# CITGO PIPELINE CO — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420075010
- **title:** CITGO PIPELINE CO — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2007-04-02
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.128, 195.406(b), 195.410(a)(1), 195.412(a), 195.420(c), 195.432(b), 195.573(d), 195.579(a).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-420075010.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420075010.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420075010
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420075010
**body:**

Notice of Probable Violation involving CITGO PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 195.128,  195.406(b),  195.410(a)(1),  195.412(a),  195.420(c),  195.432(b),  195.573(d),  195.579(a). The case was opened on 2007-04-02 and is reported as closed as of 2012-09-10. Proposed civil penalty: $94,000. Assessed civil penalty: $32,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420075010_Closure_09102012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/420075010_Closure_09102012.pdf

420075010_Closure_09102012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/420075010_Closure_09102012_text.pdf

420075010_Decision on Reconsideration_12292011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/420075010_Decision%20on%20Reconsideration_12292011.pdf

420075010_Decision on Reconsideration_12292011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/420075010_Decision%20on%20Reconsideration_12292011_text.pdf

420075010_FinalOrder_04142011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/420075010_FinalOrder_04142011.pdf

420075010_FinalOrder_04142011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/420075010_FinalOrder_04142011_text.pdf

420075010_Petition for Reconsideration_06102011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/420075010_Petition%20for%20Reconsideration_06102011.pdf

CPF 4-2007-5010 Citgo Pipeline Company NOPV PCP PCO.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/CPF%204-2007-5010%20Citgo%20Pipeline%20Company%20NOPV%20PCP%20PCO.pdf

cpf 4-2007-5010 citgo pipeline company nopv pcp pco_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/cpf%204-2007-5010%20citgo%20pipeline%20company%20nopv%20pcp%20pco_text.pdf

CPF 4-2007-5010 Citgo request for hearing_05042007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075010/CPF%204-2007-5010%20Citgo%20request%20for%20hearing_05042007.pdf

420075010_Closure_09102012_text.pdf

CERTIFIED MAIL – RETURN RECEIPT REQUESTED
September 10, 2012
Mr. Jim Sanders
General Manager, Terminal and Pipelines
CITGO Petroleum Corporation
1293 Eldridge Parkway
Houston, TX 77077
CPF 4-2007-5010
Dear Mr. Sanders
On April 14, 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued to CITGO Petroleum Corporation a Final Order in the above reference case. This order
included a Compliance Order and Civil Penalty assessment. Based on our review of the
documentation you provided and confirmation of payment of the civil penalty, it has been
determined that you have complied with terms of this order.
Accordingly, this case is now closed and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
R. M. Seeley
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
cc: Curtis L. Craig; Vice President & General Counsel, Explorer Pipeline

420075010_Decision on Reconsideration_12292011_text.pdf

DEC 29 2011
Mr. Jim Sanders
General Manager, Terminal and Pipelines
CITGO Petroleum Corporation
1293 Eldridge Parkway
Houston, TX 77077
Re: CPF No. 4-2007-5010
Dear Mr. Sanders:
Enclosed please find the Decision on Reconsideration issued in the above-referenced case. It
grants your Petition for Reconsideration, in part. Service of the Decision by certified mail is
deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Rod Seeley, Director, Southwest Region, OPS
Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS
Mr. Bruce Oakley, Partner, Hogan Lovells US LLP, 700 Louisiana Street,
Suite 4300 Houston, TX 77002
CERTIFIED MAIL – RETURN RECEIPT REQUESTED [71791000164203033168]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
______________________________
)
In the Matter of )
)
CITGO Pipeline Company, ) CPF No. 4-2007-5010
)
Petitioner. )
______________________________)
DECISION ON RECONSIDERATION
In an April 14, 2011 Final Order, I found that CITGO Pipeline Company (CITGO or Petitioner)
had committed several violations of the hazardous liquid pipeline safety regulations. I assessed
Petitioner a civil penalty of $82,000 and ordered the company to complete certain remedial
actions for committing those violations. On June 10, 2011, after receiving an extension of the
20-day filing deadline in 49 C.F.R. § 190.215(a), CITGO submitted this timely Petition for
Reconsideration (Petition).
Petitioner seeks reconsideration of two of the findings of violation and associated civil penalties
and compliance items in the Final Order. First, CITGO argues that I erred in finding that the
company violated 49 C.F.R. § 195.412(a) by failing to perform adequate inspections of the right-
of-way (ROW) for the Eagle Pipeline. Petitioner further argues that even if the evidence
substantiates that violation, the terms of the resulting compliance order are unlawful, and that its
sale of the Eagle Pipeline to Explorer Pipeline Company (Explorer) on October 31, 2007, has
rendered that aspect of this case moot. Second, CITGO argues that I erred in finding that it
violated 49 C.F.R. § 195.573(d) and (e) by failing to have adequate cathodic protection for the
aboveground breakout tanks at its Sour Lake Tank Farm. Petitioner asks that this finding of
violation be withdrawn, and that the associated $50,000 civil penalty be rescinded.
I am denying CITGO’s request for reconsideration of the finding that it violated the ROW
inspection requirements of 49 C.F.R. § 195.412(a). However, I am granting Petitioner’s request
for reconsideration of the finding that it violated the cathodic protection requirements of
49 C.F.R. § 195.573(d) and (e). The $50,000 civil penalty and associated compliance items for
that violation are withdrawn for lack of sufficient evidence.
Background
From February to June 2006, the Pipeline and Hazardous Materials Safety Administration
(PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of
CITGO’s facilities and records in Texas and Oklahoma. As a result that inspection, the Director,



