# COFFEYVILLE RESOURCES CRUDE TRANSPORTATION, LLC — Notice of Probable Violation

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

Official case documents:

320165006_Closure Letter_02212018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Closure%20Letter_02212018.pdf

320165006_Closure Letter_02212018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Closure%20Letter_02212018_text.pdf

320165006_Final Order_10312017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Final%20Order_10312017.pdf

320165006_Final Order_10312017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Final%20Order_10312017_text.pdf

320165006_NOPV PCP PCO_07252016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_NOPV%20PCP%20PCO_07252016_text.pdf

320165006_NOPV_PCP_PCO_07252016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_NOPV_PCP_PCO_07252016.pdf

320165006_Operator Response to Notice_08292016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165006/320165006_Operator%20Response%20to%20Notice_08292016.pdf

320165006_Final Order_10312017_text.pdf

October 31, 2017
Mr. John Lipinski
Chief Executive Officer and President
CVR Refining, LP
2277 Plaza Drive
Suite 500
Sugar Land, TX 77479
Re: CPF No. 3-2016-5006
Dear Mr. Lipinski:
Enclosed please find the Final Order issued in the above-referenced case to your subsidiary,
Coffeyville Resources Crude Transportation, LLC (CRCT). It makes findings of violation,
assesses a reduced civil penalty of $448,600, and acknowledges receipt of payment of the partial
penalty amount of $156,400, by wire transfer, dated September 28, 2016. A remaining balance
of $292,200 is now due. In addition, the Final Order specifies actions that need to be taken by
CRCT to comply with the pipeline safety regulations.
The penalty payment terms are set forth in the Final Order. When the remainder of the civil
penalty has been paid and the terms of the compliance order 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,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Allan C. Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA
Mr. Robert Haugen, Executive Vice President of Refining Operations, Coffeyville
Resources Crude Transportation, LLC, 2277 Plaza Drive, Suite 500; Building B,
Sugar Land, TX 77479
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 )
)
Coffeyville Resources Crude Transportation, LLC, )
a subsidiary of CVR Refining, LP, ) CPF No. 3-2016-5006
)
Respondent. )
__________________________________________ )
FINAL ORDER
On September 14-18 and 21-25, 2015, 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 Coffeyville
Resources Crude Transportation, LLC (CRCT or Respondent), in Bartlesville, Oklahoma, and its
facilities in Kansas and Oklahoma. In 2012, CVR Energy, Inc., formed a limited partnership,
CVR Refining, LP, to own, operate and grow its petroleum refining and related logistic
businesses. CVR Refining, LP’s petroleum business includes CRCT which operates an
approximately 65,000-barrel-per-day, crude oil gathering and pipeline/trucking system located in
Oklahoma and Kansas. The gathering system is comprised of more than 350 miles of company-
owned pipelines and associated tankage and truck transportation facilities.1
As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,
by letter dated July 25, 2016, a Notice of Probable Violation, Proposed Civil Penalty, and
Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice
proposed finding that CRCT had committed 11 violations of 49 C.F.R. Part 195 and proposed
assessing a civil penalty of $497,600 for the alleged violations. The Notice also proposed
ordering Respondent to take certain measures to correct the alleged violations. The Notice
included several warning items pursuant to 49 C.F.R. § 190.205, which required no further
action but warned the operator to correct the probable violations or face future possible
enforcement action.
CRCT responded to the Notice by letter dated August 29, 2016 (Response). The company
contested some of the allegations, offered additional information in response to the Notice, and
requested that the proposed civil penalty be reduced. For certain uncontested items, Respondent
submitted partial payment of the proposed penalties in the amount of $156,400 by wire transfer
dated September 28, 2016. Respondent did not request a hearing and therefore has waived its
right to one.
1 http://www.cvrrefining.com/RefiningOperations/index html (last accessed September 22, 2017).



