{"operation":"document","citation":"CPF 320205021","title":"FLINT HILLS RESOURCES PINE BEND, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2020-12-15","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.403(b)(1), 195.410(a)(1), 195.412(a), 195.428(a), 195.428(c), 195.428(d), 195.452(l)(1)(ii).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205021.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205021.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205021","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320205021","body":"Notice of Probable Violation involving FLINT HILLS RESOURCES PINE BEND, LLC. PHMSA's enforcement data identifies the cited regulations as 195.403(b)(1),  195.410(a)(1),  195.412(a),  195.428(a),  195.428(c),  195.428(d),  195.452(l)(1)(ii). The case was opened on 2020-12-15 and is reported as closed as of 2022-01-31. Proposed civil penalty: $38,300. Assessed civil penalty: $19,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320205021_Decision on Petition for Reconsideration_01182022_(19-166915S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_Decision%20on%20Petition%20for%20Reconsideration_01182022_(19-166915S).pdf\n\n320205021_Decision on Petition for Reconsideration_01182022_(19-166915S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_Decision%20on%20Petition%20for%20Reconsideration_01182022_(19-166915S)_text.pdf\n\n320205021_Final Order_08232021_(19-166915S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_Final%20Order_08232021_(19-166915S).pdf\n\n320205021_Final Order_08232021_(19-166915S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_Final%20Order_08232021_(19-166915S)_text.pdf\n\n320205021_NOPV PCP_12152020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_NOPV%20PCP_12152020.pdf\n\n320205021_NOPV PCP_12152020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_NOPV%20PCP_12152020_text.pdf\n\n320205021_Operator Petition for Reconsideration_09112021_(19-166915S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_Operator%20Petition%20for%20Reconsideration_09112021_(19-166915S).pdf\n\n320205021_Operator Response to Notice_01142021.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205021/320205021_Operator%20Response%20to%20Notice_01142021.pdf\n\n320205021_Final Order_08232021_(19-166915S)_text.pdf\n\nAugust 23, 2021\nVIA ELECTRONIC MAIL TO: jeff.ramsey@fhr.com\nMr. Jeff Ramsey\nPresident and Chief Executive Officer\nFlint Hills Resources, LLC\n4111 E. 37th Street North\nWichita, Kansas 67220\nRe: CPF No. 3-2020-5021\nDear Mr. Ramsey:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a reduced civil penalty of $19,000. The penalty payment terms are set\nforth in the Final Order. This enforcement action closes automatically upon receipt of payment.\nService of the Final Order by certified mail is effective upon the date of mailing as provided\nunder 49 C.F.R. § 190.5. Service of the Final Order by electronic mail is effective upon the date\nof transmission 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. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA\nMs. Kimberly A. Gerold, Manager, Pipeline Safety, Flint Hills Resources, LLC,\nkim.gerold@fhr.com\nMr. James B. Curry, Babst Calland, Counsel for Flint Hills Resources, LLC,\njcurry@babstcalland.com\nCONFIRMATION OF 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____________________________________\n)\nIn the Matter of )\n)\nFlint Hills Resources, LLC, ) CPF No. 3-2020-5021\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 6, 2019, through August 16, 2019, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted a pipeline safety inspection of Flint Hills Resources, LLC’s (FHR or\nRespondent) procedures, records, and facilities in Minnesota and Wisconsin. FHR transports\ncrude oil, natural gas liquids, and refined products through more than 4,000 miles of pipeline,\ntraversing six states.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated December 15, 2020, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice), which also included three warnings pursuant to 49 C.F.R. § 190.205. In accordance\nwith 49 C.F.R. § 190.207, the Notice proposed finding that FHR had committed two violations\nof 49 C.F.R. Part 195 and proposed assessing a civil penalty of $38,300 for the alleged\nviolations. The warning items required no further action, but warned the operator to correct the\nprobable violations or face possible future enforcement action.