{"operation":"document","citation":"CPF 320195021","title":"COFFEYVILLE RESOURCES CRUDE TRANSPORTATION, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-09-12","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.573(a)(1), 195.573(e), 195.589(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195021.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195021.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320195021","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320195021","body":"Notice of Probable Violation involving COFFEYVILLE RESOURCES CRUDE TRANSPORTATION, LLC. PHMSA's enforcement data identifies the cited regulations as 195.573(a)(1),  195.573(e),  195.589(c). The case was opened on 2019-09-12 and is reported as closed as of 2020-01-28. Proposed civil penalty: $36,900. Assessed civil penalty: $36,900. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320195021_Final Order_01062020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195021/320195021_Final%20Order_01062020.pdf\n\n320195021_Final Order_01062020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195021/320195021_Final%20Order_01062020_text.pdf\n\n320195021_NOPV PCP_09122019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195021/320195021_NOPV%20PCP_09122019.pdf\n\n320195021_NOPV PCP_09122019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195021/320195021_NOPV%20PCP_09122019_text.pdf\n\n320195021_Operator Response to Notice (Redacted)_10112019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320195021/320195021_Operator%20Response%20to%20Notice%20(Redacted)_10112019.pdf\n\n320195021_Final Order_01062020_text.pdf\n\nJanuary 6, 2020\nMr. John Lipinski\nChief Executive Officer and President\nCVR Refining, LP\n2277 Plaza Drive\nSuite 500\nSugar Land, Texas 77479\nRe: CPF No. 3-2019-5021\nDear Mr. Lipinski:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nCoffeyville Resources Crude Transportation, LLC. It makes one finding of violation and\nassesses a civil penalty of $36,900. The penalty payment terms are set forth in the Final Order.\nThis enforcement action closes automatically upon receipt of payment. Service of the Final\nOrder by certified mail is effective upon the date of mailing as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Allan Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA\nMr. Keith Kuehn, Vice President - Pipeline, Coffeyville Resources Crude Transportation,\nLLC, 411 Northeast Washington Boulevard, Bartlesville, Oklahoma 74006\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n_____________________________________________\nIn the Matter of )\nCoffeyville Resources Crude Transportation, LLC, ) CPF No. 3-2019-5021\na subsidiary of CVR Refining, LP, )\n)\n)\n)\nRespondent. )\n_____________________________________________)\nFINAL ORDER\nFrom August 20-24 and 27-30, 2018, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted a pipeline safety inspection of records of Coffeyville Resources Crude\nTransportation, LLC (CRCT or Respondent), in Bartlesville, Oklahoma, and conducted on-site\ninspections of CRCT’s pipeline system, pump stations, and records in Oklahoma and Kansas.\nCRCT is a subsidiary of CVR Refining, LP, and operates an approximately 65,000-barrel-per-\nday crude-oil gathering and pipeline/trucking system in Oklahoma and Kansas. The gathering\nsystem is comprised of more than 350 miles of company-owned pipelines and associated tankage\nand truck transportation facilities.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated September 12, 2019, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with 49\nC.F.R. § 190.207, the Notice proposed finding that CRCT had violated 49 C.F.R. § 195.573 and\nproposed assessing a civil penalty of $36,900 for the alleged violation. The warning item\nrequired no further action but warned the operator to correct the probable violation or face\npossible future enforcement action.\nCRCT responded to the Notice by letter dated October 11, 2019 (Response). The company did\nnot contest the allegation, offered additional information in response to the Notice, and requested\nthat the proposed civil penalty be reduced.\nRespondent did not request a hearing and therefore has waived its right to one.\n1 CVR Refining, LP website, available at http://www.cvrrefining.com/RefiningOperations/index html (last accessed\nDecember 16, 2019).\n\n\n\nCPF No. 3-2019-5021\nPage 2\nFINDING OF VIOLATION`\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e), which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) …\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the deficiency\ninvolves a pipeline in an integrity management program under § 195.452,\nyou must correct the deficiency as required by § 195.452(h).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) by failing to take corrective\naction to correct identified deficiencies on its corrosion-control system. Specifically, the Notice\nand Violation Report alleged that a review of CRCT’s external corrosion-control inspection\nrecords found that CRCT had not completed corrective actions at three test points with low\nreadings on non-integrity management pipe as required by § 195.401(b). Low readings (under\n850 mV negative) were taken in 2016 and 2017 at CR 4670 North Side, CR 4601 South Side,\nand CR 4500 North Side. These deficiencies had not been corrected by the end of the following\nyear.\nIn its Response, CRCT did not contest the allegation of violation, but did request that the penalty\nbe reduced. The penalty will be discussed more fully below.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.573(e) by failing to take corrective action to correct identified deficiencies on its\ncorrosion-control system.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.2 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\n2 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 3-2019-5021\nPage 3\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $36,900 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $36,900 for Respondent’s violation of 49 C.F.R.\n§ 195.573(e), for failing to take corrective action to correct identified deficiencies on its\ncorrosion-control system. In its response, CRCT contested the penalty for this Item and\nrequested that it be reduced. CRCT based its request on the actions it had taken to implement a\n“comprehensive mitigation solution” to upgrade its corrosion protection system, with a total\ninvestment of $313,000.3 While CRCT’s actions are commendable, they were taken after\nPHMSA discovered the violation and in order to achieve compliance with Federal law. CRCT\nalso provided no indication that the proposed penalty would impair its ability to remain in\noperation. I therefore decline to reduce the penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $36,900 for violation of 49 C.F.R. § 195.573(e).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $36,900 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of Part 195, but did not propose a\ncivil penalty or compliance order for this item. Therefore, this is considered to be a warning\nitem. The warning was for:\n49 C.F.R. § 195.589(c) (Item 2) ─ Respondent’s alleged failure to maintain\nrecords of tests conducted along its Shidler line at eight test points in accordance\nwith §195.573(a)(1), for at least five years.\n3 Response, at 2-3.\n\n\n\nCPF No. 3-2019-5021\nPage 4\nCRCT presented information in its Response showing that it had taken certain actions to address\nthe cited item. If OPS finds a violation of this provision in a subsequent inspection, Respondent\nmay be subject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of the\nFinal Order by Respondent. Any petition submitted must contain a brief statement of the issue(s)\nand meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically\nstays the payment of any civil penalty assessed. The other terms of the order, including any\ncorrective action, remain in effect unless the Associate Administrator, upon request, grants a\nstay. If Respondent submits payment of the civil penalty, the Final Order becomes the final\nadministrative decision and the right to petition for reconsideration is waived.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nJanuary 6, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":11300}