{"operation":"document","citation":"CPF 32022018NOPV","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":"2022-01-19","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.446(a), 195.446(c)(2), 195.446(g)(1), 195.446(j)(2).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022018nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022018nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022018nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/32022018NOPV","body":"Notice of Probable Violation involving TALLGRASS PONY EXPRESS PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulations as 195.446(a),  195.446(c)(2),  195.446(g)(1),  195.446(j)(2). The case was opened on 2022-01-19 and is reported as closed as of 2025-09-30. Proposed civil penalty: $55,200. Assessed civil penalty: $44,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n32022018NOPV_Closure Letter_09302025_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Closure%20Letter_09302025_(21-210993).pdf\n\n32022018NOPV_Closure Letter_09302025_(21-210993)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Closure%20Letter_09302025_(21-210993)_text.pdf\n\n32022018NOPV_Consent Agreement and Order_05162022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Consent%20Agreement%20and%20Order_05162022_(21-210993).pdf\n\n32022018NOPV_Consent Agreement and Order_05162022_(21-210993)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Consent%20Agreement%20and%20Order_05162022_(21-210993)_text.pdf\n\n32022018NOPV_Op Resp to Notice and Req for Hearing and Stmnt of Issues (Part 1)_02182022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Op%20Resp%20to%20Notice%20and%20Req%20for%20Hearing%20and%20Stmnt%20of%20Issues%20(Part%201)_02182022_(21-210993).pdf\n\n32022018NOPV_Op Resp to Notice and Req for Hearing and Stmnt of Issues (Part 2)_02182022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Op%20Resp%20to%20Notice%20and%20Req%20for%20Hearing%20and%20Stmnt%20of%20Issues%20(Part%202)_02182022_(21-210993).pdf\n\n32022018NOPV_PCP PCO_01192022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PCP%20PCO_01192022_(21-210993).pdf\n\n32022018NOPV_PCP PCO_01192022_(21-210993)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PCP%20PCO_01192022_(21-210993)_text.pdf\n\n32022018NOPV_PHC Hearing Canceled_06022022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PHC%20Hearing%20Canceled_06022022_(21-210993).pdf\n\n32022018NOPV_PHC Hearing Canceled_06022022_(21-210993)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PHC%20Hearing%20Canceled_06022022_(21-210993)_text.pdf\n\n32022018NOPV_PHC Hearing Scheduled_03032022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PHC%20Hearing%20Scheduled_03032022_(21-210993).pdf\n\n32022018NOPV_PHC Hearing Scheduled_03032022_(21-210993)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PHC%20Hearing%20Scheduled_03032022_(21-210993)_text.pdf\n\n32022018NOPV_Op Resp to Notice and Req for Hearing and Stmnt of Issues (Part 2)_02182022_(21-210993).pdf\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nIn the Matter of )\nTallgrass Pony Express Pipeline, LLC, ) CPF No. 3-2022-018-NOPV\n)\n)\nRespondent. )\n__________________________________________)\nREQUEST FOR INFORMAL CONFERENCE, REQUEST FOR HEARING AND\nPRELIMINARY STATEMENT OF ISSUES FOR ITEMS 3 AND 4\nWRITTEN RESPONSE TO NOPV ITEMS 1, 2, AND 5\nI. Request for Informal Conference Regarding Items 3 and 4\nPursuant to 49 U.S.C. § 60117(b)(1)(B), Tallgrass Pony Express Pipeline, LLC (Tallgrass)\nrespectfully requests an informal meeting to discuss the allegations in Items 3 and 4 of the above-\nreferenced Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order\n(NOPV). Tallgrass is hopeful that through further discussion these portions of the NOPV can be\naddressed without a hearing.\nII. Alternative Request for Hearing Regarding Items 3 and 4\nIn order to preserve its rights, pursuant to 49 C.F.R. §§ 190.208(a)(4), 190.208(b)(4), and\n190.211(b), Tallgrass also respectfully requests an in-person hearing for Items 3 and 4 in the event\nthat the parties cannot resolve these items informally. If a hearing is held, Tallgrass will be\nrepresented by counsel at the hearing.\nIII. Preliminary Statement of Issues\nTallgrass respectfully contests the allegations of violation, the proposed civil penalties, and\nthe proposed compliance terms for Items 3 and 4. At the hearing, Tallgrass intends to raise the\nfollowing issues:\n\n\n\nTallgrass Pony Express Pipeline, LLC\nCPF 3-2022-018-NOPV\nItem 3 – 49 C.F.R. § 195.446(c)(2) – Point-to-point Verification\nA. Whether, based on the allegation in the NOPV and evidence in the record, PHMSA has\nmet its burden of proof and persuasion that Tallgrass committed a probable violation\nof 49 C.F.R. § 195.446(c)(2).\nB. Whether the proposed civil penalty and compliance order should be withdrawn.\nC. If not withdrawn, whether the proposed compliance order should be modified.