\nFHR responded to the Notice by letter dated January 12, 2021 (Response). FHR contested one\nof the allegations requesting withdrawal of the allegation and the associated civil penalty,\nrequested a re-examination of the civil penalty for the other allegation, and offered additional\ninformation. Respondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\n1 See, FHR, Products and Services, Pipelines, website, available at https://www.fhr.com/products-services/pipeline\n(last accessed July 30, 2021).\n\n\n\nCPF No. 3-2020-5021\nPage 2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.403, which states in\nrelevant part:\n§ 195.403 Emergency response training.\n(a) . . .\n(b) At the intervals not exceeding 15 months, but at least once each\ncalendar year, each operator shall:\n(1) Review with personnel their performance in meeting the objectives\nof the emergency response training program set forth in paragraph (a) of\nthis section; and . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.403(b)(1) by failing to review with\npersonnel, during calendar year 2016, their performance in meeting the objectives of its\nemergency response training program. Specifically, the Notice alleged that during the\ninspection, FHR’s Emergency Response Manager stated that reviews of the Emergency Plan had\nbeen completed on the following dates: December 27, 2014; December 30, 2015; April 25, 2017;\nand December 4, 2017. FHR’s Emergency Response Manager further acknowledged that no\nreview has been completed for calendar year 2016.\nIn its Response, FHR did not contest this alleged violation, indicating that it recognized that the\ncompany failed to conduct the annual review of its emergency response training program in 2016\nor within 15 months of the December 30, 2015 review. However, as discussed in more detail\nbelow in the assessment of penalty of this item, FHR requested a reduction to the proposed civil\npenalty amount.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.403(b)(1) by failing to review with personnel their performance in meeting the objectives\nof the emergency response training set forth in § 195.403(a) at least once each calendar year, but\nat intervals not exceeding 15 months.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.412, which states in\nrelevant part:\n§ 195.412 Inspection of rights-of-way and crossing under navigable\nwaters.\n(a) Each operator shall, at intervals not exceeding 3 weeks, but at least\n26 times each calendar year, inspection the surface conditions on or adjacent\nto each pipeline right-of-way. Methods of inspection include walking,\ndriving, flying or other appropriate means of traversing the right-of way.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.412(a) by failing to inspect the\nsurface conditions on or adjacent to each pipeline right-of-way at intervals not exceeding 3\nweeks, but at least 26 times each calendar year. Specifically, the Notice alleged that FHR used\naerial patrolling, but neither maintained the pipeline right-of-way conditions at a level that is\nappropriate for aerial patrolling nor selected an alternate patrol method that would allow\neffective patrols based on the condition of the right-of-way for the period from January 1, 2019,\n\n\n\nCPF No. 3-2020-5021\nPage 3\nthrough August 14, 2019, at the following two locations: east of County Road Z in Pepin\nCountry, Wisconsin, and at mile post 182, near Stevens Point, Wisconsin. The Notice also\nalleged that during the inspection, OPS observed excessive vegetation cover over the right-of-\nway at these two locations, which would make it impossible to complete effective aerial patrols\nof the right-of-way. In support of its observation, OPS provided one photograph taken in\nStevens Point, Wisconsin and a Google Earth image of County Road Z in Pepin County,\nWisconsin.2\nIn its Response, FHR contested this allegation of violation and requested that PHMSA withdraw\nthe alleged violation. Respondent contended that PHMSA has not met its burden of proof to\nestablish a violation of § 195.412(a) occurred, and that the photographic evidence submitted by\nOPS fails to prove that there was excessive vegetation obscuring the surface conditions of the\nright-of-way during aerial patrol. Respondent further contended that the aerial patrol records\nsubmitted by OPS do not substantiate a violation of § 195.412(a); instead, they demonstrate that\nright-of-way was sufficiently clear to perform aerial patrols.\nSection 195.412(a) requires each operator to inspect the surface conditions on or adjacent to each\npipeline right-of-way at intervals not exceeding 3 weeks, but at least 26 times each calendar year.