{"operation":"document","citation":"CPF 320165011","title":"FLINT HILLS RESOURCES PINE BEND, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-12-15","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.132(b)(3), 195.264(b)(1).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320165011.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320165011.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320165011","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320165011","body":"Notice of Probable Violation involving FLINT HILLS RESOURCES PINE BEND, LLC. PHMSA's enforcement data identifies the cited regulations as 195.132(b)(3),  195.264(b)(1). The case was opened on 2016-12-15 and is reported as closed as of 2019-06-26. Proposed civil penalty: $13,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320165011_NOPV PCP PCO_12152016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_NOPV%20PCP%20PCO_12152016.pdf\n\n320165011_NOVP PCP PCO_12152016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_NOVP%20PCP%20PCO_12152016_text.pdf\n\n320165011_Operator Amended Response To Notice_08302017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_Operator%20Amended%20Response%20To%20Notice_08302017.pdf\n\n320165011_Operator Response to Notice_03162017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_Operator%20Response%20to%20Notice_03162017.pdf\n\n320165011_Region Withdrawal of Notice Letter_06262019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_Region%20Withdrawal%20of%20Notice%20Letter_06262019.pdf\n\n320165011_Region Withdrawal of Notice Letter_06262019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_Region%20Withdrawal%20of%20Notice%20Letter_06262019_text.pdf\n\n320165011_Region Withdrawal of Notice Letter_06262019_text.pdf\n\nWITHDRAWAL of NOTICE LETTER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 26, 2019\nMr. Randy Lenz\nSenior Vice President, Operations\nFlint Hills Resources, LLC\nPO Box 64596\nSaint Paul, MN 55164\nCPF 3-2016-5011\nDear Mr. Lenz:\nOn December 15, 2016, Flint Hills Resources Pine Bend, LLC (FHR) was issued a Notice of\nViolation letter for the case number referenced above (Notice). This Notice cited FHR for\nalleged violations of 49 CFR §§ 195.132(b)(3) and §195.264(b)(1) related to the construction\nof a breakout tank located in Milwaukee, Wisconsin. Following issuance of the Notice, FHR\nand PHMSA, Central Region engaged in consultations regarding the matter.\nThis letter is to inform you that PHMSA, Central Region hereby withdraws the Notice without\nprejudice. PHMSA is not pursuing the Notice further because FHR has taken actions to comply\nwith the Proposed Compliance Order and therefore, has addressed further safety concerns raised\nin the Notice. This case is now closed.\nSincerely,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\n\n320165011_NOPV PCP PCO_12152016.pdf\n\nof Transportation\nU.S. Department\n901 Locust Street, Suite 462\nKansas City, Missouri 64106-2641\nPipeline and Hazardous Materials\nSafety Administration\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nDecember 15, 2016\nMr. Randy Lentz\nVice President\nFlint Hills Resources Pine Bend, LLC\n4111 East 37' Street North\nWichita, KS 67220\nCPF 3-2016-5011\nDear Mr. Lentz:\nOn October 7 and 8, 2014, a representative of the Pipeline and Hazardous Materials Safety\nFlint Hills Resources Pine Bend, LLC (FHR) facilities at Waupun and Milwaukee, Wisconsin.\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violations are:\n1) §195.132 Aboveground breakout tank.\n(b) For aboveground breakout tank first placed in service after October 2, 2000,\ncompliance with paragraph (a) of this section requires one of the following:\n\n\n\n(3) Vertical, cylindrical, welded steel tanks with internal pressures at the tank top\napproximating atmospheric pressures (i.e., internal vapor space pressures not\ngreater than 2.5 psig (17.2 kPa), or not greater than the pressure developed by the\nweight of the tank roof must be designed and constructed in accordance with API\nStd 650 (incorporated by reference, see § 195.3).\nFHR failed to adequately follow the requirements of API 650 for breakout tank number 541,\nlocated at the Milwaukee facility. Tank 541 was constructed in 2013 and did not meet the\nAPI Standard 650 requirements for peaking and banding at weld joints. API Standard 650,\nSection 7.5.4 Local Deviations, specifies that peaking deviations at vertical weld joints shall\nnot exceed 13 mm (1/2 in.). API 650 also specifies that banding deviations at horizontal weld\njoints shall not exceed 13 mm (1/2 in.). During construction three shell plates were removed\nand reinstalled. There is no documentation that the tank was inspected for peaking and\nbanding other than a certification letter from Landmark stating that tank number 541 was\nconstructed per API 650.