# TALLGRASS PONY EXPRESS PIPELINE, LLC — Notice of Probable Violation

- **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:** Not available
- **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.

Official case documents:

32022018NOPV_Closure Letter_09302025_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Closure%20Letter_09302025_(21-210993).pdf

32022018NOPV_Closure Letter_09302025_(21-210993)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_Closure%20Letter_09302025_(21-210993)_text.pdf

32022018NOPV_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

32022018NOPV_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

32022018NOPV_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

32022018NOPV_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

32022018NOPV_PCP PCO_01192022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PCP%20PCO_01192022_(21-210993).pdf

32022018NOPV_PCP PCO_01192022_(21-210993)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PCP%20PCO_01192022_(21-210993)_text.pdf

32022018NOPV_PHC Hearing Canceled_06022022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PHC%20Hearing%20Canceled_06022022_(21-210993).pdf

32022018NOPV_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

32022018NOPV_PHC Hearing Scheduled_03032022_(21-210993).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022018NOPV/32022018NOPV_PHC%20Hearing%20Scheduled_03032022_(21-210993).pdf

32022018NOPV_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

32022018NOPV_Op Resp to Notice and Req for Hearing and Stmnt of Issues (Part 2)_02182022_(21-210993).pdf

U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
In the Matter of )
Tallgrass Pony Express Pipeline, LLC, ) CPF No. 3-2022-018-NOPV
)
)
Respondent. )
__________________________________________)
REQUEST FOR INFORMAL CONFERENCE, REQUEST FOR HEARING AND
PRELIMINARY STATEMENT OF ISSUES FOR ITEMS 3 AND 4
WRITTEN RESPONSE TO NOPV ITEMS 1, 2, AND 5
I. Request for Informal Conference Regarding Items 3 and 4
Pursuant to 49 U.S.C. § 60117(b)(1)(B), Tallgrass Pony Express Pipeline, LLC (Tallgrass)
respectfully requests an informal meeting to discuss the allegations in Items 3 and 4 of the above-
referenced Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order
(NOPV). Tallgrass is hopeful that through further discussion these portions of the NOPV can be
addressed without a hearing.
II. Alternative Request for Hearing Regarding Items 3 and 4
In order to preserve its rights, pursuant to 49 C.F.R. §§ 190.208(a)(4), 190.208(b)(4), and
190.211(b), Tallgrass also respectfully requests an in-person hearing for Items 3 and 4 in the event
that the parties cannot resolve these items informally. If a hearing is held, Tallgrass will be
represented by counsel at the hearing.
III. Preliminary Statement of Issues
Tallgrass respectfully contests the allegations of violation, the proposed civil penalties, and
the proposed compliance terms for Items 3 and 4. At the hearing, Tallgrass intends to raise the
following issues:



Tallgrass Pony Express Pipeline, LLC
CPF 3-2022-018-NOPV
Item 3 – 49 C.F.R. § 195.446(c)(2) – Point-to-point Verification
A. Whether, based on the allegation in the NOPV and evidence in the record, PHMSA has
met its burden of proof and persuasion that Tallgrass committed a probable violation
of 49 C.F.R. § 195.446(c)(2).
B. Whether the proposed civil penalty and compliance order should be withdrawn.
C. If not withdrawn, whether the proposed compliance order should be modified.
Item 4 – 49 C.F.R. § 195.446(g) – Incorporating Operator Experience
A. Whether, based on the allegation in the NOPV and evidence in the record, PHMSA has
met its burden of proof and persuasion that Tallgrass committed a probable violation
of 49 C.F.R. § 195.446(g).
B. Whether the proposed civil penalty and compliance order should be withdrawn.
C. If not withdrawn, whether the proposed compliance order should be modified.
Tallgrass reserves the right to supplement this preliminary statement of issues in response
to any additional information or arguments from PHMSA.
IV. Written Response to Items 1, 2, and 5
Pursuant to 49 C.F.R. §§ 190.208(a)(2), 190.208(a)(3) and 190.208(b)(3) Tallgrass
provides the following written response to Items 1, 2, and 5 of the NOPV.
A. Item 1 – 49 C.F.R. § 195.446(a) – Documenting Tests of Backup SCADA Systems
Tallgrass provided the backup checklists at the time of the inspection. These records
contain a section called “Setpoints”, where in each instance the test member verified that setpoint
commands were sent and received. Inherent in testing setpoint entry is the issuance of a command.
Since setpoints cannot be received without a command, verifying the setpoint receipt also verifies
the command that issued them. Tallgrass has included excerpts of the checklists as Attachment 1
to further explain its position. Tallgrass respectfully requests that PHMSA correct the record in
the Final Order by acknowledging that Tallgrass’ checklist records not only reflect its command
and setpoint process but, in fact, demonstrate that the command and setpoints entry processes were
tested in accordance with Tallgrass’s OM1100_GL procedure.
2



