# SINCLAIR TRANSPORTATION COMPANY — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.452(k), 195.581.
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- **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.

Official case documents:

320155006_Closure Letter_10202017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Closure%20Letter_10202017.pdf

320155006_Closure Letter_10202017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Closure%20Letter_10202017_text.pdf

320155006_Final Order_10152015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Final%20Order_10152015.pdf

320155006_Final Order_10152015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Final%20Order_10152015_text.pdf

320155006_NOPV PCP PCO_06032015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_NOPV%20PCP%20PCO_06032015.pdf

320155006_NOPV PCP PCO_06032015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_NOPV%20PCP%20PCO_06032015_text.pdf

320155006_Operator Response to Notice_07012015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320155006/320155006_Operator%20Response%20to%20Notice_07012015.pdf

320155006_Final Order_10152015_text.pdf

October 15, 2015
Mr. Mark A. Petersen
President
Sinclair Transportation Company
550 E. South Temple
P.O. Box 30825
Salt Lake City, UT 84130
Re: CPF No. 3-2015-5006
Dear Mr. Petersen:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a civil penalty of $34,200, and specifies actions that need to be taken by
Sinclair Transportation Company to comply with the pipeline safety regulations. This is to
acknowledge receipt of payment of the full penalty amount, by wire transfer dated June 30, 2015.
When the terms of the compliance order have been completed, as determined by the Director,
Central Region, this enforcement action will be closed. Service of the Final Order by certified
mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R.
§ 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Allan C. Beshore, Director, Central Region, OPS
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, DC 20590
____________________________________
)
In the Matter of )
)
Sinclair Transportation Company, ) CPF No. 3-2015-5006
)
Respondent. )
____________________________________)
FINAL ORDER
On November 25-27 and December 2-6, 2013, pursuant to 49 U.S.C. § 60117, a representative of
the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Sinclair
Transportation Company (Sinclair or Respondent) in Carrollton, Missouri. Sinclair operates an
8-inch pipeline transporting refined products approximately 320 miles from Olathe, Kansas, to
Montrose, Iowa.1
As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,
by letter dated June 3, 2015, a Notice of Probable Violation, Proposed Civil Penalty, and
Proposed Compliance Order (Notice), which also included a warning pursuant to 49 C.F.R. §
190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Sinclair had
violated 49 C.F.R. § 195.581 and proposed assessing a civil penalty of $34,200 for the alleged
violation. The Notice also proposed ordering Respondent to take certain measures to correct the
alleged violation. The warning item required no further action, but warned the operator to
correct the probable violation.
FINDING OF VIOLATION
In its Response, Sinclair did not contest the allegation in the Notice that it violated 49 C.F.R. Part
195, as follows:
1 Pipeline Safety Violation Report (Violation Report), (July 16, 2014) (on file with PHMSA), at 1.



CPF No. 3-2015-5006
Page 2
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.581, which states:
§ 195.581 Which pipelines must I protect against atmospheric
corrosion and what coating material may I use?
(a) You must clean and coat each pipeline or portion of pipeline that is
exposed to the atmosphere, except pipelines under paragraph (c) of this
section.
(b) Coating material must be suitable for the prevention of atmospheric
corrosion.
(c) Except portions of pipelines in offshore splash zones or soil-to-air
interfaces, you need not protect against atmospheric corrosion any pipeline
for which you demonstrate by test, investigation, or experience
appropriate to the environment of the pipeline that corrosion will—
(1) Only be a light surface oxide; or
(2) Not affect the safe operation of the pipeline before the next
scheduled inspection.
The Notice alleged that Respondent violated 49 C.F.R. § 195.581 by failing to clean and coat
each portion of pipeline that is exposed to the atmosphere. Specifically, the Notice alleged that
Sinclair did not clean and coat portions of its Missouri pipeline to protect it from atmospheric
corrosion. Inspection records showed that the coating on portions of the pipeline was in poor
condition, or that the pipeline was completely bare, with many spans of pipeline exhibiting
corrosion. During the on-site inspection, PHMSA’s inspector observed corrosion pits on
multiple exposed pipe spans. Respondent did not contest this allegation of violation.
Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49
C.F.R. § 195.581 by failing to clean and coat each portion of pipeline that is exposed to the
atmosphere.
This finding of violation will be considered a prior offense in any subsequent enforcement action
taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.2 In determining the amount of a civil penalty under 49 U.S.C.
§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,
circumstances, and gravity of the violation, including adverse impact on the environment; the
degree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect
that the penalty may have on its ability to continue doing business; and the good faith of
Respondent in attempting to comply with the pipeline safety regulations. In addition, I may
2 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.
1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per
violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.