\nDuring PHMSA's inspection, peaking and banding was observed that exceeded the API 650\nmaximums. FHR performed additional studies on the tank, and the findings showed 100's of\nfeet of peaking and banding that exceeds the API 650 maximums. As a result of PHSMA's\nobservations, FHR also commissioned a fitness-for-service evaluation, and the report states\nthat the tank would be fit-for-service assuming there are no crack-like flaws in the welds or no\nlocally thin areas, blisters, grooves or cracks in the deformed areas in the parent metal\nadjacent to the welds. FHR has not examined the tank for these types of defects.\n2) §195.264 Impoundment, protection against entry, normal/emergency venting or\npressure/vacuum relief for aboveground breakout tanks.\n(b) After October 2, 2000, compliance with paragraph (a) of this section requires the\nfollowing for the aboveground breakout tanks specified:\n(1) For tanks built to API Spec 12F, API Std 620, and others (such as API Std 650\n(or its predecessor Standard 12C)), the installation of impoundment must be in\naccordance with the following sections of NFPA- 30 (incorporated by reference, see\n$195.3);\n(i) Impoundment around a breakout tank must be installed in accordance with\nsection 22.11.2; and\n(ii) Impoundment by drainage to a remote impounding area must be installed in\naccordance with section 22.11.1.\n2\n\n\n\nFor tank number 541, constructed in 2013, FHR did not install impoundment in accordance\nwith NFPA 30 (incorporated by reference). Specifically, the drainage route was not located\nso that if the liquid in the drainage system where ignited, tanks and piping would not be\nexposed to the fire. In addition, the drainage route does not slope away at a 1% grade from\ntanks for at least 50 feet.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$205,638 per violation per day the violation persists up to a maximum of $2,056,380 for a\nrelated series of violations. For violations occurring between January 4, 2012 to August 1,\n2016, the maximum penalty may not exceed $200.000 per violation per day, with a maximum\npenalty not to exceed $2,000,000 for a related series of violations. For violations occurring\nprior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per\nday, with a maximum penalty not to exceed $1,000,000 for related series of violations. The\nCompliance Officer has reviewed the circumstances and supporting documentation involved\nin the above probable violations and has recommended that you be preliminarily assessed a\ncivil penalty of $13,800 as follows:\nItem number\nPENALTY\n$13,800\nProposed Compliance Order\nWith respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to FHR.\nPlease refer to the Proposed Compliance Order, which is enclosed and made a part of this\nNotice.\nresponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the response\noptions. Be advised that all material you submit in response to this enforcement action is\nsubject to being made publicly available. If you believe that any portion of your responsive\nmaterial qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete\noriginal document you must provide a second copy of the document with the portions you\nbelieve qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue a Final\nOrder.\n3\n\n\n\nIn your correspondence on this matter, please refer to CPF 3-2016-5011 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nAlle (Salee\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nncorporating the following remedial requirements to ensure the compliance of Duke Energ\nAdministration (PHMSA) proposes to issue to Duke Energy a Compliance Orde:\nwith the pipeline safety regulations:\n1. In regard to Item Number 1 of the Notice pertaining to construction deficiencies, FHR shall\ninspect the tank to confirm the assumptions for safe operation that were used in the TDV SUD\na) For the peaking and banding areas shown in TDV SUD report \"3.1 Weld Deviations Analysis\nparent metal adjacent to the welds within the deformed areas; and no locally thin areas,\nMap\", FHR shall inspect these areas to assure there are no crack-like flaws in the welds or\nblisters, grooves, or cracks; and no supplemental loadings.\nb) For the areas of interest shown in TDV SUD report \"3.2 Measured Areas of Interest\", FHR\nshall inspect these areas to assure there are no crack-like flaws in the welds or parent metal\nadjacent to the welds within the deformed areas; and no locally thin areas, blisters, grooves or\ncracks; and no supplemental loadings.