\nItem 4 – 49 C.F.R. § 195.446(g) – Incorporating Operator Experience\nA. Whether, based on the allegation in the NOPV and evidence in the record, PHMSA has\nmet its burden of proof and persuasion that Tallgrass committed a probable violation\nof 49 C.F.R. § 195.446(g).\nB. Whether the proposed civil penalty and compliance order should be withdrawn.\nC. If not withdrawn, whether the proposed compliance order should be modified.\nTallgrass reserves the right to supplement this preliminary statement of issues in response\nto any additional information or arguments from PHMSA.\nIV. Written Response to Items 1, 2, and 5\nPursuant to 49 C.F.R. §§ 190.208(a)(2), 190.208(a)(3) and 190.208(b)(3) Tallgrass\nprovides the following written response to Items 1, 2, and 5 of the NOPV.\nA. Item 1 – 49 C.F.R. § 195.446(a) – Documenting Tests of Backup SCADA Systems\nTallgrass provided the backup checklists at the time of the inspection. These records\ncontain a section called “Setpoints”, where in each instance the test member verified that setpoint\ncommands were sent and received. Inherent in testing setpoint entry is the issuance of a command.\nSince setpoints cannot be received without a command, verifying the setpoint receipt also verifies\nthe command that issued them. Tallgrass has included excerpts of the checklists as Attachment 1\nto further explain its position. Tallgrass respectfully requests that PHMSA correct the record in\nthe Final Order by acknowledging that Tallgrass’ checklist records not only reflect its command\nand setpoint process but, in fact, demonstrate that the command and setpoints entry processes were\ntested in accordance with Tallgrass’s OM1100_GL procedure.\n2\n\n\n\nTallgrass Pony Express Pipeline, LLC\nCPF 3-2022-018-NOPV\nB. Item 2– 49 C.F.R. § 195.446(a) – Documenting Training\nTallgrass has an established controller training program which specifically includes fatigue\nmanagement training. Tallgrass reasonably believes that the necessary training was performed by\nControllers 1 and 2. Although, Tallgrass could not locate the fatigue records for those controllers\nas the records are maintained on a third-party training platform. Tallgrass has made a formal\ninquiry to the third-party to locate and provide the missing records. Unfortunately, the records\ncould not be located as of the date of this Response. Tallgrass has further inquired of the vendor\nas to why such records may be missing. For these reasons, Tallgrass does not contest this warning\nitem. In order to prevent this issue in the future and as a matter of continuous improvement of\nTallgrass’ controller training program, two internal training coordinators have been hired. These\ntraining coordinators are tasked with the administration of the program in question as well as\nmaintaining the integrity of the controller training records, among other training duties.\nC. Item 5 – 49 C.F.R. § 195.446(j) – Documenting Deviations from Control Room\nManagement Procedures\nPHMSA cites two allegations and Tallgrass contests these allegations in part.\nKrohne Leak Detection System\nPHMSA alleges that Tallgrass violated Section 195.446(j) by failing to maintain\ndocumentation of deviations from its control room management procedures. The listed deviations\nwere the decision not to use the Krohne system for leak detection and an alleged failure to train its\npersonnel on the Redtail NGL pipeline. Although not a section 195.446(j) violation, PHMSA also\nalleged that Tallgrass should have updated its procedures to eliminate references to the Krohne\nsystem.\nTallgrass does not contest that it failed to file a deviation of its decision to no longer utilize\nthe Krohne system for leak detection. Notably, Tallgrass never utilized the Krohne CPM for leak\ndetection on the Redtail NGL pipeline; and therefore, was unaffected by the removal of the Krohne\nsystem from the Tallgrass suite of tools on its other pipelines.\nRedtail NGL Pipeline – Failure to Train\nIn response to PHMSA’s allegation that Tallgrass failed to properly train its controllers on\nthe Redtail NGL pipeline, it is important to clarify that Tallgrass did not use the Krohne CPM on\nRedtail; and thus, it would be unnecessary to train its controllers on the same. Instead, Redtail\nuses a meter balance threshold alarm to indicate potential leak scenarios. Contrary to the\nallegations in the NOPV, all controllers operating the Redtail NGL pipeline were properly trained\non the use of the meter balance threshold alarm.\nMoreover, Tallgrass disagrees with PHMSA’ allegation that Tallgrass does not follow its\nown training procedures requiring the use of tabletop exercises with its controllers. Tallgrass’\nprimary method for controller training is focused on the recognition and response to Abnormal\nOperating Conditions (AOCs) of which the tabletop exercises conducted during Operator\nQualification training (“OQ training”) are but one useful tool. In this regard, Tallgrass relies on\n3\n\n\n\nTallgrass Pony Express Pipeline, LLC\nCPF 3-2022-018-NOPV\nthe AOC suite of procedures including the AOC-F Leak Detection Guideline. An excerpt of the\nAOC-F Leak Detection Guideline for responding to leaks on the Redtail NGL pipeline is included\nas Attachment 2.