\nMethods of inspection specified by the regulation include walking, driving, flying or other\nappropriate means of traversing the right-of-way. The purpose of this regulation is to “ensure\nthat operators regularly inspect the surface conditions of their pipeline rights-of-way, by\nappropriate means, in order to detect encroachments and various other threats to the integrity of\ntheir facilities.”3 If an operator cannot view surface conditions using aerial patrols, then flying is\nnot a method that achieves compliance with § 195.412(a).4\nIn this case, there are two locations at issue for this alleged violation: (1) east of County Road Z\nin Pepin County, Wisconsin; and (2) mile post 182, near Stevens Point, Wisconsin, between\nWisconsin River and West River Drive. I will discuss each in turn.\nFor the first location, OPS submitted a May 2018 Google Earth image of County Road Z in\nPepin County and FHR’s aerial patrol records as evidence to support this instance of an alleged\nviolation.5 As Respondent correctly notes, OPS bears the burden of proof in demonstrating that\nan operator violated the pipeline safety regulations. Having reviewed the evidence, I find that\nOPS did not carry its burden for this instance of a violation. While OPS may submit a Google\nEarth image as evidence to support an allegation of violation, in this case, the allegation is based\nsolely on a Google Earth image that predates OPS’ inspection and does not prove the condition\nof the right-of-way during the alleged period of non-compliance from January 1, 2019, through\nAugust 14, 2019. Without any other evidence proving the surface condition of the right-of-way\n2 Pipeline Safety Violation Report (Violation Report), Evidence Exhibit A.\n3 In The Matter of Nustar Energy, LP, CPF No. 3-2007-5002, Final Order (issued Feb. 5, 2009) (emphasis in\noriginal).\n4 In the Matter of Plains Pipeline, LP, CPF No. 4-2016-5015, Final Order (issued Mar. 7, 2018).\n5 Violation Report, Evidence Exhibit A.\n\n\n\nCPF No. 3-2020-5021\nPage 4\nduring the alleged period of non-compliance, the aerial patrol records submitted by OPS simply\nshow that FHR performed the aerial patrols within the requisite intervals. OPS has presented no\nother evidence demonstrating that FHR failed to maintain the pipeline right-of-way condition at\nthe location east of County Road Z from January 1, 2019, through August 14, 2019, at a level\nthat was not appropriate for aerial patrolling.\nFor the second location, in support of its claim that it observed excessive vegetation cover at the\nright-of-way, OPS submitted a photograph taken of mile post 182, near Stevens Point,\nWisconsin, between Wisconsin River and West River Drive. Respondent contends that the\nphotograph shows a “visible line marker and ample sky, suggesting that the right-of-way could\nbe seen by the pilot performing an aerial patrol at this location.”6 However, I disagree. While\nthe photograph shows a line marker in the foreground and an open sky beyond the tree line, I\nfind that the photograph also shows excessive vegetation, specifically brush and overgrown\ngrass, immediately behind the line marker along the right of way at that location such that an\naerial patrol at this location would not have been an appropriate means to observe the surface\nconditions of the right-of-way. In this case, the excessive vegetation is not limited to tree canopy\nin the background of the photograph, which Respondent claims is not on the right-of-way.\nRespondent further contends that while the aerial patrol records tended to show that the right-of-\nway was clear because of the lack of reported excessive vegetation cover, they also showed that\nthe pilot patrolling the pipeline was attentive to reporting vegetation conditions when they were\npresent.7 Without discrediting the pilot for his attention to and reporting of vegetation conditions\nnear and along the right-of-way at the location roughly 0.2 miles south of the location at issue,\nsuch evidence is unpersuasive to the location at issue for this instance of violation.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.412(a) by failing in one instance to inspect the surface conditions on or adjacent to the\nright-of-way where excessive vegetation cover on the right-of-way precluded inspection of the\npipeline surface conditions by aerial patrol. The Assessment of Penalty below will reflect a\nreduction to account for only one of the two alleged instances of violation having been proven.