{"operation":"document","citation":"CPF 320165006","title":"COFFEYVILLE RESOURCES CRUDE TRANSPORTATION, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-07-25","effective_on":null,"summary":"CLOSED notice of probable violation citing 194.7(b), 195.404(b)(1), 195.404(c)(3), 195.410(a)(2)(ii), 195.426, 195.428(a), 195.432(b), 195.432(d), 195.452(h)(1)(i), 195.452(h)(4)(i)(c), 195.452(i)(1), 195.505(b), 195.571, 195.573(a)(1), 195.583(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320165006.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320165006.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320165006","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320165006","body":"Notice of Probable Violation involving COFFEYVILLE RESOURCES CRUDE TRANSPORTATION, LLC. PHMSA's enforcement data identifies the cited regulations as 194.7(b),  195.404(b)(1),  195.404(c)(3),  195.410(a)(2)(ii),  195.426,  195.428(a),  195.432(b),  195.432(d),  195.452(h)(1)(i),  195.452(h)(4)(i)(c),  195.452(i)(1),  195.505(b),  195.571,  195.573(a)(1),  195.583(a). The case was opened on 2016-07-25 and is reported as closed as of 2018-02-21. Proposed civil penalty: $497,600. Assessed civil penalty: $448,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320165006_Closure Letter_02212018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Closure%20Letter_02212018.pdf\n\n320165006_Closure Letter_02212018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Closure%20Letter_02212018_text.pdf\n\n320165006_Final Order_10312017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Final%20Order_10312017.pdf\n\n320165006_Final Order_10312017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Final%20Order_10312017_text.pdf\n\n320165006_NOPV PCP PCO_07252016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_NOPV%20PCP%20PCO_07252016_text.pdf\n\n320165006_NOPV_PCP_PCO_07252016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_NOPV_PCP_PCO_07252016.pdf\n\n320165006_Operator Response to Notice_08292016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Operator%20Response%20to%20Notice_08292016.pdf\n\n320165006_Final Order_10312017_text.pdf\n\nOctober 31, 2017\nMr. John Lipinski\nChief Executive Officer and President\nCVR Refining, LP\n2277 Plaza Drive\nSuite 500\nSugar Land, TX 77479\nRe: CPF No. 3-2016-5006\nDear Mr. Lipinski:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nCoffeyville Resources Crude Transportation, LLC (CRCT). It makes findings of violation,\nassesses a reduced civil penalty of $448,600, and acknowledges receipt of payment of the partial\npenalty amount of $156,400, by wire transfer, dated September 28, 2016. A remaining balance\nof $292,200 is now due. In addition, the Final Order specifies actions that need to be taken by\nCRCT to comply with the pipeline safety regulations.\nThe penalty payment terms are set forth in the Final Order. When the remainder of the civil\npenalty has been paid and the terms of the compliance order completed, as determined by the\nDirector, Central Region, this enforcement action will be closed. Service of the Final Order by\ncertified mail is deemed effective upon the date of mailing, or as otherwise provided under\n49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Allan C. Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA\nMr. Robert Haugen, Executive Vice President of Refining Operations, Coffeyville\nResources Crude Transportation, LLC, 2277 Plaza Drive, Suite 500; Building B,\nSugar Land, TX 77479\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__________________________________________\n)\nIn the Matter of )\n)\nCoffeyville Resources Crude Transportation, LLC, )\na subsidiary of CVR Refining, LP, ) CPF No. 3-2016-5006\n)\nRespondent. )\n__________________________________________ )\nFINAL ORDER\nOn September 14-18 and 21-25, 2015, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline 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 Coffeyville\nResources Crude Transportation, LLC (CRCT or Respondent), in Bartlesville, Oklahoma, and its\nfacilities in Kansas and Oklahoma. In 2012, CVR Energy, Inc., formed a limited partnership,\nCVR Refining, LP, to own, operate and grow its petroleum refining and related logistic\nbusinesses. CVR Refining, LP’s petroleum business includes CRCT which operates an\napproximately 65,000-barrel-per-day, crude oil gathering and pipeline/trucking system located in\nOklahoma and Kansas. The gathering system is comprised of more than 350 miles of company-\nowned pipelines and associated tankage and truck transportation facilities.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated July 25, 2016, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that CRCT had committed 11 violations of 49 C.F.R. Part 195 and proposed\nassessing a civil penalty of $497,600 for the alleged violations. The Notice also proposed\nordering Respondent to take certain measures to correct the alleged violations. The Notice\nincluded several warning items pursuant to 49 C.F.R. § 190.205, which required no further\naction but warned the operator to correct the probable violations or face future possible\nenforcement action.