PLAINS PIPELINE, L.P. — Notice of Probable Violation

party submissionOfficial PDF420075011_Operator Response_05232007.pdf#

420075011_notice letter_04182007_text.pdf, page 1Official PDFU. S. Department of Transportotion Pipeline and Hazardous Materlats Safety Administratioll erat S Gassner, Suins 111D Hansrnn, TX 77074 NOTICE OF PROBABLE VIOLATION and PROPOSED COMPI IANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED April 18, 2007 Mr. Harry N. Pefannis President Plains Pipeline, L. P. P. O. Box 4468 Houston, TX 77210 CPF 4-2007-5011 Dear Mr. Pefannis: On May 23 — 27, June 14 - 16 and 20 — 24, September 12 - 16, and October 24 — 28, 2005, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your Johnson Bayou to Sabine Pass System; Basin Pipeline System from Cushing, OK to Jal, NM; Red River System from Gushing, OK to Longview, TX; and your Ferriday System from Greensburg, LA to Delhi Station, LA. As a result of these 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: II195. 54 Accident reports. (a) Each operator that experiences an accident that is required to be reported under ('f195. 50 shall as soon as practicable but not later than 30 days after discovery of the accident, prepare and file an accident report on DOT Form 7000- 1, or a facsimile.#

420075011_notice letter_04182007_text.pdf, page 2At Sabine Pass, a 4 barrel spill on March 6, 2003, was not reported to DOT. Plains Pipeline, L. P (Plains) personnel thought the leaking seal on the pump at the tank header was iurisdictional to the Coast Guard. Coast Guard regulations did not require the reporting of the spill due to the spill's small volume that was totally contained on site. Plains personnel self reported the incident and submitted a copy of Plains' interne 'Spill Report' of the incident to the PHMSA representative. B. On the Ferriday System, a 3 barrel spill that occurred on September 18, 2005, at Canebrake Station was not reported to DOT within 30 days. On October 26, 2005, the PHMSA representative noticed evidence of a recent spill near tank 936 while performing a field inspection of the Canebrake Station. Plains personnel were able to show it had been reported to the Louisiana Department of Natural Resources, but not to DOT. $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 and handling abnormal operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to insure that the manual is effective. This manual shall be prepared before initial operations of a pipeline commence, and appropriate parts shall be kept at locations where operations and maintenance aictivities are conducted. A. (c) Maintenance and normal operations. The manual required by paragraplh (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (13) Periodically reviewing the work done by operator to determine the effectiveness of the procedures used in normal operation and maintenance and taking corrective action where deficiencies are found. On the Basin Pipeline System, Plains is failing to perform its annual review of personnel work to determine the effectiveness of its normal O&M procedures A reading of Plains' O&M Manual, Section 402, page 3 shows that Form 702 in Appendix C is used to meet the requirements of $195. 402(c)(13) and i3195. 403(b). Part of Section 402, page 3 is paraphrased below to show how failure to fill out Form 702 for each job classification each year results in a probable violation of $195. 402(c)(13). As per Plains' O&M Manual, Section 402, page 3; Form 702 in Appendix C. 'ANNUAL PERSONNEL TRAIIUING REVIEW', is to be filled out each year for#

420075011_notice letter_04182007_text.pdf, page 3each employee, and be evaluated to address the functional competencies of operation, maintenance, safety, and emergency procedures as they relate to each person's job classification. Form 702 had not been filled out for each employee for each of the last three years. It was observed that very few Form 702s had been filled out. $195. 430 Firefighting equipment. Each operator shall maintain adequate firefighting equipment at eaohi pump station and breakout tank area. The equipment must be- (aj In proper operating condition at all times; On the Basin Pipeline System, three fire extinguishers at Lindsey Station had not been maintained as required by Plains' O&M Manual, Section 419. During the Field Inspection at Lindsey station, it was discovered that there was no record of monthly inspections for 24 months, from May, 2003 to April, 20ti5, for three fire extinguishers. Monthly inspections of fire extinguishers are required in Plains' O&M Manual, Section 419. 5195. 404 Maps add Records. (bj Eat-hi operator shall maintain for at least 3 yesirs daily o peratting iresords that iindiicate- A. (1j Tihe discharge piressuse at each pump station; On the 18asin Pipeline System, Plains was not able to show the pressure history for the 'Basin Midland Discharge Pressure' for May 18, 2004. The Midland Station discharge pressure history of May 18, 2004, as recreated from SCADA records does not accurately represent the probable actual pressures on that date. (2j Any emergency or abnormal operation to wthlich the proceduires under C(1 95. 402 apply. On the Basin Pipeline System, the pressure history of the abnormal event of May 1, 2004 could not be shown as data from April 27 to May 4, 2004 was not retrievable.#