CPF No. 3-2016-5006
Page 2
FINDINGS OF VIOLATION
UNCONTESTED
In its Response, CRCT did not contest certain allegations in the Notice that it violated 49 C.F.R.
Part 195, as follows:
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), which states:
§ 195.404 Maps and records.
(a) …
(c) Each operator shall maintain the following records for the periods
specified:
(1) …
(3) A record of each inspection and test required by this subpart shall be
maintained for at least 2 years or until the next inspection or test is
performed, whichever is longer.
The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3) by failing to maintain a
record of each required inspection for at least two years. Specifically, the Notice alleged that
Respondent failed to maintain records demonstrating that certain over-pressure protection
devices were checked annually and failed to have records of inspecting certain flow controllers at
the pump stations. The PHMSA inspection was conducted in September 2015, which meant that
CRCT allegedly should have been able to provide records for the inspection of these devices
from at least September of 2013. CRCT, however, was unable to show that the over-pressure
protection and flow control devices had been inspected annually at Hooser Station in 2014,
Coffeyville Station in 2014-2015, Valley Station in 2015, and Valley Booster Station in 2014.
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. § 195.404(c)(3) by failing to maintain
records of each required inspection of over-pressure protection devices and flow controllers for
at least two years.
Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(c)(3), as quoted above,
by failing to maintain a record of each required inspection for at least two years. Specifically,
the Notice alleged that Respondent failed to document its monthly above-ground breakout tank
inspections conducted in accordance with API 653 (incorporated by reference, see § 195.432).
The Notice alleged that the OPS inspector reviewed tank-inspection records and found that
CRCT did not have all the monthly inspection documents for 2013-2015.
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. § 195.404(c)(3) by failing to maintain
for at least two years a record of each required monthly above-ground breakout tank inspection.
Item 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(ii), which states:



CPF No. 3-2016-5006
Page 3
§ 195.410 Line markers.
(a) Except as provided in paragraph (b) of this section, each operator
shall place and maintain line markers over each buried pipeline in
accordance with the following:
(1) …
(2) The marker must state at least the following on a background of
sharply contrasting color:
(i) …
(ii) The name of the operator and a telephone number (including area
code) where the operator can be reached at all times.
The Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(ii) by failing to provide a
telephone number where the operator could be reached at all times on line markers placed over
each buried pipeline. Specifically, the Notice alleged that while driving the 12-inch Broome-to-
Coffeyville line through Coffeyville, the OPS inspector noted that the mainline and mainline
valves were marked with old line markers that contained an incorrect telephone number that was
inactive. Other markers directed callers to report pipeline emergencies but did not state the
telephone number on the line markers. The inspector also noticed that on the #1-8-inch and #3-
8-inch lines, line markers from the previous operator were still present.
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. § 195.410(a)(2)(ii) by failing to
provide a telephone number where the operator could be reached at all times on line markers
placed over each buried pipeline.
Item 8: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states:
§ 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 71∕2 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.
The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect and test
the thermal relief valves at Broome station at intervals not to exceed 15 months, but at least once
each calendar year. Specifically, the Notice alleged that during the field inspection, the OPS
inspector found that Broome station had five new thermal relief valves on the newly built section
of the station. CRCT personnel indicated that the new section was built in February of 2014 and
that the relief valves were scheduled for inspection in December of 2015. The inspections
should have been completed within 15 months, or by May 31, 2015, but at the time of the OPS
inspection in September 2015, the valves had not been inspected.



