CRESTWOOD MIDSTREAM PARTNERS LP — Notice of Probable Violation

party submissionOfficial PDF320196006_Operator Hearing Request Withdrawn_03232020.pdf#

party submissionOfficial PDF320196006_Operator Response to Notice and Request for Hearing and Request for Case Files and Request for Civil Penalty Worksheet_12312019.pdf#

320196006_Consent Agreement and Order_05132020_text.pdf, page 1Official PDFMay 13, 2020 VIA ELECTRONIC MAIL TO: james.johnston@crestwoodlp.com Mr. James D. Johnston Senior Vice President and General Counsel 811 Main Street, Suite 3400 Houston, Texas 77002 CPF No. 3-2019-6006 Dear Mr. Johnston: Enclosed please find the fully-executed Consent Agreement and Order issued in the above- referenced case, which was executed on May 13, 2020. Service of the Consent Agreement and Order by electronic mail is deemed effective upon the date of transmission 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. Trey Overdyke, Counsel, Holland & Hart, LLP, jcoverdyke@hollandhart.com Mr. Robert D. Ayers, Jr., Counsel, Holland & Hart, LLP, rdayers@hollandhart.com CONFIRMATION OF RECEIPT REQUESTED#

320196006_Consent Agreement and Order_05132020_text.pdf, page 2US DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ____________________________________ ) In the Matter of ) ) Crestwood Equity Partners, LP, ) CPF No. 3-2019-6006 ) Respondent. ) ) CONSENT AGREEMENT AND ORDER WHEREAS, On November 22, 2019, the Director, Central Region, Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation (Director), issued to Crestwood Equity Partners, LP (Crestwood or Respondent), a Notice of Probable Violation and Proposed Civil Penalty (Notice), pursuant to Chapter 601 of 49 U.S. Code, for violations of 49 C.F.R. §§ 195.428(a) (Item 1) and 195.452(l)(ii) (Item 2). The Notice proposed assessing an administrative civil penalty of $236,100 for Item 1. The Notice also proposed ordering Respondent to take certain measures to correct Item 2; and WHEREAS, on December 31, 2019, Crestwood submitted a written response to the Notice, in which the company contested only Item 1 and the associated proposed civil penalty, and requested an informal hearing. Crestwood also requested to meet with Central Region to discuss settlement. Central Region and Crestwood (collectively, Parties) held a meeting telephonically on February 24, 2020, to discuss resolution of this enforcement proceeding; and WHEREAS, as result of these good-faith discussions, the Parties have reached agreement on the terms and conditions of a settlement, as set forth herein, and agree that this Consent Agreement and Order (Agreement) will avoid further administrative proceedings or litigation, that it is the most appropriate means of resolving this proceeding, and that it will promote the public interest by improving the safety performance of Crestwood’s pipeline system and advancing the enforcement and safety goals of PHMSA. NOW, THEREFORE, upon consent and agreement of the Parties, it is Ordered and Adjudged as follows: I. General Provisions. 1. For purposes of this Agreement, Crestwood acknowledges that the company and its pipeline system, known generally as the COLT Connector and located near Williston, North Dakota, are subject to the jurisdiction of the Federal pipeline safety laws, 49 U.S.C. 60101, et seq.,#

320196006_Consent Agreement and Order_05132020_text.pdf, page 3CPF No. 3-2019-6006 Page 2 and the regulations and administrative orders issued thereunder. Crestwood further acknowledges that it received proper notice of PHMSA’s action in this proceeding and that the Notice states claims upon which relief may be granted pursuant to 49 U.S.C. § 60101, et seq., and the regulations and orders issued thereunder. 2. Crestwood agrees to the terms of this Agreement and hereby waives any further procedural requirements with respect to its issuance. Crestwood further waives all rights to contest the validity of this Agreement, including all rights to administrative or judicial hearings or appeals. 3. Crestwood acknowledges that each allegation of violation cited in the Notice may be considered by PHMSA as a prior offense in any future enforcement action brought against Respondent by PHMSA, pursuant to the appropriate statute of limitations. This Consent Agreement and Order, however, does not constitute a finding of violation of any Federal law or regulation and may not be used in any civil proceeding of any kind as evidence or proof of any fact, fault or liability, or as evidence of the violation of any law, rule, regulation or requirement, except in a proceeding to enforce the provisions of this Consent Agreement and Order. II. Civil Penalty. 4. The Parties mutually agree, and Crestwood agrees to pay, a civil penalty assessed in connection with Item 1 of the Notice of Two Hundred Thousand Dollars ($200,000.00). 5. Crestwood will pay the civil penalty amount in Paragraph 4 within 20 calendar days of the Effective Date of this Agreement. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial Operations Division telephone number is (405) 954-8893. 6. Failure to pay the $200,000 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a district court of the United States. III. Compliance Measures. 7. Within 60 days following the Effective Date of this Agreement, Respondent agrees to perform the corrective actions set forth in the Proposed Compliance included with the Notice, namely, with regard to Item 2 pertaining to the lack of records for the risk analysis, periodic evaluation, and the preventive and mitigative measures identified and implemented at the Epping#