CPF No. 3-2015-5006
Page 3
consider the economic benefit gained from the violation without any reduction because of
subsequent damages, and such other matters as justice may require. The Notice proposed a total
civil penalty of $34,200 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $34,200 for Respondent’s violation of 49 C.F.R.
§ 195.581, for failing to clean and coat each portion of pipeline that is exposed to the
atmosphere. Sinclair neither contested the allegation nor presented any evidence or argument
justifying a reduction in the proposed penalty. Atmospheric corrosion can cause serious damage
to an exposed pipeline system, and can lead to a pipeline failure. Respondent is fully culpable
for the failure to protect its pipeline from this risk. Accordingly, having reviewed the record and
considered the assessment criteria, I assess Respondent a civil penalty of $34,200 for violation of
49 C.F.R. § 195.581.
Respondent paid the civil penalty by wire transfer on June 30, 2015.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49
C.F.R. § 195.581. Under 49 U.S.C. § 60118(a), each person who engages in the transportation
of hazardous liquids or who owns or operates a pipeline facility is required to comply with the
applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C.
§ 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to
ensure compliance with the pipeline safety regulations applicable to its operations:
1. 2. With respect to the violation of § 195.581 (Item 1):
a. Within 90 days of the issuance of this order, Respondent must:
i. Assess the integrity of the Missouri Pipeline at all locations where
aboveground pipe is known to exhibit corrosion;
ii. Make necessary repairs to the pipe; and
iii. Clean and recoat the pipe at each repaired location.
b. Within 30 days of the issuance of this order, Respondent must submit to
the Director a plan and schedule to complete inspection and repair of
aboveground pipe locations exhibiting bare soil to air transition areas.
Respondent must perform the planned repairs within 18 months.
Respondent must provide the Director with quarterly progress reports, and
a final report upon completion of repairs.
PHMSA requests that Sinclair maintain documentation of the safety improvement
costs associated with fulfilling this Compliance Order and submit the total to the
Director. 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.
The Director may grant an extension of time to comply with any of the required items upon a



CPF No. 3-2015-5006
Page 4
written request timely submitted by the Respondent and demonstrating good cause for an
extension.
Failure to comply with this Order may result in the administrative assessment of civil penalties
not to exceed $200,000 for each violation for each day the violation continues or in referral to the
Attorney General for appropriate relief in a district court of the United States.
WARNING ITEM
With respect to Item 2, the Notice alleged probable violations of Part 195 but did not propose a
civil penalty or compliance order for this item. Therefore, this is considered to be a warning
item. The warning was for:
49 C.F.R. § 195.452(k) (Item 2) ─ Respondent’s alleged failure to include
methods to measure the integrity management program’s effectiveness in
assessing and evaluating the integrity of each pipeline segment and in protecting
the high consequence areas, specifically the failure to evaluate the effectiveness of
hydrotest assessments.
If OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject
to future enforcement action.
Under 49 C.F.R. § 190.243, Respondent has a right to submit a Petition for Reconsideration of
this Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline
Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC
20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA
will accept petitions received no later than 20 days after receipt of service of this Final Order by
the Respondent, provided they contain a brief statement of the issue(s) and meet all other
requirements of 49 C.F.R. § 190.243. Unless the Associate Administrator, upon request, grants a
stay, the terms and conditions of this Final Order are effective upon service in accordance with
49 C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety

320155006_Closure Letter_10202017_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
October 20, 2017
Mr. Mark A. Petersen
President
Sinclair Transportation Company
550 E. South Temple
P.O. BOX 30825
Salt Lake City, UT 84130
CPF 3-2015-5006
Dear Mr. Petersen:
On October 15, 2015, the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued to Sinclair Transportation Company a Final Order in the above referenced case. This
Order included a Compliance Order and Civil Penalty assessment. On September 6, 2017
PHMSA received your final report as required by Item 1.b. of the Compliance Order,
summarizing the completion of repairs to your pipeline. Based on our review of the
documentation you provided, and confirmation of payment of the civil penalty, it has been
determined that you have complied with the terms of this Order.
Accordingly, this case is now closed and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
Allan C. Beshore,
Director, Central Region, OPS
Pipeline and Hazardous Materials Safety Administration

