{"operation":"document","citation":"CPF 420055010","title":"NUSTAR LOGISTICS, L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2005-01-18","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(c)(13), 195.432(b), 195.579(b)(2), 195.583(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420055010.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420055010.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420055010","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420055010","body":"Notice of Probable Violation involving NUSTAR LOGISTICS, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.402(c)(13),  195.432(b),  195.579(b)(2),  195.583(a). The case was opened on 2005-01-18 and is reported as closed as of 2007-07-11. Proposed civil penalty: $17,000. Assessed civil penalty: $9,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420055010_Final Order_07102006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420055010/420055010_Final%20Order_07102006.pdf\n\n420055010_Final Order_07102006.pdf\n\n' 400 Seventh Street, S.W.\nU.S. Department Washington, D.C. 20590\nof Transportation\nPipeline and\nHazardous Mclterials Safety\nAdministration\nMr. Richard Bluntzer\nVice President, Operations\nValero Logistics Operations, L.P.\nOne Valero Way\nSan Antonio, TX 78249\nRE: CPF NO. 4-2005-5010\nDear Mr. Bluntzer:\nEnclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the\nabove-referenced case. It withdraws one allegation of violation, makes findings of violation and\nassesses a civil penalty of $9,000. It further finds that you have completed the actions specified\nin the Notice required to comply with the pipeline safety regulations. When the civil penalty is\npaid, this enforcement action will be closed. Your receipt of the Final Order constitutes service\nof that document under 49 C.F.R. 8 190.5.\nSincerely,\nJames Reynolds\nPipeline Compliance Registry\nOffice of Pipeline Safety\ncc: Mr. Andrew Dalton, Counsel for Valero GP, Inc.\nMr. Rod Seeley, Director, Southwest Region, OPS\nEnclosure\nCERTIFIED MAIL - RETURN RECEIPT REOUESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\nIn the Matter of\nValero Logistics Operations, L.P., 1 CPF No. 4-2005-5010\nRespondent.\nFINAL ORDER\nOn August 2-5,2004, pursuant to 49 U.S.C. § 601 17, a team of representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Southwest Region, Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the records and facilities for Respondent's\nArdmore Pipeline System. As a result of the inspection, the Director, Southwest Region, issued to\nRespondent, by letter dated January 18, 2005, a Notice of Probable Violation, Proposed Civil\nPenalty and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Respondent had violated 49 C.F.R. Part 195 and proposed assessing\na total civil penalty of $1 7,000 for the alleged violations. The Notice also proposed that Respondent\ntake certain measures to correct the alleged violations.\nRespondent requested an extension of time to respond on February 16, 2005. The request for an\nextension was granted by the Director, Southwest Region, OPS. Respondent responded to theNotice\nby letter dated March 17, 2005 (Response). Respondent contested some of the allegations of\nviolation, provided information concerning the corrective actions it has taken and requested that the\nproposed civil penalty be mitigated. Respondent offered to explain the allegations, proposed\nentering a consent order and requested a hearing in the event a consent order was not granted.\nRespondent's request for a consent order was denied and the matter was set for a hearing.\nThe hearing was held in Houston, Texas via teleconference on September 20,2005. Respondent was\ngranted permission to submit a post-hearing Response. Respondent submitted a Post-Hearing Brief\ndated October 7,2005. In support of its position, Respondent provided additional documents and\na summary of the information it had presented at the hearing.\n\n\n\nFINDINGS OF VIOLATION\nUncontested\nRespondent did not contest the alleged violation of 49 C.F.R. 9195.583 in Item 1 of the Notice.\nAccordingly, I find that Respondent violated 49 C.F.R. Part 195, as more fully described in the\nNotice:\n49 C.F.R. §195.583(a) -failure to inspect each pipeline or portion of pipeline that\nis exposed to the atmosphere for evidence of atmospheric corrosion as follows: If the\npipeline is located onshore, then the frequency of inspection is at least once every 3\ncalendar years, but with intervals not exceeding 39 months. Respondent failed to\nproduce records to verify that this inspection was performed on its 12-inch Ardmore\nto Wynnewood petroleum products pipeline.\nThis finding of violation will be considered a prior offense in any subsequent enforcement\naction taken against Respondent.\nItem 2 of the Notice alleged that Respondent violated 49 C.F.R. 9 195.579(b)(2), when Respondent\ndid not provide records to demonstrate that corrosion coupons were examined at least twice each\ncalendar year, but with intervals not exceeding 7 % months. Respondent uses corrosion inhibitor to\nmitigate internal corrosion in the 12-inch Ardmore to Wynnewood petroleum products pipeline.\nAlthough, Respondent uses corrosion coupons to determine the effectiveness of the inhibitor,\nRespondent did not produce records to show that a coupon inspection was performed on the\nArdmore to Wynnewood pipeline since 2001.