420075011_notice letter_04182007_text.pdf, page 4tt195. 412 Inspection of rights-of-way and crossings under navigable waters. (a) Each operator shall, at intervals not exceeding 3 weetts, but at least 26 times each calendar year, inspect the surface conditions on or adjaceitt to each pipeline right-of-way. Methods of inspection include walking, driving, flying or other appropriate mean of traversing the right-of-way. Qn the Basin Pipeline System, the Midland to Colorado City records show inspection gaps between February 17 and April 1, 2004 (44 days); May 14 artd September 29, 2004 (138 days); and September 29 and October 31, 2004 (52 days). Each of the three time spans are in excess of the 21 day maximum Mitig. -ition for one of the inspection gaps is that one of the pilots died in a plane crash, and several weeks of records were destroyed in the crash. Records indicate the entire pipeline is usually flown weekly. %1 95. 426 Valve maiintenianice. (c) Each operator shall provide protection for each v;alve from unauthorized operation and from vandalism. A number of the Plains Pipeline LP pipeline valves do not have protection from vandalism at the sites The valves were chained and locked to prevent unauthorized use, but these locations did not provide any deterrence against vandalism. Local personnel did provide additional information regarding this issue. During the inspections it was noted that Plains' preferred method of complying with 195. 420(c) is to install locked chain link fencing around the va ves. Tnis was evident in the four Plains units that were inspected, where the ma)ority of above ground valves were located in locked fences. Some of the remaining valves in those units were located above ground with no fences. The number of above ground valves that were observed without fences by the inspector on the four units exceeded five, and the lack of fencing was pointed out to Plains personnel at the time of the inspections. It should be pointed out that all of the unfenced valves were chain locked and most had steel barricade posts installed. A review of your procedures by car inspectors did not reveal any alternative method of security for valve cites acceptable to you. Plains should review their program, procedures, and facilities to ensure they are compliant with this regulation.#

420075011_notice letter_04182007_text.pdf, page 56. ()195. 581 Which pipelines must I protect against atmospheric corrosion . . (a) You must clean and coat each pipeline or portion of pipeline that is exposed to the atmosphere, except pipe!ines under paragraph (c) of this section. (b) Coating material must be suitable for the prevention of atmospheric coi I'os ton. On the Red River System, four spans, at RL 77. 84, MP 22. 39, RL 66. 4, and RL 46. 9, were not properly coated for prevention of atmospheric corrosion During the Field Inspection, the span at RL 77. 84 had subsurface coating in poor condition, the span at MP 22. 39, Hwy 74, was bare exposed pipe across a ditch; the span at RL 66. 41, N of Hall Rd, was about 50' of bare pipe across a 30' deep gulley; and the span at RL 46. 9, creek span N side CR 5060, was about 50' of bare pipe across a 12' deep creek. It is noted that a 'Mitigation Plan for Red River East Pipeline Pipe Exposures' was submitted following the inspection. Pro osed Com liance Order Pursuant to 49 United States Code g 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Plains, with respect to items 2 and 6. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this fdotice. With respect to items 1, 3, 4, and 5, we have reviewed the circumstances and supporting documents involved in this case and have decided not to conduct additional enforcement aotiion or penalty assessment proceedings at this time. We advise you to promptly correct these items. Be advised that failure to do so may result in Plains being subject to additional enforcement action. Res onse To This Notice Enclosed as part of this Notice is a document entitled Response Options for Pipehne Otferatdrs in Compliance Proceedings. Please refer to this document and note the response opttorite Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U. S. C. 552(b), along with the complete original document you must provide a second a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you should believe the redacted information qualifies for confidential treatment under 5 U. S. C. 552(b) If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your rights to contest the allegations in this Notice and authonzes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order.#

