{"operation":"document","citation":"CPF 320155006","title":"SINCLAIR TRANSPORTATION COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2015-06-03","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(k), 195.581.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320155006.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320155006.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320155006","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320155006","body":"Notice of Probable Violation involving SINCLAIR TRANSPORTATION COMPANY. PHMSA's enforcement data identifies the cited regulations as 195.452(k),  195.581. The case was opened on 2015-06-03 and is reported as closed as of 2017-10-20. Proposed civil penalty: $34,200. Assessed civil penalty: $34,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320155006_Closure Letter_10202017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Closure%20Letter_10202017.pdf\n\n320155006_Closure Letter_10202017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Closure%20Letter_10202017_text.pdf\n\n320155006_Final Order_10152015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Final%20Order_10152015.pdf\n\n320155006_Final Order_10152015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Final%20Order_10152015_text.pdf\n\n320155006_NOPV PCP PCO_06032015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_NOPV%20PCP%20PCO_06032015.pdf\n\n320155006_NOPV PCP PCO_06032015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_NOPV%20PCP%20PCO_06032015_text.pdf\n\n320155006_Operator Response to Notice_07012015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Operator%20Response%20to%20Notice_07012015.pdf\n\n320155006_Final Order_10152015_text.pdf\n\nOctober 15, 2015\nMr. Mark A. Petersen\nPresident\nSinclair Transportation Company\n550 E. South Temple\nP.O. Box 30825\nSalt Lake City, UT 84130\nRe: CPF No. 3-2015-5006\nDear Mr. Petersen:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $34,200, and specifies actions that need to be taken by\nSinclair Transportation Company to comply with the pipeline safety regulations. This is to\nacknowledge receipt of payment of the full penalty amount, by wire transfer dated June 30, 2015.\nWhen the terms of the compliance order have been completed, as determined by the Director,\nCentral Region, this enforcement action will be closed. Service of the Final Order by certified\nmail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R.\n§ 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Allan C. Beshore, Director, Central Region, OPS\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\n____________________________________\n)\nIn the Matter of )\n)\nSinclair Transportation Company, ) CPF No. 3-2015-5006\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn November 25-27 and December 2-6, 2013, pursuant to 49 U.S.C. § 60117, a representative of\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Sinclair\nTransportation Company (Sinclair or Respondent) in Carrollton, Missouri. Sinclair operates an\n8-inch pipeline transporting refined products approximately 320 miles from Olathe, Kansas, to\nMontrose, Iowa.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated June 3, 2015, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice), which also included a warning pursuant to 49 C.F.R. §\n190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Sinclair had\nviolated 49 C.F.R. § 195.581 and proposed assessing a civil penalty of $34,200 for the alleged\nviolation. The Notice also proposed ordering Respondent to take certain measures to correct the\nalleged violation. The warning item required no further action, but warned the operator to\ncorrect the probable violation.\nFINDING OF VIOLATION\nIn its Response, Sinclair did not contest the allegation in the Notice that it violated 49 C.F.R. Part\n195, as follows:\n1 Pipeline Safety Violation Report (Violation Report), (July 16, 2014) (on file with PHMSA), at 1.\n\n\n\nCPF No. 3-2015-5006\nPage 2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.581, which states:\n§ 195.581 Which pipelines must I protect against atmospheric\ncorrosion and what coating material may I use?\n(a) You must clean and coat each pipeline or portion of pipeline that is\nexposed to the atmosphere, except pipelines under paragraph (c) of this\nsection.\n(b) Coating material must be suitable for the prevention of atmospheric\ncorrosion.\n(c) Except portions of pipelines in offshore splash zones or soil-to-air\ninterfaces, you need not protect against atmospheric corrosion any pipeline\nfor which you demonstrate by test, investigation, or experience\nappropriate to the environment of the pipeline that corrosion will—\n(1) Only be a light surface oxide; or\n(2) Not affect the safe operation of the pipeline before the next\nscheduled inspection.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.581 by failing to clean and coat\neach portion of pipeline that is exposed to the atmosphere. Specifically, the Notice alleged that\nSinclair did not clean and coat portions of its Missouri pipeline to protect it from atmospheric\ncorrosion. Inspection records showed that the coating on portions of the pipeline was in poor\ncondition, or that the pipeline was completely bare, with many spans of pipeline exhibiting\ncorrosion. During the on-site inspection, PHMSA’s inspector observed corrosion pits on\nmultiple exposed pipe spans. Respondent did not contest this allegation of violation.