\nIn response to Item 2, Respondent contended that it timely examined all applicable corrosion\ncoupons. In support of its position, Respondent submitted inspection ~lecords that it contended\n\"inadvertently were not produced at the time of the OPS inspection.\" Respondent further contended\nthat the submission of the coupon analysis reports shows that no violation occurred.\nOPS argued that the coupon inspection records submitted by Respondent showed nine pipeline\nlocations, but the inspection was not on the Ardmore to Wynnewood petroleum products pipeline\ncited in the Notice. During the compliance inspection, Respondent was found to have incomplete\nrecords of inspections for coupon ID #74, labeled \"ADWN 12 AD, Ardmore Outgoing.\" This\ncoupon was identified as the one in question for the Ardmore to Wynnewood petroleum products\npipeline by Respondent's personnel. The records showed only one inspection performed in 1998,\nand two in 2001. Afier 2001, the records do not have data on coupon ID #74. Records on this\ncoupon were requested during the OPS inspection and subsequent requests were made by phone after\nthe OPS inspection.\nDuring the hearing, Respondent's witness attested that there is not and never has been a coupon\nstation No. 74 associated with the Ardmore to Wynnewood petroleum products pipeline.\nRespondent further attested that while earlier coupon records erroneously indicated three coupon\ninspection datasets relating to coupon station No. 74, one dataset in 1 998 and two datasets in 200 1,\n\n\n\nthose three datasets actually relate to other coupon station locations along the Ardmore to\nWynnewood pipeline or to other pipeline systems. Respondent explained that the two (2) 2001\ncoupon datasets previously noted for coupon station No. 74 actually relate to coupon inspections at\ncoupon station No. 75 on the pipeline. However, due to a typographical error, the coupon datasets\nwere erroneously correlated to station No. 74. Respondent argued that because the data attributed\nto coupon station No. 74 was a typographical error no violation occurred.\nBased upon the documentation, records and testimony presented during the hearing and in the post-\nhearing brief, a determination is made that an error occurred in the earlier record referencing dataset\nfor coupon station No. 74. Therefore, a determination of compliance with the regulations is made\nand the allegation of violation is withdrawn.\nItem 3 of the Notice alleged that Respondent violated 49 C.F.R. 5195.402(~)(13), when Respondent\ndid not provide records to show that it periodically reviewed the work done by operator personnel\nto determine the effectiveness ofthe procedures used in normal operations and maintenance and took\ncorrective action where deficiencies were found.\nIn response to Item 3, Respondent contended that it conducted a 2004 annual review of its\nprocedures manual with input from various supervisors. Along with its response, Respondent\nsubmitted documentation on the 2004 annual review of the pipeline procedures manual.\nDuring the hearing, OPS argued that 5195.402(~)(13) does not address an annual review of the\nmanual, as the requirement for manual review is required by $195.402(a), OPS fiuther argued that\nthe review of the manual by several supervisors does not negate the necessity to comply with the\nrequirements of $195.402(~)(13).\nIn its post-hearing brief, Respondent described a change to its procedur~s to incorporate periodic\nreviews of work done by operator personnel to determine the effectiveness of the procedures and\nhow corrective actions are to be taken for deficiencies. The fact that Respondent had to change its\nprocedure is an acknowledgment that such requirements were not in the procedures at the time of\nthe inspection. Federal regulations require that Respondent periodically review the work done by\nits personnel to determine the effectiveness and adequacy of the procedures used in normal\noperations and maintenance, in accordance with 49 C.F.R 5195.402 (c)(13). The requisite review\nis of the \"work\" done when following procedures to determine the \"effectiveness of the procedures\"\nand to take corrective action where deficiencies are found. Respondent's 2004 annual review of the\npipeline procedures manual failed to satisfy the regulatory requirements. Accordingly, I find that\nRespondent violated 49 C.F.R. 5195.402(~)(13), as Respondent failed to provide records to show\nthat it periodically reviewed the work done by its personnel to determine the effectiveness and\nadequacy of the procedures used in normal operations and maintenance.\nItem 4 of the Notice alleged that Respondent violated 49 C.F.R. 195.432(b), when Respondent did\nnot provide records or documentation to show that the required inspection was performed on Wasson\nTank T- 103 and Wynnewood Tanks T- 10 1 and T-102.