3
Southwest Region, OPS (Director), issued to Petitioner, by letter dated April 2, 2007, a Notice of
Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice).
The Notice alleged that CITGO had committed several violations of the hazardous liquid
pipeline safety regulations. Two of those violations related to Petitioner’s failure to comply with
the ROW inspection requirements of 49 C.F.R. § 195.412(a) and cathodic protection
requirements in 49 C.F.R. § 195.573(d) and (e). The Notice proposed assessing the company a
total civil penalty of $94,000 and ordering Petitioner to perform certain remedial measures for
committing those violations. The Notice further proposed finding that CITGO had committed
certain other probable violations of 49 C.F.R. Part 195 and warning the company to take
appropriate corrective action to address them or be subject to future enforcement action.
Petitioner responded to the Notice by letters dated May 4, 2007 (Response) and June 25, 2007
(Supplemental Response). CITGO contested several of the alleged violations and the proposed
civil penalty amounts and compliance activities. Petitioner also requested a hearing, which was
held on July 24, 2007, at the PHMSA Southwest Region Office in Houston, Texas. Mr.
Christian A. Garza represented Petitioner as counsel. CITGO later submitted post-hearing
material for the record by letter dated August 23, 2007 (Closing).
On April 14, 2011, I issued the Final Order in this case. I found that Petitioner had committed all
but two of the alleged violations, assessed the company a reduced civil penalty of $84,000, and
ordered CITGO to take certain actions to comply with the hazardous liquid pipeline safety
regulations. On April 21, 2011, Petitioner’s new counsel, Mr. Bruce D. Oakley, asked for an
extension of the 20-day deadline for seeking reconsideration of the Final Order. 49 C.F.R. §
190.215. That request was granted, and on June 10, 2011, CITGO filed this timely Petition.
Petitioner seeks reconsideration of two of the findings of violation and associated civil penalties
and compliance activities in the Final Order. First, CITGO argues that I erred in finding that the
company violated 49 C.F.R. § 195.412(a) by failing to perform adequate inspections of the Eagle
Pipeline ROW. Petitioner further argues that even if the evidence substantiates that violation, the
compliance activities imposed in the Final Order are unlawful and, have become moot as a result
of its sale of the Eagle Pipeline to Explorer on October 31, 2007. Second, CITGO argues that I
erred in finding that the company violated 49 C.F.R. § 195.573(d) and (e) by failing to have
adequate cathodic protection for the aboveground breakout tanks at its Sour Lake Tank Farm.
Petitioner asks that this finding of violation be withdrawn, and that the associated $50,000 civil
penalty be rescinded. CITGO included a number of exhibits with its Petition in support of these
arguments.
Standard of Review
A respondent may petition the Associate Administrator for reconsideration of a final order.
Reconsideration is not a right of appeal or to seek a de novo review of the record.1
It is an
opportunity to present the Associate Administrator with previously unavailable information or to
request that any errors in the final order be corrected. Requests for consideration of additional
facts or arguments must be supported by a statement of reasons as to why those facts or
1 49 C.F.R. § 190.215(a)-(e).



