{"operation":"document","citation":"CPF 420065021M","title":"MAGELLAN PIPELINE COMPANY, LP — Notice of Amendment","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2006-05-02","effective_on":null,"summary":"CLOSED notice of amendment citing 195.452(e), 195.452(f)(6), 195.452(i)(1), 195.452(j)(4), 195.452(k).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065021m.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065021m.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420065021m","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420065021M","body":"Notice of Amendment involving MAGELLAN PIPELINE COMPANY, LP. PHMSA's enforcement data identifies the cited regulations as 195.452(e),  195.452(f)(6),  195.452(i)(1),  195.452(j)(4),  195.452(k). The case was opened on 2006-05-02 and is reported as closed as of 2009-09-09. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420065021M_OrderDirectingAmendment_07092009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065021M/420065021M_OrderDirectingAmendment_07092009.pdf\n\n420065021M_OrderDirectingAmendment_07092009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065021M/420065021M_OrderDirectingAmendment_07092009_text.pdf\n\n420065021M_OrderDirectingAmendment_07092009_text.pdf\n\nJUL 09 2009\nMr. Richard A. Olson\nVice President, Transportation Operations\nMagellan Midstream Partners, L.P.\nOne Williams Center\nP.O. Box 22186\nTulsa, OK 74121-2186\nRe: CPF No. 4-2006-5020\nCPF No. 4-2006-5021M\nDear Mr. Olson:\nEnclosed are the Final Order and the Order Directing Amendment issued by the Pipeline and\nHazardous Materials Safety Administration in the above-referenced companion cases. The Final\nOrder makes findings of violation, assesses a civil penalty of $147,500, and specifies certain\nactions that need to be taken by Magellan to comply with the pipeline safety regulations. The\nOrder Directing Amendment makes a finding of inadequate procedures and requires that\nMagellan make certain amendments to its written integrity management program.\nThe penalty payment terms are set forth in the Final Order. When the civil penalty has been paid\nand the terms of the Compliance Order completed, as determined by the Director, Southwest\nRegion, PHMSA, CPF No. 4-2006-5020 will be closed. When the terms of the Order Directing\nAmendment have been completed, as determined by the Director, Southwest Region, CPF No. 4-\n2006-5021M will be closed. Your receipt of the Final Order and Order Directing Amendment\nconstitute service of those documents under 49 C.F.R. § 190.5.\nThank you for your cooperation in these matters.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Paul E. Pratt, Esq., Magellan Midstream Partners, L.P.\nMr. Rod M. Seeley, Director, Southwest Region, PHMSA\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5012]\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 )\nMagellan Midstream Partners, L.P., ) CPF No. 4-2006-5021M\n)\n)\n)\nRespondent. )\n____________________________________)\nORDER DIRECTING AMENDMENT\nBetween April 11-15 and May 2-6, 2005, pursuant to 49 U.S.C. § 60117, representatives of the\nPipeline and Hazardous Materials Safety Administration’s Office of Pipeline Safety (OPS), and\nits state agent, the Minnesota Office of Pipeline Safety, conducted an on-site pipeline safety\ninspection of the integrity management program procedures and records of Magellan Midstream\nPartners, L.P. (Magellan or Respondent), at the company’s offices in Tulsa, Oklahoma.\nMagellan is a major energy supplier in the United States whose assets include an 8,500-mile\npetroleum products and a 1,100-mile ammonia pipeline system.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated May 2, 2006, a Notice of Amendment (NOA). The NOA alleged\ninadequacies in Respondent’s integrity management program and proposed to require the\ncompany to revise its procedures.\nRespondent responded to the NOA by letter dated June 2, 2006. Respondent initially contested\nthe allegations and requested a hearing. A joint hearing was held on September 21, 2006, in\nHouston, Texas, on this case and the companion Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (CPF No. 4-2006-5020). At the hearing, Magellan\nwithdrew its request to discuss the matters involved in this case and submitted a written\nwithdrawal of its hearing request by letter dated November 1, 2006. Respondent submitted\namended procedures to the Director by letter dated November 30, 2006, and provided\nsupplemental clarifications and amendments by emails in February and March 2007.\nThe Director has reviewed the amended procedures and additional materials submitted by\nRespondent. Based on the result of this review, I find that Respondent’s amendments adequately\naddress Items 1, 2, 4, and 5 in the NOA. For the reasons below, I find that the revised\nprocedures still do not adequately address Item 3.\n\n\n\nItem 3: The NOA alleged that Respondent’s integrity management program procedures were\ninadequate with respect to 49 C.F.R. § 195.452(f)(6) and (i)(4). That regulation states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(f) What are the elements of an integrity management program? An\nintegrity management program begins with the initial framework. An\noperator must continually change the program to reflect operating\nexperience, conclusions drawn from results of the integrity assessments, and\nother maintenance and surveillance data, and evaluation of consequences of\na failure on the high consequence area. An operator must include, at\nminimum, each of the following elements in its written integrity\nmanagement program . . .\n(6) Identification of preventive and mitigative measures to protect\nthe high consequence area (see paragraph (i) of this section) . . . .