\nCRCT responded to the Notice by letter dated August 29, 2016 (Response). The company\ncontested some of the allegations, offered additional information in response to the Notice, and\nrequested that the proposed civil penalty be reduced. For certain uncontested items, Respondent\nsubmitted partial payment of the proposed penalties in the amount of $156,400 by wire transfer\ndated September 28, 2016. Respondent did not request a hearing and therefore has waived its\nright to one.\n1 http://www.cvrrefining.com/RefiningOperations/index html (last accessed September 22, 2017).\n\n\n\nCPF No. 3-2016-5006\nPage 2\nFINDINGS OF VIOLATION\nUNCONTESTED\nIn its Response, CRCT did not contest certain allegations in the Notice that it violated 49 C.F.R.\nPart 195, as follows:\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), which states:\n§ 195.404 Maps and records.\n(a) …\n(c) Each operator shall maintain the following records for the periods\nspecified:\n(1) …\n(3) A record of each inspection and test required by this subpart shall be\nmaintained for at least 2 years or until the next inspection or test is\nperformed, whichever is longer.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain a\nrecord of each required inspection for at least two years. Specifically, the Notice alleged that\nRespondent failed to maintain records demonstrating that certain over-pressure protection\ndevices were checked annually and failed to have records of inspecting certain flow controllers at\nthe pump stations. The PHMSA inspection was conducted in September 2015, which meant that\nCRCT allegedly should have been able to provide records for the inspection of these devices\nfrom at least September of 2013. CRCT, however, was unable to show that the over-pressure\nprotection and flow control devices had been inspected annually at Hooser Station in 2014,\nCoffeyville Station in 2014-2015, Valley Station in 2015, and Valley Booster Station in 2014.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain\nrecords of each required inspection of over-pressure protection devices and flow controllers for\nat least two years.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), as quoted above,\nby failing to maintain a record of each required inspection for at least two years. Specifically,\nthe Notice alleged that Respondent failed to document its monthly above-ground breakout tank\ninspections conducted in accordance with API 653 (incorporated by reference, see § 195.432).\nThe Notice alleged that the OPS inspector reviewed tank-inspection records and found that\nCRCT did not have all the monthly inspection documents for 2013-2015.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain\nfor at least two years a record of each required monthly above-ground breakout tank inspection.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(ii), which states:\n\n\n\nCPF No. 3-2016-5006\nPage 3\n§ 195.410 Line markers.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall place and maintain line markers over each buried pipeline in\naccordance with the following:\n(1) …\n(2) The marker must state at least the following on a background of\nsharply contrasting color:\n(i) …\n(ii) The name of the operator and a telephone number (including area\ncode) where the operator can be reached at all times.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(ii) by failing to provide a\ntelephone number where the operator could be reached at all times on line markers placed over\neach buried pipeline. Specifically, the Notice alleged that while driving the 12-inch Broome-to-\nCoffeyville line through Coffeyville, the OPS inspector noted that the mainline and mainline\nvalves were marked with old line markers that contained an incorrect telephone number that was\ninactive. Other markers directed callers to report pipeline emergencies but did not state the\ntelephone number on the line markers. The inspector also noticed that on the #1-8-inch and #3-\n8-inch lines, line markers from the previous operator were still present.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.410(a)(2)(ii) by failing to\nprovide a telephone number where the operator could be reached at all times on line markers\nplaced over each buried pipeline.\nItem 8: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:\n§ 195.428 Overpressure safety devices and overfill protection systems.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall, at intervals not exceeding 15 months, but at least once each calendar\nyear, or in the case of pipelines used to carry highly volatile liquids, at\nintervals not to exceed 71∕2 months, but at least twice each calendar year,\ninspect and test each pressure limiting device, relief valve, pressure\nregulator, or other item of pressure control equipment to determine that it is\nfunctioning properly, is in good mechanical condition, and is adequate from\nthe standpoint of capacity and reliability of operation for the service in\nwhich it is used.