Tallgrass Pony Express Pipeline, LLC
CPF 3-2022-018-NOPV
B. Item 2– 49 C.F.R. § 195.446(a) – Documenting Training
Tallgrass has an established controller training program which specifically includes fatigue
management training. Tallgrass reasonably believes that the necessary training was performed by
Controllers 1 and 2. Although, Tallgrass could not locate the fatigue records for those controllers
as the records are maintained on a third-party training platform. Tallgrass has made a formal
inquiry to the third-party to locate and provide the missing records. Unfortunately, the records
could not be located as of the date of this Response. Tallgrass has further inquired of the vendor
as to why such records may be missing. For these reasons, Tallgrass does not contest this warning
item. In order to prevent this issue in the future and as a matter of continuous improvement of
Tallgrass’ controller training program, two internal training coordinators have been hired. These
training coordinators are tasked with the administration of the program in question as well as
maintaining the integrity of the controller training records, among other training duties.
C. Item 5 – 49 C.F.R. § 195.446(j) – Documenting Deviations from Control Room
Management Procedures
PHMSA cites two allegations and Tallgrass contests these allegations in part.
Krohne Leak Detection System
PHMSA alleges that Tallgrass violated Section 195.446(j) by failing to maintain
documentation of deviations from its control room management procedures. The listed deviations
were the decision not to use the Krohne system for leak detection and an alleged failure to train its
personnel on the Redtail NGL pipeline. Although not a section 195.446(j) violation, PHMSA also
alleged that Tallgrass should have updated its procedures to eliminate references to the Krohne
system.
Tallgrass does not contest that it failed to file a deviation of its decision to no longer utilize
the Krohne system for leak detection. Notably, Tallgrass never utilized the Krohne CPM for leak
detection on the Redtail NGL pipeline; and therefore, was unaffected by the removal of the Krohne
system from the Tallgrass suite of tools on its other pipelines.
Redtail NGL Pipeline – Failure to Train
In response to PHMSA’s allegation that Tallgrass failed to properly train its controllers on
the Redtail NGL pipeline, it is important to clarify that Tallgrass did not use the Krohne CPM on
Redtail; and thus, it would be unnecessary to train its controllers on the same. Instead, Redtail
uses a meter balance threshold alarm to indicate potential leak scenarios. Contrary to the
allegations in the NOPV, all controllers operating the Redtail NGL pipeline were properly trained
on the use of the meter balance threshold alarm.
Moreover, Tallgrass disagrees with PHMSA’ allegation that Tallgrass does not follow its
own training procedures requiring the use of tabletop exercises with its controllers. Tallgrass’
primary method for controller training is focused on the recognition and response to Abnormal
Operating Conditions (AOCs) of which the tabletop exercises conducted during Operator
Qualification training (“OQ training”) are but one useful tool. In this regard, Tallgrass relies on
3