4
arguments were not presented prior to the issuance of the final order. Repetitious information or
arguments will not be considered.
Analysis
I. Request for consideration of additional facts or arguments under
49 C.F.R. § 190.215(b).
Section 190.215(b) of the Pipeline Safety Regulations states that “[i]f the respondent requests the
consideration of additional or arguments, the respondent must submit the reasons they were not
presented prior to issuance of the final order.” CITGO included 26 exhibits with its Petition. Six
of those exhibits consist of materials submitted prior to the issuance of the Final Order in this
case, i.e., Petitioner’s Response, Supplemental Response, Closing, and certain attachments. Two
other exhibits contain documents related to the actions of Explorer, the operator who purchased
the Eagle Pipeline after the July 2007 hearing. The remaining exhibits contain a variety of
materials not submitted prior to the issuance of the Final Order, including:
• Excerpts from CITGO’s Non-Refining Operations Manual, dated February 2, 2006;
• A blank CITGO surface inspection report;
• ROW inspection logs from 2006 and 2007;
• An undated CITGO Pipeline Compliance List with information on its ROW inspection
program;
• Documents related to a September 2004 ROW maintenance contract between CITGO and
a third party, J B L Plant Services;
• An August 2005 service contract between CITGO and J B L Plant Services;
• Additional documentation, dated July and August 2006, on the ROW maintenance
contract between CITGO and J B L Plant Services.
• Invoices, purchase orders, and emails for ROW maintenance from J B L Plant Services to
CITGO from 2007;
• Work orders for ROW maintenance and clearing from June 2006 to August 2007;
• A May 10, 2011 third-party analysis of the cathodic protection program for the breakout
tanks at the Sour Lake Tank Farm;
• November 13, 2003, December 2, 2004, July 26, 2005, and September 26, 2006 facility
surveys for the Sour Lake Tank Farm; and
• Additional information, including prior inspection and operating reports, for the rectifier
at the Sour Lake Tank Farm.
With the exception of the two exhibits related to the activities of Explorer, CITGO did not
provide any explanation as to why the new exhibits submitted with its Petition should be
considered at this stage of the proceeding. Such an explanation is required under § 190.215(b).
Accordingly, I find that Petitioner did not comply with the requirements of § 190.215(b) and am
excluding Exhibits 1, 5, 6A-6B, 7A-7G, 10, 11A-11D, and 12A-12B from the record.
II. Request for reconsideration of the finding that CITGO violated the ROW
inspection requirements in 49 C.F.R. § 195.412(a).



5
CITGO seeks reconsideration of the finding that the company failed to perform adequate
inspections of the Eagle Pipeline ROW as required under 49 C.F.R. § 195.412(a). Specifically,
Petitioner contends that I erred in concluding that it was not contesting that allegations in the
Notice, and that I failed to require that PHSMA meet its burden of proof in sustaining that
finding of violation. CITGO further argues that I failed to consider all of the relevant
exculpatory and mitigating evidence, and that the company did not receive adequate notice of the
specific basis for its alleged violation of § 195.412(a). Petitioner also argues that even if the
evidence substantiates that allegation, the compliance activities imposed in the Final Order are
unlawful, and that its sale of the Eagle Pipeline on October 31, 2007, to Explorer Pipeline
Company renders the compliance order moot.
CITGO has not presented a persuasive basis for withdrawing this finding of violation. The
Pipeline Safety Regulations state, in relevant part:
§ 190.211 Hearing.
(a) A request for a hearing provided for in this part must be accompanied by a
statement of the issues that the respondent intends to raise at the hearing. The
issues may relate to the allegations in the notice, the proposed corrective action
(including a proposed amendment, a proposed compliance order, or a proposed
hazardous facility order), or the proposed civil penalty amount. A respondent's
failure to specify an issue may result in waiver of the respondent's right to raise
that issue at the hearing. . . .
In its hearing request, Petitioner did not object to the allegation that it violated the ROW
inspection requirements in 49 C.F.R. § 195.412(a). Rather, CITGO acknowledged in its
Response that “[t]he issue cited is that large trees overhanging the right-of-way obscure it from
aerial surveillance,” and “agree[d] that this is an important issue and will undertake a focused
inspection of its rights-of-way from the air to identify any areas that actually obscure the right-
of-way from aerial surveillance.” Petitioner also stated in its Supplemental Response that it was
“assessing its current canopy trimming program to reduce problem areas.” Such statements,
particularly in a document submitted by counsel, indicate that CITGO agreed with the merits of
the allegation of violation, not that the company disputed it.
Moreover, even if Petitioner intended to raise such an objection, the evidence of record supports
the finding of violation. As noted in the Violation Report, the OPS inspector observed areas of
overgrowth on the Eagle Pipeline ROW that would prevent the performance of adequate aerial
inspections, and CITGO’s employees stated those areas would be subject to ground surveillance
in the future. The OPS inspector also submitted photographic evidence of obstructed areas of the
Eagle Pipeline ROW near the North Arbuckle Block Valve, the West Trinity Block Valve,
Wynnewood Junction, the north Houston suburbs, and Milepost 87.6. Such evidence is more
than sufficient to sustain the alleged violation. Accordingly, I am denying Petitioner’s request
for reconsideration of the finding that it failed to perform adequate inspections of the Eagle
Pipeline ROW as required under 49 C.F.R. § 195.412(a).
With respect to CITGO’s remaining arguments, the terms of the compliance order do not
mandate that Petitioner perform aerial inspections of the Eagle Pipeline ROW. CITGO is merely
required to take certain steps, e.g., identification and clearing of overgrowth, to ensure that its
aerial inspections are being conducted in an appropriate manner. Nothing in the compliance