\nAs communicated during the inspection, controllers are trained on the use of all available\nleak detection tools during on-the-job (OJT) training, which includes using the Meter Balance\nThreshold alarm on Redtail. A controller’s proficiency in the use of these tools and their\nunderstanding of AOCs is verified during the Tallgrass’ Operator Qualification training (“OQ\ntraining”) as set forth under OM1100_GL, section 13.4 – System Training & Evaluation for New\nControllers. As a part of the OQ training, a controller is presented with OJT tabletop exercises\nthat present realistic scenarios and sufficient situations meant to challenge the controller’s\nknowledge as to the abnormal (including emergency) conditions that a controller may encounter\nduring the operation of the pipeline. A trainer must observe and provide feedback on a controllers’\noverall use of the tools and their performance during OJT tabletop exercises throughout the\nduration of their training. Additionally, controllers are required to participate in a series of live\nabnormal operations tabletop scenarios as a component of the final qualification review as required\nin OM1100_GL, Table 1 – Liquids System Operator Qualification Training. In sum, this means\nthat all controllers must participate, be evaluated and pass tabletop exercises on Tallgrass’ assets\nin order to be considered qualified.\nIn response to the other allegations in Item 5, Tallgrass filed a deviation to the CRM\nSharePoint Site on January 31, 2022, to account for the 2018-2020 time period without the use of\nthe Krohne Leak Detection System. In addition, Tallgrass has updated its procedures to remove\nall references pertaining to the Krohne Leak Detection System. Finally, by June 30, 2022,\nTallgrass will have implemented CPM or equivalent leak detection systems on all of its hazardous\nliquid pipelines, updated all procedures to reflect all necessary measures for identifying a leak\nusing the systems, and trained all controllers on the use and operation of the leak detection systems.\nThus, Tallgrass asserts that a compliance order is unnecessary for this allegation.\nRespectfully submitted this 18th day of\nFebruary 2022.\nJennifer Eckels\nManager - Compliance\n370 Van Gordon Street\nLakewood, CO 80228\nPhone: (303) 763-3486\nEnclosures: Attachment 1: 2018 OCC Backup Site Checklist\n2019 OCC Fort Collins Site Checklist\n2020 OCC Fort Collins Backup Site Checklist\nAttachment 2: AOC-F Leak Guideline\n4\n\n32022018NOPV_PHC Hearing Scheduled_03032022_(21-210993)_text.pdf\n\nMarch 3, 2022\nVIA ELECTRONIC MAIL TO: jennifer.eckels@tallgrassenergylp.com and\ngregory.ochs@dot.gov\nMs. Jennifer Eckels\nManager, Compliance\nTallgrass Energy, LP\n370 Van Gordon Street\nLakewood, CO 80228\nMr. Gregory Ochs\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\n901 Locust Street, Suite 480\nKansas City, MO 64106\nRe: Notice of Hearing, Tallgrass Pony Express Pipeline, LLC\nCPF No. 3-2022-018-NOPV\nDear Ms. Eckels and Mr. Ochs:\nIn accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of\nProbable Violation, Proposed Civil Penalty, and Proposed Compliance Order issued by the\nPipeline and Hazardous Materials Safety Administration in the above-referenced case. The\nhearing will take place on May 17, 2022, beginning at 9:00 a.m. Central Time.\nThe hearing will be held via videoconference. I will provide the videoconference information\nprior to the hearing. At least 10 calendar days prior to the hearing (or by May 7, 2022), both\nparties must submit and exchange any additional written materials they intend to present at the\nhearing and the name and email address of each attendee. This information should be provided\nelectronically. Materials not submitted by this date may be excluded.\nIf you have any questions, please do not hesitate to contact me.\nSincerely,\nKristin Baldwin\nPresiding Official\ncc: Mr. William Moler, Chief Executive Officer, Tallgrass Energy, LP,\nbill.moler@tallgrass.com\nMs. Crystal Heter, Chief Operating Officer, Tallgrass Energy, LP,\ncrystal.heter@tallgrass.com\n\n\n\nCPF No. 3-2022-018-NOPV\nPage 2\nMr. Ricky Seaton, Director, Liquid Operations Control Center, Tallgrass Energy, LP,\nricky.seaton@tallgrass.com\nMr. Jarid Kling, VP, Operations Control & Systems Engineering, Tallgrass Energy, LP,\njarid.kling@tallgrass.com\nMs. Nicole Longwell, Assistant General Counsel, Tallgrass Energy, LP,\nnicole.longwell@tallgrass.com\nMr. Joseph Hainline, Counsel, Central Region, Office of Pipeline Safety, PHMSA,\njoseph.hainline@dot.gov\nMr. Ryan McClure, Counsel, Central