WOLVERINE PIPELINE CO — Notice of Amendment

case documentOfficial PDF320195015M_Operator Post-Hearing Submission_01302020.pdf#

case documentOfficial PDF320195015M_Operator Pre-Hearing Submissions_10252019.pdf#

party submissionOfficial PDF320195015M_Operator Response to Notice and Request for Hearing_07222019.pdf#

320195015M_Closure Letter_07202021_(16-155088S)_text.pdf, page 1Official PDFVIA ELECTRONIC MAIL TO: saul flota@wplc.com tom morneau@wplc.com Matthew_Dunne@wplco.com Steve_Iseminger@wplco.com July 20, 2021 Mr. Saul Flota President Wolverine Pipe Line Company 8075 Creekside Drive, Suite 210 Portage, Michigan 49024 CPF 3-2019-5015M Dear Mr. Flota: On May 22, 2017 through July 20, 2017, a representative from the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to chapter 601 of 49 United States Code, conducted an on-site pipeline safety inspection of Wolverine PipeLine Company procedures in Illinois, Imdiana, and Michigan. As a result of the inspection, Wolverine Pipe Line Company was issued an Order Directing Amendment on September 3, 2020, which ordered amendments of your procedures. Wolverine Pipe Line Company submitted final amended procedures on September 18, 2020. My staff reviewed the amended procedures, and it appears that the inadequacies outlined in this Order Directing Amendment have been corrected. This letter is to inform you no further action is necessary and this case is now closed. Thank you for your cooperation. Sincerely, Gregory A. Ochs Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration cc: Thomas Morneau, General Counsel (tom_morneau@wplc.com) Matthew Dunne, VP and Manager, Matthew_Dunne@wplco.com Steve Iseminger, DOT Compliance, Steve_Iseminger@wplco.com#

320195015M_Order Directing Amendment_09032020_text.pdf, page 1Official PDFSeptember 3, 2020 VIA ELECTRONIC MAIL TO: saul flota@wplc.com Mr. Saul Flota President Wolverine Pipe Line Company 8075 Creekside Drive, Suite 210 Portage, Michigan 49024 Re: CPF No. 3-2019-5015M Dear Mr. Flota: Enclosed please find the Order Directing Amendment issued in the above-referenced case to Wolverine Pipe Line Company. It makes findings of inadequate procedures, withdraws one allegation, and requires that Wolverine amend certain portions of its operating and maintenance procedures. When the amendment of procedures has been completed, as determined by the Director, Central Region, this enforcement action will be closed. Service of the 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 Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA Mr. Thomas Morneau, General Counsel, Wolverine Pipe Line Company, tom_morneau@wplc.com Mr. Vince Murchison, Esq., Counsel for Respondent, Murchison Law Firm, PLLC, vince.murchison@pipelinelegal.com CONFIRMATION OF RECEIPT REQUESTED#

320195015M_Order Directing Amendment_09032020_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of ) Wolverine Pipe Line Company, ) CPF No. 3-2019-5015M ) ) ) Respondent. ) ____________________________________) ORDER DIRECTING AMENDMENT From May through July 2017, 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 inspection of the procedures, records, and facilities of Wolverine Pipe Line Company (Wolverine or Respondent), in Illinois, Indiana, and Michigan. Wolverine has headquarters in Portage, Michigan. The pipeline system consists of 700 miles that transports refined products, including gasoline and diesel fuel, from Illinois to Michigan.1 As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent, by letter dated April 11, 2019, a Notice of Amendment (Notice). In accordance with 49 C.F.R. § 190.206, the Notice proposed finding that certain of Wolverine’s plans and procedures were inadequate to assure safe operation and proposed that Respondent amend its procedures for operations, maintenance, and emergencies. The Murchison Law Firm, on behalf of Wolverine, responded to the Notice by letter dated July 22, 2019 (Response). The company did not contest one alleged inadequacy, contested two of the alleged inadequacies, and requested an in-person hearing. A hearing was subsequently held on November 5, 2019, before a PHMSA Presiding Official. At the hearing, Respondent was represented by counsel. Respondent provided additional materials prior to the hearing on October 25, 2019 (Pre-hearing submission), and following the hearing on January 30, 2020 (Post-hearing submission). The Director submitted a post-hearing recommendation on March 27, 2020 (Recommendation), to which the Respondent submitted a response on April 15, 2020 (Response to the Region Recommendation). 1 Wolverine Pipe Line Company website, available at (https://wolverinepipeline.com/shippers/systems-overview/ (last accessed August 19, 2020).#

