perform an inspection and may issue administrative orders
and assess civil penalties to enforce its safety standards.9
PHMSA has adopted minimum safety standards for hazardous liquid pipelines in 49 C.F.R.
Part 195. The safety regulations apply to all parts of a pipeline facility through which hazardous
liquids move in transportation, including but not limited to pipe, equipment, facilities and
breakout tanks.10 The regulations do not apply to refining facilities or storage or in-plant piping
systems associated with refining facilities.11
Respondent argued the Bushton facility meets the exception in the Act for refining because it
“employs a refining process called fractionation” that is “the same refining process that occurs at
a crude oil refinery.”12 Respondent explained that fractionation, also known as distillation,
separates raw NGL mixture into purity products, such as propane and butane, by applying
different temperatures and pressures. No chemical change takes place to the product, but
according to Respondent the separation constitutes a physical change. In this respect Respondent
argued the Bushton facility is no different than a crude oil refinery.
7 49 U.S.C. § 60102(a).
8 § 60101(a)(22). A pipeline facility includes any pipeline, right-of-way, facility, building, or equipment
used or intended to be used in pipeline transportation. § 60101(a)(5).
9 §§ 60117(c), 60118(b) and 60122.
10 49 C.F.R. §§ 195.1(a) and 195.2.
11 § 195.1(b)(8).
12 ONEOK Post-hearing Jurisdictional Brief at 9.



CPF No. 3-2013-5014
Page 4
Respondent noted the term “refining” is not defined in the Act, but the Company suggested the
term “has a plain and unambiguous meaning.”13 An expert for Respondent cited dictionary
definitions and other sources to support his opinion that a refinery is any facility where unwanted
substances are removed to produce a higher grade or purified product.14 Respondent cited the
website of the U.S. Energy Information Administration (U.S. EIA), which defines a refinery as
an “installation that manufactures finished petroleum products from crude oil, unfinished oils,
natural gas liquids, other hydrocarbons, and oxygenates.”15 Respondent also cited an industry
publication that defines a refiner as someone involved in a process “by which the physical or
chemical characteristics of petroleum or petroleum products are changed . . . .”16 Using all of
these definitions, Respondent insisted the term refining in the Act includes NGL fractionation
performed at the Bushton facility.
Respondent argued further that legislative history and past practice of PHMSA demonstrate the
refining exception was intended to cover NGL fractionation. Respondent asserted that during the
legislative process leading to enactment of the refining exception, statements by members of
Congress and the Department of Transportation demonstrated they understood the difference
between transportation and refining and they intended the Act to exclude facilities like Bushton.
Respondent noted that PHMSA has never adopted regulations for NGL fractionation. ONEOK
reasoned that Congress must be content with the absence of regulations because Congress has
never amended the refining exception.17 Respondent also suggested that by not regulating
fractionation, the Agency too must believe the Act does not apply.
At the hearing and in its written submission, OPS disagreed with these assertions. OPS argued
that since 2006, the Agency has communicated to Respondent that the Bushton facility is
covered by the Act. As a technical matter, OPS argued that refining involves more than just
separating an NGL mixture—it involves the conversion of a crude product into another
substance, such as when crude oil is converted to gasoline. NGL fractionation, OPS argued,
merely involves the separation of a mixture and does not involve conversion of a product nor
does it change the physical or chemical characteristics of the NGL. OPS noted the Department
of Energy does not recognize the Bushton facility as a refinery.
18 Finally, OPS argued that prior
litigation by the previous owner of the Bushton facility resulted in a federal court finding the
Bushton facility was not engaged in refining.
13 ONEOK Post-hearing Jurisdictional Brief at 11.
14 ONEOK Post-hearing Jurisdictional Brief at 11.
15 U.S. EIA Definitions, Sources and Explanatory Notes, available at:
http://www.eia.gov/dnav/pet/TblDefs/pet_pnp_capshell_tbldef2.asp (last accessed Aug. 10, 2016)
(emphasis added).
16 ONEOK Post-hearing Jurisdictional Brief at 12, quoting Manual of Oil and Gas Terms by Howard
Williams and Charles Meyers.
17 ONEOK Post-hearing Jurisdictional Brief at 16.
18 Central Region Recommendation at 5 (Apr. 1, 2016).