6
order precludes Petitioner from using other appropriate means of performing ROW inspections,
including ground surveillance.2
Nor has Petitioner’s sale of the Eagle Pipeline to Explorer Pipeline Company rendered the terms
of the compliance order moot. CITGO is the moving party and bears the burden of establishing
mootness,
3 i.e., that “[t]he controversy between the parties has thus clearly ceased to be ‘definite
and concrete’ and no longer ‘touch(es) the legal relations of parties having adverse legal
interests[,]’”4 and that it is “impossible . . . to grant ‘any effectual relief whatever’[.]”5 That is a
“heavy burden” where, as here, the allegation of mootness arises from the moving party’s own
voluntary conduct, i.e., Petitioner’s sale of the Eagle Pipeline.
6 In such a case, CITGO “bears
the formidable burden of showing that it is absolutely clear the allegedly wrongful behavior
could not reasonably be expected to recur[,]”7 and that “interim relief or events have completely
and irrevocably eradicated the effects of the alleged violation.”8
Petitioner states that it sold the Eagle Pipeline to Explorer on October 31, 2007, that CITGO no
longer has any authority to perform inspections of that pipeline ROW, and that Explorer has its
own program for complying with the requirements in § 195.412(a). Petitioner has also submitted
a September 30, 2009 letter from Explorer to OPS, which states that “Explorer has conducted an
aerial survey [of the Eagle Pipeline] to determine locations where ROW clearing needs to be
enhanced to facilitate weekly aerial patrol,” and that “[c]ertain ROW clearing has been
completed.”
The evidence provided is not sufficient to show that the sale of the Eagle Pipeline has
“completely and irrevocably eradicated the effects” of Petitioner’s violation of the ROW
inspection requirements. Explorer’s letter indicates that aerial inspections of the Eagle Pipeline
ROW are still being conducted, and that additional clearing of the ROW may be needed in
certain areas. This indicates that CITGO’s failure to comply with the requirements in
§ 195.412(a) is still adversely impacting the condition of the ROW. As important, the evidence
does not make “absolutely clear” that Petitioner has no obligation to ensure that these actions are
completed. The specific terms of CITGO’s transaction with Explorer are not of record in this
proceeding, including Petitioner’s obligations, if any, for conduct that arose prior to its sale of
2 PHMSA has broad discretion to ensure compliance with the Pipeline Safety Laws and Regulations, and in cases of
non-compliance such discretion can include requiring operators to take remedial actions that might not otherwise be
required in the absence of a violation. 49 U.S.C. § 60118.
3 Friends of the Earth v. Laidlaw, 528 U.S. 167, 189-90 (2000).
4 DeFunis v. Odegaard, 416 U.S. 312, 317 (1974) (per curiam) (quoting Aetna Life Ins. Co. v. Haworth, 300 U.S.
227, 240-41 (1937))
5 Church of Scientology of California v. U.S., 506 U.S. 9, 12 (1992) (quoting Mills v. Green, 159 U.S. 651, 653
(1895)).
6 Friends of the Earth, 528 U.S. at 189-190 (citing United States v. Concentrated Phosphate Export Assn., 393 U.S.
199 (1968); City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289 (1982)).
7 528 U.S. at 190.
8 Los Angeles County v. Davis, 440 U.S. 625, 631 (1979).