320196006_Consent Agreement and Order_05132020_text.pdf, page 4CPF No. 3-2019-6006 Page 3 breakout tank and pump station facilities. Crestwood will conduct these activities and submit the required documentation to the Director. 8. It is requested (not mandated) that Crestwood maintain documentation of the safety improvement costs associated with fulfilling this Agreement and submit the total to the Director. PHMSA requests that these costs be reported in two categories: (1) total cost associated with the preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 9. The Director may grant an extension of time to comply with any portion of Paragraph 8 above upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Upon completion of all actions required under Paragraph 8, Crestwood may request that the Director close the case. IV. Miscellaneous. 10. This Agreement constitutes the final, complete, and exclusive agreement and understanding between the Parties with respect to this proceeding and the issues embodied in this Agreement. The Parties acknowledge that there are no representations, agreements, or understandings relating to the amount or collection of any civil penalties other than those expressly contained in this Agreement. 11. Nothing in this Agreement affects or relieves Crestwood of its responsibility to comply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations and orders issued thereunder. Nothing in this Agreement alters PHMSA’s right of access, entry, inspection, and information gathering, or its authority to bring any enforcement action against Crestwood pursuant to the Federal pipeline safety laws, the regulations and orders issued thereunder, or any other provision of Federal or state law. 12. This Agreement does not waive or modify any Federal, state, or local laws or regulations applicable to Crestwood’s pipeline system. This Agreement is not a permit or a modification of a permit under any Federal, state, or local laws or regulations. Crestwood remains responsible for achieving and maintaining compliance with all applicable Federal, state, and local laws, regulations and permits. 13. This Agreement does not create rights in, or grant any cause of action to, any person not a party to this Agreement. PHMSA is not liable for any injuries or damages to persons or property arising from acts or omissions of Crestwood or its officers, employees, or agents carrying out the work required by this Agreement. PHMSA, its officers, employees, agents, and representatives are not liable for any cause of action arising from any acts or omissions of Crestwood or its contractors in carrying out any work required by this Agreement. 14. purchasers.This Agreement shall apply to and be binding on PHMSA and Crestwood, its officers, directors, employees, successors and assigns, including, but not limited to, subsequent#

320196006_Consent Agreement and Order_05132020_text.pdf, page 5CPF No. 3-2019-6006 Page 4 15. Respondent’s obligations pursuant to this Agreement may be enforced by PHMSA pursuant to its general enforcement authorities under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190. V. Effective Date. 16. Crestwood and PHMSA. The “Effective Date” is the date on which this Agreement has been signed by both VI. Ratification. 17. The Parties’ undersigned representatives certify that they are fully authorized to enter into the terms and conditions of this Agreement and to execute and legally bind such party to this document. For Crestwood Equity Partners, LP (Respondent): James Johnston ___________________________________ Senior Vice President, General Counsel May 13, 2020 ___________________________________ Date For PHMSA: ___________________________________ Alan K. Mayberry Associate Administrator for Pipeline Safety May 13, 2020 ___________________________________ Date#

320196006_NOPV PCP PCO_11222019_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED November 22, 2019 Mr. Robert G. Phillips President and Chief Executive Officer Crestwood Equity Partners, LP 811 Main Street Suit 3400 Houston, Texas 77002 CPF 3-2019-6006 Dear Mr. Phillips: From March 19-23, and September 10-14, 2018, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected your 10” Colt Connector Pipeline’s procedures, records and field assests near Williston, ND. As a result of the inspection, it is alleged that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected and the probable violations are:#