\n\n\n\nIn response to Item 4, Respondent argued that the April 2, 1999 amendment of the regulation1\npromulgated an inspection interval schedule for those inspections that ara required by section 4 of\nAPI Standard 653. For breakout tanks, Standard 653 requires an external inspection once every 5\nyears. Read in conjunction with $ 195.432, external inspections must be performed by July 28,2004,\nwhich is five years from the $ 195.432 effective date for operators who hwe not conducted testing\non their tanks according to the Standard 653 requirements prior to July 1999. Respondent M e r\nargued that for those operators who had performed Standard 653 external inspections prior to July\n1999, the external inspections are to occur within the five years of the prior 653 inspection.\nRespondent posed that because Tank T- 103 was not inspected prior to the effective date of $ 195.432,\nRespondent was required to inspect the tank within five years of the effective date. Respondent\ncontended that it timely conducted the required $195.432 inspection for Tank T-103 in 2003, well\nwithin the five-year period. Respondent further argued that it inspected and verified the integrity of\nWynnewood Tanks T- 1 0 1 and T- 1 02 and adopted procedures to ensure clompliance.\nOPS posed that although Respondent stated during the audit that these W s had been inspected,\nRespondent failed during the inspection, during the exit interview, and ip response to subsequent\ntelephone requests, to provide records to demonstrate compliance. In March 2005, Respondent\nsubmitted documents to demonstrate that Wasson Tank T-103 was inspected in 2003, well within\nthe time limit set by $195.432(b).\nConversely, the documentation submitted by Respondent also confirmed that Wynnewood Tanks\nT-101 and T- 102 were not in compliance at the time of the inspection. Although the inspection\nreport for T-102 was submitted to OPS, the inspection date was well past the required 5 years, as\nrequired by $ 195.432(b). After the hearing, Respondent submitted, along with its post-hearing brief,\ndocumentation to demonstrate that Wynnewood Tanks T- 10 1 and T- 102 have now been inspected\nand their integrity verified.\nOperators are required to maintain records regarding regular inspections of aboveground breakout\ntanks, in accordance with 49 C.F.R. Part 195. It is the operator that must provide proof of\ncompliance. Operators have an affirmative duty to achieve and maintain compliance. During a\npipeline safety inspection, operators must provide the documentation and records to demonstrate\ncompliance, as required by federal pipeline safety laws and regulations. During the inspection, in\nresponse to the Notice, and after subsequent phone calls, Respondent failed to present adequate\nevidence to demonstrate that it conducted regular inspections of Wynnewood Tanks T- 10 1 and Tank\nT- 102, at the requisite interval. The records were not provided during jhe inspection, during the\npost inspection exit interview or in response to the Notice. Wynnewood Tanks T- 10 1 and T- 102\nwere not in compliance at the time of the inspection. Accordingly, I find that Respondent violated\n49 C.F.R. $195.432(b), as Respondent failed to present adequate evidence to demonstrate that it\nconducted regular inspections of aboveground breakout tanks, Wynnewood Tank T- 10 1 and Tank\nT-102, at the requisite interval.\n64 FR 15926 (April 2, 1999).\n\n\n\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. $ 601 22, Respondent is subject to a civil penalty not to exceed $1 00,000 per\nviolation for each day of the violation up to a maximum of $1,000,000 for any related series of\nviolations.\n49 U.S.C. $ 60122 and 49 C.F.R. $ 190.225 require that, in determining the amount of the civil\npenalty, I consider the following criteria: nature, circumstances, and graviQ of the violation, degree\nof Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the\npenalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's\nability to continue in business, and such other matters asjustice may require. The Notice proposed\na total civil penalty of $17,000 for violations of 49 C.F.R. Part 195.\nThe proposed civil penalty for Item 1 is $5,000 for violation of 49 C.F.R. $195.583(a), as\nRespondent failed to provide records to verify that it inspected its 12-inch Ardmore to Wynnewood\npetroleum products pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion.\nRespondent did not contest the allegation of violation. Respondent is responsible for compliance\nwith the pipeline safety regulations, which includes sound record keeping. Without adequate records\nit is difficult to verify compliance with the regulations. The primary objective of the Federal pipeline\nsafety standards is safe operation of pipeline systems. When an operator fails to conduct inspections,\nthe operator will have difficulty in determining areas where there are problems that need to be\naddressed and thereby increases the risk of harm to the public and the environment. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $5,000 for violation of 49 C.F.R. $195.583(a).\nThe proposed civil penalty for Item 2 is $6,000 for violation of 49 C.F.R. § 195.579, as Respondent\nfailed to provide records to demonstrate that corrosion coupons were examined at least twice each\ncalendar year, but with intervals not exceeding 7 '/z months, on its 12-inch Ardmore to Wynnewood\npipeline. At the hearing and in its post hearing response, Respondent submitted information\ndemonstrating that an error occurred in the earlier record referencing dataget for coupon station No.