# FLINT HILLS RESOURCES PINE BEND, LLC — Notice of Probable Violation - **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:** Not available - **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. Official case documents: 320165011_NOPV PCP PCO_12152016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_NOPV%20PCP%20PCO_12152016.pdf 320165011_NOVP PCP PCO_12152016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_NOVP%20PCP%20PCO_12152016_text.pdf 320165011_Operator Amended Response To Notice_08302017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_Operator%20Amended%20Response%20To%20Notice_08302017.pdf 320165011_Operator Response to Notice_03162017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_Operator%20Response%20to%20Notice_03162017.pdf 320165011_Region Withdrawal of Notice Letter_06262019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320165011/320165011_Region%20Withdrawal%20of%20Notice%20Letter_06262019.pdf 320165011_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 320165011_Region Withdrawal of Notice Letter_06262019_text.pdf WITHDRAWAL of NOTICE LETTER CERTIFIED MAIL - RETURN RECEIPT REQUESTED June 26, 2019 Mr. Randy Lenz Senior Vice President, Operations Flint Hills Resources, LLC PO Box 64596 Saint Paul, MN 55164 CPF 3-2016-5011 Dear Mr. Lenz: On December 15, 2016, Flint Hills Resources Pine Bend, LLC (FHR) was issued a Notice of Violation letter for the case number referenced above (Notice). This Notice cited FHR for alleged violations of 49 CFR §§ 195.132(b)(3) and §195.264(b)(1) related to the construction of a breakout tank located in Milwaukee, Wisconsin. Following issuance of the Notice, FHR and PHMSA, Central Region engaged in consultations regarding the matter. This letter is to inform you that PHMSA, Central Region hereby withdraws the Notice without prejudice. PHMSA is not pursuing the Notice further because FHR has taken actions to comply with the Proposed Compliance Order and therefore, has addressed further safety concerns raised in the Notice. This case is now closed. Sincerely, Allan C. Beshore Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration 320165011_NOPV PCP PCO_12152016.pdf of Transportation U.S. Department 901 Locust Street, Suite 462 Kansas City, Missouri 64106-2641 Pipeline and Hazardous Materials Safety Administration NOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED December 15, 2016 Mr. Randy Lentz Vice President Flint Hills Resources Pine Bend, LLC 4111 East 37' Street North Wichita, KS 67220 CPF 3-2016-5011 Dear Mr. Lentz: On October 7 and 8, 2014, a representative of the Pipeline and Hazardous Materials Safety Flint Hills Resources Pine Bend, LLC (FHR) facilities at Waupun and Milwaukee, Wisconsin. Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your As a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are: 1) §195.132 Aboveground breakout tank. (b) For aboveground breakout tank first placed in service after October 2, 2000, compliance with paragraph (a) of this section requires one of the following: (3) Vertical, cylindrical, welded steel tanks with internal pressures at the tank top approximating atmospheric pressures (i.e., internal vapor space pressures not greater than 2.5 psig (17.2 kPa), or not greater than the pressure developed by the weight of the tank roof must be designed and constructed in accordance with API Std 650 (incorporated by reference, see § 195.3). FHR failed to adequately follow the requirements of API 650 for breakout tank number 541, located at the Milwaukee facility. Tank 541 was constructed in 2013 and did not meet the API Standard 650 requirements for peaking and banding at weld joints. API Standard 650, Section 7.5.4 Local Deviations, specifies that peaking deviations at vertical weld joints shall not exceed 13 mm (1/2 in.). API 650 also specifies that banding deviations at horizontal weld joints shall not exceed 13 mm (1/2 in.). During construction three shell plates were removed and reinstalled. There is no documentation that the tank was inspected for peaking and banding other than a certification letter from Landmark stating that tank number 541 was constructed per API 650. During PHMSA's inspection, peaking and banding was observed that exceeded the API 650 maximums. FHR performed additional studies on the tank, and the findings showed 100's of feet of peaking and banding that exceeds the API 650 maximums. As a result of PHSMA's observations, FHR also commissioned a fitness-for-service evaluation, and the report states that the tank would be fit-for-service assuming there are no crack-like flaws in the welds or no locally thin areas, blisters, grooves or cracks in the deformed areas in the parent metal adjacent to the welds. FHR has not examined the tank for these types of defects. 