\nWithin 30 days of issuance of the final order, FHR shall submit a plan and schedule to have\ninspection documentation within 30 davs of completion of the inspection.\nthe inspection completed within one year of issuance of the final order. FHR shall submit\n2. In regard to Item Number 2 of the Notice pertaining to impoundment. FHR shall grade the\nimpoundment area so that the slope is at least 1% away from tanks for at least 50 feet or up to\nmanner that will avoid tanks and piping at a distance that meets the above criteria. Grading\nthe dike base per NFPA 30. Remote impounding routes shall transport the product in a\nand other measures shall be complete within one year of the issuance of the final order.\nWithin 30 days of completion of the work, FHR shall submit documentation showing the\ncompleted work meets impoundment requirements.\n3. It is requested that FHR maintain documentation of the safety improvement costs associated\nwith fulfilling this Compliance Order and submit the total to Allan C. Beshore, Director, OPS\nCentral Region, Pipeline and Hazardous Materials Safety Administration. It is requested that\nthese costs be reported in two categories: 1) total cost associated with preparation/revision of\nadditions and other changes to pipeline infrastructure.\nplans, procedures, studies and analyses, and 2) total cost associated with replacements,\n\n\n\nResponse Options for Pipeline Operators in Enforcement Proceedings\nThe provisions of 49 C.F.R. Part 190, Subpart B (§$ 190.201-190.243) govern response options\nto enforcement actions initiated by a Regional Director, Pipeline and Hazardous Materials Safety\nAdministration (PHMSA). You are advised to consult Subpart B for further information\nregarding your rights and responsibilities in such proceedings.\nBe advised that all material submitted by a respondent in response to an enforcement action is\nsubject to being made publicly available. If you believe that any portion of your responsive\nmaterial qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete\noriginal document you must provide a second copy of the document with the portions you\nbelieve qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b).\nI.\nProcedures for Responding to a NOTICE OF PROBABLE VIOLATION:\nWithin 30 days of receipt of a Notice of Probable Violation, the respondent shall respond\nto the Regional Director who issued the Notice in the following way:\na. When the Notice contains a PROPOSED CIVIL PENALTY* -\n1. If you are not contesting any violations alleged in the Notice, pay the\nproposed civil penalty and advise the Regional Director of the payment.\nThis authorizes PHMSA to issue an order making findings of violation\nand upon confirmation that the payment has been received PHMSA will\nclose the case (subject to any outstanding compliance order). Payment\nterms are outlined below;\n2. If you are not contesting any violations alleged in the Notice but wish to\nsubmit written explanations, information, including the effect of the\nproposed civil penalty on your ability to continue in business, or other\nmaterials you believe warrant mitigation of the civil penalty, you may\nsubmit such materials. This authorizes PHMSA to make findings and to\nissue a Final Order. PHMSA will consider your submission in deciding\nwhether to reduce or eliminate the penalty amount proposed in the Notice.\nUnder 49 United States Code, § 60122, you are subject to a civil penalty\nmaximum of $2,056,380 for a related series of violations. For violations\nnot to exceed $205,638 per violation per day the violation persists up to a\noccurring prior to August 1, 2016, the maximum civil penalty may not\nexceed $200,000 per violation per day, with a maximum penalty not to\nexceed $2,000,000 for a related series of violations. Refer to 49 C.F.R. §\n190.225 for assessment considerations upon which civil penalties are\nbased;\nRevision August 2, 2016\n1 of 6\n\n\n\nIf you are contesting one or more of the items in the Notice but are not\nrequesting an oral hearing, submit a written response to the allegations\nand/or seek elimination or mitigation of the proposed civil penalty; or\nRequest a hearing as described below to contest the allegations and/or\nproposed assessment of a civil penalty.\nb.\nWhen the Notice contains a PROPOSED COMPLIANCE ORDER* -\nIf you are not contesting the proposed compliance order and the alleged\nviolations associated with it, notify the Regional Director that you intend\nto take the actions in the proposed compliance order;\n2.