{"operation":"document","citation":"CPF 32021089NOPV","title":"TALLGRASS PONY EXPRESS PIPELINE, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2021-11-30","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.264(b)(1)(i), 195.264(b)(1)(ii).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-32021089nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-32021089nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-32021089nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/32021089NOPV","body":"Notice of Probable Violation involving TALLGRASS PONY EXPRESS PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulations as 195.264(b)(1)(i),  195.264(b)(1)(ii). The case was opened on 2021-11-30 and is reported as closed as of 2023-10-25. Proposed civil penalty: $59,400. Assessed civil penalty: $26,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n32021089NOPV_Closure Letter_10252023_(21-210502).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021089NOPV/32021089NOPV_Closure%20Letter_10252023_(21-210502).pdf\n\n32021089NOPV_Closure Letter_10252023_(21-210502)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021089NOPV/32021089NOPV_Closure%20Letter_10252023_(21-210502)_text.pdf\n\n32021089NOPV_Final Order_07072022_(21-210502).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021089NOPV/32021089NOPV_Final%20Order_07072022_(21-210502).pdf\n\n32021089NOPV_Final Order_07072022_(21-210502)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021089NOPV/32021089NOPV_Final%20Order_07072022_(21-210502)_text.pdf\n\n32021089NOPV_Operator Response to Notice_12302021_(21-210502).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021089NOPV/32021089NOPV_Operator%20Response%20to%20Notice_12302021_(21-210502).pdf\n\n32021089NOPV_PCP PCO_11302021_(21-210502).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021089NOPV/32021089NOPV_PCP%20PCO_11302021_(21-210502).pdf\n\n32021089NOPV_PCP PCO_11302021_(21-210502)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021089NOPV/32021089NOPV_PCP%20PCO_11302021_(21-210502)_text.pdf\n\n32021089NOPV_Final Order_07072022_(21-210502)_text.pdf\n\nJuly 7, 2022\nVIA ELECTRONIC MAIL TO: matt.sheehy@tallgrassenergylp.com\nMr. Matthew Sheehy\nPresident and Chief Executive Officer\nTallgrass Energy, LP\n4200 W. 115th Street, Suite 350\nLeawood, Kansas 66211\nRe: CPF No. 3-2021-089-NOPV\nDear Mr. Sheehy:\nEnclosed please find the Final Order issued in the above-referenced case to Tallgrass Pony\nExpress Pipeline, LP, a subsidiary of Tallgrass Energy, LP. It makes findings of violation,\nassesses a reduced civil penalty of $26,200, and specifies actions that need to be taken to comply\nwith the pipeline safety regulations. The penalty payment terms are set forth in the Final Order.\nWhen the civil penalty has been paid and the terms of the compliance order completed, as\ndetermined by the Director, Central Region, this enforcement action will be closed. Service of\nthe Final Order by e-mail is effective upon the date of transmission and acknowledgement of\nreceipt 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 A. Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA\nMs. Crystal Heter, Chief Operating Officer, Tallgrass Energy, LP,\ncrystal.heter@tallgrassenergylp.com\n\n\n\nMs. Jennifer Eckels, Manager - Compliance, Tallgrass Energy, LP,\njennifer.eckels@tallgrassenergylp.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 )\nTallgrass Pony Express Pipeline, LLC, ) CPF No. 3-2021-089-NOPV\na subsidiary of Tallgrass Energy, LP, )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom May 10 through August 13, 2021, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted a pipeline safety inspection of the facilities and records of Tallgrass Pony\nExpress Pipeline, LLC, a subsidiary of Tallgrass Energy, LP,1 (Tallgrass or Respondent) in\nColorado, Wyoming, and Kansas. Tallgrass owns and operates the Pony Express System, which\nis 607.24 miles of pipeline that transports crude oil through various states, including Colorado,\nKansas, Nebraska, and Wyoming. The system has tanks located at Buckingham, Pawnee,\nSterling, and Grasslands, all within Colorado.2\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated November 30, 2021, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that Tallgrass had violated 49 C.F.R. §§ 195.264(b)(1)(i) and (b)(1)(ii) and\nproposed assessing a civil penalty of $59,400 for the alleged violation of § 195.264(b)(1)(i). The\nNotice also proposed ordering Respondent to take certain measures to correct the alleged\nviolations.\nTallgrass Energy, LP, on its behalf of Tallgrass, responded to the Notice by letter dated\nDecember 30, 2021 (Response). The company did not contest the allegations of violation but\nand requested that the proposed civil penalty be reduced. Respondent did not request a hearing\nand therefore has waived its right to one.