{"operation":"document","citation":"CPF 320205026","title":"MAGELLAN PIPELINE COMPANY, LP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2020-11-06","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.116(f)(2), 195.404(a), 195.452(b)(5), 195.452(j)(1), 195.452(j)(2), 195.505(h).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205026.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205026.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320205026","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320205026","body":"Notice of Probable Violation involving MAGELLAN PIPELINE COMPANY, LP. PHMSA's enforcement data identifies the cited regulations as 195.116(f)(2),  195.404(a),  195.452(b)(5),  195.452(j)(1),  195.452(j)(2),  195.505(h). The case was opened on 2020-11-06 and is reported as closed as of 2024-06-28. Proposed civil penalty: $52,500. Assessed civil penalty: $52,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320205026_Closure Letter_06282024_(16-152634S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205026/320205026_Closure%20Letter_06282024_(16-152634S).pdf\n\n320205026_Closure Letter_06282024_(16-152634S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205026/320205026_Closure%20Letter_06282024_(16-152634S)_text.pdf\n\n320205026_Final Order_06282021_(16-152634S).pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205026/320205026_Final%20Order_06282021_(16-152634S).pdf\n\n320205026_Final Order_06282021_(16-152634S)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205026/320205026_Final%20Order_06282021_(16-152634S)_text.pdf\n\n320205026_NOPV PCP PCO_11062020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205026/320205026_NOPV%20PCP%20PCO_11062020.pdf\n\n320205026_NOPV PCP PCO_11062020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205026/320205026_NOPV%20PCP%20PCO_11062020_text.pdf\n\n320205026_Operator Response to Notice_12182020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320205026/320205026_Operator%20Response%20to%20Notice_12182020.pdf\n\n320205026_Closure Letter_06282024_(16-152634S)_text.pdf\n\nVIA ELECTRONIC MAIL TO: pierce.norton@oneok.com; mark.materna@oneok.com;\nCharles.misak@oneok.com; Jason.A.Smith@oneok.com\nJune 28, 2024\nMr. Pierce Norton, President/CEO\nMagellan Pipeline Company, LLC\n100 West 5th Street\nTulsa, OK 74103\nRE: CPF No. 3-2020-5026\nDear Mr. Norton:\nOn June 28, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Magellan Midstream Partners, LP a Final Order the above-referenced case. This Order\nincluded a Compliance Order and Civil Penalty assessment. Based on our review of the\ndocumentation provided and confirmation of payment of the civil penalty on July 7, 2021, it has\nbeen determined that you have complied with the terms of the Final Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nGregory A. Ochs\nDirector, Central Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\ncc: Mr. Mark Materna, VP Refined Products & Crude Oil, Magellan Pipeline Company, LLC\n(mark.materna@oneok.com)\nCharles Misak, Director, Integrated Operations Services, Magellan Pipeline Company,\nLLC (Charles.misak@oneok.com\nJason A. Smith, Vice President, Asset Integrity, Magellan Pipeline Company, LLC\n(Jason.A.Smith@oneok.com)\n\n320205026_Final Order_06282021_(16-152634S)_text.pdf\n\nJune 28, 2021\nVIA ELECTRONIC MAIL TO: mike.mears@magellanlp.com\nMr. Michael Mears\nPresident & Chief Executive Officer\nMagellan Midstream Partners, LP\nOne Williams Center\nP.O. Box 22186\nTulsa, Oklahoma 74172\nRe: CPF No. 3-2020-5026\nDear Mr. Mears:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $52,500, and specifies actions that need to be taken by\nMagellan Midstream Partners, LP to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Central Region, this\nenforcement action will be closed. Service of the Final Order 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\nMr. Jason Smith, Vice President, Asset Integrity, Magellan Pipeline Company, LP\njason.smith@magellanlp.com\nMr. Mark Materna, Director, Pipeline Integrity, Magellan Pipeline Company, LP\nmark.materna@magellanlp.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____________________________________\nIn the Matter of )\nMagellan Midstream Partners, LP, ) CPF No. 3-2020-5026\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn various dates between December 11, 2018 and October 1, 2019, pursuant to 49 U.S.C.\n§ 60117, representatives of the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety (OPS), conducted a pipeline safety inspection of the\nfacilities and records of Magellan Midstream Partners, LP’s (MMP or Respondent) hazardous\nliquid pipeline system in Kansas, Nebraska, South Dakota, North Dakota, Missouri, Iowa,\nMinnesota, Illinois and Wisconsin. MMP stores and distributes refined petroleum products and\ncrude oil, and is based in Tulsa, Oklahoma.