2) §195.264 Impoundment, protection against entry, normal/emergency venting or pressure/vacuum relief for aboveground breakout tanks. (b) After October 2, 2000, compliance with paragraph (a) of this section requires the following for the aboveground breakout tanks specified: (1) For tanks built to API Spec 12F, API Std 620, and others (such as API Std 650 (or its predecessor Standard 12C)), the installation of impoundment must be in accordance with the following sections of NFPA- 30 (incorporated by reference, see $195.3); (i) Impoundment around a breakout tank must be installed in accordance with section 22.11.2; and (ii) Impoundment by drainage to a remote impounding area must be installed in accordance with section 22.11.1. 2 For tank number 541, constructed in 2013, FHR did not install impoundment in accordance with NFPA 30 (incorporated by reference). Specifically, the drainage route was not located so that if the liquid in the drainage system where ignited, tanks and piping would not be exposed to the fire. In addition, the drainage route does not slope away at a 1% grade from tanks for at least 50 feet. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $205,638 per violation per day the violation persists up to a maximum of $2,056,380 for a related series of violations. For violations occurring between January 4, 2012 to August 1, 2016, the maximum penalty may not exceed $200.000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. For violations occurring prior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $13,800 as follows: Item number PENALTY $13,800 Proposed Compliance Order With respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to FHR. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. 3 In your correspondence on this matter, please refer to CPF 3-2016-5011 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Alle (Salee Allan C. Beshore Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety ncorporating the following remedial requirements to ensure the compliance of Duke Energ Administration (PHMSA) proposes to issue to Duke Energy a Compliance Orde: with the pipeline safety regulations: 1. In regard to Item Number 1 of the Notice pertaining to construction deficiencies, FHR shall inspect the tank to confirm the assumptions for safe operation that were used in the TDV SUD a) For the peaking and banding areas shown in TDV SUD report "3.1 Weld Deviations Analysis parent metal adjacent to the welds within the deformed areas; and no locally thin areas, Map", FHR shall inspect these areas to assure there are no crack-like flaws in the welds or blisters, grooves, or cracks; and no supplemental loadings. b) For the areas of interest shown in TDV SUD report "3.2 Measured Areas of Interest", FHR shall inspect these areas to assure there are no crack-like flaws in the welds or parent metal adjacent to the welds within the deformed areas; and no locally thin areas, blisters, grooves or cracks; and no supplemental loadings. Within 30 days of issuance of the final order, FHR shall submit a plan and schedule to have inspection documentation within 30 davs of completion of the inspection. the inspection completed within one year of issuance of the final order. FHR shall submit 2. In regard to Item Number 2 of the Notice pertaining to impoundment. FHR shall grade the impoundment area so that the slope is at least 1% away from tanks for at least 50 feet or up to manner that will avoid tanks and piping at a distance that meets the above criteria. Grading the dike base per NFPA 30. Remote impounding routes shall transport the product in a and other measures shall be complete within one year of the issuance of the final order. Within 30 days of completion of the work, FHR shall submit documentation showing the completed work meets impoundment requirements. 3. It is requested that FHR maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Allan C. Beshore, Director, OPS Central Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of additions and other changes to pipeline infrastructure. plans, procedures, studies and analyses, and 2) total cost associated with replacements, Response Options for Pipeline Operators in Enforcement Proceedings The provisions of 49 C.F.R. Part 190, Subpart B (§$ 190.201-190.243) govern response options to enforcement actions initiated by a Regional Director, Pipeline and Hazardous Materials Safety Administration (PHMSA). You are advised to consult Subpart B for further information regarding your rights and responsibilities in such proceedings. Be advised that all material submitted by a respondent in response to an enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). I. Procedures for Responding to a NOTICE OF PROBABLE VIOLATION: Within 30 days of receipt of