Tallgrass Pony Express Pipeline, LLC
CPF 3-2022-018-NOPV
the AOC suite of procedures including the AOC-F Leak Detection Guideline. An excerpt of the
AOC-F Leak Detection Guideline for responding to leaks on the Redtail NGL pipeline is included
as Attachment 2.
As communicated during the inspection, controllers are trained on the use of all available
leak detection tools during on-the-job (OJT) training, which includes using the Meter Balance
Threshold alarm on Redtail. A controller’s proficiency in the use of these tools and their
understanding of AOCs is verified during the Tallgrass’ Operator Qualification training (“OQ
training”) as set forth under OM1100_GL, section 13.4 – System Training & Evaluation for New
Controllers. As a part of the OQ training, a controller is presented with OJT tabletop exercises
that present realistic scenarios and sufficient situations meant to challenge the controller’s
knowledge as to the abnormal (including emergency) conditions that a controller may encounter
during the operation of the pipeline. A trainer must observe and provide feedback on a controllers’
overall use of the tools and their performance during OJT tabletop exercises throughout the
duration of their training. Additionally, controllers are required to participate in a series of live
abnormal operations tabletop scenarios as a component of the final qualification review as required
in OM1100_GL, Table 1 – Liquids System Operator Qualification Training. In sum, this means
that all controllers must participate, be evaluated and pass tabletop exercises on Tallgrass’ assets
in order to be considered qualified.
In response to the other allegations in Item 5, Tallgrass filed a deviation to the CRM
SharePoint Site on January 31, 2022, to account for the 2018-2020 time period without the use of
the Krohne Leak Detection System. In addition, Tallgrass has updated its procedures to remove
all references pertaining to the Krohne Leak Detection System. Finally, by June 30, 2022,
Tallgrass will have implemented CPM or equivalent leak detection systems on all of its hazardous
liquid pipelines, updated all procedures to reflect all necessary measures for identifying a leak
using the systems, and trained all controllers on the use and operation of the leak detection systems.
Thus, Tallgrass asserts that a compliance order is unnecessary for this allegation.
Respectfully submitted this 18th day of
February 2022.
Jennifer Eckels
Manager - Compliance
370 Van Gordon Street
Lakewood, CO 80228
Phone: (303) 763-3486
Enclosures: Attachment 1: 2018 OCC Backup Site Checklist
2019 OCC Fort Collins Site Checklist
2020 OCC Fort Collins Backup Site Checklist
Attachment 2: AOC-F Leak Guideline
4

32022018NOPV_PHC Hearing Scheduled_03032022_(21-210993)_text.pdf

March 3, 2022
VIA ELECTRONIC MAIL TO: jennifer.eckels@tallgrassenergylp.com and
gregory.ochs@dot.gov
Ms. Jennifer Eckels
Manager, Compliance
Tallgrass Energy, LP
370 Van Gordon Street
Lakewood, CO 80228
Mr. Gregory Ochs
Director, Central Region
Pipeline and Hazardous Materials Safety Administration
901 Locust Street, Suite 480
Kansas City, MO 64106
Re: Notice of Hearing, Tallgrass Pony Express Pipeline, LLC
CPF No. 3-2022-018-NOPV
Dear Ms. Eckels and Mr. Ochs:
In accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of
Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order issued by the
Pipeline and Hazardous Materials Safety Administration in the above-referenced case. The
hearing will take place on May 17, 2022, beginning at 9:00 a.m. Central Time.
The hearing will be held via videoconference. I will provide the videoconference information
prior to the hearing. At least 10 calendar days prior to the hearing (or by May 7, 2022), both
parties must submit and exchange any additional written materials they intend to present at the
hearing and the name and email address of each attendee. This information should be provided
electronically. Materials not submitted by this date may be excluded.
If you have any questions, please do not hesitate to contact me.
Sincerely,
Kristin Baldwin
Presiding Official
cc: Mr. William Moler, Chief Executive Officer, Tallgrass Energy, LP,
bill.moler@tallgrass.com
Ms. Crystal Heter, Chief Operating Officer, Tallgrass Energy, LP,
crystal.heter@tallgrass.com



CPF No. 3-2022-018-NOPV
Page 2
Mr. Ricky Seaton, Director, Liquid Operations Control Center, Tallgrass Energy, LP,
ricky.seaton@tallgrass.com
Mr. Jarid Kling, VP, Operations Control & Systems Engineering, Tallgrass Energy, LP,
jarid.kling@tallgrass.com
Ms. Nicole Longwell, Assistant General Counsel, Tallgrass Energy, LP,
nicole.longwell@tallgrass.com
Mr. Joseph Hainline, Counsel, Central Region, Office of Pipeline Safety, PHMSA,
joseph.hainline@dot.gov
Mr. Ryan McClure, Counsel, Central Region, Office of Pipeline Safety, PHMSA,
ryan.mcclure@dot.gov