320196006_NOPV PCP PCO_11222019_text.pdf, page 21. 8195.428 Overpressure safety devices and overfill protection systems. (a) Except as provided in paragraph (b) of this section, each operator shall, at intervals not exceeding 15 months, but at least once each calendar year, or in the case of pipelines used to carry highly volatile liquids, at intervals not to exceed 72 months, but at least twice each calendar year, inspect and test each pressure limiting device, relief valve, pressure regulator, or other item of pressure control equipment to determine that it is functioning properly, is in good mechanical condition, and is adequate from the standpoint of capacity and reliability of operation for the service in which it is used. Crestwood Equity Partners, LP (Crestwood) violated 49 C.F.R. § 195.428(a) by failing to inspect and test each relief valve, at intervals not exceeding 15 months, but at least once each calendar year, to determine that it is functioning properly, is in good mechanical condition, and is adequate from the standpoint of capacity and reliability of operation for the service in which it is used. Specifically, Crestwood failed to inspect and test 16 thermal relief valves that had been installed in 2012 (as listed on the company's chart shown below), from 2015 to 2017, for a total of 48 missed inspections. Additionally, Crestwood failed to conduct two inspections on two other thermal relief valves that had been installed in 2017. Crestwood provided the following list of relief valves that were not inspected prior to April 26, 2018: COLT HUB Facility Thermal Relief Valves Location / Equipment Mfr. SN# Model In-Service Year Tested Prior 4/26/2018 DAPL Lateral / Launcher Mercer 1272637 91-11C51T11L1 2017 NO DAPL Lateral / Receiver Mercer 1272638 91-11C51T11L1 2017 NO CH / P110 Discharge Hydroseal 669544-1 14BE2MOP00/F3 2012 NO CH / P110 Discharge Hydroseal 669544-2 14BE2MOP00/F3 2012 NO CH / Meter Skid Inlet AGCO T11-25811 81PS1N88-8 2012 NO CH / Meter Skid FE-140 AGCO T11-29937 81PS1N88-8 2012 NO CH / Meter Skid FE-150 AGCO T11-16662 81PS1N88-8 2012 NO CH / Meter Skid Outlet AGCO T11-29940 81PS1N88-8 2012 NO CH / Launcher-Receiver Mercer 792780 91-11C51T11L1 2012 NO CH / Tank 201-3 Fill Taylor 017577-13 82E4451311 2012 NO DF / Launcher-Receiver Mercer 792774 91-11C51T11L1 2012 NO DF / Meter Skid Inlet AGCO T11-21145 81PS1N88-8 2012 NO DF / Meter Skid FE-200 AGCO T11-21146 81PS1N88-8 2012 NO DF / Meter Skid FE-210 AGCO T11-16664 81PS1N88-8 2012 NO DF / Meter By Pass Mercer 792777 91-11C51T11L1 2012 NO 2#

320196006_NOPV PCP PCO_11222019_text.pdf, page 3DF / Meter Skid Outlet AGCO T11‐25810 81PS1N88‐8 2012 NO DF / Enbridge Mercer 952908 91‐11C51T11L1 2012 NO DF / Tesoro Mercer 792785 91‐11C51T07L1 2012 NO Crestwood personnel acknowledged that all 18 thermal relief valves had not been inspected and tested prior to April 26, 2018. Accordingly, Crestwood violated § 195.428(a) by failing to inspect and test, at intervals not exceeding 15 months but at least once each calendar year, a total of 50 relief valves from 2015 to 2017. 2. §195.452 Pipeline integrity management in high consequence areas. (a) . . . . . (l) What records must an operator keep to demonstrate compliance? (1) An operator must maintain, for the useful life of the pipeline, records that demonstrate compliance with the requirements of this subpart. At a minimum, an operator must maintain the following records for review during an inspection: (ii) Documents to support the decisions and analyses, including any modifications, justifications, deviations and determinations made, variances, and actions taken, to implement and evaluate each element of the integrity management program listed in paragraph (f) of this section. Crestwood violated 49 C.F.R. § 195.452(l)(ii) by failing to maintain, for the useful life of the pipeline, records regarding pipeline integrity management in high consequence areas that demonstrate compliance with the requirements of Subpart F – Operations and Maintenance. Specifically, Crestwood did not have records to demonstrate compliance with:  §195.452(f)(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).” Crestwood failed to have records demonstrating that it performed a risk analysis that integrates all available information about the integrity of the Epping breakout tank and pump station facilities.  §195.452(f)(5) – “A continual process of assessment and evaluation to maintain a pipeline's integrity (see paragraph (j) of this section).” Crestwood failed to have records demonstrating that it had a continual process of assessment and evaluation of the Epping breakout tank and pump station facilities to maintain the pipeline’s integrity.  §195.452(f)(6) – “Identification of preventive and mitigative measures to protect the high consequence area (see paragraph (i) of this section).” 3#

320196006_NOPV PCP PCO_11222019_text.pdf, page 4Crestwood failed to have records demonstrating that it identified preventive and mitigative measures to protect the Epping breakout tank and pump station facilities. Accordingly, Crestwood violated §195.452(l)(ii) by failing to maintain records associated with the implementation of its integrity management program, demonstrating compliance with the requirements of Subpart F - Operations and Maintenance. Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $213,268 per violation per day the violation persists, up to a maximum of $2,132,679 for a related series of violations. For violation occurring on or after November 2, 2015 and before November 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum penalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015, 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. The Compliance Officer has reviewed the circumstances and supporting documentation involved for the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $236,100 as follows: Item number PENALTY 1 $236,100 Proposed Compliance Order With respect to item(s) 2 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Crestwood Equity Partners LP. 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. All material you submit in response to this enforcement action may be 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, or request a hearing under 49 CFR § 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 4#