Region, Office of Pipeline Safety, PHMSA,\nryan.mcclure@dot.gov\n\n32022018NOPV_Op Resp to Notice and Req for Hearing and Stmnt of Issues (Part 1)_02182022_(21-210993).pdf\n\nVia Email to Gregory.Ochs@DOT.gov\nFebruary 18, 2022\nMr. Gregory Ochs\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\n901 Locust Street, Suite 462\nKansas City, MO 64106\nRE: CPF No. 3-2022-018-NOPV\nRequest for Informal Conference\nRequest for a Hearing and Preliminary Statement of Issues\nWritten Response\nDear Mr. Ochs,\nTallgrass is in receipt of the Notice of Probable Violation, Proposed Civil Penalty, and Proposed\nCompliance Order (NOPV) that the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued in the above-captioned case on January 19, 2022. The NOPV alleged five (5) violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (C.F.R.). As described in the attached,\nTallgrass requests an informal conference for Items 3 and 4 and provides written responses for Items 1, 2,\nand 5.\nIn order to preserve its rights, Tallgrass also submits a Request for Hearing and Preliminary\nStatement of Issues for Items 3 and 4 pursuant to 49 C.F.R. § 190.211. Tallgrass hopes that the hearing\nwill be unnecessary and that the parties can resolve this matter informally.\nPursuant to 49 C.F.R. §§ 190.208(e) and 190.343, Tallgrass is requesting confidential treatment of\nAttachment #2 to the Request for Informal Conference, Request for Hearing, and Preliminary Statement of\nIssues in accordance with 5 U.S.C. § 552(b). This attachment contains confidential commercial information\nprotected from release under 5 U.S.C. § 552(b)(4).\nTallgrass shares PHMSA’s commitment to pipeline safety. Please do not hesitate to contact me if\nyou have any questions about this response. I will contact you to discuss scheduling an informal conference\nfor Items 3 and 4.\nSincerely,\nJennifer Eckels\nManager - Compliance\n370 Van Gordon Street\nLakewood, CO 80228\nPhone: (303) 763-3486\n\n\n\nCC: Tallgrass: Byron Gale, Jay Meyers, Jarid Kling, Nicole Longwell, Crystal Heter\nPHMSA: Karen Butler, Valerie Schwing\nEnclosure: Request for Informal Conference, Request for Hearing, and Preliminary Statement of\nIssues Regarding Items 3 and 4, and Written Response for Items 1, 2, and 5\n\n32022018NOPV_PHC Hearing Canceled_06022022_(21-210993)_text.pdf\n\nDate: June 2, 2022\nFrom: Ryan McClure\nTo: File\nRe: Withdrawal of Hearing Request, Tallgrass Pony Express Pipeline, LLC\n3-2022-018-NOPV\nOn May 17, 2022, Tallgrass Pony Express Pipeline, LLC, by email, withdrew its request for a\nhearing for 3-2022-018-NOPV, which it submitted on February 18, 2022. The hearing, scheduled\nfor May 17, 2022, has been cancelled.\n\n32022018NOPV_Consent Agreement and Order_05162022_(21-210993)_text.pdf\n\nMay 16, 2022\nVIA ELECTRONIC MAIL TO: bill.moler@tallgrassenergylp.com\nMr. William Moler\nChief Executive Officer\nTallgrass Energy, LP\n4200 W. 115th Street, Suite 350\nLeawood, Kansas 66211\nCPF No. 3-2022-018-NOPV\nDear Mr. Moler:\nEnclosed please find a Consent Order incorporating the terms of the Consent Agreement\nbetween the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Tallgrass\nEnergy, LP (Tallgrass or Respondent), which was executed on May 11, 2022. Service of the\nConsent Order and Consent Agreement by electronic mail is deemed effective upon the date of\ntransmission and acknowledgement of receipt, or as otherwise provided under 49 C.F.R. § 190.5.\nSincerely,\nAlan K Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosures: Consent Agreement and Consent Order\nCc: Mr. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA\nMs. Catherine Little, outside counsel for Tallgrass, catherine.little@troutman.com\nMs. Jennifer Eckels, Compliance Manager, Tallgrass, jennifer.eckels@tallgrass.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 Energy, LP, ) CPF No. 3-2022-018-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nCONSENT ORDER\nBy letter dated January 21, 2022, the Pipeline and Hazardous Materials Safety Administration,\nOffice of Pipeline Safety (PHMSA), issued a Notice of Probable Violation, Proposed Civil Penalty,\nand Proposed Compliance Order (Notice) to Tallgrass Energy, LP (Tallgrass or Respondent).\nIn response to the Notice, Respondent requested a hearing on Items 3 and 4, contesting both the\nunderlying violation and proposed civil penalty associated with each; contested warning Item 1 in\nwriting; offered additional information regarding the facts underlying Items 2 and 5; and requested\na modification of the proposed compliance order for Item 5 (Response). Respondent also asked for\nthe opportunity to meet informally with PHMSA to discuss all items in the Notice. Respondent and\nPHMSA (the Parties) subsequently met to discuss the issues raised in the Response. As a result of\nthose discussions, as explained in more detail below, PHMSA has agreed to certain factual\nclarifications associated with Items 1, 2, and 3, and Respondent has agreed without admission to\nwithdraw its hearing request and accept the warning items and findings of violation alleged in the\nNotice, subject to the clarifications as set forth below, pay a reduced civil penalty in the amount of\n$44,800 for Items 3 and 4, and to undertake certain corrective measures.