320195015M_Order Directing Amendment_09032020_text.pdf, page 3CPF No. 3-2019-5015M Page 2 FINDINGS OF INADEQUATE PROCEDURES Item 1: The Notice alleged that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 195.402(d), which states: § 195.402 Procedural manual for operations, maintenance, and emergencies. (a) …. (d) Abnormal operation. The manual required by paragraph (a) of this section must include procedures for the following to provide safety when operating design limits have been exceeded: (1) Responding to, investigating, and correcting the cause of: (i) Unintended closure of valves or shutdowns; (ii) Increase or decrease in pressure or flow rate outside normal operating limits; (iii) Loss of communications; (iv) Operation of any safety device; (v) Any other malfunction of a component, deviation from normal operation, or personnel error which could cause a hazard to persons or property. (2) Checking variations from normal operation after abnormal operation has ended at sufficient critical locations in the system to determine continued integrity and safe operation. The Notice alleged that Respondent’s procedural manual for operations, maintenance, and emergencies was inadequate with regard to 49 C.F.R. § 195.402 in that it failed to address how controllers respond to abnormal operations and check facilities for integrity before restarting operations. Specifically, Wolverine’s Abnormal Operating Condition Restart Report did not include all of the required abnormal operations, including increase or decrease in pressure or flow rate outside normal operating limits. In addition, the Notice alleged that the Report did not require controllers to check variations from normal operation to determine continued integrity and safe operation before restarting operations. Wolverine amended this procedure prior to issuance of the Notice. The Director reviewed the amended procedure and concluded that the inadequacies had been corrected. Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary. Item 2: The Notice alleged that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 195.402, which states: § 195.402 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each#

320195015M_Order Directing Amendment_09032020_text.pdf, page 4CPF No. 3-2019-5015M Page 3 pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to insure that the manual is effective. This manual shall be prepared before initial operations of a pipeline system commence, and appropriate parts shall be kept at locations where operations and maintenance activities are conducted. (b) …. (c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (1) …. (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part; … § 195.420 Valve maintenance. (a) Each operator shall maintain each valve that is necessary for the safe operation of its pipeline systems in good working order at all times. The Notice alleged that Wolverine’s operations and maintenance (O&M) procedures were inadequate with regard to 49 C.F.R. § 195.402 because they failed to provide sufficient guidance on valve maintenance in accordance with § 195.420, which provides that operators must maintain each valve that is necessary for the safe operation of its pipeline systems in good working order. Specifically, the Notice alleged that Respondent’s DOT Operations and Maintenance Manual (dated 10/2002) failed to define the inspection period for valves that were needed for the safe operation of the system, as required by this regulation. In its Response and at the hearing, Wolverine did not contest the allegation. Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice. Wolverine is hereby ordered to amend its procedures to define the inspection period for other valves that were needed for safe operation of the system, as required under 49 C.F.R. §195.420(a). Item 3: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 195.402(a), as quoted above, because they failed to properly define how to maintain each valve that is necessary for the safe operation of its pipeline systems in good working order at all times. Specifically, the Notice alleged that Wolverine’s O&M Manual failed to explain how to determine the valve position from indicator lights on a valve actuator. During the inspection, OPS inspectors observed light indicators on valves located at the Albion Pump Station and the Lansing Terminal. The Notice alleges that Wolverine’s O&M Manual, Section 195.420 failed to define how to determine that OPS alleges that Wolverine’s O&M Manual and FIMMS procedure “do not specify nor establish that the#