32022018NOPV_Op Resp to Notice and Req for Hearing and Stmnt of Issues (Part 1)_02182022_(21-210993).pdf

Via Email to Gregory.Ochs@DOT.gov
February 18, 2022
Mr. Gregory Ochs
Director, Central Region
Pipeline and Hazardous Materials Safety Administration
901 Locust Street, Suite 462
Kansas City, MO 64106
RE: CPF No. 3-2022-018-NOPV
Request for Informal Conference
Request for a Hearing and Preliminary Statement of Issues
Written Response
Dear Mr. Ochs,
Tallgrass is in receipt of the Notice of Probable Violation, Proposed Civil Penalty, and Proposed
Compliance Order (NOPV) that the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued in the above-captioned case on January 19, 2022. The NOPV alleged five (5) violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations (C.F.R.). As described in the attached,
Tallgrass requests an informal conference for Items 3 and 4 and provides written responses for Items 1, 2,
and 5.
In order to preserve its rights, Tallgrass also submits a Request for Hearing and Preliminary
Statement of Issues for Items 3 and 4 pursuant to 49 C.F.R. § 190.211. Tallgrass hopes that the hearing
will be unnecessary and that the parties can resolve this matter informally.
Pursuant to 49 C.F.R. §§ 190.208(e) and 190.343, Tallgrass is requesting confidential treatment of
Attachment #2 to the Request for Informal Conference, Request for Hearing, and Preliminary Statement of
Issues in accordance with 5 U.S.C. § 552(b). This attachment contains confidential commercial information
protected from release under 5 U.S.C. § 552(b)(4).
Tallgrass shares PHMSA’s commitment to pipeline safety. Please do not hesitate to contact me if
you have any questions about this response. I will contact you to discuss scheduling an informal conference
for Items 3 and 4.
Sincerely,
Jennifer Eckels
Manager - Compliance
370 Van Gordon Street
Lakewood, CO 80228
Phone: (303) 763-3486



CC: Tallgrass: Byron Gale, Jay Meyers, Jarid Kling, Nicole Longwell, Crystal Heter
PHMSA: Karen Butler, Valerie Schwing
Enclosure: Request for Informal Conference, Request for Hearing, and Preliminary Statement of
Issues Regarding Items 3 and 4, and Written Response for Items 1, 2, and 5

32022018NOPV_PHC Hearing Canceled_06022022_(21-210993)_text.pdf

Date: June 2, 2022
From: Ryan McClure
To: File
Re: Withdrawal of Hearing Request, Tallgrass Pony Express Pipeline, LLC
3-2022-018-NOPV
On May 17, 2022, Tallgrass Pony Express Pipeline, LLC, by email, withdrew its request for a
hearing for 3-2022-018-NOPV, which it submitted on February 18, 2022. The hearing, scheduled
for May 17, 2022, has been cancelled.