\nIf you are not contesting the compliance order but wish to submit written\nexplanations, information, or other materials you believe warrant\nmodification of the proposed compliance order in whole or in part, or you\nseek clarification of the terms of the proposed compliance order, you may\nsubmit such materials. This authorizes PHMSA to make findings and\nissue a compliance order;\nIf you are contesting the proposed compliance order but are not requesting\nan oral hearing, submit written explanations, information, or other\nmaterials in answer to the allegations in the Notice and stating your\nreasons for objecting to the proposed compliance order items in whole or\nin part; or\nRequest a hearing as described below to contest the allegations and/or\nproposed compliance order items.\nc.\nWhen the Notice contains a WARNING ITEM -\nNo written response is required. The respondent is warned that if it does not\ntake appropriate action to correct these items, enforcement action will be\ntaken if a subsequent inspection reveals a violation.\n* Failure of the respondent to respond to the Notice within 30 days of receipt\nconstitutes a waiver of the right to contest the allegations in the Notice and authorizes\nthe Associate Administrator for Pipeline Safety to find facts as alleged in the Notice\nwithout further notice to the respondent and to issue a Final Order.\nRevision August 2, 2016\n2 of 6\n\n\n\nII. Procedures for Responding to a NOTICE OF AMENDMENT*-.\nWithin 30 days of receipt of a Notice of Amendment, the respondent shall respond to the\nRegional Director who issued the Notice in the following way:\na.\nIf you are not contesting the Notice, notify the Regional Director of your plans\nto address the inadequacies identified in the Notice and/or submit copies of\nyour amended procedures;\nb.\nIf you are not contesting the Notice but wish to submit written explanations,\ninformation, or other materials you believe warrant modification of the Notice\nof Amendment in whole or in part, or you seek clarification of the terms of the\nNotice of Amendment, you may submit such materials. This authorizes\nPHMSA to make findings and issue an Order Directing Amendment;\nc. If you are contesting the Notice of Amendment but are not requesting an oral\nhearing, submit written explanations, information, or other materials in answer\nto the allegations in the Notice and stating your reasons for objecting to the\nNotice of Amendment items in whole or in part; or\nd. Request a hearing as described below to contest the allegations in the Notice.\n* Failure of the respondent to respond to the Notice within 30 days of receipt\nconstitutes a waiver of the right to contest the allegations in the Notice and authorizes\nthe Associate Administrator for Pipeline Safety to find facts as alleged in the Notice\nwithout further notice to the respondent and to issue a Final Order.\nIII. Procedure for Requesting a Hearing\nA request for a hearing must be in writing and accompanied by a statement of the issues\nthat the respondent intends to raise at the hearing. The issues may relate to the regulatory\nrequirement or factual basis for the allegations, to the proposed compliance order, or to\nthe proposed civil penalty amount. Refer to 49 C.F.R. § 190.225 for assessment\nconsiderations upon which civil penalties are based. A respondent's failure to specify an\nissue may result in waiver of the right to raise that issue at the hearing. The respondent's\nrequest must also indicate whether or not respondent will be represented by counsel at the\nhearing. Failure to request a hearing in writing within 30 days of receipt of a Notice\nwaives the right to a hearing. In addition, if the amount of the proposed civil penalty or\nthe proposed corrective action is less than $25,000, the hearing will be held by telephone,\nunless the respondent submits a written request for an in-person hearing. Complete\nhearing procedures can be found at 49 C.F.R. § 190.211.\nRevision August 2, 2016\n3 of 6\n\n\n\nIV.\nExtensions of Time\nAn extension of time to prepare an appropriate response to a Notice may be granted, at\nthe agency's discretion, following submittal of a written request to the Regional Director.\nThe request must indicate the amount of time needed and the reasons for the extension.\nThe request must be submitted within 30 days of receipt of the Notice.\nV.\nCase File\nCase file documents are available to the respondent of enforcement proceedings per 49\nC.F.R. § 190.209. Documents in the case file are provided upon request, if prepared.\nVI.