320195015M_Order Directing Amendment_09032020_text.pdf, page 5CPF No. 3-2019-5015M Page 4 light indicators on the motor-operated valve actuators should not be relied upon for determining the valve position.” In its Response and at the hearing, Wolverine contested the allegation on several bases, but its primary objection is that Wolverine uses a physical indicator, and not actuator lights, to indicate valve position. Mr. Murchison: And are you familiar with these indicator lights -- Mr. Caddick: Yes. Mr. Murchison: -- that are at issue here? What's your reaction to this alleged inadequacy that says that the Wolverine O&M does not define how to determine valve position using actuator lights? Mr. Caddick: I do not agree with it. Mr. Murchison: Why do you not agree with that? Mr. Caddick: Because we do not use indicator lights to determine position. Mr. Murchison: What do you use? Mr. Caddick: A physical indicator. Mr. Murchison: Can you describe a physical indicator? Mr. Caddick: A physical indicator is as FIMMS program speaks to, an indicator rod or another physical device on the valve that changes position when the valve changes state.2 Mr. Caddick, an area supervisor for Wolverine, testified that all of Wolverine’s valves use physical indicators (not actuator lights) to indicate whether its valves are in an open or closed position. Even though there are actuator lights on some of these valves, the lights are not what Wolverine personnel use to determine whether the valves are in the open or closed position. Therefore, Wolverine asserts that it should not amend its procedures to include a reference to indicator lights because they are not used. At the hearing, OPS testified that Wolverine personnel indicated that the actuator lights were used by personnel to determine valve status, which is why the allegation was included in the Notice. In the Region Recommendation, OPS maintains that Wolverine “must amend its procedures to define the purposes of the light indic[a]tors on motor-operated valve actuators in determining valve position in order to ensure safe operation of its pipeline system.”3 I agree that the valve indicator lights should be referenced in Wolverine’s O&M Manual, at least to clarify that they are not to be used. Nevertheless, as Wolverine appropriately argues, OPS is restricted to the specific allegation in the Notice, which stated that Wolverine was to “define how to determine the valve position from the indicator lights on a valve actuator.”4 Even if such definition simply indicates that the indicator lights should be disregarded, I hereby order Wolverine to clearly state in its O&M Manual that all indicator lights should be disregarded, as they are not used to determine valve position. 2 NOA Hearing Transcript, at 66. 3 Region Recommendation, at 4. 4 Notice, at 3.#

320195015M_Order Directing Amendment_09032020_text.pdf, page 6CPF No. 3-2019-5015M Page 5 Item 4: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 195.452, which states: § 195.452 Pipeline integrity management in high consequence areas. (a) …. (f) What are the elements of an integrity management program? An integrity management program begins with the initial framework. An operator must continually change the program to reflect operating experience, conclusions drawn from results of the integrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. An operator must include, at minimum, each of the following elements in its written integrity management program: (1) …. (3) An analysis that integrates all available information about the integrity of the entire pipeline and the consequences of a failure (see paragraph (g) of this section); … (g) What is an information analysis? In periodically evaluating the integrity of each pipeline segment (paragraph (j) of this section), an operator must analyze all available information about the integrity of the entire pipeline and the consequences of a failure. This information includes: (1) Information critical to determining the potential for, and preventing, damage due to excavation, including current and planned damage prevention activities, and development or planned development along the pipeline segment; (2) Data gathered through the integrity assessment required under this section; (3) Data gathered in conjunction with the other inspections, tests, surveillance and patrols required by this Part, including, corrosion control monitoring and cathodic protection surveys; and (4) Information about how a failure would affect the high consequence area, such as location of the water intake. The Notice alleged that Respondent’s written integrity management process was inadequate with regard to 49 C.F.R. § 195.452 because it failed to include an information analysis that analyzes all available information about the integrity of the entire pipeline and the consequences of a failure. Specifically, the Notice alleged that Wolverine’s Integrity Management Program in High Consequence Areas, Version 2014-1 (IMP Manual) did not define an information analysis process that addressed all threats for each pipeline, including not identifying any threats for the Kennedy to Niles pipeline segment. Wolverine licenses and uses TIARA (Threat Identification and Risk Assessment Manual), a process of threat identification and risk assessment that was developed by ExxonMobil Pipeline Company. The Notice alleges and OPS continues to argue that this “TIARA process” inadequately implements the requirement that Wolverine conduct an information analysis that integrates all information about the integrity of its pipeline system, as evidenced by fact that the#