\n1 Tallgrass Energy, LP Annual Report 2019, Exhibit 21.1, available at\nhttps://s1.q4cdn.com/607019075/files/doc financials/2019/ar/Annual-Report-2019.pdf\n(last accessed June 2, 2022).\n2 Pipeline Safety Violation Report, at 1.\n\n\n\nFINDINGS OF VIOLATION\nIn its Response, Respondent did not contest the allegations in the Notice that it violated 49\nC.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.264(b)(1)(i), which states\nin relevant part:\n§ 195.264 Impoundment, protection against entry, normal/emergency\nventing or pressure/vacuum relief for aboveground breakout tanks.\n(a) . . . .\n(b) After October 2, 2000, compliance with paragraph (a) of this section\nrequires the following for the aboveground breakout tanks specified:\n(1) For tanks built to API Spec 12F, API Std 620, and others (such as\nAPI Std 650 (or its predecessor Standard 12C)), the installation of\nimpoundment must be in accordance with the following sections of NFPA-\n30 (incorporated by reference, see § 195.3);\n(i) Impoundment around a breakout tank must be installed in accordance\nwith section 22.11.2; and . . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.264(b)(1)(i) by failing to satisfy the\nrequirements of section 22.11.2 of NFPA-30 (2012 edition) regarding impoundment around the\nbreakout tanks. Specifically, the Notice alleged that Tallgrass failed to subdivide the tanks at\nPawnee, Grasslands, and Buckingham, which were all built to API Std 620 after October 2,\n2000, and failed to have drainage channels or intermediate dikes installed as required by section\n22.11.2.6 of NFPA-30 (2012 edition). Section 22.11.2.6 requires that “[e]ach diked area\ncontaining two or more tanks shall be subdivided, preferably by drainage channels or at least by\nintermediate dikes, in order to prevent minor spills from a tank from endangering adjacent tanks\nwithin the diked areas.”\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.264(b)(1)(i) by failing to satisfy\nthe requirements of section 22.11.2 of NFPA-30 (2012 edition) regarding impoundment around\nthe breakout tanks.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.264(b)(1)(ii), which states\nin relevant part:\n§ 195.264 Impoundment, protection against entry, normal/emergency\nventing or pressure/vacuum relief for aboveground breakout tanks.\n(a) . . . .\n(b) After October 2, 2000, compliance with paragraph (a) of this section\nrequires the following for the aboveground breakout tanks specified:\n(1) For tanks built to API Spec 12F, API Std 620, and others (such as\nAPI Std 650 (or its predecessor Standard 12C)), the installation of\nimpoundment must be in accordance with the following sections of NFPA-\n30 (incorporated by reference, see § 195.3);\n\n\n\n(i) . . . .\n(ii) Impoundment by drainage to a remote impounding area must be\ninstalled in accordance with section 22.11.1.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.264(b)(1)(ii) by failing to satisfy\nthe requirements of section 22.11.1 of NFPA-30 (2012 edition) regarding drainage routes.\nSpecifically, the Notice alleged that Tallgrass’ tanks 5151, 5152, 5251, 5252, 5253, 5254, and\n5255, which were all built to API Std 650 after October 2, 2000, and the as-built containment at\nTallgrass’ Sterling facility did not have an adequate drainage route toward the remote\nimpounding area as required by sections 22.11.1 and 22.11.1.1 of NFPA-30 (2012 edition).\nSection 22.11.1 requires that “[w]here control of spills is provided by drainage to remote\nimpounding area so that spilled liquid does not collect around tanks, the requirements of\n22.11.1.1 through 22.11.1.4 shall apply.” Section 22.11.1.1 further states that “[t]he drainage\nroute shall have a slope of not less than 1 percent away from the tank for at least 50 ft (15 m)\ntoward the impounding area.”\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.264(b)(1)(ii) by failing to satisfy\nthe requirements of section 22.11.1 of NFPA-30 (2012 edition) regarding drainage routes.\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.3\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 $59,400 for the Item 1.\nItem 1: The Notice proposed a civil penalty of $59,400 for Respondent’s violation of 49 C.F.R.\n§ 195.264(b)(1)(ii) for failing to satisfy the requirements of section 22.11.1 of NFPA-30 (2012\nedition) regarding drainage routes. In its Response, Tallgrass requested a reduction in penalty\nunder the gravity factor. Tallgrass claimed that the proposed civil penalty incorrectly considered\nthe tanks at the Grasslands and Buckingham facilities as being located in, or could affect, a high\n3 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nconsequence area (HCA). In support of its claim, Tallgrass provided its most recent Pony\nExpress Pipeline facility HCA listings, in which neither the Grasslands nor Buckingham facility\nwas listed or identified as being located in, or could affect, an HCA. Tallgrass also noted that\nPHMSA did not provide any evidence to support the assertion that these tanks were located\nwithin a HCA or could affect a HCA. As such, Tallgrass requested that PHMSA reduce the civil\npenalty under the gravity factor to “pipeline safety being minimally affected” by Respondent’s\nviolation of § 195.264(b)(1)(ii).4 OPS Central Region evaluated Tallgrass’ Response and\nsupported such a change under the gravity factor.