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and test\nthe thermal relief valves at Broome station at intervals not to exceed 15 months, but at least once\neach calendar year. Specifically, the Notice alleged that during the field inspection, the OPS\ninspector found that Broome station had five new thermal relief valves on the newly built section\nof the station. CRCT personnel indicated that the new section was built in February of 2014 and\nthat the relief valves were scheduled for inspection in December of 2015. The inspections\nshould have been completed within 15 months, or by May 31, 2015, but at the time of the OPS\ninspection in September 2015, the valves had not been inspected.\n\n\n\nCPF No. 3-2016-5006\nPage 4\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and\ntest the thermal relief valves at Broome station at intervals not to exceed 15 months.\nItem 9: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a)…\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3). The risk-based internal inspection procedures in\nAPI Std 653, section 6.4.3 cannot be used to determine the internal\ninspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect its\nabove-ground breakout tanks according to API 653. Specifically, the Notice alleged that\nRespondent did not conduct the five-year in-service external tank inspections specified in\nSubsection 6.3.2.1 of API 653, which requires the inspection to occur every five years or\nRCA/4N years (where RCA is the difference between the measured shell thickness and the\nminimum required thickness in mils, and N is the shell corrosion rate in mils per year),\nwhichever is less. Since CRCT had no information on shell corrosion rates to apply the RCA/4N\nequation, it was required to conduct inspections every five years. When Respondent acquired the\ntanks, it was required to inspect the tanks no later than five years after the most recent inspection.\nIf Respondent could not determine if or when a prior inspection had occurred, the operator would\nbe required to perform an API 653 inspection immediately after acquiring the breakout tanks and\nthen again five years later.2\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect its\nabove-ground breakout tanks according to API 653 in that it failed to conduct the five-year in-\nservice external tank inspections.\nItem 11: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(d), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a)…\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\n2 Sunoco Pipeline L.P, CPF No. 4-2007-5040, Final Order at 7, 2010 WL 5761108, at *5 (Dec. 16, 2010).\n\n\n\nCPF No. 3-2016-5006\nPage 5\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3). The risk-based internal inspection procedures in API\nStd 653, section 6.4.3 cannot be used to determine the internal inspection\ninterval. . .\n(d) The intervals of inspection specified by documents referenced in\nparagraphs (b) and (c) of this section begin on May 3, 1999, or on the\noperator’s last recorded date of the inspection, whichever is earlier.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(d) by failing to inspect its\nabove-ground breakout tanks according to API 653, in that it failed to conduct the initial 10-year\nout-of-service tank inspections by 2009. Specifically, the Notice alleged that CRCT acquired the\nbreakout tanks in 2004, but did not have any records of previous inspections. Without records of\nprevious inspections, pursuant to § 195.432(b), Respondent was required to begin the 10-year\ninterval for initial out-of-service tank inspections on May 3, 1999. This required the tanks to be\ninspected by May 3, 2009, but Respondent failed to perform the tank inspections by that date.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.432(d) by failing to inspect its\nabove-ground breakout tanks according to API 653, in that it failed to conduct the initial 10-year\nout-of-service tank inspections by 2009.\nItem 14: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(i) What preventive and mitigative measures must an operator take to\nprotect the high consequence area?\n(1) General requirements. An operator must take measures to prevent\nand mitigate the consequences of a pipeline failure that could affect a high\nconsequence area. These measures include conducting a risk analysis of the\npipeline segment to identify additional actions to enhance public safety or\nenvironmental protection. Such actions may include, but are not limited to,\nimplementing damage prevention best practices, better monitoring of\ncathodic protection where corrosion is a concern, establishing shorter\ninspection intervals, installing [emergency flow restricting devices] on the\npipeline segment, modifying the systems that monitor pressure and detect\nleaks, providing additional training to personnel on response procedures,\nconducting drills with local emergency responders and adopting other\nmanagement controls.