# MAGELLAN PIPELINE COMPANY, LP — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 32021067NOPV
- **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:** 2021-10-20
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.452(l)(1)(ii), 195.573(a)(1), 195.573(c).
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- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/32021067NOPV
**body:**

Notice of Probable Violation involving MAGELLAN PIPELINE COMPANY, LP. PHMSA's enforcement data identifies the cited regulations as 195.452(l)(1)(ii),  195.573(a)(1),  195.573(c). The case was opened on 2021-10-20 and is reported as closed as of 2022-05-02. Proposed civil penalty: $66,800. Assessed civil penalty: $59,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

32021067NOPV_Final Order_04252022_(20-179535).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021067NOPV/32021067NOPV_Final%20Order_04252022_(20-179535).pdf

32021067NOPV_Final Order_04252022_(20-179535)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021067NOPV/32021067NOPV_Final%20Order_04252022_(20-179535)_text.pdf

32021067NOPV_Operator Response to Notice_01252022_(20-179535).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021067NOPV/32021067NOPV_Operator%20Response%20to%20Notice_01252022_(20-179535).pdf

32021067NOPV_PCP_10202021_(20-179535).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021067NOPV/32021067NOPV_PCP_10202021_(20-179535).pdf

32021067NOPV_PCP_10202021_(20-179535)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021067NOPV/32021067NOPV_PCP_10202021_(20-179535)_text.pdf

32021067NOPV_Final Order_04252022_(20-179535)_text.pdf

April 25, 2022
VIA ELECTRONIC MAIL TO: mike.mears@magellanlp.com
Mr. Michael Mears
Chief Executive Officer
Magellan Midstream Partners, LP
P.O. Box 22186
Tulsa, Oklahoma 74121
Re: CPF No. 3-2021-067-NOPV
Dear Mr. Mears:
Enclosed please find the Final Order issued in the above-referenced case to Magellan Pipeline
Company, LP. It makes findings of violation and assesses a reduced civil penalty of $59,000.
The penalty payment terms are set forth in the Final Order. This enforcement action closes
automatically upon receipt of payment. Service of the Final Order by e-mail is effective upon
the date of transmission and acknowledgement of receipt 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. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA
Mr. Mark Materna, Director, Pipeline Integrity, Magellan Midstream Partners, LP,
mark.materna@magellanlp.com
Mr. Jason Smith, Vice President, Asset Integrity, Magellan Midstream Partners, LP,
jason.smith@magellanlp.com



Mr. Aaron Milford, Chief Operating Officer, Magellan Midstream Partners, LP,
aaron.milford@magellanlp.com
Ms. Laurie England, Senior Regulatory Compliance Coordinator, Magellan Midstream
Partners, LP, laurie.england@magellanlp.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
______________________________________________
)
In the Matter of )
)
Magellan Pipeline Company, LP, ) CPF No. 3-2021-067-NOPV
a subsidiary of Magellan Midstream Partners, LP, )
)
Respondent. )
______________________________________________)
FINAL ORDER
From March 9, 2020, through April 3, 2021, pursuant to 49 U.S.C. § 60117, a representative of
the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Magellan
Pipeline Company, LP (Magellan or Respondent) in Texas. Magellan is a subsidiary of
Magellan Midstream Partners, LP. Magellan’s Texas system consists of 46 breakout tanks and
approximately 1,017 miles of refined products pipelines from El Paso to Odessa.1
As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,
by letter dated October 20, 2021, a Notice of Probable Violation and Proposed Civil Penalty
(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Magellan
had committed two violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of
$66,800 for the alleged violations. The Notice also included an additional warning item pursuant
to 49 C.F.R. § 190.205, which required no further action, but warned the operator to correct the
probable violation or face possible future enforcement action.
After requesting and receiving an extension of time to respond, Magellan responded to the
Notice by letter dated January 25, 2022 (Response). The company did not contest the allegations
of violation but provided an explanation of its actions and requested that the proposed civil
penalty be reduced. Respondent did not request a hearing and therefore has waived its right to
one.
FINDINGS OF VIOLATION
In its Response, Magellan did not contest the allegations in the Notice that it violated 49 C.F.R.
Part 195, as follows:
1 Pipeline Safety Violation Report (Violation Report), at 1, (October 20, 2021) (on file with PHMSA).