\n74, which led to the allegation of violation. Based on this information demonstrating compliance\nwith the regulation, this allegation of violation was withdrawn. Therefore, the proposed civil penalty\nis also withdrawn.\nThe proposed civil penalty for Item 4 is $6,000 for violation of 49 C.F.R. §195.432(b), as\nRespondent failed to provide records to show that the required inspection was performed on\nWynnewood Tanks T- 10 1 and T- 1 02. Initially, Respondent was also cited for Wasson Tank T- 103.\nRespondent failed, during the inspection, during the exit interview, and in response to subsequent\nphone call requests, to provide records to demonstrate compliance. Respondent subsequently\nsubmitted documents to demonstrate that Wasson Tank T-103 was inspected in 2003, well within\nthe time limit set by $ 195.432(b). Respondent contended that no violations occurred and no penalty\nis justified for Tank T- 103.\n\n\n\nHowever, the documentation submitted by Respondent confirmed that the Wynnewood Tank T-102\nwas not inspected until January 28,2005. The date of the T-102 inspection report show that the\ninspection was well past the required 5 years required by $195.432(b). Respondent's submission\nshowed that Wynnewood Tanks T- 101 and T-102 were not in compliance and did not meet the\nrequired inspection schedule.\nAlthough Respondent has now provided information to demonstrate that tanks T-101 and T-102\nhave been inspected and their integrity verified, Respondent failed to demonstrate compliance for\ntanks T- 10 1 and T-102 during the inspection, during the exit interview when the inspection team\nalerted the Respondent to deficiencies or before the hearing.\nRespondent is under an affirmative duty to achieve and maintain compliance. Respondent failed to\nmeet its duty. Preventive maintenance is critical to the safety of the pbblic, environment, and\nproperty. Only one tank of the original three cited in the Notice met the required inspection\nschedule, Wasson Tank T-103. Accordingly, a proportional reductioo to the civil penalty is\nwarranted. Having reviewed the record and considered the assessment criteria, I assess Respondent\na reduced civil penalty of $4,000 for violation of 49 C.F.R. $ 195.432(b).\nAccordingly, having reviewed the record and considered the assessment criteria, I assess Respondent\na total civil penalty of $9,000 for violation of 49 C.F.R. $195.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. $89.2 1 (b)(3)) require this payment be made by wire transfer, through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are\ncontained in the enclosure. Questions concerning wire transfers should be directed to: Financial\nOperations Division (AMZ-300), Federal Aviation Administration, Mike Monroney Aeronautical\nCenter, P.O. Box 25082, Oklahoma City, OK 73 125; (405) 954-8893.\nFailure to pay the $9,000 civil penalty will result in accrual of interest at the current annual rate in\naccordance with 3 1 U.S.C. $371 7,3 1 C.F.R. $ 901.9 and 49 C.F.R. $ 89.23. Pursuant to those same\nauthorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not\nmade within 1 10 days of service. Furthermore, failure to pay the civil penalty may result in referral\nof the matter to the Attorney General for appropriate action in a United Sitates District Court.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, 3, and 4 in the Notice for\nviolations of 49 C.F.R. Part 195. Under 49 U.S.C. $ 601 18(a), each person who engages in the\ntransportation of hazardous liquids or who owns or operates a pipeline facility is required to comply\nwith the applicable safety standards established under chapter 601. Based on information submitted\nby Respondent demonstrating compliance, Item 2 was withdrawn. The Regional Director has\n\n\n\nindicated that Respondent has taken the following actions specified in the proposed compliance\norder:\nItem 1 - Conducted the required atmospheric inspection of its 12-inch Ardmore to\nWynnewood Petroleum products pipeline and established procedures to ensure\ncontinued future compliance as required by 49 C.F.R. 5 195.583(a).\nItem 3 - Changed its procedures to incorporate periodic reviews of work done by\nRespondent's personnel to determine procedures effectiveness and to take\ncorrective actions, as required by 49 C.F.R. 5 195.402(c).\nItem 4- Submitted documentation to demonstrate that Tanks T- 10 1 and T- 102 have been\ninspected and their integrity verified, as required by 49 C.F.R. 5 195.432(b).\nThese actions comply with the requirements in Items 1,3, and 4 of this Order. Accordingly, since\ncompliance has been achieved with respect to these violations, the compliance terms are not included\nin this Order.\nUnder 49 C.F.R. 5 190.2 15, Respondent has a right to submit a Petition for Reconsideration of this\nFinal Order. The petition must be received within 20 days of Respondent's receipt of this Final\nOrder and must contain a brief statement of the issue(s). The filing of the petition automatically\nstays the payment of any civil penalty assessed. However if Respondent submits payment for the\ncivil penalty, the Final Order becomes the final administrative decision and the right to petition for\nreconsideration is waived. The terms and conditions of this Final Order are effective on receipt.\nDate Issued\nfor Pipeline Safety","truncated":false,"body_characters":21181}