# MAGELLAN PIPELINE COMPANY, LP — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420065032
- **title:** MAGELLAN PIPELINE COMPANY, LP — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2006-08-17
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.402(a), 195.420(c).
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- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420065032
**body:**

Notice of Probable Violation involving MAGELLAN PIPELINE COMPANY, LP. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.420(c). The case was opened on 2006-08-17 and is reported as closed as of 2008-06-09. Proposed civil penalty: $10,000. Assessed civil penalty: $10,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420065032_Final Order_05232008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065032/420065032_Final%20Order_05232008.pdf

420065032_final order_05232008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420065032/420065032_final%20order_05232008_text.pdf

420065032_final order_05232008_text.pdf

U S Department
of Transportation
Pipeline and Hazardous
Materials Safety
Administration
1200 New Jersey Ave S E
Washington DC 20590
MAY 2 3 2008
VIA CERTIFIED MAIL — RETURN RECEIPT RE UESTED
Mr. Rick A. Olson
Vice President of Operations
Magellan Pipeline Company, L. P.
One Williams Center
Tulsa, OK 74172-0140
Re: CPF No. 4-2006-5032
Dear Mr Olson:
Enclosed is the Final Order issued in the above-referenced case. It makes findings of violation
and assesses a civil penalty of $10, 000. The penalty payment terms are set forth in the Final
Order. This enforcement action closes automatically upon payment. Your receipt of the Final
Order constitutes service of that document under 49 C. F. R. ) 190. 5.
Thank you for your cooperation in this matter
Sincerely,
' & ~~ /~C~k
Jeffrey D. Wiese
Associate Admmistrator
for Pipeline Safety
Enclosure



U. S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D. C. 20590
In the Matter of
Magellan Pipeline Company,
Respondent.
CPF No. 4-2006-5032
FINAL ORDER
On November 14 — 18, 28 — 30, and December 1, 2005, pursuant to 49 U S. C. ) 60117, a
representative of the Pipeline and Hazardous Materials Safety Admimstration, Office of Pipeline
Safety (OPS) conducted an on-site pipeline safety inspection of Longhorn Pipeline, which is
operated by Magellan Pipeline Company (Magellan or Respondent) in Texas. Respondent's
pipeline system operates in 13 Midwestern states and transports refined petroleum products,
liquefied petroleum gases, and highly volatile liquids. As a result of the inspection, the Director,
Southwest Region, OPS, issued to Respondent by letter dated August 17, 2006, a Notice of
Probable Violation and Proposed Civil Penalty (Notice). In accordance with 49 C. F. R.
$ 190. 207, the Notice proposed finding that Respondent had committed violations of 49 C. F. R.
Part 195 and proposed assessing a civil penalty of $10, 000 for the alleged violations. In
accordance with 49 C. F. R. $ 190. 205, the Notice also proposed finding that Respondent had
committed another probable violation of 49 C. F. R. Part 195 and warned Respondent to take
appropriate corrective action to address the item or be subject to future enforcement action.
Respondent responded to the Notice by letter dated September 21, 2006 (Response). Respondent
did not contest the allegations of violation but offered an explanation and requested that the
proposed civil penalty be reduced to $5, 000. Respondent did not request a hearing and therefore
has waived its right to one.
FINDINGS OF VIOLATION
In its Response, Respondent did not contest the allegations in the Notice that it violated 49
C. F. R. Part 195, as follows:
Item 1A: The Notice alleged that Respondent violated 49 C. F. R, $ 195. 402(a), which states:
g 195. 402 — Procedural manual for operations, maintenance, and
emergencies.



