# NUSTAR LOGISTICS, L.P. — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.402(c)(13), 195.432(b), 195.579(b)(2), 195.583(a).
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- **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.

Official case documents:

420055010_Final Order_07102006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420055010/420055010_Final%20Order_07102006.pdf

420055010_Final Order_07102006.pdf

' 400 Seventh Street, S.W.
U.S. Department Washington, D.C. 20590
of Transportation
Pipeline and
Hazardous Mclterials Safety
Administration
Mr. Richard Bluntzer
Vice President, Operations
Valero Logistics Operations, L.P.
One Valero Way
San Antonio, TX 78249
RE: CPF NO. 4-2005-5010
Dear Mr. Bluntzer:
Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the
above-referenced case. It withdraws one allegation of violation, makes findings of violation and
assesses a civil penalty of $9,000. It further finds that you have completed the actions specified
in the Notice required to comply with the pipeline safety regulations. When the civil penalty is
paid, this enforcement action will be closed. Your receipt of the Final Order constitutes service
of that document under 49 C.F.R. 8 190.5.
Sincerely,
James Reynolds
Pipeline Compliance Registry
Office of Pipeline Safety
cc: Mr. Andrew Dalton, Counsel for Valero GP, Inc.
Mr. Rod Seeley, Director, Southwest Region, OPS
Enclosure
CERTIFIED MAIL - RETURN RECEIPT REOUESTED



DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
In the Matter of
Valero Logistics Operations, L.P., 1 CPF No. 4-2005-5010
Respondent.
FINAL ORDER
On August 2-5,2004, pursuant to 49 U.S.C. § 601 17, a team of representatives of the Pipeline and
Hazardous Materials Safety Administration (PHMSA), Southwest Region, Office of Pipeline Safety
(OPS), conducted an on-site pipeline safety inspection of the records and facilities for Respondent's
Ardmore Pipeline System. As a result of the inspection, the Director, Southwest Region, issued to
Respondent, by letter dated January 18, 2005, a Notice of Probable Violation, Proposed Civil
Penalty and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the
Notice proposed finding that Respondent had violated 49 C.F.R. Part 195 and proposed assessing
a total civil penalty of $1 7,000 for the alleged violations. The Notice also proposed that Respondent
take certain measures to correct the alleged violations.
Respondent requested an extension of time to respond on February 16, 2005. The request for an
extension was granted by the Director, Southwest Region, OPS. Respondent responded to theNotice
by letter dated March 17, 2005 (Response). Respondent contested some of the allegations of
violation, provided information concerning the corrective actions it has taken and requested that the
proposed civil penalty be mitigated. Respondent offered to explain the allegations, proposed
entering a consent order and requested a hearing in the event a consent order was not granted.
Respondent's request for a consent order was denied and the matter was set for a hearing.
The hearing was held in Houston, Texas via teleconference on September 20,2005. Respondent was
granted permission to submit a post-hearing Response. Respondent submitted a Post-Hearing Brief
dated October 7,2005. In support of its position, Respondent provided additional documents and
a summary of the information it had presented at the hearing.



FINDINGS OF VIOLATION
Uncontested
Respondent did not contest the alleged violation of 49 C.F.R. 9195.583 in Item 1 of the Notice.
Accordingly, I find that Respondent violated 49 C.F.R. Part 195, as more fully described in the
Notice:
49 C.F.R. §195.583(a) -failure to inspect each pipeline or portion of pipeline that
is exposed to the atmosphere for evidence of atmospheric corrosion as follows: If the
pipeline is located onshore, then the frequency of inspection is at least once every 3
calendar years, but with intervals not exceeding 39 months. Respondent failed to
produce records to verify that this inspection was performed on its 12-inch Ardmore
to Wynnewood petroleum products pipeline.
This finding of violation will be considered a prior offense in any subsequent enforcement
action taken against Respondent.
Item 2 of the Notice alleged that Respondent violated 49 C.F.R. 9 195.579(b)(2), when Respondent
did not provide records to demonstrate that corrosion coupons were examined at least twice each
calendar year, but with intervals not exceeding 7 % months. Respondent uses corrosion inhibitor to
mitigate internal corrosion in the 12-inch Ardmore to Wynnewood petroleum products pipeline.
Although, Respondent uses corrosion coupons to determine the effectiveness of the inhibitor,
Respondent did not produce records to show that a coupon inspection was performed on the
Ardmore to Wynnewood pipeline since 2001.
In response to Item 2, Respondent contended that it timely examined all applicable corrosion
coupons. In support of its position, Respondent submitted inspection ~lecords that it contended
"inadvertently were not produced at the time of the OPS inspection." Respondent further contended
that the submission of the coupon analysis reports shows that no violation occurred.
OPS argued that the coupon inspection records submitted by Respondent showed nine pipeline
locations, but the inspection was not on the Ardmore to Wynnewood petroleum products pipeline
cited in the Notice. During the compliance inspection, Respondent was found to have incomplete
records of inspections for coupon ID #74, labeled "ADWN 12 AD, Ardmore Outgoing." This
coupon was identified as the one in question for the Ardmore to Wynnewood petroleum products
pipeline by Respondent's personnel. The records showed only one inspection performed in 1998,
and two in 2001. Afier 2001, the records do not have data on coupon ID #74. Records on this
coupon were requested during the OPS inspection and subsequent requests were made by phone after
the OPS inspection.
During the hearing, Respondent's witness attested that there is not and never has been a coupon
station No. 74 associated with the Ardmore to Wynnewood petroleum products pipeline.
Respondent further attested that while earlier coupon records erroneously indicated three coupon
inspection datasets relating to coupon station No. 74, one dataset in 1 998 and two datasets in 200 1,