CPF No. 3-2016-5006
Page 4
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. § 195.428(a) by failing to inspect and
test the thermal relief valves at Broome station at intervals not to exceed 15 months.
Item 9: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:
§ 195.432 Inspection of in-service breakout tanks.
(a)…
(b) Each operator must inspect the physical integrity of in-service
atmospheric and low-pressure steel above-ground breakout tanks according
to API Std 653 (except section 6.4.3, Alternative Internal Inspection
Interval) (incorporated by reference, see § 195.3). However, if structural
conditions prevent access to the tank bottom, its integrity may be assessed
according to a plan included in the operations and maintenance manual
under § 195.402(c)(3). The risk-based internal inspection procedures in
API Std 653, section 6.4.3 cannot be used to determine the internal
inspection interval.
The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect its
above-ground breakout tanks according to API 653. Specifically, the Notice alleged that
Respondent did not conduct the five-year in-service external tank inspections specified in
Subsection 6.3.2.1 of API 653, which requires the inspection to occur every five years or
RCA/4N years (where RCA is the difference between the measured shell thickness and the
minimum required thickness in mils, and N is the shell corrosion rate in mils per year),
whichever is less. Since CRCT had no information on shell corrosion rates to apply the RCA/4N
equation, it was required to conduct inspections every five years. When Respondent acquired the
tanks, it was required to inspect the tanks no later than five years after the most recent inspection.
If Respondent could not determine if or when a prior inspection had occurred, the operator would
be required to perform an API 653 inspection immediately after acquiring the breakout tanks and
then again five years later.2
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. § 195.432(b) by failing to inspect its
above-ground breakout tanks according to API 653 in that it failed to conduct the five-year in-
service external tank inspections.
Item 11: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(d), which states:
§ 195.432 Inspection of in-service breakout tanks.
(a)…
(b) Each operator must inspect the physical integrity of in-service
atmospheric and low pressure steel above-ground breakout tanks according
to API Std 653 (except section 6.4.3, Alternative Internal Inspection
Interval) (incorporated by reference, see § 195.3). However, if structural
conditions prevent access to the tank bottom, its integrity may be assessed
2 Sunoco Pipeline L.P, CPF No. 4-2007-5040, Final Order at 7, 2010 WL 5761108, at *5 (Dec. 16, 2010).



CPF No. 3-2016-5006
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according to a plan included in the operations and maintenance manual
under § 195.402(c)(3). The risk-based internal inspection procedures in API
Std 653, section 6.4.3 cannot be used to determine the internal inspection
interval. . .
(d) The intervals of inspection specified by documents referenced in
paragraphs (b) and (c) of this section begin on May 3, 1999, or on the
operator’s last recorded date of the inspection, whichever is earlier.
The Notice alleged that Respondent violated 49 C.F.R. § 195.432(d) by failing to inspect its
above-ground breakout tanks according to API 653, in that it failed to conduct the initial 10-year
out-of-service tank inspections by 2009. Specifically, the Notice alleged that CRCT acquired the
breakout tanks in 2004, but did not have any records of previous inspections. Without records of
previous inspections, pursuant to § 195.432(b), Respondent was required to begin the 10-year
interval for initial out-of-service tank inspections on May 3, 1999. This required the tanks to be
inspected by May 3, 2009, but Respondent failed to perform the tank inspections by that date.
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. § 195.432(d) by failing to inspect its
above-ground breakout tanks according to API 653, in that it failed to conduct the initial 10-year
out-of-service tank inspections by 2009.
Item 14: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1), which states:
§ 195.452 Pipeline integrity management in high consequence areas.
(a) . . .
(i) What preventive and mitigative measures must an operator take to
protect the high consequence area?
(1) General requirements. An operator must take measures to prevent
and mitigate the consequences of a pipeline failure that could affect a high
consequence area. These measures include conducting a risk analysis of the
pipeline segment to identify additional actions to enhance public safety or
environmental protection. Such actions may include, but are not limited to,
implementing damage prevention best practices, better monitoring of
cathodic protection where corrosion is a concern, establishing shorter
inspection intervals, installing [emergency flow restricting devices] on the
pipeline segment, modifying the systems that monitor pressure and detect
leaks, providing additional training to personnel on response procedures,
conducting drills with local emergency responders and adopting other
management controls.
The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1) by failing to take
measures to prevent and mitigate the consequences of a pipeline failure that could affect a high
consequence area (HCA). Specifically, the Notice alleged that Respondent could not provide
any documentation showing it had taken preventive and mitigative (P&M) measures in
accordance with its integrity management program (IMP). The IMP plan, implemented on
February 21, 2013, references appendices for P&M measures and P&M evaluation forms, but
P&M measures did not appear to have been documented or developed, nor had the evaluation