7
the Eagle Pipeline. Therefore, I find that CITGO has not met its heavy burden of establishing
that the terms of the compliance order are moot.
III. Request for reconsideration of the finding that CITGO violated the cathodic
protection requirements in 49 C.F.R. § 195.573(d) and (e).
CITGO requests reconsideration of the finding in the Final Order that it violated 49 C.F.R.
§ 195.573(d) and (e) by failing to have adequate cathodic protection for the aboveground
breakout tanks at its Sour Lake Tank Farm. Petitioner argues that OPS has not submitted the
evidence required to sustain that violation, i.e., that its case rests solely on the fact that one of the
four cathodic protection beds was out of service at the time of the inspection, but that the record
does not contain any evidence to show that the breakout tank was not receiving adequate
cathodic protection from the three remaining in-service beds.
I find CITGO’s arguments persuasive. OPS bears the burden of proof in an enforcement action
and must prove, by a preponderance of the evidence, that all of the elements necessary to sustain
a violation are present in a particular case.
that one of the four cathodic protection beds for the breakout tank at the Sour Lake Tank Farm
was out of service. However, the record does not contain any additional evidence, such as test
results or an expert opinion, to demonstrate that the breakout tank was not receiving adequate
cathodic protection from the three remaining beds. Accordingly, I am withdrawing the finding in
the Final Order that CITGO violated 49 C.F.R. § 195.573(d) and (e) by failing to have adequate
cathodic protection for the aboveground breakout tanks at its Sour Lake Tank Farm and
rescinding the $50,000 civil penalty for that violation.
9 As Petitioner notes, OPS’s case is based on the fact
RELIEF GRANTED
Based on the information provided in the Petition, a review of the relevant portions of the record,
and for the reasons stated above, I am withdrawing the finding in the Final Order that CITGO
violated 49 C.F.R. § 195.573(d) and (e) by failing to have adequate cathodic protection for the
aboveground breakout tanks at its Sour Lake Tank Farm and rescinding the $50,000 civil penalty
for that violation. The remainder of the Final Order is affirmed without modification.
This Decision is the final administrative action in this proceeding.
_____________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety
9 In the Matter of Alyeska Pipeline Service Co., Decision on Reconsideration, CPF No. 5-2005-5023, p. 4-5 (Dec.
16, 2009); In the Matter of Butte Pipeline Co., Final Order, CPF No. 5-2007-5008, p. 2, n. 3 (Aug. 17, 2009); see
Schaeffer v. Weast, 546 U.S. 49, 56-58 (2005).

cpf 4-2007-5010 citgo pipeline company nopv pcp pco_text.pdf

U. S. Oepartment
of Transportation
Pipeline and
Hazardous Sttatertats Safety
Admtnistratlon
8701 South Gessner, Suite 1110
Houston. TX 7707S
NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPI IANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
April 2, 2007
Jim Sanders
Vice President, Operations
Citgo Pipeline Company
1293 Eldridge Parkway
Houston, TX 77077
CPF 4-2007-5010
Dear Mr. Sanders:
During the weeks of February 6 — 10, March 6 - 10, April 3 — 7, and May 31 - June 2, 2006, a
representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA),
pursuant to Chapter 601 of 49 United States Code, inspected CITGO Pipeline Company's
(CITGO) operations and maintenance procedures, and records, and conducted field inspections
of your Sour Lake district pipelines and tank farm, the Eagle Line south pipeline unit, from
Houston to Arlington, TX, and the Eagle Line north pipeline unit from Arlington, TX to the
Drumrigrtt, OK area. An inspection of the Tulsa control center for the pipeline units was also
conducted as part of these standard inspections.
As a result of the inspections, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and
the probable violations are:
1. rJ 195. 128 Station Piping
Any pipe to be installed in a station that is subject to system pressure must meet the
applicable requirements of this subpart.



The regulation requires that materials for permanent installation in facility piping be
suitable, and meet the requirements of referenced standards. ABME B31. 4 does not list
rubberized, braided hoses as suitable for permanent installation in pipeline service.
Drag Reducing Agent (DRA) is introduced at a number of pump stations on the OITGO
pipeline systems. The DRA is pumped into the station piping from permanently located
tank and pump assemblies, but is being introduced into the pipeline system through
braided, rubber covered hoses, casually laid on the ground between pump and the
pipeline.
In addition, the rubber hoses laid on the ground present a tripping, or snagging safety
hazard.
2. &tf &35A06 Maximuiim operating pressure
b. No operator may permit the pressure in a pipe!ine during surges or other
varialio&ss from nord!el operations to exse, . di 1I10 percent of tltie operating
pressure lllmit establlished under paragraph (al of this sect(on. I=aoh operator
must provid'e adequate controls and protectlive equ!pnaent to cir&ntrr&l the
priessure within thiis limit.
Pipeline must be protected against over pressures and surges that would exceed ';l10%
of the MOP established for the pipeline Adequate controls and protective equipment to
control the pressure within this limit must be prowded. CITGO was unable to provide
documentation that surge pressures have been car&side!ed:, . rtr that' t'lie pigsk!Ine is
adequately protected from surges.
3. &9 595A10 Line markers
(a!' Except ss providled' in pasagraph (9&]& of this section, sxach &rperatoi shall
place andi m&sintaiin line markers over eaclh buiried pi&pelfne In adcorr!;anccx with the
fallowing:
(0;I Markers midst be located at each put&lip road crossing, at each railroad
a&rossing, , snd In sufficient number along the r&areain der of. eacih buir led Itrte so that
its location is aiccurately known.
CITGO does not have sufficient markers along their pipelines in some areas. When
crossing cultivated agricultural fields, often the markers on the far side of the field could
not be seen. From Valve sites, looking in both directions, the next marker for i"e
pipeline could not be seen. The pipeline markers across Northgate Forest golf course
are flush mounted markers The markers are from Area Pipeline, and the phone
numbers on the markers are no longer valid.



