# COUNTRYMARK REFINING AND LOGISTICS, LLC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 320185008
- **title:** COUNTRYMARK REFINING AND LOGISTICS, LLC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2018-07-03
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.440(d)(2), 195.440(g), 195.571, 195.573(c), 195.589(a)(2).
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- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-320185008
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/320185008
**body:**

Notice of Probable Violation involving COUNTRYMARK REFINING AND LOGISTICS, LLC. PHMSA's enforcement data identifies the cited regulations as 195.440(d)(2),  195.440(g),  195.571,  195.573(c),  195.589(a)(2). The case was opened on 2018-07-03 and is reported as closed as of 2018-12-10. Proposed civil penalty: $39,900. Assessed civil penalty: $39,900. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

320185008_Final Order_12102018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320185008/320185008_Final%20Order_12102018.pdf

320185008_Final Order_12102018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320185008/320185008_Final%20Order_12102018_text.pdf

320185008_NOPV PCP_07032018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320185008/320185008_NOPV%20PCP_07032018.pdf

320185008_NOPV PCP_07032018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320185008/320185008_NOPV%20PCP_07032018_text.pdf

320185008_Operator Response to Notice_07202018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320185008/320185008_Operator%20Response%20to%20Notice_07202018.pdf

320185008_Final Order_12102018_text.pdf

December 10, 2018
Mr. Charlie Smith
Chief Executive Officer
Countrymark Cooperative Holding Corporation
225 South East Street, Suite 144
Indianapolis, Indiana 46202
Re: CPF No. 3-2018-5008
Dear Mr. Smith:
Enclosed please find the Final Order issued in the above-referenced case to your subsidiary,
Countrymark Refining and Logistics, LLC. It makes findings of violation and assesses a civil
penalty of $39,900. This is to acknowledge receipt of payment of the full penalty amount by
wire transfer dated August 2, 2018. This enforcement action is now closed. Service of the Final
Order by certified mail is effective upon the date of mailing as 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. Ash Titzer, Manager, Crude Gathering and Transportation, Countrymark Refining
and Logistics, LLC, 1200 Refinery Road, Mt. Vernon, Indiana 47620
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 )
Countrymark Refining and Logistics, LLC, )
a subsidiary of Countrymark Cooperative ) CPF No. 3-2018-5008
Holding Cooperation, )
)
)
)
Respondent. )
__________________________________________)
FINAL ORDER
From March 14 through March 18, 2016, 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
Countrymark Refining and Logistics, LLC’s (Countrymark or Respondent) rural regulated
gathering system in Mount Vernon, Indiana. Countrymark’s system consists of 22.48 miles of
jurisdictional 12” and 16” crude-oil and 4.4 miles of 6” jurisdictional highly volatile liquids
(HVL) pipeline.1 Countrymark is a subsidiary of Countrymark Cooperative Holding
Cooperation.2
As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,
by letter dated July 3, 2018, a Notice of Probable Violation and Proposed Civil Penalty (Notice),
which also included warnings pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R.
§ 190.207, the Notice proposed finding that Countrymark had violated 49 C.F.R. §§ 195.571 and
195.573 and proposed assessing a civil penalty of $39,900 for the alleged violations. The
warning items required no further action, but warned the operator to correct the probable
violations or face possible future enforcement action.
Countrymark responded to the Notice by letter dated July 20, 2018 (Response). The company
did not contest the allegations of violation and paid the proposed civil penalty of $39,900. In
accordance with 49 C.F.R. § 190.208(a)(1), such payment authorizes the Associate
Administrator to make findings of violation and to issue this final order without further
proceedings.
1 Pipeline Safety Violation Report (Violation Report), (July 3, 2018) (on file with PHMSA), at 1.
2 Countrymark website, available at https://www.countrymark.com/countrymark/aboutus/contactus.aspx (last
accessed September 28, 2018) See also, Bloomberg Countrymark Snapshot, available at
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=290862711 (last accessed September
28, 2018).