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 195.581 by failing to clean and coat each portion of pipeline that is exposed to the\natmosphere.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.2 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\n2 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.\n1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per\nviolation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.\n\n\n\nCPF No. 3-2015-5006\nPage 3\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $34,200 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $34,200 for Respondent’s violation of 49 C.F.R.\n§ 195.581, for failing to clean and coat each portion of pipeline that is exposed to the\natmosphere. Sinclair neither contested the allegation nor presented any evidence or argument\njustifying a reduction in the proposed penalty. Atmospheric corrosion can cause serious damage\nto an exposed pipeline system, and can lead to a pipeline failure. Respondent is fully culpable\nfor the failure to protect its pipeline from this risk. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $34,200 for violation of\n49 C.F.R. § 195.581.\nRespondent paid the civil penalty by wire transfer on June 30, 2015.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49\nC.F.R. § 195.581. Under 49 U.S.C. § 60118(a), each person who engages in the transportation\nof hazardous liquids or who owns or operates a pipeline facility is required to comply with the\napplicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C.\n§ 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to\nensure compliance with the pipeline safety regulations applicable to its operations:\n1. 2. With respect to the violation of § 195.581 (Item 1):\na. Within 90 days of the issuance of this order, Respondent must:\ni. Assess the integrity of the Missouri Pipeline at all locations where\naboveground pipe is known to exhibit corrosion;\nii. Make necessary repairs to the pipe; and\niii. Clean and recoat the pipe at each repaired location.\nb. Within 30 days of the issuance of this order, Respondent must submit to\nthe Director a plan and schedule to complete inspection and repair of\naboveground pipe locations exhibiting bare soil to air transition areas.\nRespondent must perform the planned repairs within 18 months.\nRespondent must provide the Director with quarterly progress reports, and\na final report upon completion of repairs.\nPHMSA requests that Sinclair maintain documentation of the safety improvement\ncosts associated with fulfilling this Compliance Order and submit the total to the\nDirector. It is requested that these costs be reported in two categories: 1) total\ncost associated with preparation/revision of plans, procedures, studies, and\nanalyses, and 2) total cost associated with replacements, additions, and other\nchanges to pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\n\n\n\nCPF No. 3-2015-5006\nPage 4\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 $200,000 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.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged probable violations of Part 195 but did not propose a\ncivil penalty or compliance order for this item. Therefore, this is considered to be a warning\nitem. The warning was for:\n49 C.F.R. § 195.452(k) (Item 2) ─ Respondent’s alleged failure to include\nmethods to measure the integrity management program’s effectiveness in\nassessing and evaluating the integrity of each pipeline segment and in protecting\nthe high consequence areas, specifically the failure to evaluate the effectiveness of\nhydrotest assessments.\nIf OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject\nto future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of this Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.243. Unless the Associate Administrator, upon request, grants a\nstay, the 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\n\n320155006_Closure Letter_10202017_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nOctober 20, 2017\nMr. Mark A. Petersen\nPresident\nSinclair Transportation Company\n550 E. South Temple\nP.O. BOX 30825\nSalt Lake City, UT 84130\nCPF 3-2015-5006\nDear Mr. Petersen:\nOn October 15, 2015, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Sinclair Transportation Company a Final Order in the above referenced case. This\nOrder included a Compliance Order and Civil Penalty assessment. On September 6, 2017\nPHMSA received your final report as required by Item 1.b. of the Compliance Order,\nsummarizing the completion of repairs to your pipeline. Based on our review of the\ndocumentation you provided, and confirmation of payment of the civil penalty, it has been\ndetermined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nAllan C. Beshore,\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\n\n320155006_NOPV PCP PCO_06032015_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 3, 2015\nMr. Mark Petersen\nVice President Transportation\nSinclair Transportation Company\n550 East South Temple\nP.O. Box 30825\nSalt Lake City, Utah 84102\nCPF 3-2015-5006\nDear Mr. Petersen:\nOn November 25-27 and December 2-6, 2013, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\npursuant to Chapter 601 of 49 United States Code inspected your records and facilities in\nCarrollton, Missouri.\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\nand the probable violations are:\n1. §195.581 Which pipelines must I protect against atmospheric corrosion and what\ncoating material may I use?