those three datasets actually relate to other coupon station locations along the Ardmore to
Wynnewood pipeline or to other pipeline systems. Respondent explained that the two (2) 2001
coupon datasets previously noted for coupon station No. 74 actually relate to coupon inspections at
coupon station No. 75 on the pipeline. However, due to a typographical error, the coupon datasets
were erroneously correlated to station No. 74. Respondent argued that because the data attributed
to coupon station No. 74 was a typographical error no violation occurred.
Based upon the documentation, records and testimony presented during the hearing and in the post-
hearing brief, a determination is made that an error occurred in the earlier record referencing dataset
for coupon station No. 74. Therefore, a determination of compliance with the regulations is made
and the allegation of violation is withdrawn.
Item 3 of the Notice alleged that Respondent violated 49 C.F.R. 5195.402(~)(13), when Respondent
did not provide records to show that it periodically reviewed the work done by operator personnel
to determine the effectiveness ofthe procedures used in normal operations and maintenance and took
corrective action where deficiencies were found.
In response to Item 3, Respondent contended that it conducted a 2004 annual review of its
procedures manual with input from various supervisors. Along with its response, Respondent
submitted documentation on the 2004 annual review of the pipeline procedures manual.
During the hearing, OPS argued that 5195.402(~)(13) does not address an annual review of the
manual, as the requirement for manual review is required by $195.402(a), OPS fiuther argued that
the review of the manual by several supervisors does not negate the necessity to comply with the
requirements of $195.402(~)(13).
In its post-hearing brief, Respondent described a change to its procedur~s to incorporate periodic
reviews of work done by operator personnel to determine the effectiveness of the procedures and
how corrective actions are to be taken for deficiencies. The fact that Respondent had to change its
procedure is an acknowledgment that such requirements were not in the procedures at the time of
the inspection. Federal regulations require that Respondent periodically review the work done by
its personnel to determine the effectiveness and adequacy of the procedures used in normal
operations and maintenance, in accordance with 49 C.F.R 5195.402 (c)(13). The requisite review
is of the "work" done when following procedures to determine the "effectiveness of the procedures"
and to take corrective action where deficiencies are found. Respondent's 2004 annual review of the
pipeline procedures manual failed to satisfy the regulatory requirements. Accordingly, I find that
Respondent violated 49 C.F.R. 5195.402(~)(13), as Respondent failed to provide records to show
that it periodically reviewed the work done by its personnel to determine the effectiveness and
adequacy of the procedures used in normal operations and maintenance.
Item 4 of the Notice alleged that Respondent violated 49 C.F.R. 195.432(b), when Respondent did
not provide records or documentation to show that the required inspection was performed on Wasson
Tank T- 103 and Wynnewood Tanks T- 10 1 and T-102.