4. It 195. 412 Inspection of Right of Way
(a) Each opet'ator shall. at iritel'va'Is not ettceefftpg 3 weeks, bgt at leakii 26 times
each calendar year, Inspect the sitrfaaa Condihiona gn or adjacent to qpgii pipeline
rightmf-way. Methodis of inspect!on !ncltttie vs(king, dr(vir&g, flyihg or other
appropriate mean of traver'sing the rigl;t-of vtra„.
In order to perform pipeline surveillance, the right of way must ". 8 i'naintained so that the
ROW is clearly visible by the means of surveillance employed. Aerial surveillance is the
primary method of pipeline patrolling used by CITQO. Many areas of Cl JGG's pipelines
have ROW areas that are lined with targe trees The treeS liave branches that overhang
the ROW, and form a canopy that obscures the pipeline ROW from observation by aerial
surveillance. Some areas are overgrown with deep brush and grass that should be
cleared to allow clear observation of the ROW during surveillance, and to allow visibilily
of pipe ine markers.
5. 4r 19. '5. 42ll Valjve Mainftenance
(c) IEacki operator shall provide protection for each valve from t!Nattfthorized
operatic. ni and fromm vandalism.
A number of the CITGO pipeline valves do not have protection from vandalism at the
sites. The valves were chained and locked to prevent unauthorized use, but these
ocations did not provide any deterrence against vandalism. I-ocal personn"-. did provi~
additional information regarding this issue.
During the inspections it was noted that CITG&&s preferred method of complying wit", I
195. 420(c) is to install locked chain link fencing around the valves. This was evident in
the three CITGO units that were inspected, where the majority of above ground valves
were located in locked fences.
Stime of the remaining valves in those units were located above ground with no fences.
i4 number of above ground valves that were observed without fences by the inspeclc~ FA'
the three Texas and Oklahoma units, and the lack of fencing was pointed out to C ITiiGO
personnel at the time of the inspections.
It should be pointed out that a of the unfenced valves were i tain locked and most. htfd'
steel barricade posts installed. A review of your procedures by our inspectors did'rL'hatt
reveal any alternative method of security for valve sites acceptable to you Ci!TiG&
should review their program, procedures, and facilities to ensure they are compliant with
this regulation.
6. g95:432 Breakout tar &ks.
(b) Each opetratnr shallins pi!. t. tie It, itysi cal intpgrtty of ln-a@vice atmoflPheric
arcr' Inw pass ue s: teel, atsvegrouna breako utltanirs according to akctton. 4, nf API
X'ttrrdtnt d653', Hnvever, . if;structural conditio nb' i prevent access to, i!he tat ik bottom,
3