\nAccordingly, the Consent Agreement is hereby approved and incorporated by reference into this\nOrder. Tallgrass is hereby ordered to comply with the terms of the Consent Agreement, effective\nimmediately.\nPursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the\nassessment of civil penalties as set forth in 49 C.F.R. § 190.223.\nThe terms and conditions of this Consent Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nMay 16, 2022\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\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 Energy, LP, ) CPF No. 3-2022-018-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nCONSENT AGREEMENT\nFrom May 7 through May 11, 2018, and December 4 through December 6, 2018, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected\nTallgrass Energy, LP (Respondent) records for the hazardous liquid Control Room Management\nprocedures and records in Lakewood, Colorado. This inspection covered Pony Express Pipeline,\nLLC (OPID 39043) and Tallgrass Midstream, LLC (OPID 39216). The inspection team\ncontinued the inspection after receiving items from Respondent through 2019. In addition, while\nworking to complete inspection in 2020, PHMSA became aware of a complaint that had a\ncommon area of focus with the prior inspection. For this reason, the inspection and complaint\nresolution continued from 2019 through October 2021.\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated January 21, 2022, a Notice of Probable Violation, Proposed Civil Penalty and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nalleged that Respondent committed probable violations of seven provisions of 49 C.F.R. part\n195, proposed ordering Respondent to take certain measures to correct the alleged violations, and\nproposed a civil penalty in the amount of $55,200 associated with those items. Two of the\nprobable violations (Items 1 and 2) were brought as warnings, advising Respondent to correct\nthem or be subject to potential future enforcement action.\nIn response to the Notice, Respondent, for Item 1, stated that its checklist records reflect its\ncommand and setpoint process and demonstrate that the command and setpoint entry processes\nwere tested in accordance with its procedures. Respondent did not contest Item 2. Regarding\nItem 5, Respondent asserted that a compliance order is unnecessary in light of its actions\nfollowing receipt of the Notice. Respondent also requested a hearing and asked for the\nopportunity to meet informally with PHMSA to discuss Items 3 and 4. For both of Items 3 and\n4, Respondent contested the underlying allegations of violation, as well as the proposed civil\npenalties and compliance orders.\n1\n\n\n\nPHMSA and Respondent (the Parties) subsequently met to discuss the issues raised in the\nResponse. As a result of those discussions, as explained in more detail below, PHMSA has\nagreed to certain factual clarifications associated with Items 1, 2, and 3, and Respondent has\nagreed without admission to withdraw its hearing request and accept the warning items and\nfindings of violation alleged in the Notice, subject to the clarifications as set forth below, pay a\nreduced civil penalty in the amount of $44,800 for Items 3 and 4, and to undertake certain\ncorrective measures.\nHaving agreed that settlement of this enforcement action will avoid further administrative\nproceedings or litigation and will serve the public interest by promoting safety and protection of\nthe environment, pursuant to 49 C.F.R. part 190, and upon consent and agreement of Respondent\nand PHMSA, the Parties hereby agree as follows:\nI. General Provisions:\n1. Respondent acknowledges that as the operator of the pipeline facilities subject\nto the Notice, Respondent and its referenced hazardous liquid pipeline facilities are subject to the\njurisdiction of the Federal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations\nand administrative orders issued thereunder. For purposes of this Agreement, Respondent\nacknowledges that it received proper notice of PHMSA’s action in this proceeding and that the\nNotice states claims upon which relief may be granted pursuant to 49 U.S.C. § 60101, et seq.,\nand the regulations and orders issued thereunder.\n2. After Respondent returns this signed Agreement to PHMSA, the Agency’s\nrepresentative will present it to the Associate Administrator for Pipeline Safety, recommending\nthat the Associate Administrator adopt the terms of this Agreement by issuing an administrative\norder (Consent Order) incorporating the terms of this Agreement. The terms of this Agreement\nconstitute an offer of settlement until accepted by the Associate Administrator. Once accepted,\nthe Associate Administrator will issue a Consent Order incorporating the terms of this Agreement.