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated November 6, 2020, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice), which also included a warning pursuant to 49 C.F.R.\n§ 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that MMP had\ncommitted four violations of 49 C.F.R. Part 195, proposed assessing a civil penalty of $52,500\nfor one of the alleged violations, and proposed that MMP take certain correction measures to\ncomply with the pipeline safety regulations. The warning item required no further action, but\nwarned the operator to correct the probable violation or face possible future enforcement action.\nOn November 13, 2020, MMP requested a copy of the case file and an extension of time to\nrespond to the Notice until December 18, 2020. The extension request was granted by the\nDirector, Central Region the same day. MMP responded to the Notice by letter dated December\n18, 2020 (Response). The company did not contest the allegations of violation but provided an\nexplanation for each violation and requested to clarify and correct a statement contained in Item\n5 of the Notice. Respondent did not request a hearing and therefore has waived its right to one.\n1 Magellan Midstream Partners, LP website, About Us, available at\nhttps://www magellanlp.com/AboutUs/Default.aspx (last accessed June 15, 2021).\n\n\n\nCPF No. 3-2020-5026\nPage 2\nFINDINGS OF VIOLATION\nIn its Response, MMP did not contest the allegations in the Notice that it violated 49 C.F.R. Part\n195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.116(f)(2), which states:\n§ 195.116(f)(2) Valves.\nEach valve installed in a pipeline system must comply with the\nfollowing:\n(a) . . .\n(f) Each valve must be marked on the body or the nameplate, with at\nleast the following:\n(1) . . .\n(2) Class designation or the maximum working pressure to which the\nvalve may be subjected.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.116(f)(2) by incorrectly marking\non the valve body or the nameplate the class designation or the maximum working pressure to\nwhich the valve may be subjected. Specifically, the Notice alleged that at MMP’s EDE #1-8”\ntrap in the El Dorado East Station two valves were marked with an ANSI 400 rating (maximum\nworking pressure of 960 psig). However, the maximum operating pressure (MOP) on the EDE\n#1-8” pipeline was documented as 1111 psig, and the designated maximum working pressure of\nthe valves is 1150 psig based on the MOP list provided by MMP and reviewed by PHMSA. The\nNotice also proposed that MMP take certain corrective measures associated with this alleged\nviolation as detailed in the Proposed Compliance Oder (PCO).\nRespondent did not contest this allegation of violation or the PCO associated with this Item, but\ndid provide information related to improvements made to address the admitted noncompliance.\nSpecifically, Magellan stated that “[o]n January 13, 2019, Magellan provided the PHMSA\nInspector with a modification to the Management of Change Procedure, SIP-ADM-1 1.01, that\nrequires an MOCR for the replacement of a 400 ANSI valve. Magellan also developed and\nimplemented a new tag, MGLN-0046 in 5.02-ADM-001 Safety Sign Matrix, which reads\n‘WARNING This ANSI 400 valve has a MOP of 1150 psi. Valve shall not be replaced or re-\nworked without MOCR and input from Asset Integrity’. Magellan has tagged each of the listed\n400 ANSI valves that are rated for 1150 psig accordingly.”2 Accordingly, based upon a review\nof all of the evidence and the fact that MMP did not contest the underlying allegation of violation\nor the PCO, I find that Respondent violated 49 C.F.R. § 195.116(f)(2) by incorrectly marking on\nthe valve body or the nameplate the class designation or the maximum working pressure to\nwhich the valve may be subjected.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5), which states:\n§ 195.452(b)(5) Pipeline integrity management in high consequence areas.\n2 Response, at 2.\n\n\n\nCPF No. 3-2020-5026\nPage 3\n(a) . . .\n(b) What program and practices must operators use to manage pipeline\nintegrity? Each operator of a pipeline covered by this section must:\n(1) . . .\n(5) Implement and follow the program.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to implement\nand follow its Integrity Management Program (IMP). Specifically, the Notice alleged that\nSection 6.4 Risk Analysis Overview of MMP’s IMP states that each analysis for facility piping\nsystems will be documented per the System Equipment Review Form. In reviewing\nRespondent’s records, it was determined that 54 of the 71 facilities that could affect a high\nconsequence area (HCA) did not have completed System Equipment Review Forms.\nAdditionally, MMP’s IMP allows for the incorporation and analysis of data collected through\nseveral distinct programs, however, these individual programs were not collectively documented\nand evaluated on the System Equipment Review Forms to determine if additional preventative or\nmitigative measures were necessary for the facilities.