420075011_notice letter_04182007_text.pdf, page 6In your correspondence on this matter, please refer to CPF 4-2007-5011 and for each document you submit, please prowde a copy in electronic format whenever possible. Sincerely, R. M. Seeley Director, Southwest Region Pipeline and Hazardous Materials Safety Administration Enclosure: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings#

420075011_notice letter_04182007_text.pdf, page 7PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code g 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Plains Pipeline, L. P. a Compliance Order incorporating the following remedial requirements to ensure the compliance of Plains Pipeline, L. P with the pipeline safety regulations: In regard to Item Number 2 of the Notice, pertaining to periodically reviewing work done by the Operator to determine the effectiveness of the procedures; you will submit copies of Form 702 for each employee associated with the Basin Pipeline System The Forms will be completed in accordance with your O&M Manual. You will also submit a letter describing how the Forms were used to determine the effectiveness of the procedures used in normal operation and maintenance and taking corrective action where deficiencies are found. The Forms and the letter will be submitted to this office within 30 days following receipt of the Final Order. In regard to Item Number 6 of the Notice pertaining to proper coating of exposed spans for prevention of atmospheric corrosion, you will perform an audit to ensure that Plains is in compliance with $195. 581. This audit shall consist of: A. Review all applicable procedures and amend as necessary. B. Survey all applicable segments of Plains pipe lines, paying particular attention to pipe spans to ensure that they are protected from atmospheric corrosion, and meet applicable procedures. C. Based upon the review and survey, develop a plan for repairing/recoating of facilities to bring Plains into compliance. Results of surveys and plans, with time tables, must be submitted to Mr. R. M. Seeley, Director, Southwest Region, within 30 days following the receipt of the Final Order. All Items shall be completed within 90 days following receipt of the final Order. Plains Pipeline, L. P. shall maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Mr. R. M. Seeley, Director, Southwest Region, Pipeline and Hazardous Materials Safety Administration. Costs shall be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analysis, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure#

420075011_final order_11072008_text.pdf, page 1Official PDFU S Department of Transportation Pipeline and Hazardous Materials Safety Administration 1200 New Jersey Ave S E Washington DC 20590 No'It' 7 gp08 Mr. Harry N. Pefannis President Plains Pipeline, L. P. 333 Clay St. Suite 1600 , Houston, TX 77002 Re: CPF No. 4-2007-5011 Dear Mr. Pefannis: Enclosed is the Final Order issued in the above-referenced case. It makes findings of violation, specifies certain actions to be taken to comply with the pipeline safety regulations, and acknowledges that Plains Pipeline has completed other actions specified in the Notice. When the terms of the compliance order have been completed, as determined by the Director, Southwest Region, this enforcement action will be closed 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, Jeffrey D. Wiese Associate Admmistrator for Pipeline Safety Enclosure cc: Mr. R. M. Seeley, Director, Southwest Region, PHMSA CERTIFIED MAIL — RETURN RECEIPT RE UESTED#