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1) by failing to take\nmeasures to prevent and mitigate the consequences of a pipeline failure that could affect a high\nconsequence area (HCA). Specifically, the Notice alleged that Respondent could not provide\nany documentation showing it had taken preventive and mitigative (P&M) measures in\naccordance with its integrity management program (IMP). The IMP plan, implemented on\nFebruary 21, 2013, references appendices for P&M measures and P&M evaluation forms, but\nP&M measures did not appear to have been documented or developed, nor had the evaluation\n\n\n\nCPF No. 3-2016-5006\nPage 6\nforms been filled out.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.452(i)(1) by failing to take\nmeasures to prevent and mitigate consequences of a pipeline failure that could affect an HCA.\nItem 17: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with\n§195.571:\n(1) Conduct tests on the protected pipeline at least once each calendar\nyear, but with intervals not exceeding 15 months. However, if tests at those\nintervals are impractical for separately protected short sections of bare or\nineffectively coated pipelines, testing may be done at least once every 3\ncalendar years, but with intervals not exceeding 39 months.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct\nannual testing of its cathodic protection on multiple facilities in the CRCT system from 2013-\n2015. Specifically, the Notice alleged that a review of CRCT’s annual cathodic-protection\nreadings identified 10 facilities at which Respondent failed to perform annual cathodic-\nprotection monitoring.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct\nannual testing of its cathodic protection on multiple facilities in the CRCT system from 2013-\n2015.\nItem 18: The Notice alleged that Respondent violated 49 C.F.R. § 195.583(a), which states:\n§ 195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed\nto the atmosphere for evidence of atmospheric corrosion, as follows:\nIf the pipeline is\nlocated:\nThen the frequency of\ninspection is:\nOnshore……………………………...\nOffshore……………………………...\nAt least once every 3 calendar\nyears, but with intervals not\nexceeding 39 months\nAt least once each calendar\nyear, but with intervals not\nexceeding 15 months\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.583(a) by failing to conduct\natmospheric corrosion inspections of its onshore pump stations at least once every three years.\n\n\n\nCPF No. 3-2016-5006\nPage 7\nSpecifically, the Notice alleged that in response to a request by the OPS inspector for\natmospheric inspection records from 2009-2015, CRCT submitted records showing ultrasonic\n(UT) inspections of the wall thickness of the above-ground facilities in Coffeyville Station for\n2012 and 2013, as well as Hooser Station in 2013. However, Respondent did not have records\nindicating that atmospheric inspections were performed at the time of the UT evaluations.\nAdditionally, Respondent did not have records for Broome, Shidler, Coffeyville, Valley, Valley\nBooster #1 and #2, and Hooser stations.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.583(a) by failing to conduct\natmospheric corrosion inspections of its onshore pump stations at least once every three years.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nCONTESTED\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 13: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4)(i)(C), which\nstates:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a)…\n(h) What actions must an operator take to address integrity issues?\n(1) General requirements. An operator must take prompt action to\naddress all anomalous conditions that the operator discovers through the\nintegrity assessment or information analysis. In addressing all conditions,\nan operator must evaluate all anomalous conditions and remediate those that\ncould reduce a pipeline’s integrity. An operator must be able to demonstrate\nthat the remediation of the condition will ensure that the condition is\nunlikely to pose a threat to the long-term integrity of the pipeline. A\nreduction in operating pressure cannot exceed 365 days without an operator\ntaking further remedial action to ensure the safety of the pipeline. An\noperator must comply with § 195.422 when making a repair…\n(4) Special requirements for scheduling remediation. (i) Immediate\nrepair conditions. An operator’s evaluation and remediation schedule must\nprovide for immediate repair conditions. To maintain safety, an operator\nmust temporarily reduce operating pressure or shut down the pipeline until\nthe operator completes the repair of these conditions. An operator must\ncalculate the temporary reduction in operating pressure using the formula\nin section 451.7 of ASME/ANSI B31.4 (incorporated by reference, see §\n195.3). An operator must treat the following conditions as immediate repair\nconditions:\n(A) …\n(C) A dent located on the top of the pipeline (above the 4 and 8 o’clock\n\n\n\nCPF No. 3-2016-5006\nPage 8\npositions) that has any indication of metal loss, cracking or a stress riser.3\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4)(i)(C) by failing to\ntemporarily reduce operating pressure or shut down the pipeline until it completed the repair of\ncertain “immediate repair” conditions. Specifically, the Notice alleged that Respondent did not\nreduce pressure or shut down the Valley 6-inch Segment 2 and Segment 3 lines once it\ndiscovered five top-side dents with metal loss, which are considered immediate repair conditions\nunder § 195.452(h)(4)(i)(C). At the time of the OPS inspection, CRCT’s supervisors on the job\nindicated that no pressure reduction was taken at the time of discovery.