In response to Item 4, Respondent argued that the April 2, 1999 amendment of the regulation1
promulgated an inspection interval schedule for those inspections that ara required by section 4 of
API Standard 653. For breakout tanks, Standard 653 requires an external inspection once every 5
years. Read in conjunction with $ 195.432, external inspections must be performed by July 28,2004,
which is five years from the $ 195.432 effective date for operators who hwe not conducted testing
on their tanks according to the Standard 653 requirements prior to July 1999. Respondent M e r
argued that for those operators who had performed Standard 653 external inspections prior to July
1999, the external inspections are to occur within the five years of the prior 653 inspection.
Respondent posed that because Tank T- 103 was not inspected prior to the effective date of $ 195.432,
Respondent was required to inspect the tank within five years of the effective date. Respondent
contended that it timely conducted the required $195.432 inspection for Tank T-103 in 2003, well
within the five-year period. Respondent further argued that it inspected and verified the integrity of
Wynnewood Tanks T- 1 0 1 and T- 1 02 and adopted procedures to ensure clompliance.
OPS posed that although Respondent stated during the audit that these W s had been inspected,
Respondent failed during the inspection, during the exit interview, and ip response to subsequent
telephone requests, to provide records to demonstrate compliance. In March 2005, Respondent
submitted documents to demonstrate that Wasson Tank T-103 was inspected in 2003, well within
the time limit set by $195.432(b).
Conversely, the documentation submitted by Respondent also confirmed that Wynnewood Tanks
T-101 and T- 102 were not in compliance at the time of the inspection. Although the inspection
report for T-102 was submitted to OPS, the inspection date was well past the required 5 years, as
required by $ 195.432(b). After the hearing, Respondent submitted, along with its post-hearing brief,
documentation to demonstrate that Wynnewood Tanks T- 10 1 and T- 102 have now been inspected
and their integrity verified.
Operators are required to maintain records regarding regular inspections of aboveground breakout
tanks, in accordance with 49 C.F.R. Part 195. It is the operator that must provide proof of
compliance. Operators have an affirmative duty to achieve and maintain compliance. During a
pipeline safety inspection, operators must provide the documentation and records to demonstrate
compliance, as required by federal pipeline safety laws and regulations. During the inspection, in
response to the Notice, and after subsequent phone calls, Respondent failed to present adequate
evidence to demonstrate that it conducted regular inspections of Wynnewood Tanks T- 10 1 and Tank
T- 102, at the requisite interval. The records were not provided during jhe inspection, during the
post inspection exit interview or in response to the Notice. Wynnewood Tanks T- 10 1 and T- 102
were not in compliance at the time of the inspection. Accordingly, I find that Respondent violated
49 C.F.R. $195.432(b), as Respondent failed to present adequate evidence to demonstrate that it
conducted regular inspections of aboveground breakout tanks, Wynnewood Tank T- 10 1 and Tank
T-102, at the requisite interval.
64 FR 15926 (April 2, 1999).



ASSESSMENT OF PENALTY
Under 49 U.S.C. $ 601 22, Respondent is subject to a civil penalty not to exceed $1 00,000 per
violation for each day of the violation up to a maximum of $1,000,000 for any related series of
violations.
49 U.S.C. $ 60122 and 49 C.F.R. $ 190.225 require that, in determining the amount of the civil
penalty, I consider the following criteria: nature, circumstances, and graviQ of the violation, degree
of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the
penalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's
ability to continue in business, and such other matters asjustice may require. The Notice proposed
a total civil penalty of $17,000 for violations of 49 C.F.R. Part 195.
The proposed civil penalty for Item 1 is $5,000 for violation of 49 C.F.R. $195.583(a), as
Respondent failed to provide records to verify that it inspected its 12-inch Ardmore to Wynnewood
petroleum products pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion.
Respondent did not contest the allegation of violation. Respondent is responsible for compliance
with the pipeline safety regulations, which includes sound record keeping. Without adequate records
it is difficult to verify compliance with the regulations. The primary objective of the Federal pipeline
safety standards is safe operation of pipeline systems. When an operator fails to conduct inspections,
the operator will have difficulty in determining areas where there are problems that need to be
addressed and thereby increases the risk of harm to the public and the environment. Accordingly,
having reviewed the record and considered the assessment criteria, I assess Respondent a civil
penalty of $5,000 for violation of 49 C.F.R. $195.583(a).
The proposed civil penalty for Item 2 is $6,000 for violation of 49 C.F.R. § 195.579, as Respondent
failed to provide records to demonstrate that corrosion coupons were examined at least twice each
calendar year, but with intervals not exceeding 7 '/z months, on its 12-inch Ardmore to Wynnewood
pipeline. At the hearing and in its post hearing response, Respondent submitted information
demonstrating that an error occurred in the earlier record referencing dataget for coupon station No.
74, which led to the allegation of violation. Based on this information demonstrating compliance
with the regulation, this allegation of violation was withdrawn. Therefore, the proposed civil penalty
is also withdrawn.
The proposed civil penalty for Item 4 is $6,000 for violation of 49 C.F.R. §195.432(b), as
Respondent failed to provide records to show that the required inspection was performed on
Wynnewood Tanks T- 10 1 and T- 1 02. Initially, Respondent was also cited for Wasson Tank T- 103.
Respondent failed, during the inspection, during the exit interview, and in response to subsequent
phone call requests, to provide records to demonstrate compliance. Respondent subsequently
submitted documents to demonstrate that Wasson Tank T-103 was inspected in 2003, well within
the time limit set by $ 195.432(b). Respondent contended that no violations occurred and no penalty
is justified for Tank T- 103.