\n3. Respondent consents to the issuance of the Consent Order, and hereby waives any\nfurther procedural requirements with respect to its issuance. Respondent waives all rights to\ncontest the adequacy of notice, or the validity of the Consent Order or this Agreement, including\nall rights to administrative or judicial hearings or appeals, except as set forth herein.\n4. This Agreement shall apply to and be binding upon PHMSA and Respondent, its\nofficers, directors, and employees, and its successors, assigns, or other entities or persons\notherwise bound by law. Respondent agrees to provide a copy of this Agreement and any\nincorporated work plans and schedules to all of Respondent’s officers, employees, and agents\nwhose duties might reasonably include compliance with this Agreement.\n5. This Agreement constitutes the final, complete and exclusive agreement and\nunderstanding between the Parties with respect to the settlement embodied in this Agreement.\nThe Parties acknowledge that there are no representations, agreements or understandings relating\nto settlement other than those expressly contained in this Agreement, except that the terms of this\nAgreement may be construed by reference to the Notice.\n2\n\n\n\n6. Nothing in this Agreement affects or relieves Respondent of its responsibility to\ncomply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101,\net seq., and the regulations and orders issued thereunder. Nothing in this Agreement alters\nPHMSA’s right of access, entry, inspection, and information gathering or PHMSA’s authority to\nbring enforcement actions against Respondent pursuant to the Federal pipeline safety laws, the\nregulations and orders issued thereunder, or any other provision of Federal or State law.\n7. For all transfers of ownership or operating responsibility of Respondent’s pipeline\nsystem referenced herein, Respondent will provide a copy of this Agreement to the prospective\ntransferee at least 30 days prior to such transfer. Respondent will provide written notice of the\ntransfer to the PHMSA Central Regional Director no later than 60 days after the transfer occurs.\n8. This Agreement does not waive or modify any Federal, State, or local laws or\nregulations that are applicable to Respondent’s pipeline systems. This Agreement is not a\npermit, or a modification of any permit, under any Federal, State, or local laws or regulations.\nRespondent remains responsible for achieving and maintaining compliance with all applicable\nFederal, State, and local laws, regulations and permits.\n9. This Agreement does not create rights in, or grant any cause of action to, any third\nparty not party to this Agreement. The U.S. Department of Transportation is not liable for any\ninjuries or damages to persons or property arising from acts or omissions of Respondent or its\nofficers, employees, or agents carrying out the work required by this Agreement. Respondent\nagrees to hold harmless the U.S. Department of Transportation, its officers, employees, agents,\nand representatives from any and all causes of action arising from any acts or omissions of\nRespondent or its contractors in carrying out any work required by this Agreement.\n10. Except as otherwise specified below, Respondent neither admits nor denies any\nallegation or conclusion in the Notice or this Agreement but agrees for purposes of this\nAgreement to comply with the terms of this Agreement.\n11. Upon issuance of the Consent Order, the Parties agree to the following terms.\nII. Warning Items:\n12. Item 1: 49 C.F.R. § 195.446(a): The Notice alleged that Respondent failed to\nfollow its written control room management procedures when implementing the test of any\nbackup SCADA systems at least once each calendar year, but at intervals not to exceed 15\nmonths, as required by § 195.446(c)(4). During the inspection and informal discussion,\nRespondent presented records showing testing of the back-up SCADA system was performed,\nbut the records did not include sufficient detail to demonstrate to PHMSA that Respondent’s\nprocedures were followed regarding command and setpoints. This item was brought as a\nwarning and does not constitute a finding of violation. Respondent does not contest this\nWarning Item.\n13. Item 2: 49 C.F.R. § 195.446(a): The Notice alleged that Respondent failed\n3\n\n\n\nto follow its written control room management procedures when implementing methods to\nreduce the risk associated with controller fatigue that could inhibit a controller’s ability to carry\nout the roles and responsibilities by not training controllers to recognize the effects of fatigue, as\nrequired by § 195.446(d)(3). This item was brought as a warning and does not constitute a\nfinding of violation. Respondent does not contest this Warning Item and has undertaken certain\nremedial actions to address the issue identified in the Notice, including the hiring of a training\ncoordinator.