\nRespondent did not contest this allegation of violation or the PCO associated with this Item.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 195.452(b)(5) by failing to implement and follow its IMP.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)3, which at the time\nof the violation stated in relevant part:\n§ 195.452(j) Pipeline integrity management in high consequence areas.\n(a) . . .\n(j) What is a continual process of evaluation and assessment to maintain\na pipeline’s integrity?\n(1) General. After completing the baseline integrity assessment, an\noperator must continue to assess the line pipe at specified intervals and\nperiodically evaluate the integrity of each pipeline segment that could affect\na high consequence area.\n(2) Evaluation. An operator must conduct a periodic evaluation as\nfrequently as needed to assure pipeline integrity. An operator must base the\nfrequency of evaluation on risk factors specific to its pipeline, including the\nfactors specified in paragraph (e) of this section. The evaluation must\nconsider the results of the baseline and periodic integrity assessments,\ninformation analysis (paragraph (g) of this section), and decisions about\nremediation, and preventive and mitigative actions (paragraphs (h) and (i)\nof this section).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(j) by failing to complete\nperiodic evaluations to assure pipeline integrity on all of its pipeline facilities. Specifically, the\n3 49 C.F.R. § 195.452(j) was amended effective July 1, 2020. However, the above-referenced violation and\nsubsequent safety inspection occurred prior to the date of amendment, and thus, said amendment is not applicable\nhere.\n\n\n\nCPF No. 3-2020-5026\nPage 4\nNotice alleged that MMP identified 71 facilities that were in a HCA or could affect an HCA. Of\nthose 71 facilities, two facilities, the Columbia Pipeline Junction and the Wathena Pipeline\nJunction, had not been evaluated for all the risk factors specific to the facilities. At the time of\nthe inspection, MMP provided documentation, which showed that several reviews, analyses, or\nassessments had not been completed for the two facilities, including System Equipment Review\nForm, System Equipment Review Analysis, Facility RISK Model Questionnaire, or a Facility\nRisk Ranking Assessment Tool. Consequently, MMP was unable to demonstrate that all\nnecessary inspections, assessments, and evaluations had been completed to assure pipeline\nintegrity as required by §195.452(j)(2).\nRespondent did not contest this allegation of violation and stated that it would pay the civil\npenalty upon receipt of a final order. Accordingly, based upon a review of all of the evidence, I\nfind that Respondent violated 49 C.F.R. § 195.452(j) by failing to complete periodic evaluations\nto assure pipeline integrity on all of its pipeline facilities.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(h), which states:\n§ 195.505(h) Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) . . .\n(h) After December 16, 2004, provide training, as appropriate, to ensure\nthat individuals performing covered tasks have the necessary knowledge\nand skills to perform the tasks in a manner that ensures the safe operation\nof pipeline facilities; . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(h) by failing to have and\nfollow procedures for ensuring through evaluation that individuals performing covered tasks\nhave the necessary knowledge and skills to perform the covered tasks in a manner that ensures\nthe safe operation of its pipeline facilities. Specifically, the Notice alleged that MMP was unable\nto demonstrate that the individuals who performed breakout tank inspections had the necessary\nknowledge of MMP’s covered task 27.1 Routine Monthly Inspection of Breakout Tanks as\nevidenced by the monthly tank inspection records. The Notice further alleged that MMP’s\ncovered task list describes Task 27.1 Routine Monthly Inspection of Breakout Tanks as,\n“Breakout tanks must be inspected monthly per API 653. The inspection includes the\nfoundation, the shell, flanges, valves, and the roof.” However, neither MMP’s procedure 7.10-\nADM-009 nor form 07-FORM-0077 provides guidance or a location to record the condition of\nthe roof. Additionally, MMP’s inspection records did not identify shell distortions, leaks,\nunmitigated corrosions pits, and other prevailing tank integrity threats as required by the\nbreakout tank inspection procedures.\nRespondent did not contest the underlying allegation of violation or the PCO associated with this\nItem, but requested rescinding a reference in the Notice to the roof inspection criteria in API RP\n1161, arguing that API RP 1161 is not incorporated by reference in 49 CFR Part 195 or\nRespondent’s procedures. I agree. Therefore the finding of violation in this Final Order does not\ncontain reference to API RP 1161.