32022018NOPV_Consent Agreement and Order_05162022_(21-210993)_text.pdf

May 16, 2022
VIA ELECTRONIC MAIL TO: bill.moler@tallgrassenergylp.com
Mr. William Moler
Chief Executive Officer
Tallgrass Energy, LP
4200 W. 115th Street, Suite 350
Leawood, Kansas 66211
CPF No. 3-2022-018-NOPV
Dear Mr. Moler:
Enclosed please find a Consent Order incorporating the terms of the Consent Agreement
between the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Tallgrass
Energy, LP (Tallgrass or Respondent), which was executed on May 11, 2022. Service of the
Consent Order and Consent Agreement by electronic mail is deemed effective upon the date of
transmission and acknowledgement of receipt, or as otherwise provided under 49 C.F.R. § 190.5.
Sincerely,
Alan K Mayberry
Associate Administrator
for Pipeline Safety
Enclosures: Consent Agreement and Consent Order
Cc: Mr. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA
Ms. Catherine Little, outside counsel for Tallgrass, catherine.little@troutman.com
Ms. Jennifer Eckels, Compliance Manager, Tallgrass, jennifer.eckels@tallgrass.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 )
Tallgrass Energy, LP, ) CPF No. 3-2022-018-NOPV
)
)
)
Respondent. )
____________________________________)
CONSENT ORDER
By letter dated January 21, 2022, the Pipeline and Hazardous Materials Safety Administration,
Office of Pipeline Safety (PHMSA), issued a Notice of Probable Violation, Proposed Civil Penalty,
and Proposed Compliance Order (Notice) to Tallgrass Energy, LP (Tallgrass or Respondent).
In response to the Notice, Respondent requested a hearing on Items 3 and 4, contesting both the
underlying violation and proposed civil penalty associated with each; contested warning Item 1 in
writing; offered additional information regarding the facts underlying Items 2 and 5; and requested
a modification of the proposed compliance order for Item 5 (Response). Respondent also asked for
the opportunity to meet informally with PHMSA to discuss all items in the Notice. Respondent and
PHMSA (the Parties) subsequently met to discuss the issues raised in the Response. As a result of
those discussions, as explained in more detail below, PHMSA has agreed to certain factual
clarifications associated with Items 1, 2, and 3, and Respondent has agreed without admission to
withdraw its hearing request and accept the warning items and findings of violation alleged in the
Notice, subject to the clarifications as set forth below, pay a reduced civil penalty in the amount of
$44,800 for Items 3 and 4, and to undertake certain corrective measures.
Accordingly, the Consent Agreement is hereby approved and incorporated by reference into this
Order. Tallgrass is hereby ordered to comply with the terms of the Consent Agreement, effective
immediately.
Pursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the
assessment of civil penalties as set forth in 49 C.F.R. § 190.223.
The terms and conditions of this Consent Order are effective upon service in accordance with 49
C.F.R. § 190.5.
May 16, 2022
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Tallgrass Energy, LP, ) CPF No. 3-2022-018-NOPV
)
)
)
Respondent. )
____________________________________)
CONSENT AGREEMENT
From May 7 through May 11, 2018, and December 4 through December 6, 2018, a
representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office
of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected
Tallgrass Energy, LP (Respondent) records for the hazardous liquid Control Room Management
procedures and records in Lakewood, Colorado. This inspection covered Pony Express Pipeline,
LLC (OPID 39043) and Tallgrass Midstream, LLC (OPID 39216). The inspection team
continued the inspection after receiving items from Respondent through 2019. In addition, while
working to complete inspection in 2020, PHMSA became aware of a complaint that had a
common area of focus with the prior inspection. For this reason, the inspection and complaint
resolution continued from 2019 through October 2021.
As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,
by letter dated January 21, 2022, a Notice of Probable Violation, Proposed Civil Penalty and
Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice
alleged that Respondent committed probable violations of seven provisions of 49 C.F.R. part
195, proposed ordering Respondent to take certain measures to correct the alleged violations, and
proposed a civil penalty in the amount of $55,200 associated with those items. Two of the
probable violations (Items 1 and 2) were brought as warnings, advising Respondent to correct
them or be subject to potential future enforcement action.
In response to the Notice, Respondent, for Item 1, stated that its checklist records reflect its
command and setpoint process and demonstrate that the command and setpoint entry processes
were tested in accordance with its procedures. Respondent did not contest Item 2. Regarding
Item 5, Respondent asserted that a compliance order is unnecessary in light of its actions
following receipt of the Notice. Respondent also requested a hearing and asked for the
opportunity to meet informally with PHMSA to discuss Items 3 and 4. For both of Items 3 and
4, Respondent contested the underlying allegations of violation, as well as the proposed civil
penalties and compliance orders.
1