\n14. For Warning Items 1 and 2, if OPS finds a violation of these provisions in a\nsubsequent inspection, Respondent may be subject to future enforcement actions.\nIII. Findings of Violation:\n15. Item 3: 49 C.F.R. § 195.446(c)(2): The Notice alleged that Respondent\nfailed to conduct a point-to-point verification between SCADA displays and related field\nequipment when field equipment was added or moved, and when other changes that affect\npipeline safety were made to field equipment or SCADA displays on its Pony Express pipeline\nsystem. During the informal discussions, Respondent presented records showing that it is\nworking to modify its procedures to include required verifications of SCADA displays during\npoint-to-point activities. Respondent does not contest the allegation of violation as alleged in the\nNotice. As such, PHMSA finds a violation of 49 C.F.R. § 195.446(c)(2).\n16. Item 4: 49 C.F.R. § 195.446(g)(1): The Notice alleged that Respondent\nfailed to demonstrate that accidents required to be reported pursuant to §§ 195.50 and 195.52\nwere reviewed to assure that lessons learned from its operating experience are incorporated, as\nappropriate, into its control room management procedures. Respondent does not contest the\nallegation of violation as alleged in the Notice. As such, PHMSA finds a violation of 49 C.F.R.\n§ 195.446(g)(1).\n17. Item 5: 49 C.F.R. § 195.446(j)(2): The Notice alleged that Respondent failed\nto maintain documentation to demonstrate that any deviation from its control room procedures\n(CRM) was necessary for the safe operation of the pipeline facility, as required. Respondent\ndoes not contest the allegation of violation as alleged in the Notice. As such, PHMSA finds a\nviolation of 49 C.F.R. § 195.446(j)(2).\n18. Items 3, 4, and 5 will be considered by PHMSA as a prior offense in any\nfuture PHMSA enforcement action taken against Respondent for the five (5)-year period\nfollowing the Effective Date of this Agreement.\nIV. Civil Penalty:\n19. Item 3: Respondent shall pay a civil penalty in the amount of $22,400 for Item 3.\n20. Item 4: Respondent shall pay a reduced civil penalty in the amount of $22,400\nfor Item 4. During the informal discussion, Respondent presented information in support of its\nrequest for a reduced civil penalty. Specifically, Respondent presented information regarding the\n4\n\n\n\ncompanies’ efforts to improve its records and alarm system for the tanks at issue in the violation.\nPHMSA finds that a reduction to the proposed civil penalty is warranted under the gravity factor\nfrom “[t]he violation occurred NOT within a HCA or “could affect” HCA, and NOT within an\narea required to be covered by a gas distribution system integrity management program”, to\n“Pipeline safety was minimally affected, notwithstanding the conditions above.”\n21. Respondent shall pay a total civil penalty in the amount of $44,800, to be paid in\nfull no later than 20 days from the Effective Date of this Agreement.\nV. Compliance Order:\n22. Item 3: The Notice proposed certain compliance order actions to address the non-\ncompliance alleged in the Notice. Respondent requested that the timeframe provided by the\nProposed Compliance Order (PCO) associated with Item 3 be extended to allow the company to\ncomplete this requirement within 90 days, or to align with a maintenance shutdown to\naccommodate the work, whichever comes first. PHMSA agrees to this request. Accordingly, in\nregard to Item 3 of the Notice pertaining to Buckingham Terminal points on the Pony Express\npipeline and point-to-point records, Respondent must:\nFor those safety related points designated in-service when Respondent submitted\nthe 2017 construction notification for the Buckingham Terminal extension,\ncomplete a point-to-point for each point from the field end device through to the\nSCADA system displays within 90 days of the Effective Date of this Agreement,\nor to align with a maintenance shutdown to accommodate the work, whichever\ncomes first, starting with submitting a complete list of all points (tags, point\nnames, descriptors) with an identification of whether or not it is a point that can\nimpact safety. After this designation is provided, Respondent must then submit a\nlist of those points that have safety related alarms and what parameters (attributes)\nare safety related. The completed point-to-point records for each point that can\nimpact safety, or for safety related alarms, must include at a minimum, and not all\ninclusive, the following: recording the ranges of equipment (if analog) employed,\nthe confirmation of the event and alarming functions (as maybe relevant),\nconfirmation and testing of any