the bottom integrity may be assessed according to a piap included in the
operations and maintenance manual uhider t)195. 402tc)(3).
(d) The intervals of inspection Speotfled by documents refehenqed in
paragraphs (b) and (c) of this seiction begin on May 3. 1999, or on the opargtor's
last recorded date of the inspection, whichiever' is cacti„r.
A number of tanks at the Sour Lake facility, Fauna Station, and Arlington Station have
items that are out of compliance with API-653. Most of these arise from items that are
being missed during monthly inspections The purpose of the monthly inspections is to
catch minor items, such as vegetation growing adjacent to tanks, wa'bouts of sttbegi'
from under tank bottom or animal burrows, cracks in concrete nng wall, leaks or diiba at
mixers or flanges, etc These items should be noted in the monthly inspections, sis well
as other items, as listed in the API-653 checklist. Once noted, the items should be
resolved prior to the next inspection, or a reason given for why the item was not
resolved.
Regulations require that the operator of pipeline breakout tanks adopt an API-653 Istql;
inspection schedule, and inspect breakout tanks on a frequency prescribed in the
standard. CITGO has adopted the API-653 tank inspection standard, but has not met
the required tank inspection frequency, as required by the standard and regulation.
Two tanks are overdue for their out of service internal inspections. Eight tanks have
been missed for the in-service external inspections, and it appeeii's that eight tanks have
been missed for their UT inspections. This information is based upon the operator's
records for 'enk inspections.
7, $1195. 573 Iitfhat must I do to itnociltror tecterntcj corrosion COntrolg
(d) Breaks. ut I;an)rs. 'You mus t (inspect eac'h sathcitfie prot~ttion, sysfpm used, to
co ntrol corresiorri on the bottom ctf an atto vegroutid' breakout (isnk to ensure that
operatjenn and maintenance ef the sya4ern are in accordance vyifh, API
Recomoxenided Pracfice 651. However, tltiis ittsspectktn is not requitiad ilf you note
in the crtrrositon contrctl procWurssx cstaitdtshecl uindeti, Sec. 1I94 402(iclt3) why
ciomp'liance wdhi alP or certain'. opettatiort and nItsettenance previsions of API
Recorntnended Pracfiice 651 is n~ol necessary forithy safety oftlltitsftank, ,
(e) Correct(ve action. Youi umst ccxrrwt any fdiritttified deficiency in corrosion
control as renviuiredl by Sec. . 1f!5401'(bx):. IRowever, ,
lf the dfjficiansy involves, a
pipeline ih an ibilegrity mar raacimctitt. procqract urtder Sec. 195. 452, you must
correct the deffciieincy as required by Siec. 1ic)5. 452tfti).
Regulation requires that the operator of pipeline breakout tanks maintain a cathodic
protection system on their breakout tanks which is in accordance with AF:. IMP-651. The
regulations also require that if there is an identified deficiency, it must be corrected
within a reasonable time.



Citgo discovered that tank farm rectifier/ground bed, Srbu'r' I ake ¹3, had failed in
October 2003. The records indicate that the system was failing as early as December
2002. As of the standard inspection conducted February 6 - 10, 2006, the Sour Lake
¹3 system was still down, and not providing Cathedic Protection to the tank farm. The
system has been failing or out of service for over -1 years, without correction.
8. II195. 579 What tnust I do to miticiate internal corrosion?
(a} General, . If you transport any llih", slrtlous liquid or carbon dig)ride '„habit would
coirroitie tbe pipeline, you must invesfi$Iate the corfos;ve effect rf the I)azardous
liquid or carbohi dioxide on the pipellihe arid take adequate steps fo mitigate
intertsali corrosion,
CIYGO Pipeline has not performed adequate investigations of the corrosivity of the
products on their pipelines and facilities. The operator has not performed inspections on
dead legs, low points, facility and non-piggable pipe, and downstream of supplier taps. The
operator also does not have adequate monitoring, and monitoring points that are insta led
are installed incorrectly.
Pro osed Civil Penalt
Under 49 Unifed' States Code, g 60122, you are subject to a civil penalty not to exceed
$100, 000 for each vio ation for each day the violations persists up to a maximum of $1, 000, 000
for any related series of violations. The Compliance Officer has reviewed the circumstances
and supporting documentatiori involved in the above probable wolation(s) anti
recommended that you be preliminanly assessed a civil penalty of $94, 000 as follows:
Item number
(1]
(6]
(7)
FEALTY
$:, '2:000]
$32, 000
$50, 000
W~il t
With respect to item 5 we have reviewed the circumstances and supporting documents involved
in this case and have decided not to conduct additional enforcement ai".
. Ibn or penal'y'
assessment proceedings at this time. We advise you to promptly cirrect these item(s).
advised that failure to do so may result in CITGO Pipeline Company being subject to additioi, al
enforcement action.
Pro osed Com liance Order
With respect to items 1, 2, 3, 4, 6, 7, and 6, pursuant to 49 United States 'Code g 60116 the
Pipe ine and Hazardous Materials Safety Administration propose '':4' I&'ue a' t'ompliance Ckder
to CITGO Pipeline Company. Please refer to the Proposed i. omp//ance Order whicn is
enclosed and made a part of this Notice.