\n\n\n\nCPF No. 3-2020-5026\nPage 5\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 195.505(h) by failing to have and follow procedures for ensuring through evaluation\nthat individuals performing covered tasks have the necessary knowledge and skills to perform\nthe covered tasks in a manner that ensures the safe operation of its pipeline facilities.\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.4\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\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 $52,500 for the violation cited above in Item 4.\nItem 4: The Notice proposed a civil penalty of $52,500 for Respondent’s violation of 49 C.F.R.\n§ 195.452(j), for failing to complete periodic evaluations to assure pipeline integrity on all of its\npipeline facilities. MMP neither contested the allegation nor presented any evidence or argument\njustifying a reduction in or elimination of the proposed penalty. The nature of the violation was\nactivity-related due to the operator’s failure to complete the required evaluations, the operator\ndid not self-report the violation, and the violation occurred in a HCA or HCA could-affect area.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $52,500 for violation of 49 C.F.R. § 195.452(j).\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 $52,500 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\n4 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 3-2020-5026\nPage 6\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.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 3, and 5 in the Notice for\nviolations of 49 C.F.R. §§ 192.116(f)(2), 195.452(b)(5), and 195.505(h), respectively. Under 49\nU.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\nestablished under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R.\n§ 190.217, Respondent is ordered to take the following actions to ensure compliance with the\npipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 192.116(f)(2) (Item 1), Respondent must review\nall of its valves listed in the excel spreadsheet provided on November 1, 2019, and\nverify proper markings as required by §192.116(f) within 60 days of receipt of the\nFinal Order.5\n2. With respect to the violation of § 195.452(b)(5) (Item 3), Respondent must revise\nits procedures to ensure future facilities will be properly evaluated. Respondent must\nalso complete all of its facility assessments and implement any required actions as\nsoon as practicable. Within 60 days of receipt of the Final Order, Respondent must\nsubmit a plan with a list of all current facilities and the timing for assessment and\nassociated actions to the Region Director for approval. Once the Region Director\napproves the plan, Respondent must complete the assessments per the approved plan\nand submit quarterly reports until completion of the plan.\n3. With respect to the violation of § 195.505(h) (Item 5), Respondent must revise its\nOperator Qualifications Plan (OQ Plan) and provide additional training to ensure that\nindividuals have the knowledge and skills necessary to identify shell distortions,\nleaks, unmitigated corrosions pits, and other prevailing tank integrity threats. The\namended plan must be in accordance with Respondent’s procedures and also address\nproper documentation of these findings so that further tank assessments or remedial\nmeasures may be taken.\nRespondent must perform the above-referenced tasks as follows:\na) Within 30 days upon receipt of the Final Order, Respondent must revise its\nOQ Plan and the plan’s referenced written procedures and training materials\nas applicable to monthly inspections of breakout tanks, as indicated above,\n5 The Notice did not propose a date by which the corrective measures in Item 1 must be completed. Having\nconsidered the record, I find that a deadline of 60 days from the date of this Order is reasonable and appropriate.\n\n\n\nCPF No. 3-2020-5026\nPage 7\nb) c) and provide the revised documents to the PHMSA Central Region Office.\nWithin 90 days upon receipt of the Final Order, Respondent must train and\nqualify all of its individuals who independently conduct monthly breakout\ntank inspections, in accordance with the written procedures and training\nmaterials described in (a) above.\nWithin 120 days upon receipt of the Final Order, Respondent must provide to\nthe PHMSA Central Region Office the list of all individuals who\nindependently conduct monthly breakout tank inspection, and the date that the\ntraining and qualification of each individual, as described in (b) above, was\ncompleted.