PHMSA and Respondent (the Parties) subsequently met to discuss the issues raised in the
Response. As a result of those discussions, as explained in more detail below, PHMSA has
agreed to certain factual clarifications associated with Items 1, 2, and 3, and Respondent has
agreed without admission to withdraw its hearing request and accept the warning items and
findings of violation alleged in the Notice, subject to the clarifications as set forth below, pay a
reduced civil penalty in the amount of $44,800 for Items 3 and 4, and to undertake certain
corrective measures.
Having agreed that settlement of this enforcement action will avoid further administrative
proceedings or litigation and will serve the public interest by promoting safety and protection of
the environment, pursuant to 49 C.F.R. part 190, and upon consent and agreement of Respondent
and PHMSA, the Parties hereby agree as follows:
I. General Provisions:
1. Respondent acknowledges that as the operator of the pipeline facilities subject
to the Notice, Respondent and its referenced hazardous liquid pipeline facilities are subject to the
jurisdiction of the Federal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations
and administrative orders issued thereunder. For purposes of this Agreement, Respondent
acknowledges that it received proper notice of PHMSA’s action in this proceeding and that the
Notice states claims upon which relief may be granted pursuant to 49 U.S.C. § 60101, et seq.,
and the regulations and orders issued thereunder.
2. After Respondent returns this signed Agreement to PHMSA, the Agency’s
representative will present it to the Associate Administrator for Pipeline Safety, recommending
that the Associate Administrator adopt the terms of this Agreement by issuing an administrative
order (Consent Order) incorporating the terms of this Agreement. The terms of this Agreement
constitute an offer of settlement until accepted by the Associate Administrator. Once accepted,
the Associate Administrator will issue a Consent Order incorporating the terms of this Agreement.
3. Respondent consents to the issuance of the Consent Order, and hereby waives any
further procedural requirements with respect to its issuance. Respondent waives all rights to
contest the adequacy of notice, or the validity of the Consent Order or this Agreement, including
all rights to administrative or judicial hearings or appeals, except as set forth herein.
4. This Agreement shall apply to and be binding upon PHMSA and Respondent, its
officers, directors, and employees, and its successors, assigns, or other entities or persons
otherwise bound by law. Respondent agrees to provide a copy of this Agreement and any
incorporated work plans and schedules to all of Respondent’s officers, employees, and agents
whose duties might reasonably include compliance with this Agreement.
5. This Agreement constitutes the final, complete and exclusive agreement and
understanding between the Parties with respect to the settlement embodied in this Agreement.
The Parties acknowledge that there are no representations, agreements or understandings relating
to settlement other than those expressly contained in this Agreement, except that the terms of this
Agreement may be construed by reference to the Notice.
2