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken 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.8\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\n6 Response, at 8.\n7 Response, at 9.\n8 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 3-2020-5021\nPage 5\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $38,300 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $19,000 for Respondent’s violation of 49 C.F.R.\n§ 195.403(b)(1) for failing to review with personnel, during calendar year 2016, their\nperformance in meeting the objectives of FHR’s emergency response training program.\nRespondent did not contest the allegation of violation but argued the penalty should be reduced\nbased on the culpability penalty assessment criterion because the company discovered and\ncorrected the violation before it was discovered by PHMSA. Respondent also argued that\npipeline safety was minimally affected during the period after the 2016 review interval had\npassed and that the duration of the violation was four months, and not the two and half years\ncited in the Violation Report. Respondent further argued that based on PHMSA’s Pipeline\nSafety Enforcement Procedures (Enforcement Procedures)9 and the Department of\nTransportation’s regulations in 49 CFR Part 5 (now rescinded), PHMSA should further reduce\nthe penalty assessment.\nWith regard to culpability argument, FHR contended that upon learning that the company had\nmissed the required emergency response training review in 2016, it took prompt action to\nconduct the required review in April 2017.10 In support of its contention, Respondent provided a\nwork order demonstrating that the emergency response training review was completed on April\n25, 2017.11 Respondent also asserted that since missing the required review in 2016, it has since\nconducted the emergency response training reviews at the requisite intervals pursuant to\n§ 195.403(b)(1). The Notice and evidence support this position by showing that FHR completed\nthe required review for calendar year 2017. Moreover, the record shows Respondent performed\ntwo emergency response training reviews in 2017. While Respondent missed the required\nreview for calendar year 2016, it completed four emergency response training reviews in the four\nyears from 2014 to 2017, which is the required amount of reviews for that period. Respondent’s\ndecision to perform a review in April 2017, and then a subsequent review in December 2017,\ndemonstrates that Respondent took documented action in April 2017 to correct a non-compliance\nbefore PHMSA discovered the violation. Having considered the arguments raised by\nRespondent, I find that FHR found the non-compliance, took documented action to address the\ncause of the non-compliance, and corrected the non-compliance before PHMSA learned of the\nviolation. As such, I find a reduction in penalty is warranted under the culpability criterion.\n9 PHMSA, Pipeline Safety Enforcement Procedures, at § 3.1.1.4 (Sept. 15, 2020), available at\nhttps://www.phmsa.dot.gov/pipeline/enforcement/pipeline-enforcement-procedures.\n10 Response, at 2.\n11 Response, Attachment 1.\n\n\n\nCPF No. 3-2020-5021\nPage 6\nWith regard to Respondent’s additional arguments, pipeline safety being minimally affected has\nalready been considered under the gravity criterion.12 Additionally, while FHR noted that it had\nremedied the non-compliance in April 2017, four months after the non-compliance occurred, this\ndoes not serve to change the penalty amount, as the duration of the violation remains greater than\n10 days for penalty assessment purposes. As for Respondent’s citation to PHMSA’s\nEnforcement Procedures, the purpose of those procedures is to provide PHMSA personnel with\nguidance on implementation of PHMSA’s enforcement program. The Enforcement Procedures\ndo not bind PHMSA to any particular course of action and do not mandate that PHMSA consider\nany penalty assessment criteria other than those required by statute and regulation.13\nFurthermore, the provisions of 49 CFR Part 5 cited by Respondent have been rescinded. Even\nbefore they were rescinded, they did not create any right or benefit, substantive or procedural,\nenforceable at law or in equity to any party.14 Accordingly, neither the Enforcement Procedures\nnor the rescinded Part 5 regulations require further reduction to the civil penalty.\nAccordingly, having reviewed the record and the assessment criteria, and based upon a finding\nthat a culpability credit is warranted, the civil penalty assessed is reduced to $0 for the violation\nof 49 C.F.R. § 195.403(b)(1).