CPF No. 3-2016-5006
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forms been filled out.
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. § 195.452(i)(1) by failing to take
measures to prevent and mitigate consequences of a pipeline failure that could affect an HCA.
Item 17: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine
whether cathodic protection required by this subpart complies with
§195.571:
(1) Conduct tests on the protected pipeline at least once each calendar
year, but with intervals not exceeding 15 months. However, if tests at those
intervals are impractical for separately protected short sections of bare or
ineffectively coated pipelines, testing may be done at least once every 3
calendar years, but with intervals not exceeding 39 months.
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct
annual testing of its cathodic protection on multiple facilities in the CRCT system from 2013-
2015. Specifically, the Notice alleged that a review of CRCT’s annual cathodic-protection
readings identified 10 facilities at which Respondent failed to perform annual cathodic-
protection monitoring.
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. § 195.573(a)(1) by failing to conduct
annual testing of its cathodic protection on multiple facilities in the CRCT system from 2013-
2015.
Item 18: The Notice alleged that Respondent violated 49 C.F.R. § 195.583(a), which states:
§ 195.583 What must I do to monitor atmospheric corrosion control?
(a) You must inspect each pipeline or portion of pipeline that is exposed
to the atmosphere for evidence of atmospheric corrosion, as follows:
If the pipeline is
located:
Then the frequency of
inspection is:
Onshore……………………………...
Offshore……………………………...
At least once every 3 calendar
years, but with intervals not
exceeding 39 months
At least once each calendar
year, but with intervals not
exceeding 15 months
The Notice alleged that Respondent violated 49 C.F.R. § 195.583(a) by failing to conduct
atmospheric corrosion inspections of its onshore pump stations at least once every three years.



CPF No. 3-2016-5006
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Specifically, the Notice alleged that in response to a request by the OPS inspector for
atmospheric inspection records from 2009-2015, CRCT submitted records showing ultrasonic
(UT) inspections of the wall thickness of the above-ground facilities in Coffeyville Station for
2012 and 2013, as well as Hooser Station in 2013. However, Respondent did not have records
indicating that atmospheric inspections were performed at the time of the UT evaluations.
Additionally, Respondent did not have records for Broome, Shidler, Coffeyville, Valley, Valley
Booster #1 and #2, and Hooser stations.
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. § 195.583(a) by failing to conduct
atmospheric corrosion inspections of its onshore pump stations at least once every three years.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
CONTESTED
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
Item 13: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4)(i)(C), which
states:
§ 195.452 Pipeline integrity management in high consequence areas.
(a)…
(h) What actions must an operator take to address integrity issues?
(1) General requirements. An operator must take prompt action to
address all anomalous conditions that the operator discovers through the
integrity assessment or information analysis. In addressing all conditions,
an operator must evaluate all anomalous conditions and remediate those that
could reduce a pipeline’s integrity. An operator must be able to demonstrate
that the remediation of the condition will ensure that the condition is
unlikely to pose a threat to the long-term integrity of the pipeline. A
reduction in operating pressure cannot exceed 365 days without an operator
taking further remedial action to ensure the safety of the pipeline. An
operator must comply with § 195.422 when making a repair…
(4) Special requirements for scheduling remediation. (i) Immediate
repair conditions. An operator’s evaluation and remediation schedule must
provide for immediate repair conditions. To maintain safety, an operator
must temporarily reduce operating pressure or shut down the pipeline until
the operator completes the repair of these conditions. An operator must
calculate the temporary reduction in operating pressure using the formula
in section 451.7 of ASME/ANSI B31.4 (incorporated by reference, see §
195.3). An operator must treat the following conditions as immediate repair
conditions:
(A) …
(C) A dent located on the top of the pipeline (above the 4 and 8 o’clock