320195015M_Order Directing Amendment_09032020_text.pdf, page 7CPF No. 3-2019-5015M Page 6 TIARA process did not identify any threats for the Kennedy to Niles pipeline segment. In its Response and at the hearing, Wolverine argues that the Region Recommendation alters the original allegation in the Notice.5 The Notice states that Wolverine must “define an information analysis process that address[es] all threats for each pipeline,” then goes on to state the inadequacies of the information analysis conducted for the Kennedy to the Niles pipeline segment. In the Region Recommendation, OPS states that the process used by Wolverine only accounts for the highest consequence threats, and inappropriately eliminate[s] threats that did not meet Wolverine’s definition of a significant threat.” Even if this is true, it remains unclear, from the allegation in the Notice, what OPS wants the Respondent to change. The Region Recommendation makes a fair argument that the TIARA process does not meet the standards required of an information analysis that is compliant with OPS regulations. However, it still does not state with specificity what changes the agency is seeking. 49 C.F.R. § 190.206 states that a Notice of Amendment will “specify the alleged inadequacies and the proposed revisions of the plans or procedures.” Without more specificity regarding what needs to change in the Respondent’s procedures, I cannot order the Respondent to amend their procedures. Accordingly, based upon a review of all the evidence, I am withdrawing this allegation. Item 5: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 195.452, which states: § 195.452 Pipeline integrity management in high consequence areas. (a) …. (f) What are the elements of an integrity management program? An integrity management program begins with the initial framework. An operator must continually change the program to reflect operating experience, conclusions drawn from results of the integrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. An operator must include, at minimum, each of the following elements in its written integrity management program: (1) …. (4) Criteria for remedial actions to address integrity issues raised by the assessment methods and information analysis (see paragraph (h) of this section); … (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 in the pipeline 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, as required by this part. An operator must be able to demonstrate that the remediation of the 5 “The NOA alleges that Respondent's IMP15 did not address "all threats for each pipeline"; however, the agency now argues that the IMP "was inadequate to integrate all available information about the integrity of pipeline segments by excluding threats of the pipeline integrity that were not deemed 'significant.’” Operator Response to the Region Recommendation, at 5.#

320195015M_Order Directing Amendment_09032020_text.pdf, page 8CPF No. 3-2019-5015M Page 7 condition will ensure that the condition is unlikely to pose a threat to the long-term integrity of the pipeline. An operator must comply with §195.422 when making a repair. The Notice alleged that Respondent’s IMP Manual for operations, maintenance, and emergencies was inadequate with regard to 49 C.F.R. § 195.452(f) in that it failed to address criteria for remedial actions to address integrity issues raised by the assessment methods and information analysis. Specifically, Wolverine’s IMP Manual, Section 4, did not address how assessment tool tolerances were considered for corrosion anomalies. Wolverine amended this procedure prior to its Response. The Director reviewed the amended procedure and concluded that the inadequacies had been corrected. Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary. Item 6: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 195.452, which states: § 195.452 Pipeline integrity management in high consequence areas. (a) …. (f) What are the elements of an integrity management program? An integrity management program begins with the initial framework. An operator must continually change the program to reflect operating experience, conclusions drawn from results of the integrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. An operator must include, at minimum, each of the following elements in its written integrity management program: (1) …. (4) Criteria for remedial actions to address integrity issues raised by the assessment methods and information analysis (see paragraph (h) of this section); … (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 in the pipeline 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, as required by this part. 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. An operator must comply with §195.422 when making a repair. The Notice alleged that Respondent failed to develop a pipeline repair manual that addressed the repair methods that were used by Wolverine. Specifically, Wolverine’s IMP Manual, Section#