\nItem 3: The Notice proposed a civil penalty of $19,300 for Respondent’s alleged violation of\n49 C.F.R. § 195.412(a), for failing to inspect the surface conditions on or adjacent to the right-of-\nway where excessive vegetation cover on the right-of-way precluded inspection of the pipeline\nsurface conditions by aerial patrol. Respondent requested that the penalty be eliminated\nconsistent with statutory factors, as well as PHMSA’s Enforcement Procedures and the\nDepartment of Transportation’s regulations in 49 CFR Part 5.\nAs discussed above, I withdrew the instance of violation associated with the right-of-way east of\nCounty Road Z in Pepin County, Wisconsin, which results in a reduction to the proposed civil\npenalty. As for the remaining instance of violation associated with the right-of-way at mile post\n182, with respect to the nature and circumstances of the violation, inspection the surface\nconditions on or adjacent to each pipeline right-of-way is a routine pipeline maintenance activity.\nWith respect to gravity, the civil penalty assessment already considered that pipeline safety was\nminimally affected. With respect to culpability and good faith, Respondent’s failure to inspect\nthe surface conditions on or adjacent to the right-of-way at mile post 182 was not consistent with\nthe purpose of the regulation, which is an added means of detecting threats and monitoring and\nminimizing the risk of a pipeline failure. Furthermore, nothing in the record would indicate that\nthe proposed civil penalty amount would impact Respondent’s ability to continue in business.\nRespondent has not presented any information or arguments that would warrant a reduction in\nthe civil penalty amount proposed in the Notice for the one remaining instance of violation.\nFinally, for the reasons discussed under Item 1, the penalty will not be further reduced based on\nthe PHMSA Enforcement Procedures or the Part 5 regulations. Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a reduced civil penalty of\n12 Violation Report, at 8.\n13 49 U.S.C. 60122; 49 CFR § 190.225.\n14 See Enforcement Procedures, Section 3, page 1; 86 Fed. Reg. 17,292 (Apr. 2, 2021); and 49 CFR § 5.111 (2020).\n\n\n\nCPF No. 3-2020-5021\nPage 7\n$19,000 for the one instance of violation of 49 C.F.R. § 195.412(a).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $19,000.\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 $19,000 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 ITEMS\nWith respect to Items 2, 4 and 5, the Notice alleged probable violations of Part 195, but\nidentified them as warning items pursuant to § 190.205. The warnings were for:\n49 C.F.R. § 195.410(a)(1) (Item 2) ─ Respondent’s alleged failure to maintain\nline markers as required at certain locations in Wisconsin. PHMSA observed a\nlack of sufficient line markers at two locations so that the location of the pipeline\ncould be accurately known.\n49 C.F.R. § 195.428(d) (Item 4) ─ Respondent’s alleged failure to complete the\nannual overfill protection system inspection for Tank 541 at the Milwaukee\nTerminal in 2015; and\n49 C.F.R. § 195.452(l)(1)(ii) (Item 5) ─ Respondent’s alleged failure to maintain\nrecords of the decisions and analysis for the periodic evaluation of pipeline\nintegrity in 2018.\nIf OPS finds a violation of any of these items in a subsequent inspection, Respondent may be\nsubject 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\n\n\n\nCPF No. 3-2020-5021\nPage 8\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.\nAugust 23, 2021\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n320205021_Decision on Petition for Reconsideration_01182022_(19-166915S)_text.pdf\n\nJanuary 18, 2022\nVIA ELECTRONIC MAIL TO: jeff.ramsey@fhr.com\nMr. Jeff Ramsey\nPresident and Chief Executive Officer\nFlint Hills Resources, LLC\n4111 E. 37th Street North\nWichita, Kansas 67220\nRe: CPF No. 3-2020-5021\nDear Mr. Ramsey:\nEnclosed is the Decision on the Petition for Reconsideration issued in the above-referenced case.\nFor the reasons explained therein, the Decision denies your Petition and affirms Item 3 and the\nassociated Civil Penalty of the August 23, 2021 Final Order. This Decision constitutes the final\nadministrative action in this proceeding. Service of this Decision by electronic mail is effective\nupon the date of transmission 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. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA\nMs. Kimberly A. Gerold, Manager, Pipeline Safety, Flint Hills Resources, LLC,\nkim.gerold@fhr.com\nMr. James B. Curry, Babst Calland, Counsel for Flint Hills Resources, LLC,\njcurry@babstcalland.com\nCONFIRMATION OF 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____________________________________\n)\nIn the Matter of )\n)\nFlint Hills Resources, LLC, ) CPF No. 3-2020-5021\n)\nRespondent. )\n____________________________________)\nDECISION ON PETITION FOR RECONSIDERATION\nIn an August 23, 2021 Final Order, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA or Agency) determined that Flint Hills Resources, LLC, (FHR or Petitioner) had\ncommitted two violations of 49 C.F.R. Part 195 following an inspection by the Office of Pipeline\nSafety (OPS) of FHR’s procedures, records, and pipeline facilities in Minnesota and Wisconsin\nand assessed a civil penalty of $19,000 for the violations.1 On September 11, 2021, FHR filed a\nPetition for Reconsideration pursuant to 49 C.F.R. § 190.243 (Petition). The Petition requested\nthat PHMSA reconsider its finding in Item 3 of the Final Order that FHR had violated 49 C.F.R.\n§ 195.412(a) for failing to inspect the surface conditions on or adjacent to the right-of-way where\nexcessive vegetation cover on the right-of-way precluded inspection of the pipeline surface\nconditions by aerial patrol at mile post 182, near Stevens Point, Wisconsin (MP 182).\nAfter consideration of the arguments and record in this case, the Petition is denied, and Item 3 of\nthe Final Order is affirmed.\nBackground\nFrom March 6, 2019 through August 16, 2019, pursuant to 49 U.S.C. § 60117, a representative\nof OPS conducted a pipeline safety inspection of the facilities, procedures, and records of FHR’s\npipeline facility from the Pine Bend Refinery to the Milwaukee and Madison terminals. As a\nresult of the inspection, the Director, Central Region, OPS (Director), issued to FHR, by letter\ndated December 15, 2020, a Notice of Probable Violation and Proposed Civil Penalty (Notice).\nIn accordance with 49 C.F.R. § 190.207, the Notice proposed finding that FHR had committed\ntwo violations of 49 C.F.R. Part 195, proposed assessing a civil penalty of $38,300 for the\nalleged violations, and included an additional three warning items which required no further\naction but warned FHR to correct the probable violations or face possible future enforcement\naction.\n1 Flint Hills Resources, LLC, Final Order, CPF No. 3-2020-5021, 2021 WL 4055259, at *1 (Aug. 23, 2021) (Final\nOrder).\n\n\n\nCPF No. 3-2020-5021\nPage 2\nFHR responded to the Notice by letter dated January 12, 2021 (Response). FHR requested\nwithdrawal of one of the allegations and the associated civil penalty and offered additional\ninformation and requested re-examination of the civil penalty for the other allegation. FHR did\nnot request a hearing and therefore waived its right to one.\nOn August 23, 2021, pursuant to 49 U.S.C. §§ 60118 and 60122 and 49 C.F.R. § 190.213, the\nAssociate Administrator for Pipeline Safety issued a Final Order finding that FHR had\ncommitted a violation of 49 C.F.R. § 195.403(b)(1) (Item 1), with respect to its emergency\nresponse training reviews, and 49 C.F.R. § 195.412(a) (Item 3), with respect to its right-of-way\ninspections at MP 182. Specifically, Item 1 of the Final Order found that FHR had failed to\nreview with personnel their performance in meeting the objectives of the emergency response\ntraining set forth in § 195.403(a) at least once each calendar year, but at intervals not exceeding\n15 months, as required by § 195.403(b)(1). Item 3 of the Final Order found that FHR violated §\n195.412(a) when it failed to inspect the surface conditions on or adjacent to the right-of-way\nwhere excessive vegetation cover on the right-of-way precluded inspection of the pipeline\nsurface conditions by aerial patrol. While the Notice had alleged two instances of this violation,\nthe Final Order withdrew one instance of the alleged violation of § 195.412(a) for insufficient\nevidence.\nPursuant to the authority of 49 U.S.C. § 60122 and 49 C.F.R. § 190.221, the Final Order assessed\na civil penalty of $19,000 for the violations. The Final Order reduced the civil penalty for Item 1\nfrom $19,000 to $0 after considering FHR’s actions in light of the assessment considerations in\n49 C.F.R. § 190.225. Specifically, the Final Order found that FHR had identified and addressed\nthe non-compliance before PHMSA learned of the violation. Therefore, a penalty reduction was\nwarranted under the culpability criterion. The Final Order also reduced the civil penalty for\nItem 3 from $19,300 to $19,000. This reduction was commensurate with withdrawing one\ninstance of the alleged violation.