a Notice of Probable Violation, the respondent shall respond to the Regional Director who issued the Notice in the following way: a. When the Notice contains a PROPOSED CIVIL PENALTY* - 1. If you are not contesting any violations alleged in the Notice, pay the proposed civil penalty and advise the Regional Director of the payment. This authorizes PHMSA to issue an order making findings of violation and upon confirmation that the payment has been received PHMSA will close the case (subject to any outstanding compliance order). Payment terms are outlined below; 2. If you are not contesting any violations alleged in the Notice but wish to submit written explanations, information, including the effect of the proposed civil penalty on your ability to continue in business, or other materials you believe warrant mitigation of the civil penalty, you may submit such materials. This authorizes PHMSA to make findings and to issue a Final Order. PHMSA will consider your submission in deciding whether to reduce or eliminate the penalty amount proposed in the Notice. Under 49 United States Code, § 60122, you are subject to a civil penalty maximum of $2,056,380 for a related series of violations. For violations not to exceed $205,638 per violation per day the violation persists up to a occurring prior to August 1, 2016, the maximum civil penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. Refer to 49 C.F.R. § 190.225 for assessment considerations upon which civil penalties are based; Revision August 2, 2016 1 of 6 If you are contesting one or more of the items in the Notice but are not requesting an oral hearing, submit a written response to the allegations and/or seek elimination or mitigation of the proposed civil penalty; or Request a hearing as described below to contest the allegations and/or proposed assessment of a civil penalty. b. When the Notice contains a PROPOSED COMPLIANCE ORDER* - If you are not contesting the proposed compliance order and the alleged violations associated with it, notify the Regional Director that you intend to take the actions in the proposed compliance order; 2. If you are not contesting the compliance order but wish to submit written explanations, information, or other materials you believe warrant modification of the proposed compliance order in whole or in part, or you seek clarification of the terms of the proposed compliance order, you may submit such materials. This authorizes PHMSA to make findings and issue a compliance order; If you are contesting the proposed compliance order but are not requesting an oral hearing, submit written explanations, information, or other materials in answer to the allegations in the Notice and stating your reasons for objecting to the proposed compliance order items in whole or in part; or Request a hearing as described below to contest the allegations and/or proposed compliance order items. c. When the Notice contains a WARNING ITEM - No written response is required. The respondent is warned that if it does not take appropriate action to correct these items, enforcement action will be taken if a subsequent inspection reveals a violation. * Failure of the respondent to respond to the Notice within 30 days of receipt constitutes a waiver of the right to contest the allegations in the Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in the Notice without further notice to the respondent and to issue a Final Order. Revision August 2, 2016 2 of 6 II. Procedures for Responding to a NOTICE OF AMENDMENT*-. Within 30 days of receipt of a Notice of Amendment, the respondent shall respond to the Regional Director who issued the Notice in the following way: a. If you are not contesting the Notice, notify the Regional Director of your plans to address the inadequacies identified in the Notice and/or submit copies of your amended procedures; b. If you are not contesting the Notice but wish to submit written explanations, information, or other materials you believe warrant modification of the Notice of Amendment in whole or in part, or you seek clarification of the terms of the Notice of Amendment, you may submit such materials. This authorizes PHMSA to make findings and issue an Order Directing Amendment; c. If you are contesting the Notice of Amendment but are not requesting an oral hearing, submit written explanations, information, or other materials in answer to the allegations in the Notice and stating your reasons for objecting to the Notice of Amendment items in whole or in part; or d. Request a hearing as described below to contest the allegations in the Notice. * Failure of the respondent to respond to the Notice within 30 days of receipt constitutes a waiver of the right to contest the allegations in the Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in