\n(i) What preventive and mitigative measures must an operator take to\nprotect the high consequence area? (1) General requirements. An operator\nmust take measures to prevent and mitigate the consequences of a pipeline\nfailure that could affect a high consequence area . . . .\n(4) Emergency Flow Restricting Devices (EFRD). If an operator\ndetermines that an EFRD is needed on a pipeline segment to protect a\nhigh consequence area in the event of a hazardous liquid pipeline\nrelease, an operator must install the EFRD. In making this\ndetermination, an operator must, at least, consider the following\nfactors—the swiftness of leak detection and pipeline shutdown\ncapabilities, the type of commodity carried, the rate of potential leakage,\nthe volume that can be released, topography or pipeline profile, the\npotential for ignition, proximity to power sources, location of nearest\nresponse personnel, specific terrain between the pipeline segment and\nthe high consequence area, and benefits expected by reducing the spill\nsize.\nItem 3 of the NOA alleged that Magellan’s procedures were inadequate because the decision-\nmaking process for installing emergency flow restricting devices (EFRDs) did not include\njustification for the spill volume exceedance decision point and application of the 28% factor to\nthe calculated drain-down volume. The NOA alleged that at the time of the OPS inspection, the\ninspection team found inadequate technical justification for Respondent’s decision-making\nprocess regarding installation of EFRDs, which was based on whether or not the assumed drain-\ndown volume exceeded the 15 minute full-flow spill volume. Additionally, the inspection team\nfound inadequate technical justification for limiting the assumed drain-down volume to 28% of\nthe total calculated drain-down volume. The NOA alleged that use of the 28% multiplier could\nresult in failing to identify locations where installation of EFRDs was necessary to protect High\nConsequence Areas (HCAs).\n\n\n\n2\nThe amended procedures submitted by Respondent adequately modified the EFRD installation\ndecision-making process to include justification regarding spill volume exceedance decision\npoints and to document the procedures on Respondent’s process flowsheets. Respondent did not,\nhowever, provide adequate justification for the use of the 28% factor in determining potential\nspill volume.\nDuring the inspection, Magellan represented that the 28% figure came from a report conducted\nby EDM Services for the California State Fire Marshal in March 1993, which is titled,\n“Hazardous Liquid Pipeline Risk Assessment.” The report is based on 10 years (1981 through\n1990) of pipeline failures and leaks in California.\nFor several reasons, I find that that 28% drain-down volume factor used in the California study\ncannot be applied universally to other pipeline systems, including Magellan’s lines that were the\nsubject of this inspection. First, the factor was based upon limited historical accident data from\nspecific pipelines in California between 1981 and 1990. Second, specific topographical, pipeline\nconfiguration, and operational differences existed between the pipelines studied in California and\nthose operated by Magellan. Third, the California study utilized the 28% factor as part of a\ntotally different type of risk analysis (i.e., a “cost-benefit” analysis) than the one involved in\nPHMSA’s integrity management program (i.e., a “could-affect” analysis). Fourth, applying the\n28% factor from the California study, which had already accounted for topography,\ninappropriately reduced the maximum drain-down volume even further\nUse of the 28% drain-down factor under these circumstances risks failing to identify locations\nwhere installation of an EFRD is necessary to protect HCAs in accordance with § 195.452(f)(6)\nand (i)(4).\nAccordingly, based on the results of this review, I find that Respondent’s integrity management\nprogram procedures are inadequate to ensure safe operation of its pipeline system in accordance\nwith the integrity management regulations. Pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R.\n§ 190.237, Respondent is ordered to make the following revisions to its integrity management\nprogram procedures. Respondent must—\n1. Modify emergency flow restricting device (EFRD) installation procedures and apply\na justified factor to the calculated drain-down volume, in accordance with\n§ 195.452(f)(6) and (i)(4), performing EFRD needs analysis using justified methods.\n2. Submit the amended procedures to the Director within 30 days following receipt of\nthis Order Directing Amendment. With respect to the submission of amended\nprocedures, the Director may notify Respondent if any or all of the procedures have\nbeen amended satisfactorily. If further modification is necessary, the Director may\nrequire Respondent to modify the submission to cure the deficiencies. If the Director\nfinds deficiencies and orders further modification, Respondent must proceed to take\nall action to correct its procedures to comply with the Director’s order. Respondent\nmust correct all deficiencies within the time specified by the Director and resubmit\nthe procedures for review.\n\n\n\n3\n3. If a resubmitted item is disapproved in whole or in part, the Director may again\nrequire Respondent to correct the deficiencies in accordance with the foregoing\nprocedure, or the Director may otherwise proceed to enforce the terms of this Order.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent demonstrating good cause for an extension.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\nto exceed $100,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nThe terms and conditions of this Order Directing Amendment shall be effective upon receipt.\n___________________________________ __________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":11643}