\nFreedom of Information Act\nAny material provided to PHMSA by the respondent, and materials prepared by PHMSA\nincluding the Notice and any order issued in this case, may be considered public\ninformation and subject to disclosure under the Freedom of Information Act (FOIA). If\nyou believe the information you are providing is security sensitive, privileged,\nconfidential or may cause your company competitive disadvantages, please clearly\nidentify the material and provide justification why you believe the documents, or portions\nof a document, qualify for confidential treatment under 5 U.S.C. 552(b). If we receive a\nrequest for your material, we will notify you if PHMSA, after reviewing the materials and\nyour provided justification, determines that withholding the materials does not meet any\nexemption provided under the FOIA. You may appeal the agency's decision to release\nmaterial under the FOIA at that time. Your appeal will stay the release of those materials\nuntil a final decision is made.\nVII.\nThe Rights of Small Entities to Enforcement Fairness and Policy Against Retaliation\nThe Department of Transportation has a policy regarding the rights of small entities to\nregulatory enforcement fairness and an explicit policy against retaliation for exercising\nthese rights. Our objective is to ensure a fair regulatory enforcement environment. The\nUS Small Business Administration provides standards for small business classifications\nfor Pipeline Transportation in the North American Industry Classification System Codes\n(NAICS). If you are a small business and would like PHMSA to consider your\nclassification as such in this enforcement action, please respond accordingly. Moreover,\nif you feel you have been treated unfairly or unprofessionally, you may contact the\nPHMSA Office of Chief Counsel. You also have the right to contact the Small Business\nAdministration's National Ombudsman at 1-888-REGFAIR or www.sba.gov/ombudsman\nregarding the fairness of the compliance and enforcement activities of this agency.\nThe Department of Transportation strictly forbids retaliatory acts by its employees. As\nsuch, you should feel confident that you will not be penalized for expressing your\nconcerns about compliance and enforcement activities.\nRevision August 2, 2016\n4 of 6\n\n\n\nVIII.\nSmall Business Regulatory Enforcement Fairness Act Information\nThe Small Business and Agricultural Regulatory Enforcement Ombudsman and 10\nRegional Fairness Boards were established to receive comments from small businesses\nabout federal agency enforcement actions. The Ombudsman will annually evaluate the\nenforcement activities and rate each agency's responsiveness to small business. If you\nwish to comment on the enforcement actions of the Pipeline and Hazardous Materials\nSafety Administration, call 1-888-REG-FAIR (1-888-734-3247) or go to\nhttp://www.sba.gov/ombudsman/dsp_faq.html.\nIX.\nPayment Instructions\nCivil Penalty Payments of Less Than $10,000\nPayment of a civil penalty of less than $10,000 proposed or assessed, under Subpart B of\nPart 190 of the Pipeline Safety Regulations can be made by certified check, money order\nor wire transfer. Payment by certified check or money order (containing the CPF Number\nfor this case) should be made payable to the \"Department of Transportation\" and should\nbe sent to:\nFederal Aviation Administration\nMike Monroney Aeronautical Center\nFinancial Operations Division (AMK-325) P.O. Box 269039\nOklahoma City, OK 73125-4915\nWire transfer payments of less than $10,000 may be made through the Federal Reserve\nCommunications System (Fedwire) to the account of the U.S. Treasury. Detailed\ninstructions are provided below. Questions concerning wire transfer should be directed to\nthe Financial Operations Division at (405) 954-8845, or at the above address.\nCivil Penalty Payments of $10,000 or more\nPayment of a civil penalty of $10,000 or more proposed or assessed under Subpart B of\nPart 190 of the Pipeline Safety Regulations must be made wire transfer (49 C.F.R. §\n89.21 (b)(3)), through the Federal Reserve Communications System (Fedwire) to the\naccount of the U.S. Treasury. Detailed instructions are provided below. Questions\nconcerning wire transfers should be directed to the Financial Operations Division at\n(405) 954-8845, or at the above address.\nRevision August 2, 2016\n5 of 6\n\n\n\nINSTRUCTIONS FOR ELECTRONIC FUND TRANSFERS\n(1) RECEIVER ABA NO.\n(2) TYPE/SUB-TYPE\n021030004\n(Provided by sending bank)\n(3) SENDING BANK ABA NO.\n(4) SENDING BANK REF NO.\n(Provided by sending bank)\n(Provided by sending bank)\n(5) AMOUNT\n(6) SENDING BANK NAME\n(Provided by sending bank)\n(7) RECEIVER NAME\n(8) PRODUCT CODE\nTREAS NYC\n(Normally CTR, or as provided by sending bank)\n(9) BENEFICIAL (BNE) = AGENCY (10) REASONS FOR PAYMENT\nLOCATION CODE 69140001\nExample: PHMSA - CPF # / Ticket Number/Pipeline\nAssessment number\nINSTRUCTIONS: You, as sender of the wire transfer, must provide the sending bank with the\ninformation for blocks (1), (5), (7), (9), and (10). The information provided in Blocks (1), (7)\nand (9) are constant and remain the same for all wire transfers to the Pipeline and Hazardous\nMaterials Safety Administration, Department of Transportation.