the Notice without further notice to the respondent and to issue a Final Order. III. Procedure for Requesting a Hearing A request for a hearing must be in writing and accompanied by a statement of the issues that the respondent intends to raise at the hearing. The issues may relate to the regulatory requirement or factual basis for the allegations, to the proposed compliance order, or to the proposed civil penalty amount. Refer to 49 C.F.R. § 190.225 for assessment considerations upon which civil penalties are based. A respondent's failure to specify an issue may result in waiver of the right to raise that issue at the hearing. The respondent's request must also indicate whether or not respondent will be represented by counsel at the hearing. Failure to request a hearing in writing within 30 days of receipt of a Notice waives the right to a hearing. In addition, if the amount of the proposed civil penalty or the proposed corrective action is less than $25,000, the hearing will be held by telephone, unless the respondent submits a written request for an in-person hearing. Complete hearing procedures can be found at 49 C.F.R. § 190.211. Revision August 2, 2016 3 of 6 IV. Extensions of Time An extension of time to prepare an appropriate response to a Notice may be granted, at the agency's discretion, following submittal of a written request to the Regional Director. The request must indicate the amount of time needed and the reasons for the extension. The request must be submitted within 30 days of receipt of the Notice. V. Case File Case file documents are available to the respondent of enforcement proceedings per 49 C.F.R. § 190.209. Documents in the case file are provided upon request, if prepared. VI. Freedom of Information Act Any material provided to PHMSA by the respondent, and materials prepared by PHMSA including the Notice and any order issued in this case, may be considered public information and subject to disclosure under the Freedom of Information Act (FOIA). If you believe the information you are providing is security sensitive, privileged, confidential or may cause your company competitive disadvantages, please clearly identify the material and provide justification why you believe the documents, or portions of a document, qualify for confidential treatment under 5 U.S.C. 552(b). If we receive a request for your material, we will notify you if PHMSA, after reviewing the materials and your provided justification, determines that withholding the materials does not meet any exemption provided under the FOIA. You may appeal the agency's decision to release material under the FOIA at that time. Your appeal will stay the release of those materials until a final decision is made. VII. The Rights of Small Entities to Enforcement Fairness and Policy Against Retaliation The Department of Transportation has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights. Our objective is to ensure a fair regulatory enforcement environment. The US Small Business Administration provides standards for small business classifications for Pipeline Transportation in the North American Industry Classification System Codes (NAICS). If you are a small business and would like PHMSA to consider your classification as such in this enforcement action, please respond accordingly. Moreover, if you feel you have been treated unfairly or unprofessionally, you may contact the PHMSA Office of Chief Counsel. You also have the right to contact the Small Business Administration's National Ombudsman at 1-888-REGFAIR or www.sba.gov/ombudsman regarding the fairness of the compliance and enforcement activities of this agency. The Department of Transportation strictly forbids retaliatory acts by its employees. As such, you should feel confident that you will not be penalized for expressing your concerns about compliance and enforcement activities. Revision August 2, 2016 4 of 6 VIII. Small Business Regulatory Enforcement Fairness Act Information The Small Business and Agricultural Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small business. If you wish to comment on the enforcement actions of the Pipeline and Hazardous Materials Safety Administration, call 1-888-REG-FAIR (1-888-734-3247) or go to http://www.sba.gov/ombudsman/dsp_faq.html. IX. Payment Instructions Civil Penalty Payments of Less Than $10,000 Payment of a civil penalty of less than $10,000 proposed or assessed, under Subpart B of Part 190 of the Pipeline Safety Regulations can be made by certified check, money order or wire transfer. Payment by certified check or money order (containing the CPF Number for this case) should be made payable to the "Department of Transportation" and should be sent to: Federal Aviation Administration Mike Monroney Aeronautical Center