\n5 I agree it is appropriate. Accordingly, based\nupon the foregoing, I assess Respondent a reduced civil penalty of $26,200 for the violation of\n49 C.F.R. § 195.264(b)(1)(ii).\nIn summary, having reviewed the record and considered the assessment criteria, I assess\nRespondent a total civil penalty of $26,200.\nPayment of the civil penalty must be made within 20 days after receipt of this Final Order.\nPayment may be made by sending a certified check or money order (containing the CPF Number\nfor this case), made payable to “U.S. Department of Transportation,” to the Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, Financial Operations Division (AMK-\n325), 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. Federal regulations (49 C.F.R.\n§ 89.21(b)(3)) also permit payment to be made by wire transfer through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions\nare contained in the enclosure. Questions concerning wire transfers should be directed to:\nFinancial Operations Division (AMK-325), Federal Aviation Administration, Mike Monroney\nAeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. The Financial\nOperations Division telephone number is (405) 954-8845.\nFailure to pay the $26,200 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.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for\nviolations of 49 C.F.R. §§ 195.264(b)(1)(i) and (b)(1)(ii), respectively. Under 49 U.S.C.\n§ 60118(a), each person who engages in the transportation of hazardous liquids or who owns or\noperates a pipeline facility is required to comply with the applicable safety standards established\nunder chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217,\nRespondent is ordered to take the following actions to ensure compliance with the pipeline safety\nregulations applicable to its operations:\n4 Response, at 2.\n5 Region Recommendation, dated, February 28, 2022, at 1-2.\n\n\n\n1. With respect to the violation of § 195.264(b)(1)(i) (Item 1), Respondent must:\na. Subdivide, either by drainage channels or at least by intermediate dikes at the\nPawnee, Grasslands, and Buckingham facilities, in accordance with NFPA-30\n(2012 edition), within 12 months of receipt of the Final Order.\nb. Submit to the Director, Central Region, evidence of remediated locations to\ndemonstrate compliance with NFPA-30 (2012 edition) and 195.264(b)(1)(i).\n2. With respect to the violation of § 195.264(b)(1)(ii) (Item 2), Respondent must:\na. Provide adequate drainage routes and slope to a remote impounding area so\nthat spilled liquid does not collect around tanks at the Sterling Facility, in\naccordance with NFPA-30 (2012 edition), within 12 months of receipt of the\nFinal Order.\nb. Submit to the Director, Central Region, evidence of remediated locations to\ndemonstrate compliance with NFPA-30 (2012 edition) and 195.264(b)(1)(ii).\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.\nPHMSA requests 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 (see 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.\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. The written petition must be received no later than\n20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a\nstatement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a\npetition automatically stays the payment of any civil penalty assessed. The other terms of the\norder, including corrective action, remain in effect unless the Associate Administrator, upon\nrequest, grants a stay. The terms and conditions of this Final Order are effective upon service in\naccordance with 49 C.F.R. § 190.5.\nJuly 7, 2022\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n32021089NOPV_Closure Letter_10252023_(21-210502)_text.pdf\n\nVIA ELECTRONIC MAIL TO: crystal.heter@tallgrass.com; kale.stanton@tallgrass.com\nOctober 25, 2023\nCrystal Heter, Chief Operating Officer\nTallgrass Pony Express Pipeline, LLC\n4200 W. 115th St. Suite 350\nLeawood, KS 66211\nRE: CPF 3-2021-089-NOPV\nDear Ms. Heter:\nOn July 7, 2022, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Tallgrass Pony Express Pipeline, LP, a subsidiary of Tallgrass Energy, LP, (Tallgrass) a Final\nOrder in the above-referenced case. This Order included a Compliance Order and Civil Penalty\nassessment. Based on our review of the documentation provided and confirmation of payment of\nthe civil penalty on July 11, 2022, it has been determined that Tallgrass has complied with the\nterms 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: Kale Stanton, Director, Asset Integrity, kale.stanton@tallgrass.com","truncated":false,"body_characters":18377}