\nBlock #1 - RECEIVER ABA NO. - \"021030004\". Ensure the sending bank enters this 9-digit\nidentification number; it represents the routing symbol for the U.S. Treasury at the Federal\nReserve Bank in New York.\nBlock #5 - AMOUNT - You as the sender provide the amount of the transfer. Please be sure the\ntransfer amount is punctuated with commas and a decimal point. EXAMPLE: $10,000.00\nBlock #7 - RECEIVER NAME - \"TREAS NYC\". Ensure the sending bank enters this\nabbreviation. It must be used for all wire transfers to the Treasury Department.\nBlock #9 - BENEFICIAL - AGENCY LOCATION CODE - \"69140001\". Ensure the sending\nbank enters this information. This is the Agency Location Code for the Pipeline and Hazardous\nMaterials Safety Administration, Department of Transportation.\nBlock #10 - REASON FOR PAYMENT - \"AC-payment for PHMSA Case # / To ensure your\nwire transfer is credited properly, enter the case number/ticket number or Pipeline Assessment\nnumber, and country.\"\nNOTE: A wire transfer must comply with the format and instructions or the Department cannot\naccept the wire transfer. You as the sender can assist this process by notifying the Financial\nOperations Division (405) 954-8845 at the time you send the wire transfer.\nRevision August 2, 2016\n6 of 6\n\n320165011_NOVP PCP PCO_12152016_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nDecember 15, 2016\nMr. Randy Lentz\nVice President\nFlint Hills Resources Pine Bend, LLC\n4111 East 37th Street North\nWichita, KS 67220\nCPF 3-2016-5011\nDear Mr. Lentz:\nOn October 7 and 8, 2014, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your\nFlint Hills Resources Pine Bend, LLC (FHR) facilities at Waupun and Milwaukee, Wisconsin.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violations are:\n1) §195.132 Aboveground breakout tank.\n(b) For aboveground breakout tank first placed in service after October 2, 2000,\ncompliance with paragraph (a) of this section requires one of the following:\n\n\n\n(3) Vertical, cylindrical, welded steel tanks with internal pressures at the tank top\napproximating atmospheric pressures (i.e., internal vapor space pressures not\ngreater than 2.5 psig (17.2 kPa), or not greater than the pressure developed by the\nweight of the tank roof) must be designed and constructed in accordance with API\nStd 650 (incorporated by reference, see § 195.3).\nFHR failed to adequately follow the requirements of API 650 for breakout tank number 541,\nlocated at the Milwaukee facility. Tank 541 was constructed in 2013 and did not meet the\nAPI Standard 650 requirements for peaking and banding at weld joints. API Standard 650,\nSection 7.5.4 Local Deviations, specifies that peaking deviations at vertical weld joints shall\nnot exceed 13 mm (1/2 in.). API 650 also specifies that banding deviations at horizontal weld\njoints shall not exceed 13 mm (1/2 in.). During construction three shell plates were removed\nand reinstalled. There is no documentation that the tank was inspected for peaking and\nbanding other than a certification letter from Landmark stating that tank number 541 was\nconstructed per API 650.\nDuring PHMSA’s inspection, peaking and banding was observed that exceeded the API 650\nmaximums. FHR performed additional studies on the tank, and the findings showed 100’s of\nfeet of peaking and banding that exceeds the API 650 maximums. As a result of PHSMA’s\nobservations, FHR also commissioned a fitness-for-service evaluation, and the report states\nthat the tank would be fit-for-service assuming there are no crack-like flaws in the welds or no\nlocally thin areas, blisters, grooves or cracks in the deformed areas in the parent metal\nadjacent to the welds. FHR has not examined the tank for these types of defects.\n2) §195.264 Impoundment, protection against entry, normal/emergency venting or\npressure/vacuum relief for aboveground breakout tanks.\n(b) After October 2, 2000, compliance with paragraph (a) of this section requires the\nfollowing for the aboveground breakout tanks specified:\n(1) For tanks built to API Spec 12F, API Std 620, and others (such as API Std 650\n(or its predecessor Standard 12C)), the installation of impoundment must be in\naccordance with the following sections of NFPA- 30 (incorporated by reference, see\n§195.3);\n(i) Impoundment around a breakout tank must be installed in accordance with\nsection 22.11.2; and\n(ii) Impoundment by drainage to a remote impounding area must be installed in\naccordance with section 22.11.1.