320195015M_Order Directing Amendment_09032020_text.pdf, page 9CPF No. 3-2019-5015M Page 8 4.4.2 listed in the Repair and Modification table conflicted with the repair methods used on Wolverine’s pipeline system. Wolverine amended this procedure prior to its Response. The Director reviewed the amended procedure and concluded that the inadequacies had been corrected. Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary. Item 7: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 195.402, which states: § 195.402 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to insure that the manual is effective. This manual shall be prepared before initial operations of a pipeline system commence, and appropriate parts shall be kept at locations where operations and maintenance activities are conducted. (b) …. (c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (1) …. (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part. § 195.559 What coating material may I use for external corrosion control? (a) Coating material for external corrosion control under § 195.557 must –Be designed to mitigate corrosion of the buried or submerged pipeline; … The Notice alleged that Respondent’s IMP Manual for operations, maintenance, and emergencies was inadequate with regard to 49 C.F.R. § 195.402 in that it failed to address the coating material that may be used for external corrosion control. Specifically, Wolverine’s Facilities Inspection and Maintenance Manual Pipe Coating Program, Revision 1.10 did not address the application of RD6 coating that was utilized at the Darden Road ILI dig site. Wolverine amended this procedure prior to its Response. The Director reviewed the amended procedure and concluded that the inadequacies had been corrected. Accordingly, based upon a#

320195015M_Order Directing Amendment_09032020_text.pdf, page 10CPF No. 3-2019-5015M Page 9 review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary. Pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206, Wolverine is ordered to revise its procedures as specified in Item 3 above. Respondent must submit the amended procedures to the Director, Central Region, within 30 days following receipt of this Order. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Order Directing Amendment to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this Order Directing Amendment by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The terms of the order, including required amendment to procedures, remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Order Directing Amendment are effective upon service in accordance with 49 C.F.R. § 190.5. September 3, 2020 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

320195015M_Notice of Amendment_04112019_text.pdf, page 1Official PDFNOTICE OF AMENDMENT CERTIFIED MAIL - RETURN RECEIPT REQUESTED April 11, 2019 Mr. Saul Flota President Wolverine Pipe Line Company 8075 Creekside Drive Suite 210 Portage, Michigan 49024 CPF 3-2019-5015M Dear Mr. Flota: From May 22 – 26 and June 12- 16, 2017, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected Wolverine Pipe Line Company’s (“Wolverine”) procedures for integrity management and operations and maintenance in Portage, Michigan. On the basis of the inspection, PHMSA has identified the apparent inadequacies found within Wolverine Pipe Line Company’s plans or procedures, as described below: 1. §195.402 Procedural manual for operations, maintenance, and emergencies. (d) Abnormal operation. The manual required by paragraph (a) of this section must include procedures for the following to provide safety when operating design limits have been exceeded: (1) Responding to, investigating, and correcting the cause of: (i) Unintended closure of valves or shutdowns; (ii) Increase or decrease in pressure or flow rate outside normal operating limits;#

320195015M_Notice of Amendment_04112019_text.pdf, page 2(iii) Loss of communications; (iv) Operation of any safety device; (v) Any other malfunction of a component, deviation from normal operation, or personnel error which could cause a hazard to persons or property. (2) Checking variations from normal operation after abnormal operation has ended at sufficient critical locations in the system to determine continued integrity and safe operation. Wolverine failed to develop adequate procedures for controllers to respond to abnormal operations and check facilities for integrity before restarting operations. Wolverine’s Abnormal Operating Condition Restart Report (Report) is completed by controllers for abnormal operations. The Report did not include all of the abnormal operations required by §195.402(d). The Report omitted an increase or decrease in pressure or flow rate outside normal operating limits and included unauthorized valve closure, instead of unintended closures of valves or shutdowns. The Report also did not require the controllers to check variations from normal operation after abnormal operation has ended at sufficient critical locations in the system to determine continued integrity and safe operation before restarting operations. Wolverine amended this procedure and submitted it to PHMSA, which was found satisfactory. No further action needs to be taken regarding this item. 2. §195.402 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to ensure that the manual is effective. This manual shall be prepared before initial operations of a pipeline system commence, and appropriate parts shall be kept at locations where operations and maintenance activities are conducted. (b) … (c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (1) … 2#