420075011_final order_11072008_text.pdf, page 2U. S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D. C. 20590 In the Matter of Plains Pipeline, L. P. , Respondent. CPF No. 4-2007-5011 FINAL ORDER On May 23-27, June 14-16 and 20-24, September 12-16 and October 24-28, 2005, pursuant to 49 U. S. C. $ 60117, a representative of the Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of the following lines operated by Plains Pipeline, L. P. (Plains or Respondent): Johnson Bayou to Sabine Pass; Basin Pipeline System between Cushing, Oklahoma, and Jal, New Mexico; Red River System between Cushing, Oklahoma, and Longview, Texas; and the Ferriday System from Greensburg, Louisiana, to Delhi Station, Louisiana. Plains, a subsidiary of Plains All American Pipeline, L. P. , is engaged in the interstate pipeline transportation of crude oil and refined petroleum products. As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated April 18, 2007, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C. F. R. $ 190. 207, the Notice proposed finding that Respondent had committed violations of 49 C. F. R. )$ 195. 402(c)(13) and 195. 581(a) and proposed ordering Respondent to take certain measures to correct the alleged violations. The Notice also proposed finding that Respondent had committed other probable violations of 49 C. F. R. )( 195. 54(a), 195. 430(a), 195. 404(b)(1) and (2), 195. 412(a), and 195. 420(c) and warned Respondent to take appropriate corrective action to address them or be subject to future possible enforcement action. Respondent responded to the Notice by letter dated May 23, 2007 (Response). Respondent provided comments regarding the alleged violations and proposed compliance order, as well as information concerning the corrective actions it had already taken to comply with the cited safety regulations. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C. F. R. Part 195 as follows:#

420075011_final order_11072008_text.pdf, page 3Item 2A: The Notice alleged that Respondent violated 49 C. F, R $ 195, 402(c)(13), 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 and handling abnormal operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to insure that the manual is effective. This manual shall be prepared before initial operations of a pipeline system commence, and appropriate parts shall be kept at locations where operations and maintenance activities are conducted. . . . (c) Maintenance and normal operations The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations;. . . (13) Periodically reviewing the work done by operator personnel to determine the effectiveness of the procedures used in normal operation and maintenance and taking corrective action where deficiencies are found. . . . The Notice alleged that Respondent violated 49 C. F. R. $ 195. 402(c)(13) by failing to follow its own procedures, which required an annual review of the work performed by Plains' personnel to determine the effectiveness of Respondent's normal operations and maintenance (OEM) procedures. According to its OAM Manual, Respondent's personnel were supposed to fill out Form 702 (" Annual Personnel Training Review" ) each year for every employee in order to address their finictional competencies of operation, maintenance, safety, and emergency procedures under $ 195. 402(c)(13). The OPS inspector observed that Form 702 had not been filled out for each employee for the last three years. The inspector further observed that very few Form 702s had ever been filled out. In its Response, Plains did not contest this Item but submitted information requested by OPS pursuant to the proposed compliance order. Accordingly, I find that Respondent violated 49 C. F. R. $ 195. 402(c)(13) by failing to follow its procedures and perform periodic reviews of the work done by personnel to determine the effectiveness of the procedures used in normal OAM. Item 6: The Notice alleged that Respondent violated 49 C. F. R. $ 195. 581(a), which states: g 195. 5S1 Which pipeliues must I protect against atmospheric corrosion and what coating material may I use? (a) You must clean and coat each pipeline or portion of pipeline that is exposed to the atmosphere, except pipelines under paragraph (c) of this section. (b) Coating material must be suitable for the prevention of atmospheric corrosion. (c) Except portions of pipelines in offshore splash zones or soil-to-air interfaces, you need not protect against atmospheric corrosion any pipeline for which you demonstrate by test, investigation, or experience appropriate to the environment of the pipeline that corrosion will— (1) Only be a light surface oxide; or (2) Not affect the safe operation of the pipeline before the next scheduled inspection.#