CPF No. 3-2016-5006
Page 8
positions) that has any indication of metal loss, cracking or a stress riser.3
The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4)(i)(C) by failing to
temporarily reduce operating pressure or shut down the pipeline until it completed the repair of
certain “immediate repair” conditions. Specifically, the Notice alleged that Respondent did not
reduce pressure or shut down the Valley 6-inch Segment 2 and Segment 3 lines once it
discovered five top-side dents with metal loss, which are considered immediate repair conditions
under § 195.452(h)(4)(i)(C). At the time of the OPS inspection, CRCT’s supervisors on the job
indicated that no pressure reduction was taken at the time of discovery.
In its Response, CRCT contested the allegation of violation on two grounds. First, it contended
that the anomalies identified by its in-line inspection (ILI) vendor had been misclassified as
“dents.” Second, it argued that a pressure reduction was unnecessary, based on its vendor’s
engineering analysis of a safe operating pressure.
On the first issue, CRCT argued that the anomalies had been misclassified as dents when, in fact,
its experience with previous repairs of the Valley 6-inch pipeline showed that many anomalies
were actually “small scratches on the outer surface of the pipe, presumably artifacts of the pipe
installation.” CRCT explained that its ILI procedures nevertheless required the vendor to report
all depth anomalies greater than two percent and that it treated any such anomalies located on the
top side of the pipe as immediate-repair conditions, regardless of metal loss.4 CRCT
acknowledged that two of the anomalies shown on the chart in its Response did, in fact, meet the
company’s own criteria for immediate repair because they were top-side anomalies with a depth
greater than two percent, but that the other three did not.5
On the second issue, Respondent argued that considering the fact that these anomalies “may have
been misclassified as dents” yet two still met the company’s own criteria for immediate repair,
CRCT agreed “that an evaluation of a safe operating pressure for the line is required by PHMSA
regulations.” According to the company, it undertook such an analysis but found that no
pressure reduction was required because the ILI final report had showed that the calculated safe
operating pressure for the pipeline was greater than the operating pressures that had been
reported to PHMSA by CRCT.6 It based this calculation on the maximum allowable operating
pressure (MAOP) for the segments, not the operating pressure.7 Respondent reported to PHMSA
that its operating pressure was 500 psi and that the MAOP was 620 psi.8
3 49 CFR § 195.452(h) was subsequently amended on March 11, 2015 (Pipeline Safety: Miscellaneous Changes to
Pipeline Safety Regulations, 80 FR 12762).
4 Response at 6.
5 Id.
6 Id., 5-6.
7 Response, Attachment A.
8 Violation Report, Ex. E, Att. 5; Response, Att. A.



CPF No. 3-2016-5006
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I find both arguments unpersuasive. Section 195.452(h)(4)(i) requires operators to take
immediate action to address various types of anomalous conditions discovered through an
integrity assessment. These include dents located on the top of the pipeline where there is any
indication of metal loss. Once an immediate-repair condition is discovered, to maintain safety,
an operator must temporarily reduce operating pressure or shut down the pipeline until the
operator completes the repair of the condition. In this case, Respondent received an integrity
assessment that identified five dents on the top side of the pipe with metal loss, but failed to
reduce pressure or shut down the Valley 6-inch Segments 2 and 3 after the discovery.
Respondent received two “Pipeline Inspection Reports” from its ILI vendor that included a
section titled “Dent - Immediate Prioritized Repairs.”9 This section listed the five anomalies
identified in the Notice and indicated that they were dents with metal loss.10 Respondent
ultimately repaired each of these conditions and received five completed repair worksheets for
the anomalies that categorized each “External Pipe Condition” anomaly as a “Dent w/Metal
Loss.”11 Thus, Respondent’s own vendor and its own documents treated these anomalies as
dents. Although Respondent now claims that these five anomalies “may have been misclassified
as dents,” it has provided no evidence demonstrating that it performed a documented analysis at
the time it received the vendor’s report to justify disregarding them as immediate-repair
conditions. I therefore find that the ILI vendor’s report, together with the company’s own repair
worksheets, constitute sufficient information about the conditions that CRCT is deemed to have
discovered that the conditions presented a potential integrity threat.12 Accordingly, Respondent
was required to treat the five anomalies as dents with metal loss, which are immediate-repair
conditions.
One of the anomalies warrants additional discussion. The anomaly identified as
ID#1400203/Wheel count 37672.20 was reported by the vendor as a “dent with metal loss”
because of metal loss in close proximity to the dent. In consideration of tool tolerances, the
vendor’s reporting of this anomaly as a dent with metal loss was reasonable and would be within
the reporting specifications for the vendor’s tools. Again, Respondent has provided no
contemporaneous information indicating that the tool results were considered unacceptable or
erroneous by CRCT. Even accepting, without supporting evidence, that this anomaly was
misclassified, there were four other dents with metal loss for which CRCT should have
implemented a pressure reduction or shut down Segments 2 and 3. Moreover, as noted above,
Table 1 in the Response shows two anomalies with greater than two percent depth, located above
the 4 and 8 o’clock positions, with metal loss. Under CRCT’s own procedures, any anomaly
greater than two percent on the top side of the pipe was supposed to have been treated as an
immediate-repair condition, regardless of metal loss.13 Therefore, under both the regulation and
CRCT’s own procedures, Respondent was required to reduce operating pressure or shut down
the pipeline.
9 Violation Report, Ex. H, at 5-6 and 9-10.
10 Id.
11 Violation Report, Ex. H, at 16, 30, 41, 55, and 70.
12 49 C.F.R. § 195.452(h)(2).
13 Response, at 6.