\n4. All documentation demonstrating compliance with each of the items outlined in\nthis order must be submitted to the Director, Central Region, Pipeline and Hazardous\nMaterials Safety Administration, 901 Locust Street, Kansas City, MO 64106.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nIt is requested that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of Part 195, but identified it as a\nwarning item pursuant to § 190.205. The warning was for:\n49 C.F.R. § 195.404(a) (Item 2) ─ Respondent’s alleged failure to maintain\ncurrent maps and records of the location and identification of its pipeline systems\nfor multiple pipeline facilities, and Respondent’s alleged failure to maintain\ncurrent maps and records of the diameter, grade, type, and nominal wall thickness\nof all pipe.\nMMP presented information in its Response showing that it had taken certain actions to address\nthe cited items. If OPS finds a violation of any of these items in a subsequent inspection,\nRespondent may be subject to future enforcement action.\n\n\n\nCPF No. 3-2020-5026\nPage 8\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 this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nJune 28, 2021\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n320205026_NOPV PCP PCO_11062020_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nVIA ELECTRONIC MAIL TO: jason.smith@magellanlp.com\nNovember 6, 2020\nMr. Michael Mears\nPresident and CEO\nMagellan Pipeline Company, LP\nOne Williams Center, P.O. Box 22186\nTulsa, OK 74172\nmike.mears@magellanlp.com and\nCPF 3-2020-5026\nDear Mr. Mears:\nFrom December 11, 2018 through October 1, 2019, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United\nStates Code (U.S.C.), inspected your Magellan Midstream Partners, L.P. (MMP) hazardous\nliquid pipeline system in Kansas, Nebraska, South Dakota, North Dakota, Missouri, Iowa,\nMinnesota, Illinois and Wisconsin.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n\n\n\n1. §195.116 Valves.\nEach valve installed in a pipeline system must comply with the following:\n(a) . . .\nfollowing:\n(1) . . .\nsubjected.\n(f) Each valve must be marked on the body or the nameplate, with at least the\n(2) Class designation or the maximum working pressure to which the valve may be\nMMP violated § 195.116(f)(2) by incorrectly marking on the valve body or the nameplate\nthe class designation or the maximum working pressure to which the valve may be\nsubjected. At the EDE #1-8” trap in the El Dorado East Station two valves were marked\nwith an ANSI 400 rating (maximum working pressure of 960 psig). However, the\nmaximum operating pressure on the EDE #1-8” pipeline was documented as 1111 psig,\nand the designated the maximum working pressure of the valves is 1150 psig based on\nthe MOP list provided by MMP and reviewed by PHMSA. MMP also provided PHMSA\nwith internal documentation and copies of PHMSA Final Orders CPF 3521 and 3523\ndescribing the justification for using ANSI 400 valves for the pipeline that operated at a\npressure that exceeded the ANSI 400 valve rating.\nHowever, after reviewing the documentation provided to PHMSA, Final Orders CPF\n3521 and 3523 indicated that the valves should be marked with the maximum working\npressure to which the valve may be subjected. Furthermore, at the time of the inspection,\nMMP could not provide details when requested if an additional 139 mainline valves\nwhere properly marked with the class designation or the maximum working pressure to\nwhich the valves may be subjected. This is supported by a spreadsheet provided by MMP\non November 1, 2019.\n2\n\n\n\n2. §195.404 Map and records.\n(a) Each operator shall maintain current maps and records of its pipeline systems\nthat include at least the following information:\n(1) Location and identification of the following pipeline facilities:\n(i) Breakout tanks;\n(ii) Pump stations;\n(iii) Scraper and sphere facilities;\n(iv) Pipeline valves;\n(v) Facilities to which §195.402(c)(9) applies;\n(vi) Rights-of-way; and\n(vii) Safety devices to which §195.428 applies.\n(2) All crossings of public roads, railroads, rivers, buried utilities, and foreign\npipelines.\n(3) The maximum operating pressure of each pipeline.\n(4) The diameter, grade, type, and nominal wall thickness of all pipe.\nMMP violated §195.404(a) by failing to maintain current maps and records of the\nlocation and identification of its pipeline systems for multiple pipeline facilities.\nOn March 19, 2019, PHMSA inspectors discovered that the Argentine Meter Station\npiping and instrumentation diagram (P&ID) failed to accurately depict the custody\ntransfer location. The P&ID also failed to identify where MMP owned facilities ended\nand Sinclair owned facilities began.\nOn April 5, 2019, PHMSA inspectors discovered that the Lincoln Terminal P&ID failed\nto correctly identify thermal relief safety devices to which §195.428 applies with the\ncorrect maximum set points.