CPF 3-2021-067-NOPV
Page 2
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1), which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine
whether cathodic protection required by this subpart complies with
§ 195.571:
(1) Conduct tests on the protected pipeline at least once each calendar
year, but with intervals not exceeding 15 months. However, if tests at those
intervals are impractical for separately protected short sections of bare or
ineffectively coated pipelines, testing may be done at least once every 3
calendar years, but with intervals not exceeding 39 months.
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct
tests on the protected pipeline at least once each calendar year, but with intervals not exceeding
15 months. Specifically, the Notice alleged that a review of Magellan’s corrosion-control
records showed 46 missing cathodic protection inspections and three inspections exceeding 15
months on the Odessa to El Paso unit.
Respondent did not contest this allegation of violation but provided additional information and
requested a reduction of the civil penalty. Accordingly, based on a review of the evidence, I find
that Respondent violated 49 C.F.R. § 195.573(a)(1) by failing to conduct tests on the protected
pipeline at least once each calendar year, but with intervals not exceeding 15 months.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(c), which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) …
(c) Rectifiers and other devices. You must electrically check for proper
performance each device in the first column at the frequency stated in the
second column.
Device Check frequency
Rectifier…………………………..
At least six times each calendar
year, but with intervals not
exceeding 2 ½ months.
Reverse current switch.
Diode.
Interference bond whose failure
would jeopardize structural
protection.
Other interference bond…………. At least once each calendar year,
but with intervals not exceeding
15 months.



CPF 3-2021-067-NOPV
Page 3
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(c) by failing to electrically
check for proper performance of rectifiers or critical interference bonds at least six times each
calendar year, at intervals not to exceed 2 ½ months, and other interference bonds at least once
each calendar year, but with intervals not exceeding 15 months. Specifically, the Notice alleged
that Magellan failed to conduct 15 readings on a rectifier from 2017-2019; three readings on a
critical bond in 2019; and two readings on three others interference bonds in 2017 and 2018, for
a total of six readings.
Respondent did not contest this allegation of violation but provided additional information and
requested a reduction of the civil penalty. Accordingly, based on a review of the evidence, I find
that Respondent violated 49 C.F.R. § 195.573(c) by failing to electrically check for proper
performance of rectifiers or critical interference bonds at least six times each calendar year, at
intervals not to exceed 2 ½ months, and other interference bonds at least once each calendar
year, but with intervals not exceeding 15 months.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.2
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue
doing business; the good faith of Respondent in attempting to comply with the pipeline safety
regulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.
In addition, I may consider the economic benefit gained from the violation without any reduction
because of subsequent damages, and such other matters as justice may require. The Notice
proposed a total civil penalty of $66,800 for the violations cited above.
Item 2: The Notice proposed a civil penalty of $23,100 for Respondent’s violation of 49 C.F.R.
§ 195.573(a)(1), for failing to conduct tests on the protected pipeline at least once each calendar
year, but with intervals not exceeding 15 months. Specifically, the Notice alleged that a review
of Magellan’s corrosion-control records showed 46 missing cathodic protection inspections and
three inspections exceeding 15 months on the Odessa to El Paso unit for a total of 49 instances of
violation. As fully described below, I reduce the number of instances of violation from 49 to 33.
With respect to gravity, Magellan stated that from July 3, 2013, to July 31, 2019, it leased a
portion of its pipeline to DCP Midstream (DCP). Magellan noted that it filed the Operator
2 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.



CPF 3-2021-067-NOPV
Page 4
Registry Notification in 2013 regarding DCP’s status as “Operator of Record,” and again in 2019
when Magellan resumed as “Operator of Record.” Therefore, Magellan contended it was not the
Operator of Record for the applicable portions of the pipeline corresponding to 43 of the 46
missing cathodic protection readings. For the remaining three instances of missing cathodic
protection readings, Magellan stated that mileposts (MP) 113.8, 113.88 and 113.9 were not
installed until 2018 thus there were no missing readings associated with these locations in 2017.
Magellan also provided additional records that it obtained from DCP regarding the PHMSA
identified missing records (Missing Records). The Missing Records contained the 2018
inspection records for MP zero through 13 in Kermit Station. The Missing Records also
included information demonstrating that the rectifier location at MP zero was not a test point. In
consideration of the Missing Records and the lease agreement with DCP, Magellan requested a
reduction in the proposed civil penalty.
Magellan’s argument that it was not the “Operator of Record” does not excuse it from
compliance with Part 195.3 Section 195.2 defines an operator as any “person who owns or
operates pipeline facilities.”4 Consequently, Magellan is an operator as long as it owns pipeline
facilities, irrespective of any other contractual arrangements. Further, although “[a]n operator
may make arrangements with another person for the performance of any action required by [Part
195] … the operator is not thereby relieved from the responsibility for compliance with any
requirement of [Part 195].”5 Thus, although Magellan leased portions of its pipeline facilities to
DCP, it maintained responsibility for compliance with Part 195 throughout the lease term (i.e.,
July 3, 2013, to July 31, 2019).
However, having reviewed and considered the Missing Records provided by Magellan, I
withdraw the instances of allegation of missing test records for MP 113.8, 113.88, and 113.9 in
2017; from MP zero through 13 in Kermit Station in 2018; and MP zero, for the reasons
discussed above. As such, I reduce the number of instances of violation by 16, from 49 to 33.
With respect to culpability, Magellan asserted that it “conducted all required inspections
in accordance with 49 CFR § 195.573(a)(1)” upon expiration of the DCP lease agreement.6
However, all of the missing inspections occurred during the lease term. Therefore, Magellan’s
actions upon expiration of the lease term to comply with § 195.573(a)(1), while commendable,
do not warrant further reduction in the civil penalty.
Based on the foregoing, I assess Respondent a reduced civil penalty of $21,000 for violation of
49 C.F.R. § 195.573(a)(1).
3 “Operator of Record” is not a status PHMSA recognizes. That phrase does not appear in the pipeline safety
statute or regulations. If a person owns or operates a pipeline, it is responsible for compliance with Part 195.
4 49 C.F.R. § 195.2.
5 Id. § 195.10.
6 Violation Report, at 9.