CPF 3-2018-5008
Page 2
FINDINGS OF VIOLATION
In its Response, Countrymark did not contest the allegations in the Notice that it violated 49
C.F.R. Part 195, as follows:
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.571, which states:
§ 195.571 What criteria must I use to determine the adequacy of cathodic
protection?
Cathodic protection required by this subpart must comply with one or more
of the applicable criteria and other considerations for cathodic protection
contained in paragraphs 6.2.2, 6.2.3, 6.2.4, 6.2.5 and 6.3 in NACE SP 0169
(incorporated by reference, see §195.3).
The Notice alleged that Respondent violated 49 C.F.R. § 195.571 by failing to comply with one
or more applicable criteria and other considerations for cathodic protection (CP) contained in
paragraph 6.2.2 of NACE [Standard Practice (SP)] 0169. Specifically, the Notice alleged that
the 2013-2016 CP readings that Countrymark provided to PHMSA failed to demonstrate how
voltage (IR) drop was considered in the CP criteria it used to determine if CP levels were
adequate, as required by NACE SP 0169, section 6.2.2.1.1.3
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. § 195.571 by failing to consider IR
drop in the CP criteria it used to determine if CP levels were adequate, as required by NACE SP
0169, section 6.2.2.1.1
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(c), which states, in
relevant part:
§ 195.573 What must I do to monitor external corrosion control?
(a) . . . .
(c) Rectifiers and other devices. You must electrically check for proper
performance each device in the first column at the frequency stated in the
second column.
Device Check frequency
Rectifier……………………... At least six times each calendar year, but
with intervals not exceeding 2½
months….
3 NACE SP 0169 Section 6.2.2. Steel and Cast Iron Piping.
6.2.2.1- External corrosion control can be achieved at various levels of cathodic polarization depending on
the environmental conditions. However, in the absence of specific data that demonstrate that adequate CP has been
achieved, one or more of the following shall apply:
6.2.2.1.1.- A negative (cathodic) potential of at least 850 mV with the CP applied. This potential is
measured with respect to a saturated copper/copper sulfate reference electrode contacting the electrolyte. Voltage
drops other than those across the structure-to-electrolyte boundary must be considered for valid interpretation of this
voltage measurement. . . .



CPF 3-2018-5008
Page 3
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(c) by failing to monitor its
external corrosion control provided by rectifiers at least six times each year, but with intervals
not to exceed 2½ months. Specifically, the Notice alleged that Countrymark had 11 rectifier
checks that exceeded the 2½ month interval from 2013-2016.
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(c) by failing to monitor its
external corrosion control provided by rectifiers at least six times each year, but with intervals
not to exceed 2½ months.
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.4 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 $39,900 for the violations cited above.
Item 3: The Notice proposed a civil penalty of $19,100 for Respondent’s violation of 49 C.F.R.
§ 195.571, for failing to consider IR drop in the CP criteria that it used to determine if CP levels
were adequate, as required by NACE SP 0169, section 6.2.2.1.1. Countrymark neither contested
the allegation nor presented any evidence or argument justifying a reduction in or elimination of
the proposed penalty. Accordingly, having reviewed the record and considered the assessment
criteria, I assess Respondent a civil penalty of $19,100 for violation of 49 C.F.R. § 195.571.
Item 4: The Notice proposed a civil penalty of $20,800 for Respondent’s violation of 49 C.F.R.
§ 195.573(c), for failing to monitor its external corrosion control provided by rectifiers at least
six times each year, but with intervals not to exceed 2½ months. Countrymark neither contested
the allegation nor presented any evidence or argument justifying a reduction in or elimination of
the proposed penalty. Accordingly, having reviewed the record and considered the assessment
criteria, I assess Respondent a civil penalty of $20,800 for violation of 49 C.F.R. § 195.573(c).
In summary, having reviewed the record and considered the assessment criteria for each of the
items cited above, I assess Respondent a total civil penalty of $39,900, which was paid in full by
wire transfer on August 2, 2018.
4 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).



CPF 3-2018-5008
Page 4
WARNING ITEMS
With respect to Items 1, 2, and 5, the Notice alleged probable violations of Part 195 but did not
propose a civil penalty or compliance order for these items. Therefore, these are considered to
be warning items. The warnings were for:
49 C.F.R. § 195.440(d)(2) (Item 1) ─ Respondent’s alleged failure to include
provisions in its public awareness program to educate the public, appropriate
government organizations, and persons engaged in excavation-related activities
on the possible hazards associated with unintended releases from hazardous liquid
or carbon dioxide pipeline facility. Specifically, Respondent allegedly failed to
provide sufficient information about potential hazards, such as fire and
explosions, in its excavator and affected-public brochures in effect in March
2016. The Regional Director noted that Countrymark had revised and corrected
its brochure on June 6, 2016, and thus no further action is required.
49 C.F.R. § 195.440(g) (Item 2) ─ Respondent’s alleged failure to conduct its
public awareness program in other languages commonly understood by a
significant number and concentration of the non-English speaking population in
the operator’s area. Specifically, Respondent failed to evaluate whether a
significant number and concentration of non-English speakers were in its area.
The Regional Director noted that by December 29, 2016, Countrymark had
corrected this issue by conducting a language survey and updating its public
awareness plan to include frequencies for new language surveys and a threshold
percentage for a significant non-English speaking population.
49 C.F.R. § 195.589(a)(2) (Item 5) ─ Respondent’s alleged failure to maintain
current records of maps to show the location of cathodic protection facilities,
including galvanic anodes, installed after January 28, 2002. Specifically,
Respondent allegedly failed to have anode bed locations identified on system
drawings or other records. The Regional Director noted that on or before May 26,
2016, Countrymark had corrected this by adding latitudes and longitudes for
anode beds to its drawings.
If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be
subject to future enforcement action.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
December 10, 2018
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
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