Res onse to this Notice
Enclosed as part of this Notice is a document entitled Response O)5tlr)ns for Pipetirid Voerators
in Compliance Proceedings. Please refer to this document antj rioti' '. tie respor'5" offttons. Be
advised that all matenal you submit in response to this entorcement action is subject to b '
g
made publicly available If you believe that any portion of your responsive material qualifies fb'k
confidential treatment under 5 U. S. C. 552(b), along with the complete original documeri' ~c"j
must provide a second copy' df the document with the portions you believe qua', ify fo, '
confidential treatment redacted aih'd an explanation of why you believe the redacted inforiftgt'Gri
qualifies for confidential treatment under 5 U. S. C. 552(b). If you dC r)c&t I'espond within 30 days
of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this
Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as, ieged in
this Notice without further notice to you and to issue a Final Order
In your correspondence on this matter, please refer to CPF 4~F7 I" O and for each document
you submit, please prowde a copy in electronic format whenever possib e.
Sincerely,
R trt, Saeley
Director, Southwest Region
Pipeline and Hazardous
Materials . efety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Comptrancr. ' P'oceedings



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code g 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to CITGO Pipeline Company a Compliance Order
incorporating the following remedial requirements to ensure the compliance of ITGO Pipeline
Company with the pipeline safety regulations:
Regarding item Number 1 of the Notice, CITGO must inspect all of their pipeline
systems to locate areas using temporary hose/ piping in permanent Iodatiene.
Provide a plan to re-pipe the locations with piping that comply with standards,
recommended practices and regulations. Provide the results of the analysis to
PHMSA Based on the results, CITGO should implement any modifications
necessary to assure that the pipelines are compliant with (~95. 128.
In regard to Item Number 2 of the Notice, CITGO must perform the necessary
hydraulic analysis including the consideration of surges to insure that their pipelines
will not be over pressured during normal operations. Provide the results of the
analysis to PHKRSA. Based on the results, CITGO should implement any
modifications necessary to assure that the pipelines are compliant with $195. 406(b).
In regard to Item Number 3 of the Notice, pertaining to CITGO's pipeline systems,
perform an inspection of all pipelines to locate areas lacking sufficient markers. If
there are areas where it is impractical to place markers, or because the markers are
removed or plowed under by the landowner, an alternativia method of ensuring the
safety of the public and the pipeline should be developed. In areas where fhefe' are
insufficient markers, develop a plan and time table to place markers to ensure
Cl I GO is in compliance with $195. 410(a)(1).
In regard to Item Number 4 of the Notice, pertaining to CITGQ's pipeline systdmS,
perform an inspection of all pipelines to locate areas where ROW is over grown with
brush or tall grass, or areas where the ROW is overgil'owri by a canopy firWi
surrounding trees, preventing visibility from aerial surveila'fit. Develop a plan Nff@
time table to clear brush and canopy from ROW to ensure that C"-ITGO is in
compliance with $195, 412(a). Until the ROW can be clea'red' a'nd made suitable for
aerial surveillance, develop an alternative surveillance method for affected areas.
In Regard to Items Number 6 of the Notice, pertaining tc GITGO's pipeline systems,
review CITGO's Tank Inspection program, Develop a plan arid time tab e to inspect
tanks that have been missed, and ensure that inspections are performed according
to the required schedules in the future. Ensure that monthly inspections note items
as required by API 653, and that the items are addressed prior to sequential
inspections. Ensure that inspection report documentation )La eiotnplete, and tl at items
from all inspection reports are addressed, and documenrtedI, so that CITGO is in
compliance with II195. 432 and referenced API 653.
In regard to Item Number 7 of the Notice, pertaining to Cl I~~O's pipeline systems,
review C:ilTGO's CP data collection and evaluation to ensuire tliat if CP systems need
repair or replacement, they are addressed promptly and tltiant the pipelines and tarik~
are protected. Develop a plan and time table to replace iiin&dequate iCP systems to
bring CITGO into compliance with $195. 573.



7. In regard to Item Number 8 of the Notice, pertaining to CITGO's pipeline systems,
perform an assessment to fully determine the corrosive effect of the transported
products on pipelines and all facilities. If there are areas that would be susceptible to
internal corrosion, perform inspections, install monitoring, and if active corrosion is
determined, implement mitigation methods to ensure that CITGO is in compliance
with $195. 579.
8, CITGO shall maintain documentation of the safety improvement costs associated
with fulfilling this Compliance Order and submit the total to R. M. Seeley, Director,
Southwest Region, Pipeline and Hazardous Materials Safety Administration. Costs
shall be reported in two categones: 1) total cost associa
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