CPF 3-2021-067-NOPV
Page 5
Item 3: The Notice proposed a civil penalty of $43,700 for Respondent’s violation of 49 C.F.R.
§ 195.573(c), for failing to electrically check for proper performance of rectifiers and critical
interference bonds at least six times each calendar year, at intervals not to exceed 2 ½ months
and other interference bonds at least once each calendar year, but with intervals not exceeding 15
months. As fully described below, I reduce the number of instances of violation from 24 to 6.
With respect to gravity, as noted above, Magellan stated that DCP was the “Operator of Record”
of the applicable portion of the Odessa to El Paso pipeline during the time frame alleged in the
Notice. Therefore, Magellan coordinated with DCP to obtain records and respond to the
allegations in the Notice. Regarding the alleged 15 instances of violation for failure to
electrically check for the proper performance of a rectifier, Magellan obtained the 2017, 2018,
and 2019 rectifier inspection records for line segment 6936 at MP 107.955 (Rectifier Records).
Concerning an alleged three instances of violation for failure to electrically check for the proper
performance of critical interference bond on line segment 6936 at MP 88.07, Magellan argued
that the bond was not critical to its pipeline and provided records to satisfy the bond inspection
requirement as non-critical bond (Non-Critical Bond Records). Lastly, for the alleged six
instances of violation for failure to electrically check for the proper performance of other
interference bonds, Magellan argued that those bonds were not protecting the leased Magellan
pipeline. Rather, Magellan averred that those interference bonds were protecting DCP’s Red
Bluff and Hidalgo pipelines. Magellan stated further that these interference bonds were installed
during the lease term and removed after the lease expired. In light of the records and information
obtained from DCP, Magellan requested a reduction in the proposed civil penalty.
As explained above, although Magellan leased portions of its pipeline facilities to DCP, it
maintained responsibility for compliance with Part 195 throughout the lease term (i.e., July 3,
2013, to July 31, 2019). However, having reviewed and considered the Rectifier Records and
the Non-Critical Bond Records, I withdraw the 15 instances of allegation of violation for missing
inspection records for the rectifier located on line segment 6936 at MP 107.955, and three
instances of allegation of violation for missing critical bond records. Concerning the interference
bonds, I am not persuaded by Magellan’s argument that the bonds did not need to be inspected
because they were protecting DCP’s Red Bluff or Hidalgo pipelines. These interference bonds
were located on Magellan’s pipeline and Magellan has failed to provide any documentation
indicating that they were inspected. Therefore, I find no reduction in the number of instances of
violation is warranted for Magellan’s failure to electrically check for the proper performance of
other interference bonds, line segment 6936, mile posts 49.595, 100.887, and 113.212.
Therefore, in sum, I reduce the number of instances of violation by 18, from 24 to 6.
With respect to culpability, as noted above, Magellan asserted that it “conducted all required
inspections in accordance with 49 CFR § 195.573(a)(1)” upon expiration of the DCP lease
agreement.7 However, the remaining missing inspections all occurred during the lease term.
Therefore, Magellan’s actions upon expiration of the lease term to comply with § 195.573(a)(1),
while commendable, do not warrant further reduction in the civil penalty.
7 Violation Report, at 9.



CPF 3-2021-067-NOPV
Page 6
Based on the foregoing, I assess Respondent a reduced civil penalty of $38,000 for violation of
49 C.F.R. § 195.573(c).
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a reduced civil penalty of $59,000.
Payment of the civil penalty must be made within 20 days after receipt of this Final Order.
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 (AMK-325), Federal Aviation
Administration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,
Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the $59,000 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.
WARNING ITEM
With respect to Item 1, the Notice alleged a probable violation of Part 195, but identified it as a
warning item pursuant to § 190.205. The warning was for:
49 C.F.R. § 195.452(l)(1)(ii) (Item 1) ─ Respondent’s alleged failure to complete
and maintain 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.
If OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject
to future enforcement action.
Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final
Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey
Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of
Chief Counsel, PHMSA, at the same address. The written petition must be received no later than
20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a
brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing
of a petition automatically stays the payment of any civil penalty assessed. The other terms of
the order, including any corrective action, remain in effect unless the Associate Administrator,
upon request, grants a stay. If Respondent submits payment of the civil penalty, the Final Order
becomes the final administrative decision and the right to petition for reconsideration is waived.



CPF 3-2021-067-NOPV
Page 7
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
April 25, 2022
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
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