6. Nothing in this Agreement affects or relieves Respondent of its responsibility to
comply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101,
et seq., and the regulations and orders issued thereunder. Nothing in this Agreement alters
PHMSA’s right of access, entry, inspection, and information gathering or PHMSA’s authority to
bring enforcement actions against Respondent pursuant to the Federal pipeline safety laws, the
regulations and orders issued thereunder, or any other provision of Federal or State law.
7. For all transfers of ownership or operating responsibility of Respondent’s pipeline
system referenced herein, Respondent will provide a copy of this Agreement to the prospective
transferee at least 30 days prior to such transfer. Respondent will provide written notice of the
transfer to the PHMSA Central Regional Director no later than 60 days after the transfer occurs.
8. This Agreement does not waive or modify any Federal, State, or local laws or
regulations that are applicable to Respondent’s pipeline systems. This Agreement is not a
permit, or a modification of any permit, under any Federal, State, or local laws or regulations.
Respondent remains responsible for achieving and maintaining compliance with all applicable
Federal, State, and local laws, regulations and permits.
9. This Agreement does not create rights in, or grant any cause of action to, any third
party not party to this Agreement. The U.S. Department of Transportation is not liable for any
injuries or damages to persons or property arising from acts or omissions of Respondent or its
officers, employees, or agents carrying out the work required by this Agreement. Respondent
agrees to hold harmless the U.S. Department of Transportation, its officers, employees, agents,
and representatives from any and all causes of action arising from any acts or omissions of
Respondent or its contractors in carrying out any work required by this Agreement.
10. Except as otherwise specified below, Respondent neither admits nor denies any
allegation or conclusion in the Notice or this Agreement but agrees for purposes of this
Agreement to comply with the terms of this Agreement.
11. Upon issuance of the Consent Order, the Parties agree to the following terms.
II. Warning Items:
12. Item 1: 49 C.F.R. § 195.446(a): The Notice alleged that Respondent failed to
follow its written control room management procedures when implementing the test of any
backup SCADA systems at least once each calendar year, but at intervals not to exceed 15
months, as required by § 195.446(c)(4). During the inspection and informal discussion,
Respondent presented records showing testing of the back-up SCADA system was performed,
but the records did not include sufficient detail to demonstrate to PHMSA that Respondent’s
procedures were followed regarding command and setpoints. This item was brought as a
warning and does not constitute a finding of violation. Respondent does not contest this
Warning Item.
13. Item 2: 49 C.F.R. § 195.446(a): The Notice alleged that Respondent failed
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to follow its written control room management procedures when implementing methods to
reduce the risk associated with controller fatigue that could inhibit a controller’s ability to carry
out the roles and responsibilities by not training controllers to recognize the effects of fatigue, as
required by § 195.446(d)(3). This item was brought as a warning and does not constitute a
finding of violation. Respondent does not contest this Warning Item and has undertaken certain
remedial actions to address the issue identified in the Notice, including the hiring of a training
coordinator.
14. For Warning Items 1 and 2, if OPS finds a violation of these provisions in a
subsequent inspection, Respondent may be subject to future enforcement actions.
III. Findings of Violation:
15. Item 3: 49 C.F.R. § 195.446(c)(2): The Notice alleged that Respondent
failed to conduct a point-to-point verification between SCADA displays and related field
equipment when field equipment was added or moved, and when other changes that affect
pipeline safety were made to field equipment or SCADA displays on its Pony Express pipeline
system. During the informal discussions, Respondent presented records showing that it is
working to modify its procedures to include required verifications of SCADA displays during
point-to-point activities. Respondent does not contest the allegation of violation as alleged in the
Notice. As such, PHMSA finds a violation of 49 C.F.R. § 195.446(c)(2).
16. Item 4: 49 C.F.R. § 195.446(g)(1): The Notice alleged that Respondent
failed to demonstrate that accidents required to be reported pursuant to §§ 195.50 and 195.52
were reviewed to assure that lessons learned from its operating experience are incorporated, as
appropriate, into its control room management procedures. Respondent does not contest the
allegation of violation as alleged in the Notice. As such, PHMSA finds a violation of 49 C.F.R.
§ 195.446(g)(1).
17. Item 5: 49 C.F.R. § 195.446(j)(2): The Notice alleged that Respondent failed
to maintain documentation to demonstrate that any deviation from its control room procedures
(CRM) was necessary for the safe operation of the pipeline facility, as required. Respondent
does not contest the allegation of violation as alleged in the Notice. As such, PHMSA finds a
violation of 49 C.F.R. § 195.446(j)(2).
18. Items 3, 4, and 5 will be considered by PHMSA as a prior offense in any
future PHMSA enforcement action taken against Respondent for the five (5)-year period
following the Effective Date of this Agreement.
IV. Civil Penalty:
19. Item 3: Respondent shall pay a civil penalty in the amount of $22,400 for Item 3.
20. Item 4: Respondent shall pay a reduced civil penalty in the amount of $22,400
for Item 4. During the informal discussion, Respondent presented information in support of its
request for a reduced civil penalty. Specifically, Respondent presented information regarding the
4



companies’ efforts to improve its records and alarm system for the tanks at issue in the violation.
PHMSA finds that a reduction to the proposed civil penalty is warranted under the gravity factor
from “[t]he violation occurred NOT within a HCA or “could affect” HCA, and NOT within an
area required to be covered by a gas distribution system integrity management program”, to
“Pipeline safety was minimally affected, notwithstanding the conditions above.”
21. Respondent shall pay a total civil penalty in the amount of $44,800, to be paid in
full no later than 20 days from the Effective Date of this Agreement.
V. Compliance Order:
22. Item 3: The Notice proposed certain compliance order actions to address the non-
compliance alleged in the Notice. Respondent requested that the timeframe provided by the
Proposed Compliance Order (PCO) associated with Item 3 be extended to allow the company to
complete this requirement within 90 days, or to align with a maintenance shutdown to
accommodate the work, whichever comes first. PHMSA agrees to this request. Accordingly, in
regard to Item 3 of the Notice pertaining to Buckingham Terminal points on the Pony Express
pipeline and point-to-point records, Respondent must:
For those safety related points designated in-service when Respondent submitted
the 2017 construction notification for the Buckingham Terminal extension,
complete a point-to-point for each point from the field end device through to the
SCADA system displays within 90 days of the Effective Date of this Agreement,
or to align with a maintenance shutdown to accommodate the work, whichever
comes first, starting with submitting a complete list of all points (tags, point
names, descriptors) with an identification of whether or not it is a point that can
impact safety. After this designation is provided, Respondent must then submit a
list of those points that have safety related alarms and what parameters (attributes)
are safety related. The completed point-to-point records for each point that can
impact safety, or for safety related alarms, must include at a minimum, and not all
inclusive, the following: recording the ranges of equipment (if analog) employed,
the confirmation of the event and alarming functions (as maybe relevant),
confirmation and testing of any automated logic such as automated pump
shutdown upon high discharge or low suction, the relevant alarm setpoint values
and alarm descriptors, confirmation of the correct alarm response by color
including action (such as blinking) and priority for all relevant displays and alarm
summary screens, and record a list of all SCADA displays that have been
reviewed to confirm correct display response and correct location of the point
(screen shots with listing). The record must include who performs the verification
in the field at the end device, identify the end device, and who performs the
control room verification on each day along with the relevant date, and must
describe the method used for the confirmation (such as pressure switch tripped
and valve closed, or pressure transmitter calibrated, simulation of loss of
communication at the PLC, etc.). These records must be submitted to the
Director, Central region within 30 days of completing the point-to-point
confirmation and verification of SCADA displays.
5