(a) General. Each operator shall prepare and follow for each pipeline
system a manual of written procedures for conducting normal operations and
maintenance activities, . . .
The Notice alleged that Respondent did not follow its own written procedures for inspecting
cathodic protection rectifiers. Respondent's procedures required that each rectifier be inspected
at least 12 times each calendar year, with intervals not to exceed 45 days. Respondent's records
indicated that several rectifiers were inspected during the 2005 calendar year at intervals that
exceeded 45 days. Respondent did not contest this allegation of violation and explained that the
issue resulted from an employee's deficient job performance. Accordingly, I find that
Respondent violated 49 C. F, R. ) 195. 402(a) by failing to follow its manual of written procedures
for regularly inspecting cathodic protection rectifiers.
Item 1B: The Notice also alleged that Respondent violated 49 C. F. R. $ 195. 402(a), as quoted
above, by failing to follow its own written procedures for inspecting foreign crossings and
interference currents. Respondent's procedures required that each interference or foreign bond
whose failure would jeopardize structure protection be inspected at least 12 times each calendar
year, with intervals not to exceed 45 days. Respondent's records indicated that several foreign
bonds were inspected during the 2005 calendar year at intervals that exceeded 45 days.
Respondent did not contest this allegation of violation and explained that the issue resulted &om
an employee's deficient job performance, Accordingly, I find that Respondent violated 49
C. F. R, $ 195. 402(a) by failing to follow its manual of written procedures for regularly inspecting
foreign crossings and interference currents
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent,
ASSESSMENT OF PENALTY
Under 49 U. S. C. ) 60122, Respondent is subject to a civil penalty not to exceed $100, 000 per
violation for each day of the violation up to a maximum of $1, 000, 000 for any related series of
violations. The Notice proposed a total civil penalty of $10, 000 for the 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: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent's culpability; the history
of Respondent's prior offenses; the Respondent's ability to pay the penalty and any effect that
the penalty may have on its ability to continue doing business; and the good faith of Respondent
in attempting to comply with the pipeline safety regulations. In addition, I may consider the
economic benefit gained from the violation without any reduction because of subsequent
damages, and such other matters as justice may require.
In its Response, Magellan explained that the violations identified in the Notice resulted from the
deficient ~ob performance of a certain individual and that action had been taken to permanently
address the issue, Respondent also reported that it had undertaken additional mitigation
measures, such as transferring job duties to a NACE-certified corrosion technician.



Respondent indicated that it found no pipeline damage resulting from the conduct that led to the
violations. Respondent also contended that the violations were "self-reported, " but there is no
evidence in the record supporting such contention. Based upon the foregoing, Respondent
requested that the civil penalty be reduced to $5, 000 for its good faith efforts to achieve
compliance and because the violations did not result m any harm to the pipeline or the public.
Although the violations committed by Magellan may have been caused by a single employee,
Respondent is nevertheless responsible for the conduct of its employees and is culpable for
violations of the pipeline safety regulations resulting from employee misconduct. Respondent's
failure to perform cathodic protection inspections at the intervals specified by its procedures for
safe operations had the potential to impact the safety of Respondent's pipeline. Inadequate
cathodic protection can allow corrosion to develop on pipelines, and is one of the major causes
of pipeline failures presenting a threat to public safety and the environment.
Although Respondent may have determined that no injuries or damage resulted from these
violations, I still find that the nature, circumstances, and gravity of the violations warrant the
proposed civil penalty amount. While Respondent did undertake corrective action by making
changes in company policies and personnel, such measures were taken to ensure compliance
after the violations had been identified by OPS and therefore are not considered in determining
whether or not Respondent had made a good faith effort to achieve compliance as of the time the
violations occurred.
Accordingly, having reviewed the record and considered the assessment criteria, I hereby assess
Respondent a total civil penalty of $10, 000.
Payment of the civil penalty must be made within 20 days of service. Payment may be made by
sending a certified check or money order (containing the CPF Number for this case) payable to
"U. S. Department of Transportation" to the Federal Aviation Administration, Mike Monroney
Aeronautical Center, Financial Operations Division (AMZ-341), P. O. Box 25082, Oklahoma
City, OK 73125.
Federal regulations (49 C. F. R. $ 89. 21(b)(3)) also permit this payment to 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-341), Federal Aviation
Administration, Mike Monroney Aeronautical Center, P. O. Box 25082, Oklahoma City, OK
73125; (405) 954-8893,
Failiue to pay the $10, 000 civil penalty will result in accrual of interest at the current annual rate
in accordance with 31 U. S. C. $ 3717, 31 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 110 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
States District Court.



WARNING ITEM
With respect to Item 2, the Notice alleged a probable violation of 49 C. F. R. Part 195 but did not
propose a civil penalty or compliance order for this item. Therefore, this is considered to be a
warning item. The warning was for:
49 C. F. R. $ 195. 420(c) — Respondent's alleged failure to provide protection from
vandalism for each valve. A large number of valves on Respondent's pipeline were not
protected from vandalism, even though they had been chained and locked to protect
against unauthorized operation.
The Notice acknowledged, and Respondent confirmed in its Response, that the company was in
the process of installing security fencing to protect valve sites from vandalism. Having
considered such information, I find pursuant to 49 C. F. R. ) 190. 205, that a probable violation of
49 C. F. R. $ 195. 420(c) has occurred and Respondent is hereby advised to correct such
conditions. In the event that OPS finds a violation for this item in a subsequent inspection,
Respondent may be subject to future enforcement action.
Under 49 C. F, R. $ 190, 215, 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 shall
be effective upon receipt.
MAY 2 3 2098
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Date Issued
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