However, the documentation submitted by Respondent confirmed that the Wynnewood Tank T-102
was not inspected until January 28,2005. The date of the T-102 inspection report show that the
inspection was well past the required 5 years required by $195.432(b). Respondent's submission
showed that Wynnewood Tanks T- 101 and T-102 were not in compliance and did not meet the
required inspection schedule.
Although Respondent has now provided information to demonstrate that tanks T-101 and T-102
have been inspected and their integrity verified, Respondent failed to demonstrate compliance for
tanks T- 10 1 and T-102 during the inspection, during the exit interview when the inspection team
alerted the Respondent to deficiencies or before the hearing.
Respondent is under an affirmative duty to achieve and maintain compliance. Respondent failed to
meet its duty. Preventive maintenance is critical to the safety of the pbblic, environment, and
property. Only one tank of the original three cited in the Notice met the required inspection
schedule, Wasson Tank T-103. Accordingly, a proportional reductioo to the civil penalty is
warranted. Having reviewed the record and considered the assessment criteria, I assess Respondent
a reduced civil penalty of $4,000 for violation of 49 C.F.R. $ 195.432(b).
Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent
a total civil penalty of $9,000 for violation of 49 C.F.R. $195.
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. $89.2 1 (b)(3)) require this payment be made by wire transfer, through the Federal Reserve
Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are
contained in the enclosure. Questions concerning wire transfers should be directed to: Financial
Operations Division (AMZ-300), Federal Aviation Administration, Mike Monroney Aeronautical
Center, P.O. Box 25082, Oklahoma City, OK 73 125; (405) 954-8893.
Failure to pay the $9,000 civil penalty will result in accrual of interest at the current annual rate in
accordance 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
authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not
made within 1 10 days of service. Furthermore, failure to pay the civil penalty may result in referral
of the matter to the Attorney General for appropriate action in a United Sitates District Court.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 1, 2, 3, and 4 in the Notice for
violations of 49 C.F.R. Part 195. Under 49 U.S.C. $ 601 18(a), each person who engages in the
transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply
with the applicable safety standards established under chapter 601. Based on information submitted
by Respondent demonstrating compliance, Item 2 was withdrawn. The Regional Director has



indicated that Respondent has taken the following actions specified in the proposed compliance
order:
Item 1 - Conducted the required atmospheric inspection of its 12-inch Ardmore to
Wynnewood Petroleum products pipeline and established procedures to ensure
continued future compliance as required by 49 C.F.R. 5 195.583(a).
Item 3 - Changed its procedures to incorporate periodic reviews of work done by
Respondent's personnel to determine procedures effectiveness and to take
corrective actions, as required by 49 C.F.R. 5 195.402(c).
Item 4- Submitted documentation to demonstrate that Tanks T- 10 1 and T- 102 have been
inspected and their integrity verified, as required by 49 C.F.R. 5 195.432(b).
These actions comply with the requirements in Items 1,3, and 4 of this Order. Accordingly, since
compliance has been achieved with respect to these violations, the compliance terms are not included
in this Order.
Under 49 C.F.R. 5 190.2 15, Respondent has a right to submit a Petition for Reconsideration of this
Final Order. The petition must be received within 20 days of Respondent's receipt of this Final
Order and must contain a brief statement of the issue(s). The filing of the petition automatically
stays the payment of any civil penalty assessed. However if Respondent submits payment for the
civil penalty, the Final Order becomes the final administrative decision and the right to petition for
reconsideration is waived. The terms and conditions of this Final Order are effective on receipt.
Date Issued
for Pipeline Safety
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