320195015M_Notice of Amendment_04112019_text.pdf, page 3(2) … (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part. §195.420 Valve maintenance. (a) Each operator shall maintain each valve that is necessary for the safe operation of its pipeline systems in good working order at all times. Wolverine’s DOT Operations and Maintenance Manual, Issued October 2002 (O&M Manual), Section 195.420, did not define the inspection period for other valves that were needed for the safe operation of the system. 3. §195.402 Procedural manual for operations, maintenance, and emergencies. (a) See above. (b) … (c)(3) See above. §195.420 Valve maintenance. (a) Each operator shall maintain each valve that is necessary for the safe operation of its pipeline systems in good working order at all times. Wolverine’s O&M Manual, Section 195.420, did not define how to determine the valve position from the indicator lights on a valve actuator. The valve indicator was needed to determine the valve position, which was necessary for the safe operation of the pipeline system. Wolverine provided conflicting interpretations for valve position from the indicator lights on valve actuators. Wolverine noted that the indicator lights on the valve actuator indicated that valve was in the remote or the local position and that the valve was in the open or the closed position. 4. §195.452 Pipeline integrity management in high consequence areas. (f) What are the elements of an integrity management program? An integrity management program begins with the initial framework. An operator must continually change the program to reflect operating experience, conclusions drawn from results of the integrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. An operator must include, at minimum, each of the following elements in its written integrity management program: 3#

320195015M_Notice of Amendment_04112019_text.pdf, page 4(1) . . . (2) . . . (3) An analysis that integrates all available information about the integrity of the entire pipeline and the consequences of a failure (see paragraph (g) of this section); (g) What is an information analysis? In periodically evaluating the integrity of each pipeline segment (paragraph (j) of this section), an operator must analyze all available information about the integrity of the entire pipeline and the consequences of a failure. This information includes: (1) Information critical to determining the potential for, and preventing, damage due to excavation, including current and planned damage prevention activities, and development or planned development along the pipeline segment; (2) Data gathered through the integrity assessment required under this section; (3) Data gathered in conjunction with other inspections, tests, surveillance and patrols required by this Part, including, corrosion control monitoring and cathodic protection surveys; and (4) Information about how a failure would affect the high consequence area, such as location of the water intake. Wolverine’s Integrity Management Program in High Consequence Areas, Version 2014-1 (IMP Manual), did not define an information analysis process that addressed all threats for each pipeline. Wolverine’s Threat Identification and Risk Assessment Model (TIARA) did not identify any threats for the Kennedy to Niles pipeline segment. Additionally, in the evaluation process, Wolverine only identified third party damage as a threat and only developed preventive and mitigative measures that addressed third party damage. 5. §195.452 Pipeline integrity management in high consequence areas. (f) What are the elements of an integrity management program? An integrity management program begins with the initial framework. An operator must continually change the program to reflect operating experience, conclusions drawn from results of the integrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. An operator must include, at minimum, each of the following elements in its written integrity management program: (4) Criteria for remedial actions to address integrity issues raised by the assessment methods and information analysis (see paragraph (h) of this section); (g)… (h) What actions must an operator take to address integrity issues?— 4#

320195015M_Notice of Amendment_04112019_text.pdf, page 5(1) General requirements. An operator must take prompt action to address all anomalous conditions 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 the condition is unlikely to pose a threat to the long-term integrity of the pipeline. An operator must comply with §195.422 when making a repair. Wolverine's IMP Manual, Section 4., inadequately addressed how assessment tool tolerances were considered for corrosion anomalies. Wolverine amended this procedure and submitted it to PHMSA, which was found satisfactory. No further action needs to be taken regarding this item. 6. §195.452 Pipeline integrity management in high consequence areas. (f)(4) See above. (h)(1) See above. Wolverine failed to develop a pipeline repair manual that addressed the repair methods that were used by Wolverine. The IMP Manual, Section 4.4.2., referenced Wolverine’s Repair and Modification Manual for approved repair methods. The repair methods listed in the table in the Repair and Modification Manual conflicted with the repair methods used on Wolverine’s pipeline system. During the inspection, Wolverine noted that all repairs were determined by the Risk & Integrity Specialist. The Repair and Modification Manual listed bolt on clamps as permanent repair methods, however, the Risk & Integrity Specialist noted that bolt on clamps were temporary repair methods. Wolverine amended this procedure and submitted it to PHMSA, which was found satisfactory. No further action needs to be taken regarding this item. 7. §195.402 Procedural manual for operations, maintenance, and emergencies. (a) See above. (b) … (c)(3) See above. §195.559 What coating material may I use for external corrosion control? Coating material for external corrosion control under §195.557 must – 5#