CPF No. 3-2016-5006
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Finally, I also reject Respondent’s argument that a pressure reduction was unnecessary based on
the vendor’s engineering analysis. Respondent based this analysis on the MAOP of the pipeline,
and therefore reasoned that since its actual operating pressure was more than 20 percent lower
than the MAOP, it did not need to reduce pressure to comply with pipeline safety regulations.
This is incorrect. The regulations require either a temporary reduction in operating pressure or a
shutdown of the pipeline when immediate-repair conditions are discovered, regardless of the
MAOP.
Accordingly, after considering all of the evidence, I find that CRCT violated
§ 195.452(h)(4)(i)(C) by failing to temporarily reduce operating pressure or shut down the
pipeline until it had completed the repair of these immediate-repair conditions.
Item 15: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:
§ 195.505 Qualification program.
Each operator shall have and follow a written qualification program.
The program shall include provisions to:
(a)…
(b) Ensure through evaluation that individuals performing covered tasks
are qualified.
The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to follow its own
written qualification program to ensure through evaluation that individuals performing covered
tasks were qualified. Specifically, the Notice alleged that while reviewing the mainline valve
inspection records, the OPS inspector asked for operator-qualification records of three CRCT
employees conducting valve inspections. The company allegedly was unable to provide any
records that showed the employees were qualified to inspect and operate mainline valves for the
years 2013-2015.
In its Response, CRCT stated that the three employees at issue were trained, qualified, and able
to perform mainline valve inspections. It argued that each employee had pipeline experience or
was trained by other employees with pipeline experience, and all three employees had
documented operator qualifications for numerous pipeline tasks far more complex than
inspecting a mainline valve, which includes only a visual inspection and manual operation.
CRCT contended, therefore, that all three employees were fully qualified for mainline valve
inspections, but “simply lacked all of the appropriate documentation.”14
Section 195.505 requires operators to follow a written program to ensure through evaluation that
individuals performing covered tasks are able to perform the tasks safely and can recognize and
react to abnormal operating conditions. In this case, the record is absent of any evidence
showing that the personnel identified in the Notice had been evaluated specifically for the task of
performing mainline valve inspections. Respondent produced information relating to the
workers’ general experience and qualifications for other tasks, but did not demonstrate that its
14 Response, at 8.



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own established process for assessing individuals was carried out and documented for these
individuals to perform mainline valve inspections. There was also no evidence that the three
employees took any required classes and passed tests associated with the covered task of
inspecting mainline valves.15
Respondent is required to follow its operator qualification program and therefore must ensure
that each employee performing a covered task has been qualified for that task. This includes
following written procedures established by the operator to evaluate each employee, using an
examination or other form of assessment to ensure they are qualified. Individuals performing
mainline valve inspection must be qualified specifically to ensure that the inspections are
conducted properly and that any abnormal operating conditions are recognized and reacted to
appropriately.
After considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.505(b) by
failing to follow its own written qualification program to ensure through evaluation that
individuals performing covered tasks were qualified.
These findings of violation will be considered prior offenses 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.16 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
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 $497,600 for the violations cited above.
Item 4: The Notice proposed a civil penalty of $23,300 for Respondent’s violation of 49 C.F.R.
§ 195.404(c)(3), for failing to maintain records of each required inspection of over-pressure
protection devices and flow controllers for at least two years. Respondent did not contest the
allegation or request a reduction in the proposed penalty. Accordingly, having reviewed the
record and considered the assessment criteria, I assess Respondent a civil penalty of $23,300 for
15 Violation Report at 60 (stating that “OQ Qualifications show[ed] that [the employees] were not qualified for the
years the inspections occurred” and Respondent stated that it was “unable to provide qualification records for the
inspection of mainline valves that cover October 2013 to August 2015”).
16 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum
Civil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).