automated logic such as automated pump\nshutdown upon high discharge or low suction, the relevant alarm setpoint values\nand alarm descriptors, confirmation of the correct alarm response by color\nincluding action (such as blinking) and priority for all relevant displays and alarm\nsummary screens, and record a list of all SCADA displays that have been\nreviewed to confirm correct display response and correct location of the point\n(screen shots with listing). The record must include who performs the verification\nin the field at the end device, identify the end device, and who performs the\ncontrol room verification on each day along with the relevant date, and must\ndescribe the method used for the confirmation (such as pressure switch tripped\nand valve closed, or pressure transmitter calibrated, simulation of loss of\ncommunication at the PLC, etc.). These records must be submitted to the\nDirector, Central region within 30 days of completing the point-to-point\nconfirmation and verification of SCADA displays.\n5\n\n\n\n23. Item 4: The Notice proposed certain compliance order actions to address the non-\ncompliance alleged in the Notice. Respondent requested that the timeframe provided by the\nPCO associated with Item 4 be extended until December 30, 2022, to allow Respondent time to\ncomplete its development of a plan to assess the feasibility of a dynamic tank alarming system\nfor tank systems. PHMSA agrees to this request. Accordingly, regarding Item 4 of the Notice\nand pertaining specifically to the Sterling Tank, Respondent must:\nProvide to the Director, Central Region, by December 30, 2022, a summary of\nwhat leak alarms have been added for this location for controller use. In addition,\nby December 30, 2022, provide to the Director, Central Region, a list of all other\nsimilar locations and identify either the leak alarms added with the associated\ndates of implementation, or a proposed plan in place to add similar alarms. If leak\nalarms have not been added for similar installations at other locations and a plan\nhas not been developed for these to be added, then a plan must be provided to the\nDirector, Central Region regarding planned dates of implementation, or\njustification for why this was not necessary at various locations for pipeline safety\nmust be provided.\n24. Item 5: The Notice proposed certain compliance order actions to address the non-\ncompliance alleged in the Notice. Respondent requested that PHMSA remove from the PCO for\nItem 5 the order to write a deviation for the years under which the Krohnes leak detection system\nhas not been used and update all procedures to remove references to this system. During\ninformal discussion, Respondent provided documentation showing this had been completed. As\nsuch, PHMSA finds that Respondent has satisfied the terms of the PCO with respect to this\nrequirement.\nRespondent additionally requested that the timeframe for implementing a fully\nfunctioning leak system detection be extended until September 30, 2022. PHMSA agrees to this\nrequest. Accordingly, regarding Item 5 of the Notice pertaining to pertaining to a deviation of\nleak detection procedures, Respondent must:\nBy September 30, 2022, have a fully functioning CPM leak detection system and\nhave updated all relevant procedures, performed training, and implemented this\nselected system on all segments of the Hazardous liquid pipeline systems\noperating in crude or refined products services. For any HVL systems, all\nprocedure must be updated accurately to reflect how a leak will be detected, and\ntraining performed by September 30, 2022. Records of each element required in\nthis compliance order (written deviations, procedure updates, training) including\ntesting associated with the new leak detection system (FAT and SAT tests) will be\nsubmitted to the Director, Central Region Office within 30 days of completion of\nthat element.\nVI. Enforcement:\n25. This Agreement is subject to all enforcement authorities available to PHMSA\nunder 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190, including administrative civil penalties\n6\n\n\n\nunder 49 U.S.C. § 60122, of up to $239,142 per violation for each day the violation continues\nand referral of the case to the Attorney General for judicial enforcement, if PHMSA determines\nthat Respondent is not complying with the terms of this Agreement in accordance with\ndeterminations made by the Director, or if appealed, in accordance with decisions of the\nAssociate Administrator. The maximum civil penalty amounts are adjusted annually for\ninflation. See 49 C.F.R. § 190.223.\nVII. Dispute Resolution:\n26. The Director and Respondent will informally attempt to resolve any disputes\narising under this Agreement, including but not limited to any decision of the Director. If\nRespondent and the Director are unable to informally resolve the ","truncated":true,"body_characters":43359}