420075011_final order_11072008_text.pdf, page 4The Notice alleged that four spans of exposed pipe on Respondent's Red River System were not properly coated for prevention of atmospheric corrosion. Specifically, the span at RL 77. 84 had subsurface coating in poor condition; the span at MP 22. 39, Highway 74, had bare exposed pipe across a ditch; the span at RL 66. 41, north of Hall Road, had approximately 50 feet of bare pipe across a 30-foot-deep gully; and the span at RL 46. 9, on the creek span north of CR 5060, had approximately 50 feet of bare pipe across a 12-foot-deep creek. In its Response, Plains did not contest this allegation and did not demonstrate by test, investigation, or experience appropriate to the environment of the pipeline that corrosion will: only be a light surface oxide; or not affect the safe operation of the pipeline before the next scheduled inspection. Accordingly, I find that Respondent violated 49 C. F. R. $ 195. 581(a) by failing to clean and coat each portion of pipeline exposed to the atmosphere with a coating material suitable for the prevention of atmospheric corrosion. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 2A and 6 in the Notice for violations of 49 C. F. R. $$ 195. 402(c)(13) and 195. 581(a), respectively. Under 49 U S. C. $ 60118(a), each person who engages in the transportation of gas or hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. With regard to Item 2A, Respondent submitted information indicating that Plains had procedures in place to review periodically the work of its personnel to determine the effectiveness of its procedures used in normal operation and maintenance and in taking corrective action whenever deficiencies were found. These materials have been reviewed by the Director and found to satisfy the requirements of 49 C. F. R. $ 195. 402(c)(13). Therefore, no additional corrective action is necessary for Item 2A. With regard to Item 6, Respondent submitted information indicating that Plains had developed a mitigation plan subsequent to the inspection that included a survey of its facilities and a schedule of repairs over three years. However, Respondent's submittal lacked a detailed report on each of the 45 pipe exposure sites, including precise location, description of the corrective measures taken, or the dates that the work was performed or scheduled. Also, Respondent provided cost estimates for future repairs, rather than the actual cost of repairing the 45 pipe exposure sites. Accordingly, further action is required. Pursuant to the authority of 49 U. S, C. $ 60118(b) and 49 C. F. R. $ 190. 217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations. Respondent must— 1. In regard to Item 6 of the Notice pertaining to the four spans of exposed pipe, the results of Respondent's surveys and plans, with time tables, must be submitted to the Director within 30 days following the receipt of the Final Order.#

420075011_final order_11072008_text.pdf, page 52, In regard to Item 6 of the Notice pertaining to the four spans of exposed pipe, Respondent shall maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director within 30 days following the receipt of the Final Order. Costs shall be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies, and analysis; and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent demonstrating good cause for an extension. Failure to comply with this Order may result in administrative assessment of civil penalties not to exceed $100, 000 for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. WARNING ITEMS With respect to Items 1, 2B, 3, 4, and 5, the Notice alleged various probable violations of Part 195 but did not propose a civil penalty or compliance order for these items. Therefore, these are considered to be warning items. The warnings were for: 49 C. F. R. $ 195, 54(a) (Item I) — Respondent's alleged failure to report two accidents to DOT within 30 days; 49 C. F. R. $ 195. 430(a) (Item 2B) — Respondent's alleged failure for 24 months, from May, 2003 to April, 2005, to record monthly inspections for three fire extinguishers at Lindsey Station, as required by Respondent's OAM Manual, Section 419; 49 C. F. R. $ 195. 404(b)(1) and (2) (Item 3) — Respondent's alleged failure to maintain for at least three years daily operating records that indicate accurate discharge pump pressure histories, for May 1, 2004 and May 18, 2004, on the Basin Pipeline System; 49 C. F. R. $ 195. 412(a) (Item 4) - Respondent's alleged failure to inspect the surface conditions on the Basin Pipeline System right-of-way at intervals not exceeding three weeks; and 49 C. F. R. $ 195. 420(c) (Item 5) — Respondent's alleged failure to provide protection against vandalism at several valve sites. Respondent presented information in its Response showing that it had taken certain actions to address the cited items. Having considered such information, I find, pursuant to 49 C. F. R. ) 190. 205, that probable violations of 49 C. F. R. $ 195. 54(a) (Notice Item 1), 49 C. F. R. $ 195. 430(a) (Notice Item 2B), 49 C. F. R $ 195. 404(b)(1) and (2) (Notice Item 3), 49 C. F. R. $ 195. 412(a) (Notice Item 4) and 49 C. F. R. $ 195. 420(c) (Notice Item 5) have occurred and Respondent is hereby advised to correct such conditions.#

420075011_final order_11072008_text.pdf, page 6In the event that OPS finds a violation for any of these items 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 terms of the order, including any required corrective action and amendment of procedures, shall remain in full force and effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order shall be effective upon receipt. Jeffrey D. Wiese Associate Administrator for Pipeline Safety Date Issued#