\nIn its Response, CRCT contested the allegation of violation on two grounds. First, it contended\nthat the anomalies identified by its in-line inspection (ILI) vendor had been misclassified as\n“dents.” Second, it argued that a pressure reduction was unnecessary, based on its vendor’s\nengineering analysis of a safe operating pressure.\nOn the first issue, CRCT argued that the anomalies had been misclassified as dents when, in fact,\nits experience with previous repairs of the Valley 6-inch pipeline showed that many anomalies\nwere actually “small scratches on the outer surface of the pipe, presumably artifacts of the pipe\ninstallation.” CRCT explained that its ILI procedures nevertheless required the vendor to report\nall depth anomalies greater than two percent and that it treated any such anomalies located on the\ntop side of the pipe as immediate-repair conditions, regardless of metal loss.4 CRCT\nacknowledged that two of the anomalies shown on the chart in its Response did, in fact, meet the\ncompany’s own criteria for immediate repair because they were top-side anomalies with a depth\ngreater than two percent, but that the other three did not.5\nOn the second issue, Respondent argued that considering the fact that these anomalies “may have\nbeen misclassified as dents” yet two still met the company’s own criteria for immediate repair,\nCRCT agreed “that an evaluation of a safe operating pressure for the line is required by PHMSA\nregulations.” According to the company, it undertook such an analysis but found that no\npressure reduction was required because the ILI final report had showed that the calculated safe\noperating pressure for the pipeline was greater than the operating pressures that had been\nreported to PHMSA by CRCT.6 It based this calculation on the maximum allowable operating\npressure (MAOP) for the segments, not the operating pressure.7 Respondent reported to PHMSA\nthat its operating pressure was 500 psi and that the MAOP was 620 psi.8\n3 49 CFR § 195.452(h) was subsequently amended on March 11, 2015 (Pipeline Safety: Miscellaneous Changes to\nPipeline Safety Regulations, 80 FR 12762).\n4 Response at 6.\n5 Id.\n6 Id., 5-6.\n7 Response, Attachment A.\n8 Violation Report, Ex. E, Att. 5; Response, Att. A.\n\n\n\nCPF No. 3-2016-5006\nPage 9\nI find both arguments unpersuasive. Section 195.452(h)(4)(i) requires operators to take\nimmediate action to address various types of anomalous conditions discovered through an\nintegrity assessment. These include dents located on the top of the pipeline where there is any\nindication of metal loss. Once an immediate-repair condition is discovered, to maintain safety,\nan operator must temporarily reduce operating pressure or shut down the pipeline until the\noperator completes the repair of the condition. In this case, Respondent received an integrity\nassessment that identified five dents on the top side of the pipe with metal loss, but failed to\nreduce pressure or shut down the Valley 6-inch Segments 2 and 3 after the discovery.\nRespondent received two “Pipeline Inspection Reports” from its ILI vendor that included a\nsection titled “Dent - Immediate Prioritized Repairs.”9 This section listed the five anomalies\nidentified in the Notice and indicated that they were dents with metal loss.10 Respondent\nultimately repaired each of these conditions and received five completed repair worksheets for\nthe anomalies that categorized each “External Pipe Condition” anomaly as a “Dent w/Metal\nLoss.”11 Thus, Respondent’s own vendor and its own documents treated these anomalies as\ndents. Although Respondent now claims that these five anomalies “may have been misclassified\nas dents,” it has provided no evidence demonstrating that it performed a documented analysis at\nthe time it received the vendor’s report to justify disregarding them as immediate-repair\nconditions. I therefore find that the ILI vendor’s report, together with the company’s own repair\nworksheets, constitute sufficient information about the conditions that CRCT is deemed to have\ndiscovered that the conditions presented a potential integrity threat.12 Accordingly, Respondent\nwas required to treat the five anomalies as dents with metal loss, which are immediate-repair\nconditions.