\nOn September 11, 2021, FHR filed a Petition for Reconsideration pursuant to 49 C.F.R.\n§ 190.243 (Petition). In its Petition, FHR seeks reconsideration of Item 3 in the Final Order and\nthe accompanying Civil Penalty.\nFHR presents two grounds for reconsideration. First, FHR contends that PHMSA did not meet\nits burden of proof regarding the violation of § 195.412(a) that occurred at MP 182. Second,\nFHR contends that the Final Order should be set aside for policy reasons and alleges that the\nFinal Order creates uncertainty for pipeline operators who use aerial patrols to inspect rights-of-\nways.\nOn September 17, 2021, the Central Region (Region) filed a Motion for Leave to File Response\nto Petition for Reconsideration of Final Order (Region Response). The Region requested that the\nPetition be denied in full because FHR’s arguments had already been considered in the Final\nOrder and FHR introduced new evidence and advanced new arguments without sufficient\njustification.\n\n\n\nCPF No. 3-2020-5021\nPage 3\nOn October 4, 2021, FHR filed a Motion for Leave to File Reply to Central Region’s Response\n(Reply). In its Reply, FHR again requested that PHMSA withdraw Item 3 and the associated\nCivil Penalty and asserted that its new arguments were necessary in light of the analysis in the\nFinal Order.\nStandard of Review\nSection 190.243 allows a respondent to petition the Associate Administrator for reconsideration\nof a final order that has been issued pursuant to § 190.213. Reconsideration is not an appeal or a\ncompletely new review of the record. A respondent may ask for correction of an error or, in\nlimited circumstances, may present previously unavailable information. If a respondent requests\nconsideration of additional facts or arguments, the respondent must submit the reasons they were\nnot presented prior to the issuance of the final order. Repetitious information or arguments will\nnot be considered.2 The Associate Administrator may grant or deny, in whole or in part, a\npetition for reconsideration without further proceedings.\nAdditional Facts and Repetitious Arguments\nIn its Petition, FHR reiterates arguments from its Response, presents additional facts and\narguments, and asserts that these facts and arguments should be considered on reconsideration.3\nIn its Region Response, the Region argues first, that the reiterated arguments should not be\nconsidered because they were taken into account earlier in the enforcement proceeding, and\nsecond, that the additional facts and arguments should not be considered because FHR fails to\nprovide a valid justification as to why they were not presented prior to the issuance of the Final\nOrder.4 In its Reply, FHR states that the need for the additional information only became evident\nafter issuance of the Final Order because PHMSA erred in its evaluation of the burden of proof.5\nWhen a petition is repetitious of the record or presents new arguments and evidence without\nvalid reason, the additional information need not be considered.6 In justifying its presentation of\nnew information, FHR states that it is providing additional detail and arguments that it did not\nprovide earlier “because it believed that the evidence in the case demonstrated that PHMSA did\n2 Plains All American Pipeline, LP, (Plains), Decision on Reconsideration, CPF No. 5-2009-00118, 2013 WL\n5883403, at *3 (Aug. 30, 2013) (stating that the right to petition the Associate Administrator for reconsideration is a\nlimited one and repetitious information or arguments will not be considered).\n3 Motion for Leave to File Reply to Central Region’s Response (Reply to Central Region’s Response), at 2–3 (Oct.\n4, 2021).\n4 Central Region’s Motion for Leave to File Response to Petition for Reconsideration of Final Order, at 2 (Sept. 17,\n2021) (Central Region’s Response).\n5 Reply to Central Region’s Response, at 1.\n6 Plains, at *3; see also TPM, Inc., Decision on Petition for Reconsideration, CPF No. 2-2010-6007, 2012 WL\n6184434, at *2 (Oct. 12, 2012).\n\n\n\nCPF No. 3-2020-5021\nPage 4\nnot meet its burden of proof.”7 FHR supports this argument by citing to four decisions on\nreconsideration where they say PHMSA considered new arguments to determine whether the\nburden of proof had been carried.8 FHR’s citation to other decisions is not a valid justification\nfor raising new details and arguments they had access to all along and glosses over the fact-\nspecific nature of each case. FHR asserts that the new information is needed because the Final\nOrder’s analysis of the burden of proof was flawed. But, by introducing new details and\narguments in its Petition, FHR concedes that it did not present its full case at a stage of the\nproceeding where it could have been used to assist in final review of the issues.