Financial Operations Division (AMK-325) P.O. Box 269039 Oklahoma City, OK 73125-4915 Wire transfer payments of less than $10,000 may be made through the Federal Reserve Communications System (Fedwire) to the account of the U.S. Treasury. Detailed instructions are provided below. Questions concerning wire transfer should be directed to the Financial Operations Division at (405) 954-8845, or at the above address. Civil Penalty Payments of $10,000 or more Payment of a civil penalty of $10,000 or more proposed or assessed under Subpart B of Part 190 of the Pipeline Safety Regulations must be made wire transfer (49 C.F.R. § 89.21 (b)(3)), through the Federal Reserve Communications System (Fedwire) to the account of the U.S. Treasury. Detailed instructions are provided below. Questions concerning wire transfers should be directed to the Financial Operations Division at (405) 954-8845, or at the above address. Revision August 2, 2016 5 of 6 INSTRUCTIONS FOR ELECTRONIC FUND TRANSFERS (1) RECEIVER ABA NO. (2) TYPE/SUB-TYPE 021030004 (Provided by sending bank) (3) SENDING BANK ABA NO. (4) SENDING BANK REF NO. (Provided by sending bank) (Provided by sending bank) (5) AMOUNT (6) SENDING BANK NAME (Provided by sending bank) (7) RECEIVER NAME (8) PRODUCT CODE TREAS NYC (Normally CTR, or as provided by sending bank) (9) BENEFICIAL (BNE) = AGENCY (10) REASONS FOR PAYMENT LOCATION CODE 69140001 Example: PHMSA - CPF # / Ticket Number/Pipeline Assessment number INSTRUCTIONS: You, as sender of the wire transfer, must provide the sending bank with the information for blocks (1), (5), (7), (9), and (10). The information provided in Blocks (1), (7) and (9) are constant and remain the same for all wire transfers to the Pipeline and Hazardous Materials Safety Administration, Department of Transportation. Block #1 - RECEIVER ABA NO. - "021030004". Ensure the sending bank enters this 9-digit identification number; it represents the routing symbol for the U.S. Treasury at the Federal Reserve Bank in New York. Block #5 - AMOUNT - You as the sender provide the amount of the transfer. Please be sure the transfer amount is punctuated with commas and a decimal point. EXAMPLE: $10,000.00 Block #7 - RECEIVER NAME - "TREAS NYC". Ensure the sending bank enters this abbreviation. It must be used for all wire transfers to the Treasury Department. Block #9 - BENEFICIAL - AGENCY LOCATION CODE - "69140001". Ensure the sending bank enters this information. This is the Agency Location Code for the Pipeline and Hazardous Materials Safety Administration, Department of Transportation. Block #10 - REASON FOR PAYMENT - "AC-payment for PHMSA Case # / To ensure your wire transfer is credited properly, enter the case number/ticket number or Pipeline Assessment number, and country." NOTE: A wire transfer must comply with the format and instructions or the Department cannot accept the wire transfer. You as the sender can assist this process by notifying the Financial Operations Division (405) 954-8845 at the time you send the wire transfer. Revision August 2, 2016 6 of 6 320165011_NOVP PCP PCO_12152016_text.pdf NOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED December 15, 2016 Mr. Randy Lentz Vice President Flint Hills Resources Pine Bend, LLC 4111 East 37th Street North Wichita, KS 67220 CPF 3-2016-5011 Dear Mr. Lentz: On October 7 and 8, 2014, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your Flint Hills Resources Pine Bend, LLC (FHR) facilities at Waupun and Milwaukee, Wisconsin. As a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are: 1) §195.132 Aboveground breakout tank. (b) For aboveground breakout tank first placed in service after October 2, 2000, compliance with paragraph (a) of this section requires one of the following: (3) Vertical, cylindrical, welded steel tanks with internal pressures at the tank top approximating atmospheric pressures (i.e., internal vapor space pressures not greater than 2.5 psig (17.2 kPa), or not greater than the pressure developed by the weight of the tank roof) must be designed and constructed in accordance with API Std 650 (incorporated by reference, see § 195.3). FHR failed to adequately follow the requirements of API 650 for breakout tank number 541, located at the Milwaukee facility. Tank 541 was constructed in 2013 and did not meet the API Standard 650 requirements for peaking and banding at weld joints. API Standard 650, Section 7.5.4 Local Deviations, specifies that peaking deviations at vertical weld joints shall not exceed 13 mm (1/2 in.). API 650 also specifies that banding deviations at horizontal weld joints shall not exceed 13 mm (1/2 in.). During construction three shell plates were removed and reinstalled. There is no documentation that the tank was inspected for peaking and banding other