\nOn June 3-7, 2019, PHMSA inspectors discovered that the 2016 pipeline replacement\nproject had not been documented in MMP’s official record keeping system PODs. The\nFargo-Grand Forks #1-6” pipeline had been replaced in 2016 yet the database depicted an\nANSI 400 valve installed on January 1, 1987. The ANSI 400 valve was replaced during\nthe 2016 replacement project with a higher rated ANSI 600 valve.\nMMP also violated 49 C.F.R. §195.404(a) by failing to maintain current maps and\nrecords of the diameter, grade, type, and nominal wall thickness of all pipe.\nOn June 3-7, 2019, PHMSA inspectors discovered that the 2016 pipeline replacement\nproject had not been documented in MMP’s official record keeping system PODs. The\nFargo-Grand Forks #1-6” pipeline had been replaced in 2016 yet the database depicted a\nrepair sleeve installed on September 16, 2014. The repair sleeve was no longer in\nexistence and was replaced with a new pipeline during the 2016 project.\n3\n\n\n\n3. §195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(b) What program and practices must operators use to manage pipeline integrity? Each\noperator of a pipeline covered by this section must:\n(1) . . .\n(5) Implement and follow the program.\nMMP violated §195.452(b)(5) by failing to implement and follow its Integrity\nManagement Program (IMP). Specifically, Section 6.4 Risk Analysis Overview of\nMMP’s IMP states that each analysis for facility piping systems will be documented per\nthe System Equipment Review Form. MMP identified 71 facilities that were in a high\nconsequence area (HCA) or could affect an HCA. Of those 71 facilities, 54 do not have a\ncompleted System Equipment Review Forms. MMP’s IMP also allows for the\nincorporation and analysis of data collected through several distinct programs. Examples\nof these programs include ultrasonic thickness inspections per API 510/570, vibration\nanalysis of rotating equipment, and API 653 tank inspections. However, these individual\nprograms were not collectively documented and evaluated on the System Equipment\nReview Forms to determine if additional preventive or mitigative measures were\nnecessary for the facilities. Therefore, MMP failed to follow its IMP in performing\nanalysis for 54 of its 71 facilities.\n4. §195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(j) What is a continual process of evaluation and assessment to maintain a pipeline’s\nintegrity?\n(1) General. After completing the baseline integrity assessment, an operator must\ncontinue to assess the line pipe at specified intervals and periodically evaluate the\nintegrity of each pipeline segment that could affect a high consequence area.\n(2) Evaluation. An operator must conduct a periodic evaluation as frequently as\nneeded to assure pipeline integrity. An operator must base the frequency of\nevaluation on risk factors specific to its pipeline, including the factors specified in\nparagraph (e) of this section. The evaluation must consider the results of the\nbaseline and periodic integrity assessments, information analysis (paragraph (g) of\nthis section), and decisions about remediation, and preventive and mitigative actions\n(paragraphs (h) and (i) of this section).\nMMP violated §195.452(j)(2) by failing to complete periodic evaluations to assure\npipeline integrity on all of its pipelines, including facilities. MMP identified 71 facilities\nthat were in a HCA or could affect an HCA. Of those 71 facilities, two facilities, the\nColumbia Pipeline Junction and the Wathena Pipeline Junction, had not been evaluated\nfor all the risk factors specific to the facilities. At the time of the inspection, MMP\n4\n\n\n\nprovided documentation, which showed that none of the following reviews, analyses, or\nassessments had been completed for these two facilities: System Equipment Review\nForm, System Equipment Review Analysis, Facility RISK Model Questionnaire, or a\nFacility Risk Ranking Assessment Tool. Consequently, MMP was unable to demonstrate\nthat all necessary inspections, assessments, and evaluations had been completed to assure\npipeline integrity as required by §195.452(j)(2).\n5. §195.505 Qualification Program.\nEach operator shall have and follow a written qualification program. The program\nshall include provisions to:\n(a) . . .\n(h) After December 16, 2004, provide training, as appropriate, to ensure that\nindividuals performing covered tasks have the necessary knowledge and skills to\nperform the tasks in a manner that ensures the safe operation of pipeline facilities;\nand . . .\nMMP violated §195.505(h) by failing to have and follow its procedure for ensuring\nthrough evaluation that individuals performing covered tasks have the necessary\nknowledge and skills to perform certain covered tasks required by its Operator\nQualification (OQ) Program in a manner that ensures the safe operation of its pipeline\nfacilities. Specifically, MMP was unable to demonstrate that the individuals who\nperformed breakout tank inspections had the necessary adequate knowledge of MMP’s\ncovered task 27.1 Routine Monthly Inspection of Breakout Tanks as evidenced by the\nmonthly tank inspection records.