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violation of 49 C.F.R. § 195.404(c)(3), which amount has already been paid.
Item 5: The Notice proposed a civil penalty of $25,900 for Respondent’s violation of 49 C.F.R.
§ 195.404(c)(3), for failing to maintain for at least two years a record of each monthly above-
ground breakout tank inspection required. Respondent neither contested the allegation nor
presented any evidence or argument justifying elimination of the proposed penalty. Accordingly,
having reviewed the record and considered the assessment criteria, I assess Respondent a civil
penalty of $25,900 for violation of 49 C.F.R. § 195.404(c)(3), which amount has already been
paid.
Item 8: The Notice proposed a civil penalty of $33,100 for Respondent’s violation of 49 C.F.R.
§ 195.428(a), for failing to inspect and test the thermal relief valves at Broome station at
intervals not to exceed 15 months. CRCT did not contest the probable violation, but requested
that the proposed penalty be reduced based on its prompt correction of the deficiency. CRCT
noted that it had inspected and tested the thermal relief valves in January 2016, soon after the
violation had been identified during the OPS inspection. CRCT further stated that because this
violation did not identify any issues requiring corrective action for the valves themselves, the
gravity factor for the proposed penalty should be lowered.
I disagree. With respect to Respondent promptly correcting the violation, I find that correcting a
violation after it has already been identified by OPS is not grounds to reduce the penalty, as
Respondent is obligated to remediate the noncompliance issue once it becomes aware of it.17
With respect to the gravity factor, the Violation Report alleged that pipeline safety had been
compromised in an area other than an HCA. This allegation is supported by the record. The
purpose of a relief valve inspection is to ensure that the valve works in an emergency situation.
Thermal relief valves are important for maintaining the integrity of above-ground piping.
Inspection of these valves is essential to ensuring that the relief device will function as designed.
Respondent’s failure to inspect and test relief valves necessary to prevent pipeline failures
compromised safety, even though more serious problems, such as a release or issues requiring
corrective action, did not occur. For these reasons, I find that there is no justification to reduce
the proposed penalty.
Based upon the foregoing, I assess Respondent a civil penalty of $33,100 for violation of
49 C.F.R. § 195.428(a).
Item 9: The Notice proposed a civil penalty of $54,700 for Respondent’s violation of 49 C.F.R.
§ 195.432(b), for failing to conduct five-year in-service external tank inspections according to
API 653. CRCT did not contest the allegation of violation but requested that the penalty be
reduced, at a minimum, by 30 percent because five of the inspections were completed within
what would have been the second round of five-year inspections following CRCT’s acquisition
of these assets. CRCT stated that the remaining four tanks are now in compliance with the
inspection requirements. Furthermore, CRCT argued that the gravity of the violation should be
lower because subsequent inspection reports for these tanks did not identify any imminent threats
17 See, e.g., In the Matter of Enbridge Pipelines LLC, Final Order, CPF No. 3-2007-5022, at 3, 2009 WL 2336996
(Jun. 2, 2009) (finding corrective action taken after an accident had already occurred did not warrant mitigation of
the proposed penalty).



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to tank integrity. Finally, CRCT argued that a penalty reduction was justified because “the
severity score of the issue…is better characterized as having no significant impact and that
gravity for pipeline safety…was minimally affected.”18
As stated above, Respondent’s correction of a violation after it has already been identified by
OPS is not grounds to reduce a proposed penalty. With respect to gravity, the Violation Report
alleged that pipeline safety or integrity was compromised in an HCA or an HCA “could affect”
segment. While Respondent argued that the violation did not lead to an actual imminent threat,
pipeline safety was still compromised. Although the tanks were within diked areas, several of
the tanks were located in HCAs, which means that a failure of a tank could affect an HCA such
as the Verdigris River. Finally, the “severity score” 
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