\nOne of the anomalies warrants additional discussion. The anomaly identified as\nID#1400203/Wheel count 37672.20 was reported by the vendor as a “dent with metal loss”\nbecause of metal loss in close proximity to the dent. In consideration of tool tolerances, the\nvendor’s reporting of this anomaly as a dent with metal loss was reasonable and would be within\nthe reporting specifications for the vendor’s tools. Again, Respondent has provided no\ncontemporaneous information indicating that the tool results were considered unacceptable or\nerroneous by CRCT. Even accepting, without supporting evidence, that this anomaly was\nmisclassified, there were four other dents with metal loss for which CRCT should have\nimplemented a pressure reduction or shut down Segments 2 and 3. Moreover, as noted above,\nTable 1 in the Response shows two anomalies with greater than two percent depth, located above\nthe 4 and 8 o’clock positions, with metal loss. Under CRCT’s own procedures, any anomaly\ngreater than two percent on the top side of the pipe was supposed to have been treated as an\nimmediate-repair condition, regardless of metal loss.13 Therefore, under both the regulation and\nCRCT’s own procedures, Respondent was required to reduce operating pressure or shut down\nthe pipeline.\n9 Violation Report, Ex. H, at 5-6 and 9-10.\n10 Id.\n11 Violation Report, Ex. H, at 16, 30, 41, 55, and 70.\n12 49 C.F.R. § 195.452(h)(2).\n13 Response, at 6.\n\n\n\nCPF No. 3-2016-5006\nPage 10\nFinally, I also reject Respondent’s argument that a pressure reduction was unnecessary based on\nthe vendor’s engineering analysis. Respondent based this analysis on the MAOP of the pipeline,\nand therefore reasoned that since its actual operating pressure was more than 20 percent lower\nthan the MAOP, it did not need to reduce pressure to comply with pipeline safety regulations.\nThis is incorrect. The regulations require either a temporary reduction in operating pressure or a\nshutdown of the pipeline when immediate-repair conditions are discovered, regardless of the\nMAOP.\nAccordingly, after considering all of the evidence, I find that CRCT violated\n§ 195.452(h)(4)(i)(C) by failing to temporarily reduce operating pressure or shut down the\npipeline until it had completed the repair of these immediate-repair conditions.\nItem 15: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a)…\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to follow its own\nwritten qualification program to ensure through evaluation that individuals performing covered\ntasks were qualified. Specifically, the Notice alleged that while reviewing the mainline valve\ninspection records, the OPS inspector asked for operator-qualification records of three CRCT\nemployees conducting valve inspections. The company allegedly was unable to provide any\nrecords that showed the employees were qualified to inspect and operate mainline valves for the\nyears 2013-2015.\nIn its Response, CRCT stated that the three employees at issue were trained, qualified, and able\nto perform mainline valve inspections. It argued that each employee had pipeline experience or\nwas trained by other employees with pipeline experience, and all three employees had\ndocumented operator qualifications for numerous pipeline tasks far more complex than\ninspecting a mainline valve, which includes only a visual inspection and manual operation.\nCRCT contended, therefore, that all three employees were fully qualified for mainline valve\ninspections, but “simply lacked all of the appropriate documentation.”14\nSection 195.505 requires operators to follow a written program to ensure through evaluation that\nindividuals performing covered tasks are able to perform the tasks safely and can recognize and\nreact to abnormal operating conditions. In this case, the record is absent of any evidence\nshowing that the personnel identified in the Notice had been evaluated specifically for the task of\nperforming mainline valve inspections. Respondent produced information relating to the\nworkers’ general experience and qualifications for other tasks, but did not demonstrate that its\n14 Response, at 8.\n\n\n\nCPF No. 3-2016-5006\nPage 11\nown established process for assessing individuals was carried out and documented for these\nindividuals to perform mainline valve inspections. There was also no evidence that the three\nemployees took any required classes and passed tests associated with the covered task of\ninspecting mainline valves.15\nRespondent is required to follow its operator qualification program and therefore must ensure\nthat each employee performing a covered task has been qualified for that task. This includes\nfollowing written procedures established by the operator to evaluate each employee, using an\nexamination or other form of assessment to ensure they are qualified. Individuals performing\nmainline valve inspection must be qualified specifically to ensure that the inspections are\nconducted properly and that any abnormal operating conditions are recognized and reacted to\nappropriately.\nAfter considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.505(b) by\nfailing to follow its own written qualification program to ensure through evaluation that\nindividuals performing covered tasks were qualified.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.16 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\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 $497,600 for the violations cited above.\nItem 4: The Notice proposed a civil penalty of $23,300 for Respondent’s violation of 49 C.F.R.