\n(a) You must clean and coat each pipeline or portion of pipeline that is exposed\nto the atmosphere, except pipelines under paragraph (c) of this section.\n(b) Coating material must be suitable for the prevention of atmospheric\ncorrosion.\n\n\n\n2. (c) Except portions of pipelines in offshore splash zones or soil-to-air\ninterfaces, you need not protect against atmospheric corrosion any pipeline\nfor which you demonstrate by test, investigation, or experience appropriate\nto the environment of the pipeline that corrosion will-\n(1) Only be a light surface oxide; or\n(2) Not affect the safe operation of the pipeline before the next scheduled\ninspection.\nSinclair did not protect its pipe spans and exposures on its Missouri Pipeline from\natmospheric corrosion. Atmospheric inspection records showed that the coating on\nmany spans was in very poor or completely bare condition with many spans\nexhibiting general corrosion. PHMSA observed during on-site inspection multiple\nexposed pipe locations exhibiting corrosion pits. Sinclair span numbers: 1, 2, 45,\n63, 71, 88, 117, and 130.1 were observed on site and found to have significant pits\nmeasuring from between 0.070 inches in depth up to 0.150 inches in depth.\nTransition areas were also not protected by a suitable coating.\n§195.452 Pipeline integrity management in high consequence areas.\n(k) What methods to measure program effectiveness must be used? An\noperator's program must include methods to measure whether the program is\neffective in assessing and evaluating the integrity of each pipeline segment and\nin protecting the high consequence areas. See Appendix C of this part for\nguidance on methods that can be used to evaluate a program's effectiveness.\nSinclair did not have definitive methods to measure the effectiveness of integrity\nassessments by hydrotest. Sinclair’s process and procedures for evaluation of\nhydrotest assessment results and subsequent repairs did not measure whether the\nintegrity management program is effective in reducing the risk of a release due to\ncorrosion.\nProposed Civil Penalty\nUnder 49 United States Code, §60122, you are subject to a civil penalty not to exceed\n$200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a\nrelated series of violations. For violations occurring prior to January 4, 2012, the maximum\npenalty may not exceed $100,000 per violation per day with a maximum penalty not to\nexceed $1,000,000 for a related series of violations. The Compliance Officer has reviewed\nthe circumstances and supporting documentation involved in the above probable violations\nand has recommended that you be preliminarily assessed a civil penalty of $34,200 as\nfollows:\nItem Number PENALTY\n1 $34,200\n2\n\n\n\nWarning Items\nWith respect to Item 2 we have reviewed the circumstances and supporting documents\ninvolved in this case and have decided not to conduct additional enforcement action or\npenalty assessment proceedings at this time. We advise you to promptly correct this item.\nFailure to do so may result in additional enforcement action.\nProposed Compliance Order\nWith respect to item 1 pursuant to 49 United States Code §60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to\nSinclair Transportation Company. Please refer to the Proposed Compliance Order, which\nis enclosed 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. All material you submit in response to this enforcement action may be made\npublicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document,\nyou must provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted\ninformation qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for\nPipeline Safety to find facts as alleged in this Notice without further notice to you and to\nissue a Final Order.\nIn your correspondence on this matter, please refer to CPF 3-2015-5006 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n3\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 Sinclair Transportation Company a\nCompliance Order incorporating the following remedial requirements to ensure the\ncompliance of Sinclair Transportation Company with the pipeline safety regulations:\n1. 2. In regard to Item Number 1 of the Notice pertaining to deficiencies in the\nprotection of exposed pipe from corrosion, Sinclair Transportation Company\nmust accomplish the following:\na. Within 90 days of the issuance of the Final Order: assess the integrity of\nthe Missouri Pipeline at all locations where aboveground pipe is known\nto exhibit corrosion, make necessary repairs, clean and recoat the pipe at\neach location.\nb. Within 30 days of the issuance of the Final Order: furnish to the\nDirector, Central Region, a plan and schedule to complete inspection and\nrepair of aboveground pipe locations exhibiting bare soil to air transition\nareas.\ni. ii. Perform the planned repairs within 12 months.\nFurnish to the Director additional quarterly progress reports, and\na final report upon completion of repairs.\nIt is requested (not mandated) that Sinclair Transportation Company\nmaintain documentation of the safety improvement costs associated with\nfulfilling this Compliance Order and submit the total to Allan C. Beshore,\nDirector, Central Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories:\n1) total cost associated with preparation/revision of plans, procedures,\nstudies and analyses, and 2) total cost associated with replacements,\nadditions and other changes to pipeline infrastructure.\n4","truncated":false,"body_characters":20723}