320195015M_Notice of Amendment_04112019_text.pdf, page 6(a) Be designed to mitigate corrosion of the buried or submerged pipeline; Wolverine’s Facilities Inspection and Maintenance Manual Pipe Coating Program, Revision 1.10, did not address the application of RD6 coating that was utilized at the Darden Road ILI Dig Site. Wolverine amended this procedure and submitted it to PHMSA, which was found satisfactory. No further action needs to be taken regarding this item. Response to this Notice This Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. 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). Following the receipt of this Notice, you have 30 days to submit written comments, revised procedures, or a request for a hearing under §190.211. 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 an Order Directing Amendment. If your plans or procedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C.F.R. § 190.206). If you are not contesting this Notice, we propose that you submit your amended procedures to my office within 90 days of receipt of this Notice. This period may be extended by written request for good cause. Once the inadequacies identified herein have been addressed in your amended procedures, this enforcement action will be closed. 6#

320195015M_Notice of Amendment_04112019_text.pdf, page 7It is requested (not mandated) that Wolverine Pipe Line Company maintain documentation of the safety improvement costs associated with fulfilling this Notice of Amendment (preparation/revision of plans, procedures) and submit the total to Allan Beshore, Director, Central Region, Pipeline and Hazardous Materials Safety Administration. In correspondence concerning this matter, please refer to CPF 3-2019-5015M and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Allan Beshore Director, Central Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Options for Pipeline Operators in Enforcement Proceedings 7#

320195015M_PHC Hearing Scheduled_08272019.pdf, page 1Official PDF2 DECEIVE of Transportation U.S. Department SEP 05 2019) 1200 New Jersey Ave., SE Pipeline and Hazardous Materials BY: Washington, DC 20590 Safety Administration August 27, 2019 VIA CERTIFIED MAIL AND EMAIL TO: Vince.Murchison@pipelinelegal.com and Allan.Beshore @dot.gov Mr. Vince Murchison 325 North Saint Paul Street Murchison Law Firm, PLLC Suite 2700 Dallas, Texas 75201 Mr. Allan Beshore Director, Central Region Pipeline and Hazardous Materials Safety Administration 901 Locust Street, Suite 462 Kansas City, Missouri 64106 Re: Notice of Hearing, Wolverine Pipeline Company CPF No. 3-2019-5016 and CPF No. 3-2019-5015M Dear Mr. Murchison and Mr. Beshore: In accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of Pipeline Company by the Office of Pipeline Safety in the above-referenced case. The hearing wil Probable Violation and Proposed Civil Penalty and Notice of Amendment issued Wolverin take place on November 5, 2019, beginning at 8:30 a.m. Central Time. The hearing will be at the PHMSA Chicago office, 2300 E. Devon Avenue, Suite 350-1, Des Plaines, Illinois 60018. Upon arrival at the building, attendees will be required to present photo identification to security personnel. At least 10 calendar days prior to the hearing (or by October 26, 2019), both parties must submit and exchange any additional written materials they intend to present at the hearing and a list of attendees. This information should be provided electronically. Materials not submitted by this date may be excluded. If you have any questions, please do not hesitate to call me at (202) 366-6139. Sincerely, Kristin Baldwin Presiding Official CC: Ms. Melanie Stevens, Counsel, Central Region, Office of Pipeline Safety, PHMSA#