23. Item 4: The Notice proposed certain compliance order actions to address the non-
compliance alleged in the Notice. Respondent requested that the timeframe provided by the
PCO associated with Item 4 be extended until December 30, 2022, to allow Respondent time to
complete its development of a plan to assess the feasibility of a dynamic tank alarming system
for tank systems. PHMSA agrees to this request. Accordingly, regarding Item 4 of the Notice
and pertaining specifically to the Sterling Tank, Respondent must:
Provide to the Director, Central Region, by December 30, 2022, a summary of
what leak alarms have been added for this location for controller use. In addition,
by December 30, 2022, provide to the Director, Central Region, a list of all other
similar locations and identify either the leak alarms added with the associated
dates of implementation, or a proposed plan in place to add similar alarms. If leak
alarms have not been added for similar installations at other locations and a plan
has not been developed for these to be added, then a plan must be provided to the
Director, Central Region regarding planned dates of implementation, or
justification for why this was not necessary at various locations for pipeline safety
must be provided.
24. Item 5: The Notice proposed certain compliance order actions to address the non-
compliance alleged in the Notice. Respondent requested that PHMSA remove from the PCO for
Item 5 the order to write a deviation for the years under which the Krohnes leak detection system
has not been used and update all procedures to remove references to this system. During
informal discussion, Respondent provided documentation showing this had been completed. As
such, PHMSA finds that Respondent has satisfied the terms of the PCO with respect to this
requirement.
Respondent additionally requested that the timeframe for implementing a fully
functioning leak system detection be extended until September 30, 2022. PHMSA agrees to this
request. Accordingly, regarding Item 5 of the Notice pertaining to pertaining to a deviation of
leak detection procedures, Respondent must:
By September 30, 2022, have a fully functioning CPM leak detection system and
have updated all relevant procedures, performed training, and implemented this
selected system on all segments of the Hazardous liquid pipeline systems
operating in crude or refined products services. For any HVL systems, all
procedure must be updated accurately to reflect how a leak will be detected, and
training performed by September 30, 2022. Records of each element required in
this compliance order (written deviations, procedure updates, training) including
testing associated with the new leak detection system (FAT and SAT tests) will be
submitted to the Director, Central Region Office within 30 days of completion of
that element.
VI. Enforcement:
25. This Agreement is subject to all enforcement authorities available to PHMSA
under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190, including administrative civil penalties
6



under 49 U.S.C. § 60122, of up to $239,142 per violation for each day the violation continues
and referral of the case to the Attorney General for judicial enforcement, if PHMSA determines
that Respondent is not complying with the terms of this Agreement in accordance with
determinations made by the Director, or if appealed, in accordance with decisions of the
Associate Administrator. The maximum civil penalty amounts are adjusted annually for
inflation. See 49 C.F.R. § 190.223.
VII. Dispute Resolution:
26. The Director and Respondent will informally attempt to resolve any disputes
arising under this Agreement, including but not limited to any decision of the Director. If
Respondent and the Director are unable to informally resolve the 
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