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To these points, Respondent responded that prior written interpretations by PHMSA demonstrate
“shifting theories” of jurisdiction,19 the definition of refining offered by OPS is too narrow, and
OPS improperly treats NGL fractionation facilities different than crude oil refineries.
A. Preliminary Analysis
When deciding issues of legal interpretation, such as the scope of the Pipeline Safety Act, I first
look to the plain language of the law.20 As noted above, the Act applies by its terms to facilities
used in the “movement of hazardous liquid by pipeline” and “storage of hazardous liquid
incidental to the movement of hazardous liquid by pipeline.”21
The record shows the Bushton facility has both inbound and outbound pipelines that transport
NGLs, which are a hazardous liquid. The NGLs arrive as “Y-grade” (a raw mixture of NGLs) or
as “purity products” (NGLs previously separated from a raw mixture). Purity products arrive by
inbound pipeline and are then either transported through the facility to outbound pipelines for
continued transportation or to storage caverns for later transportation by pipeline. Incoming
Y-grade NGLs are either sent to fractionation equipment for separation and stored or transported,
sent to storage wells for fractionation or transportation at a later time, or transported directly to
outbound pipelines. In summary, the Bushton facility receives hazardous liquids in
transportation by pipeline, stores hazardous liquids incidental to their movement by pipeline, and
transports hazardous liquids from the facility by pipeline. The facility is therefore engaged in
pipeline transportation subject to the Act unless an exception applies.
Both the Act and Part 195 except the movement of hazardous liquids through refining facilities
and the storage or in-plant piping systems associated with refining facilities. The term “refining”
is not defined in the Act or regulations, but as discussed in more detail below PHMSA has
previously interpreted the refining exception as it relates to NGL fractionation.
B. Prior Interpretations
As a general matter, when deciding interpretive issues in an enforcement proceeding, I give prior
decisions by the Agency on that issue effect unless there is a compelling reason to change or
depart from the position previously adopted.22
In 2005, a representative of the Central Region, OPS attempted to perform a pipeline safety
inspection of the Bushton facility. ONEOK personnel communicated their belief that the facility
19 ONEOK Post-hearing Jurisdictional Brief at 6.
20 Plains Pipeline, L.P., CPF No. 4-2013-5007, Item 5, 2015 WL 4397455 (May 22, 2015).
21 49 U.S.C. § 60101(a)(22).
22 See, e.g., Sunoco Pipeline, LP, CPF No. 1-2014-5005, Item 1, 2016 WL 770393, at *3 (Jan. 13, 2016)
(finding a violation based on prior interpretations of a safety standard).



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was not subject to PHMSA jurisdiction. In a follow-up letter from the Central Region Director,
ONEOK was asked to provide the reasons why it believed the facility was not jurisdictional.23
Respondent replied in March 2006 and explained the Bushton facility consists of underground
storage wells and associated facility piping. Product is brought into the facility by pipeline and
stored until customers request delivery by pipeline or truck. Respondent contended at that time
that the facility was not subject to Agency regulations because movement of product inside the
facility involved in-plant piping systems associated with storage and because non-pipeline modes
of transportation were used in some instances.24
The Director replied by letter dated June 27, 2006 (2006 Interpretation). The Director stated that
after reviewing the response, he disagreed with the Company’s assessment, finding the facility
was being used for the transportation of hazardous liquids. Specifically, he noted “the storage
fields are utilized for storage of product delivered to the fields by pipeline, and product is
re-injected into the pipeline for delivery to another destination by pipeline.”25 He advised
ONEOK that the Agency would be performing another scheduled inspection of the facility.
Respondent replied on November 13, 2006, stating the Company would “implement a transition
plan to convert certain of its storage assets . . . to a PHMSA/Part 195 driven hazard control
system for facilities where PHMSA has jurisdiction.”26 Respondent requested clarification that
“all pipes, valves, and other appurtenances connecting the cavern wellhead to the regulated
pipelines must comply with the PHMSA/Part 195 regulations for pipeline systems . . . but no
Part 195 regulations specific to ‘caverns’ [underground storage] currently exist.”27 Respondent
indicated it also planned to request a waiver to allow continued use of certain programs and
requested that PHMSA confirm or clarify the Company’s plan.
Additional discussions between Respondent and the Central Region demonstrated the Company
intended to follow Part 195 regulations for the Bushton facility but wanted additional guidance
on issues such as where jurisdiction started and ended.28 In early 2007, Respondent confirmed
Part 195 requirements were being integrated into its manual of written procedures for the
Bushton facility.29 By mid-2007, OPS had documented telephone and in-person conversations
with Respondent confirming the progress. Demarcation points for PHMSA-jurisdictional
facilities were completed.30 Respondent performed operator qualification (OQ) and maximum
23 OPS letter (Feb. 15, 2006), OPS Violation Report, Exhibit A: Draft OPS Failure Investigation Report
(FIR) (Apr. 29, 2013), Appendix C at 1.
24 25 26 27 28 29 ONEOK letter (Mar. 27, 2006), FIR Appendix C at 5.
OPS letter (Jun. 27, 2006), FIR Appendix C at 7.
ONEOK letter (Nov. 13, 2006), FIR Appendix C at 9.
ONEOK letter (Nov. 13, 2006), FIR Appendix C at 10.
OPS memo (Dec. 20, 2006), FIR Appendix C at 15.
ONEOK email (Jan. 15, 2007), FIR Appendix C at 16.
30 OPS memo (Apr. 16, 2007), FIR Appendix C at 20.



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operating pressure (MOP) determination activities.31 In early 2008, Respondent called to
confirm that conversion to Part 195 regulations was complete with the exception of pressure
testing. In April 2011, Respondent confirmed that pressure testing had been completed.32
Following a meeting between Respondent and OPS on August 4, 2011, the Company submitted a
request for written interpretation concerning the jurisdictional status of the Bushton facility.
Respondent asserted in its request that Bushton was “a processing (refining) facility” and
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