\nFHR should have raised all arguments prior to the issuance of the Final Order to assist in\ndeveloping the record prior to final review. Alternatively, the Petition should have stated case-\nspecific reasons, beyond dissatisfaction with the outcome of the Final Order, that the new\ninformation was not previously made available. Stating that the new information is necessary\nbecause the Final Order did not adopt the position in FHR’s Response is not enough.\nThe reconsideration stage is a limited one and while FHR has appropriately asked for correction\nof an error, it has not justified the consideration of new evidence to determine whether an error\nwas made. Therefore, I find reason to deny the petition on these grounds. Notwithstanding this\nfinding, I have considered the information and arguments submitted by FHR and further find no\nbasis to alter the finding of violation in Item 3.\nAnalysis for Item 3\nThe Final Order found FHR violated 49 C.F.R. § 195.412, which states:\n§ 195.412 Inspection of rights-of-way and crossing under navigable\nwaters.\n(a) Each operator shall, at intervals not exceeding 3 weeks, but at least\n26 times each calendar year, inspect the surface conditions on or adjacent\nto each pipeline right-of-way. Methods of inspection include walking,\ndriving, flying or other appropriate means of traversing the right-of-way.\nThe Final Order found that FHR violated § 195.412(a) by failing to inspect the surface\nconditions on or adjacent to its right-of-way. Specifically, it found that Respondent had used\naerial patrolling to inspect its pipeline right-of-way, but excessive vegetation cover on the right-\nof-way at MP 182 precluded inspection of the surface conditions by aerial patrol. Evidence\nsupporting the violation included a photograph of the right-of way taken at MP 182, near Stevens\nPoint, Wisconsin, between Wisconsin River and West River Drive.\nAs noted above, FHR presents two grounds for reconsideration. First, FHR contends that\nPHMSA did not meet its burden of proof regarding the violation of § 195.412(a) that occurred at\n7 Petition for Reconsideration, at 2 (Sept. 11, 2021) (Petition).\n8 Reply to Central Region’s Response, at n.1.\n\n\n\nCPF No. 3-2020-5021\nPage 5\nMP 182. Second, FHR contends that the Final Order should be set aside for policy reasons and\nalleges that the Final Order creates uncertainty for pipeline operators who use aerial patrols to\ninspect rights-of-ways.\nI. Burden of Proof\nThroughout these proceedings, FHR has asserted that PHMSA’s evidence, consisting of a\nphotograph of the right-of-way at MP 182, fails to meet the burden of proof that PHMSA must\ncarry. Specifically, FHR contends that the photographic evidence submitted by PHMSA does\nnot establish that there was excessive vegetation obscuring the surface conditions of the right-of-\nway at MP 182, such that aerial patrol was an inappropriate method of inspection.9 FHR notes\nthat PHMSA had the burden of proof, the burden of presentation, and the burden of persuasion in\nthis enforcement matter.10 FHR alleges that because the regulation is performance-based,\nPHMSA has an additional burden of proving why the method chosen by the operator was not\neffective to establish compliance.11\nIn order to find that FHR violated § 195.412(a) as alleged in the Notice, PHMSA must\ndetermine, by a preponderance of the evidence, that Respondent failed to inspect the surface\nconditions of its right-of-way at MP 182.12 Aerial patrols, the method selected by FHR to\ninspect its right-of-way, are a permissible method of right-of-way inspections if the operator can\nview surface conditions while flying.13 If the operator could not view surface conditions while\nconducting aerial patrols, then the operator’s inspections were not in compliance with\n§ 195.412(a). After reviewing the evidence, I find that PHMSA appropriately found FHR\nviolated § 195.412(a) based on the photograph of the right-of-way.\n9 Pipeline Safety Violation Report (Violation Report), Evidence Exhibit A (A-Photographs of right-of-way).\n10 49 U.S.C. § 60117(b)(1)(F).\n11 Petition, at 1–2. FHR asserts that 49 C.F.R. § 195.412(a) is a pe","truncated":true,"body_characters":52287}