\nMMP’s covered task list describes Task 27.1 Routine Monthly Inspection of Breakout\nTanks as, “Breakout tanks must be inspected monthly per API 653. The inspection\nincludes the foundation, the shell, flanges, valves, and the roof.” Furthermore, the\ncovered task list also references API RP 1161 Task 27.1-Perform Routine Inspection of\nBreakout Tanks (API 653 Monthly or DOT Annual). Section 3 step 5 of API RP 1161\nTask 27.1-1 specifically states, “Visually inspect the tank roof for the following: coating\nconditions, holes, pitting, and corrosion; standing or pooling water or product; floating\nroof out of level.” However, neither MMP’s procedure 7.10-ADM-009 nor form 07-\nFORM-0077 provides guidance or a location to record the condition of the roof.\nAdditionally, MMP’s inspection records did not identify shell distortions, leaks,\nunmitigated corrosions pits, and other prevailing tank integrity threats as required by the\nbreakout tank inspection procedures. During PHMSA’s inspection, MMP’s Tank\nIntegrity Manager made a comment that the company’s OQ training for breakout tanks\nhad room for improvement. Therefore, MMP failed to have and follow a procedure for\nensuring through evaluation that individuals performing covered tasks have the necessary\nknowledge and skills to perform certain covered tasks, specifically breakout tank\n5\n\n\n\ninspections, required by its OQ Program in a manner that ensures the safe operation of its\npipeline facilities.\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a\nrelated series of violations. For violation occurring on or after November 27, 2018 and before\nJuly 31, 2019, the maximum penalty may not exceed $213,268 per violation per day, with a\nmaximum penalty not to exceed $2,132,679. For violation occurring on or after November 2,\n2015 and before November 27, 2018, the maximum penalty may not exceed $209,002 per\nviolation per day, with a maximum penalty not to exceed $2,090,022. For violations occurring\nprior to November 2, 2015, the maximum penalty may not exceed $200,000 per violation per\nday, with a maximum penalty not to exceed $2,000,000 for a related series of violations. We\nhave reviewed the circumstances and supporting documentation involved for the above probable\nviolation(s) and recommend that you be preliminarily assessed a civil penalty of $ 52,500 as\nfollows:\nItem number\nPENALTY\n4\n$ 52,500\nWarning Item\nWith respect to item 2, we have reviewed the circumstances and supporting documents involved\nin this case and have decided not to conduct additional enforcement action or penalty assessment\nproceedings at this time. We advise you to promptly correct these item. Failure to do so may\nresult in additional enforcement action.\nProposed Compliance Order\nWith respect to items 1, 3, and 5, pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Magellan Midstream\nPartners, L.P. Please refer to the Proposed Compliance Order, which is enclosed and made a\npart of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators\nin Compliance Proceedings. Please refer to this document and note the response options. Be\nadvised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted information\nqualifies for confidential treatment under 5 U.S.C. 552(b).\n6\n\n\n\nFollowing the receipt of this Notice, you have 30 days to submit written comments, or request a\nhearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,\nthis constitutes a waiver of your right to contest the allegations in this Notice and authorizes the\nAssociate Administrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order. If you are responding to this Notice, we propose that\nyou submit your correspondence to my office within 30 days from receipt of this Notice. This\nperiod may be extended by written request for good cause.\nIn your correspondence on this matter, please refer to CPF 3-2020-5026 and, for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nGregory A. Ochs\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Enforcement Proceedings\nCc: Mr. Jason Smith, Vice President of Asset Integrity, Magellan Pipeline Company, LP\nOne Williams Center, OTC-9,Tulsa, OK 74172, jason.smith@magellanlp.com\n7\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) proposes to issue to Magellan Midstream Partners, L.P. a Compliance Order\nincorporating the following remedial requirements to ensure the compliance of Magellan\nMidstream Partners, L.P. with the pipeline safety regulations:\n1. 2. 3. In regard to Item Number 1 of the Notice pertaining to MMP’s failure to properly\nm","truncated":true,"body_characters":43261}