320196006_NOPV PCP PCO_11222019_text.pdf, page 5authorizes 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. If you are responding to this Notice, we propose that you submit your correspondence to my office within 30 days from receipt of this Notice. This period may be extended by written request for good cause. In your correspondence on this matter, please refer to CPF 3-2019-6006 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 Enforcement Proceedings 5#

320196006_NOPV PCP PCO_11222019_text.pdf, page 6PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Crestwood Equity Partners LP (Crestwood) a Compliance Order incorporating the following remedial requirements to ensure the compliance of Crestwood Equity Partners LP with the pipeline safety regulations: 1. 3. 4. In regard to Item Number 2 of the Notice pertaining to the lack of records for the risk analysis, periodic evaluation, and the preventive and mitigative measures identified and implemented at the Epping breakout tank and pump station facilities, Crestwood must conduct these activities and submit the required documentation to the Director Central Region. Creswood shall submit the required documentation within 60 days of the date of the Final Order. It is requested (not mandated) that Crestwood maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Allan C. Beshore, Director, 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. 6#

320196006_Closure Letter_07072020_text.pdf, page 1Official PDFVIA ELECTRONIC MAIL TO: Robert.Phillips@crestwoodlp.com and Justin.Davidson@crestwoodllp.com July 7, 2020 Mr. Robert G. Phillips President and Chief Executive Officer Crestwood Equity Partners LP 811 Main Street Suite 3400 Houston, Texas 77002 Robert.Phillips@crestwoodlp.com Re: CPF 3-2019-6006 Dear Mr. Phillips: On March 19-23, 2018, and September 10-14, 2018, 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 Crestwood Equity Partners LP (Crestwood) facilities and records in Williston, North Dakota. As a result of the inspection, Crestwood was issued a Notice of Probable Violation, Proposed Civil Penalty and Proposed Compliance Order (Notice) on November 22, 2019. Crestwood responded to the Notice on December 31, 2019, requesting a hearing on Item 1 and further discussions of the Notice in advance of a hearing. In this letter Crestwood did not contest Item 2, or the Proposed Compliance Order. Following discussions, the request for a hearing was withdrawn on March 23, 2020, and a Consent Agreement and Order was issued on May 13, 2020. Crestwood acknowledged each allegation of the violation cited in the Notice, agreed to a civil penalty of $200,000 connected to Item 1 and to perform the corrective actions set forth in the Proposed Compliance Order regarding Item 2. My staff has reviewed the documentation of corrective actions taken along with the penalty payment received on May 5, 2020 and determined that all items of the Consent Agreement and thereby the Notice have been met. This letter is to inform you no further action is necessary and this case is now closed. Thank you for your cooperation.#

320196006_Closure Letter_07072020_text.pdf, page 2Sincerely, Allan C. Beshore Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration Copy: Justin Davidson, Pipeline Compliance Advisor, Crestwood, 811 Main St., Suite 3400, Houston, TX 77002, Justin.Davidson@crestwoodllp.com#

320196006_PHC Hearing Scheduled_02192020_text.pdf, page 1Official PDFFebruary 19, 2020 VIA CERTIFIED MAIL AND EMAIL TO: JCOverdyck@hollandhart.com and Allan.Beshore@dot.gov Mr. Jere C. Overdyck, III, Esq. Counsel for Crestwood Equity Partners, LP Holland & Hart, LLP P.O. Box 68 Jackson, Wyoming 83001 Mr. Allan C. Beshore Director, Central Region Pipeline and Hazardous Materials Safety Administration 901 Locust Street, Suite 462 Kansas City, MO 64106-2641 Re: Notice of Hearing, Crestwood Equity Partners, LP CPF No. 3-2019-6006 Dear Mr. Overdyck and Mr. Beshore: In accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order issued to Crestwood Equity Partners, LP by the Office of Pipeline Safety in the above-referenced matter. The hearing will take place April 2, 2020, beginning at 8:30 a.m. Central Time. The hearing will be at the PHMSA Central Region office, 901 Locust Street, Suite 462, Kansas City, Missouri 64106. Upon arrival at the building, attendees will be required to present photo identification to security personnel. A contact phone number for the day of the hearing is (816) 329-3800. At least 10 calendar days prior to the hearing (or by March 23, 2020), 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) 366-9093. Sincerely, Larry White Presiding Official cc: Mr. Robert G. Phillips, President, E&C Services Support, Rover Pipeline, LLC 1300 Main Street, Houston, Texas 77002 Ms. Melanie Stevens, Counsel, Central Region, Office of Pipeline Safety, PHMSA#