\n§ 195.404(c)(3), for failing to maintain records of each required inspection of over-pressure\nprotection devices and flow controllers for at least two years. Respondent did not contest the\nallegation or request a reduction in the proposed penalty. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $23,300 for\n15 Violation Report at 60 (stating that “OQ Qualifications show[ed] that [the employees] were not qualified for the\nyears the inspections occurred” and Respondent stated that it was “unable to provide qualification records for the\ninspection of mainline valves that cover October 2013 to August 2015”).\n16 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum\nCivil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).\n\n\n\nCPF No. 3-2016-5006\nPage 12\nviolation of 49 C.F.R. § 195.404(c)(3), which amount has already been paid.\nItem 5: The Notice proposed a civil penalty of $25,900 for Respondent’s violation of 49 C.F.R.\n§ 195.404(c)(3), for failing to maintain for at least two years a record of each monthly above-\nground breakout tank inspection required. Respondent neither contested the allegation nor\npresented any evidence or argument justifying elimination of the proposed penalty. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $25,900 for violation of 49 C.F.R. § 195.404(c)(3), which amount has already been\npaid.\nItem 8: The Notice proposed a civil penalty of $33,100 for Respondent’s violation of 49 C.F.R.\n§ 195.428(a), for failing to inspect and test the thermal relief valves at Broome station at\nintervals not to exceed 15 months. CRCT did not contest the probable violation, but requested\nthat the proposed penalty be reduced based on its prompt correction of the deficiency. CRCT\nnoted that it had inspected and tested the thermal relief valves in January 2016, soon after the\nviolation had been identified during the OPS inspection. CRCT further stated that because this\nviolation did not identify any issues requiring corrective action for the valves themselves, the\ngravity factor for the proposed penalty should be lowered.\nI disagree. With respect to Respondent promptly correcting the violation, I find that correcting a\nviolation after it has already been identified by OPS is not grounds to reduce the penalty, as\nRespondent is obligated to remediate the noncompliance issue once it becomes aware of it.17\nWith respect to the gravity factor, the Violation Report alleged that pipeline safety had been\ncompromised in an area other than an HCA. This allegation is supported by the record. The\npurpose of a relief valve inspection is to ensure that the valve works in an emergency situation.\nThermal relief valves are important for maintaining the integrity of above-ground piping.\nInspection of these valves is essential to ensuring that the relief device will function as designed.\nRespondent’s failure to inspect and test relief valves necessary to prevent pipeline failures\ncompromised safety, even though more serious problems, such as a release or issues requiring\ncorrective action, did not occur. For these reasons, I find that there is no justification to reduce\nthe proposed penalty.\nBased upon the foregoing, I assess Respondent a civil penalty of $33,100 for violation of\n49 C.F.R. § 195.428(a).\nItem 9: The Notice proposed a civil penalty of $54,700 for Respondent’s violation of 49 C.F.R.\n§ 195.432(b), for failing to conduct five-year in-service external tank inspections according to\nAPI 653. CRCT did not contest the allegation of violation but requested that the penalty be\nreduced, at a minimum, by 30 percent because five of the inspections were completed within\nwhat would have been the second round of five-year inspections following CRCT’s acquisition\nof these assets. CRCT stated that the remaining four tanks are now in compliance with the\ninspection requirements. Furthermore, CRCT argued that the gravity of the violation should be\nlower because subsequent inspection reports for these tanks did not identify any imminent threats\n17 See, e.g., In the Matter of Enbridge Pipelines LLC, Final Order, CPF No. 3-2007-5022, at 3, 2009 WL 2336996\n(Jun. 2, 2009) (finding corrective action taken after an accident had already occurred did not warrant mitigation of\nthe proposed penalty).\n\n\n\nCPF No. 3-2016-5006\nPage 13\nto tank integrity. Finally, CRCT argued that a penalty reduction was justified because “the\nseverity score of the issue…is better characterized as having no significant impact and that\ngravity for pipeline safety…was minimally affected.”18\nAs stated above, Respondent’s correction of a violation after it has already been identified by\nOPS is not grounds to reduce a proposed penalty. With respect to gravity, the Violation Report\nalleged that pipeline safety or integrity was compromised in an HCA or an HCA “could affect”\nsegment. While Respondent argued that the violation did not lead to an actual imminent threat,\npipeline safety was still compromised. Although the tanks were within diked areas, several of\nthe tanks were located in HCAs, which means that a failure of a tank could affect an HCA such\nas the Verdigris River. Finally, the “severity score” ","truncated":true,"body_characters":86325}