than a certification letter from Landmark stating that tank number 541 was constructed per API 650. During PHMSA’s inspection, peaking and banding was observed that exceeded the API 650 maximums. FHR performed additional studies on the tank, and the findings showed 100’s of feet of peaking and banding that exceeds the API 650 maximums. As a result of PHSMA’s observations, FHR also commissioned a fitness-for-service evaluation, and the report states that the tank would be fit-for-service assuming there are no crack-like flaws in the welds or no locally thin areas, blisters, grooves or cracks in the deformed areas in the parent metal adjacent to the welds. FHR has not examined the tank for these types of defects. 2) §195.264 Impoundment, protection against entry, normal/emergency venting or pressure/vacuum relief for aboveground breakout tanks. (b) After October 2, 2000, compliance with paragraph (a) of this section requires the following for the aboveground breakout tanks specified: (1) For tanks built to API Spec 12F, API Std 620, and others (such as API Std 650 (or its predecessor Standard 12C)), the installation of impoundment must be in accordance with the following sections of NFPA- 30 (incorporated by reference, see §195.3); (i) Impoundment around a breakout tank must be installed in accordance with section 22.11.2; and (ii) Impoundment by drainage to a remote impounding area must be installed in accordance with section 22.11.1. 2 For tank number 541, constructed in 2013, FHR did not install impoundment in accordance with NFPA 30 (incorporated by reference). Specifically, the drainage route was not located so that if the liquid in the drainage system where ignited, tanks and piping would not be exposed to the fire. In addition, the drainage route does not slope away at a 1% grade from tanks for at least 50 feet. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $205,638 per violation per day the violation persists up to a maximum of $2,056,380 for a related series of violations. For violations occurring between January 4, 2012 to August 1, 2016, the maximum penalty may not exceed $200.000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. For violations occurring prior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $13,800 as follows: Item number PENALTY 1 $13,800 Proposed Compliance Order With respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to FHR. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. 3 In your correspondence on this matter, please refer to CPF 3-2016-5011 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Allan C. Beshore Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 4 1. a) b) 2. 3. PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Duke Energy a Compliance Order incorporating the following remedial requirements to ensure the compliance of Duke Energy with the pipeline safety regulations: In regard to Item Number 1 of the Notice pertaining to construction deficiencies, FHR shall inspect the tank to confirm the assumptions for safe operation that were used in the TDV SUD study. For the peaking and banding areas shown in TDV SUD report “3.1 Weld Deviations Analysis Map”, FHR shall inspect these areas to assure there are no crack-like flaws in the welds or parent metal adjacent to the welds within the deformed areas; and no locally thin areas, blisters, grooves, or cracks; and no supplemental loadings. For the areas of interest shown in TDV SUD report “3.2 Measured Areas of Interest”, FHR shall inspect these areas to assure there are no crack-like flaws in the welds or parent metal adjacent to the welds within the deformed areas; and no locally thin areas, blisters, grooves or cracks; and no supplemental loadings. Within 30 days of issuance of the final order, FHR shall submit a plan and schedule to have the inspection completed within one year of issuance of the final order. FHR shall submit inspection documentation within 30 days of completion of the inspection. In regard to Item Number 2 of the Notice pertaining to impoundment. FHR shall grade the impoundment area so that the slope is at least 1% away from tanks for at least 50 feet or up to the dike base per NFPA 30. Remote impounding routes shall transport the product in a manner that will avoid tanks and piping at a distance that meets the above criteria. Grading and other measures shall be complete within one year of the issuance of the final order. Within 30 days of completion of the work, FHR shall submit documentation showing the completed work meets impoundment requirements. It is requested that FHR maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Allan C. Beshore, Director, OPS Central Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 5 - **truncated:** false - **body characters:** 35056