320155006_NOPV PCP PCO_06032015_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
June 3, 2015
Mr. Mark Petersen
Vice President Transportation
Sinclair Transportation Company
550 East South Temple
P.O. Box 30825
Salt Lake City, Utah 84102
CPF 3-2015-5006
Dear Mr. Petersen:
On November 25-27 and December 2-6, 2013, a representative of the Pipeline and
Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
pursuant to Chapter 601 of 49 United States Code inspected your records and facilities in
Carrollton, Missouri.
As a result of the inspection, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected
and the probable violations are:
1. §195.581 Which pipelines must I protect against atmospheric corrosion and what
coating material may I use?
(a) You must clean and coat each pipeline or portion of pipeline that is exposed
to the atmosphere, except pipelines under paragraph (c) of this section.
(b) Coating material must be suitable for the prevention of atmospheric
corrosion.



2. (c) Except portions of pipelines in offshore splash zones or soil-to-air
interfaces, you need not protect against atmospheric corrosion any pipeline
for which you demonstrate by test, investigation, or experience appropriate
to the environment of the pipeline that corrosion will-
(1) Only be a light surface oxide; or
(2) Not affect the safe operation of the pipeline before the next scheduled
inspection.
Sinclair did not protect its pipe spans and exposures on its Missouri Pipeline from
atmospheric corrosion. Atmospheric inspection records showed that the coating on
many spans was in very poor or completely bare condition with many spans
exhibiting general corrosion. PHMSA observed during on-site inspection multiple
exposed pipe locations exhibiting corrosion pits. Sinclair span numbers: 1, 2, 45,
63, 71, 88, 117, and 130.1 were observed on site and found to have significant pits
measuring from between 0.070 inches in depth up to 0.150 inches in depth.
Transition areas were also not protected by a suitable coating.
§195.452 Pipeline integrity management in high consequence areas.
(k) What methods to measure program effectiveness must be used? An
operator's program must include methods to measure whether the program is
effective in assessing and evaluating the integrity of each pipeline segment and
in protecting the high consequence areas. See Appendix C of this part for
guidance on methods that can be used to evaluate a program's effectiveness.
Sinclair did not have definitive methods to measure the effectiveness of integrity
assessments by hydrotest. Sinclair’s process and procedures for evaluation of
hydrotest assessment results and subsequent repairs did not measure whether the
integrity management program is effective in reducing the risk of a release due to
corrosion.
Proposed Civil Penalty
Under 49 United States Code, §60122, you are subject to a civil penalty not to exceed
$200,000 per violation per 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 violations
and has recommended that you be preliminarily assessed a civil penalty of $34,200 as
follows:
Item Number PENALTY
1 $34,200
2



Warning Items
With respect to Item 2 we have reviewed the circumstances and supporting documents
involved in this case and have decided not to conduct additional enforcement action or
penalty assessment proceedings at this time. We advise you to promptly correct this item.
Failure to do so may result in additional enforcement action.
Proposed Compliance Order
With respect to item 1 pursuant to 49 United States Code §60118, the Pipeline and
Hazardous Materials Safety Administration proposes to issue a Compliance Order to
Sinclair Transportation Company. 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. All material you submit in response to this enforcement action may be 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.
In your correspondence on this matter, please refer to CPF 3-2015-5006 and for each
document you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Allan C. Beshore
Director, Central Region, OPS
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
3



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to Sinclair Transportation Company a
Compliance Order incorporating the following remedial requirements to ensure the
compliance of Sinclair Transportation Company with the pipeline safety regulations:
1. 2. In regard to Item Number 1 of the Notice pertaining to deficiencies in the
protection of exposed pipe from corrosion, Sinclair Transportation Company
must accomplish the following:
a. Within 90 days of the issuance of the Final Order: assess the integrity of
the Missouri Pipeline at all locations where aboveground pipe is known
to exhibit corrosion, make necessary repairs, clean and recoat the pipe at
each location.
b. Within 30 days of the issuance of the Final Order: furnish to the
Director, Central Region, a plan and schedule to complete inspection and
repair of aboveground pipe locations exhibiting bare soil to air transition
areas.
i. ii. Perform the planned repairs within 12 months.
Furnish to the Director additional quarterly progress reports, and
a final report upon completion of repairs.
It is requested (not mandated) that Sinclair Transportation Company
maintain documentation of the safety improvement costs associated with
fulfilling this Compliance Order and submit the total to Allan C. Beshore,
Director, Central Region, 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.
4
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