\n2\n\n\n\nFor tank number 541, constructed in 2013, FHR did not install impoundment in accordance\nwith NFPA 30 (incorporated by reference). Specifically, the drainage route was not located\nso that if the liquid in the drainage system where ignited, tanks and piping would not be\nexposed to the fire. In addition, the drainage route does not slope away at a 1% grade from\ntanks for at least 50 feet.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$205,638 per violation per day the violation persists up to a maximum of $2,056,380 for a\nrelated series of violations. For violations occurring between January 4, 2012 to August 1,\n2016, the maximum penalty may not exceed $200.000 per violation per day, with a maximum\npenalty not to exceed $2,000,000 for a related series of violations. For violations occurring\nprior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per\nday, with a maximum penalty not to exceed $1,000,000 for related series of violations. The\nCompliance Officer has reviewed the circumstances and supporting documentation involved\nin the above probable violations and has recommended that you be preliminarily assessed a\ncivil penalty of $13,800 as follows:\nItem number PENALTY\n1 $13,800\nProposed Compliance Order\nWith respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to FHR.\nPlease refer to the Proposed Compliance Order, which is enclosed and made a part of this\nNotice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the response\noptions. Be advised that all material you submit in response to this enforcement action is\nsubject to being made publicly available. If you believe that any portion of your responsive\nmaterial qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete\noriginal document you must provide a second copy of the document with the portions you\nbelieve qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue a Final\nOrder.\n3\n\n\n\nIn your correspondence on this matter, please refer to CPF 3-2016-5011 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n4\n\n\n\n1. a) b) 2. 3. PROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Duke Energy a Compliance Order\nincorporating the following remedial requirements to ensure the compliance of Duke Energy\nwith the pipeline safety regulations:\nIn regard to Item Number 1 of the Notice pertaining to construction deficiencies, FHR shall\ninspect the tank to confirm the assumptions for safe operation that were used in the TDV SUD\nstudy.\nFor the peaking and banding areas shown in TDV SUD report “3.1 Weld Deviations Analysis\nMap”, FHR shall inspect these areas to assure there are no crack-like flaws in the welds or\nparent metal adjacent to the welds within the deformed areas; and no locally thin areas,\nblisters, grooves, or cracks; and no supplemental loadings.\nFor the areas of interest shown in TDV SUD report “3.2 Measured Areas of Interest”, FHR\nshall inspect these areas to assure there are no crack-like flaws in the welds or parent metal\nadjacent to the welds within the deformed areas; and no locally thin areas, blisters, grooves or\ncracks; and no supplemental loadings.\nWithin 30 days of issuance of the final order, FHR shall submit a plan and schedule to have\nthe inspection completed within one year of issuance of the final order. FHR shall submit\ninspection documentation within 30 days of completion of the inspection.\nIn regard to Item Number 2 of the Notice pertaining to impoundment. FHR shall grade the\nimpoundment area so that the slope is at least 1% away from tanks for at least 50 feet or up to\nthe dike base per NFPA 30. Remote impounding routes shall transport the product in a\nmanner that will avoid tanks and piping at a distance that meets the above criteria. Grading\nand other measures shall be complete within one year of the issuance of the final order.\nWithin 30 days of completion of the work, FHR shall submit documentation showing the\ncompleted work meets impoundment requirements.\nIt is requested that FHR maintain documentation of the safety improvement costs associated\nwith fulfilling this Compliance Order and submit the total to Allan C. Beshore, Director, OPS\nCentral Region, Pipeline and Hazardous Materials Safety Administration. It is requested that\nthese costs be reported in two categories: 1) total cost associated with preparation/revision of\nplans, procedures, studies and analyses, and 2) total cost associated with replacements,\nadditions and other changes to pipeline infrastructure.\n5","truncated":false,"body_characters":35056}