{"operation":"document","citation":"CPF 420075050","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":"2007-12-20","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(a), 195.410(a)(1), 195.420(b), 195.420(c), 195.432(b), 195.436, 195.573(d).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420075050.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420075050.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420075050","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420075050","body":"Notice of Probable Violation involving MAGELLAN PIPELINE COMPANY, LP. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.410(a)(1),  195.420(b),  195.420(c),  195.432(b),  195.436,  195.573(d). The case was opened on 2007-12-20 and is reported as closed as of 2010-07-13. Proposed civil penalty: $66,000. Assessed civil penalty: $66,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420075050_Closure_07132010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075050/420075050_Closure_07132010.pdf\n\n420075050_Closure_07132010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075050/420075050_Closure_07132010_text.pdf\n\n420075050_Final Order_12282009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075050/420075050_Final%20Order_12282009.pdf\n\n420075050_Final Order_12282009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075050/420075050_Final%20Order_12282009_text.pdf\n\n420075050_nopvpcppco_12202007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075050/420075050_nopvpcppco_12202007.pdf\n\n420075050_Operator Request for a Hearing_01222008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420075050/420075050_Operator%20Request%20for%20a%20Hearing_01222008.pdf\n\n420075050_Final Order_12282009_text.pdf\n\nDEC 28 2009\nMr. Richard A. Olson\nSenior Vice President, Operations and Technical Services\nMagellan Midstream Partners, L.P.\nMagellan Pipeline Company, L.P.\nOne Williams Center, MD-27\nTulsa, OK 74172\nRe: CPF No. 4-2007-5050\nDear Mr. Olson:\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation\nand assesses a total civil penalty of $66,000. The Final Order also specifies actions that\nMagellan needs to take to comply with the pipeline safety regulations. The penalty payment\nterms are set forth in the Final Order. When the civil penalty has been paid and the terms of the\ncompliance order completed, as determined by the Director, Southwest Region, this enforcement\naction will be closed. Service of this document is in accordance with 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Rod M. Seeley, Director, Southwest Region, PHMSA\nVIA CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2464 5805]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nMagellan Pipeline Company, L.P., ) CPF No. 4-2007-5050\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn August 8-11, August 14-18, and October 24-26, 2006, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of Magellan Pipeline Company, L.P.’s (Magellan or Respondent) Longhorn Partners\nPipeline system (Longhorn Pipeline) near El Paso, Texas, as well as the Magellan Operations\nControl Center in Tulsa, Oklahoma. Magellan, a subsidiary of Magellan Midstream Partners,\nL.P., operates approximately 10,000 miles of pipelines in the United States, transporting refined\npetroleum products, highly volatile liquids, and crude oil. The 700-mile Longhorn Pipeline\ndelivers refined petroleum products from Galena Park to El Paso, Texas.\nAs a result of this inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated December 20, 2007, a Notice of Probable Violation, Proposed Civil\nPenalty and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Respondent had committed certain violations of 49 C.F.R. Part 195\nand proposed assessing a civil penalty of $66,000 for the alleged violations. The Notice also\nproposed ordering Respondent to take certain measures to correct the alleged violations. In\naccordance with 49 C.F.R. § 190.205, the Notice further proposed finding that Respondent had\ncommitted certain other probable violations of 49 C.F.R. Part 195 and warning Respondent to\ntake appropriate corrective action to address them or be subject to future enforcement action.\nRespondent responded to the Notice by letter dated January 22, 2008 (Response). Respondent\ninitially requested a hearing “to discuss the interpretations applied in the inspection upon which\nthe [Notice] is based, the requirements set forth in the Proposed Compliance Order, and the\nproposed civil penalty.” In accordance with § 190.211, a hearing was scheduled for January 28,\n2009; however, by letter dated January 16, 2009, Magellan withdrew its request for a hearing,\nthereby waiving its right to one and authorizing the entry of this final order based on the case\nfile.\n\n\n\n2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.410, which states:\n§ 195.410 Line markers.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall place and maintain line markers over each buried pipeline in\naccordance with the following:\n(1) Markers must be located at each public road crossing, at each\nrailroad crossing, and in sufficient number along the remainder of each\nburied line so that its location is accurately known . . . .\nThe Notice alleged that Respondent violated § 195.410(a)(1) by failing to place and maintain\nline markers over each buried pipeline in sufficient number so that its location would be\naccurately known. In addition, the Notice alleged Respondent failed to comply with relevant\nprovisions in the company’s Longhorn Mitigation Plan (LMP), which specified additional\nevidence, indicated the pipeline did not appear to have an adequate number of markers. The\nNotice stipulated that Magellan had made some improvements since the date of the OPS\nprocedural requirements pertaining to pipeline markers.\nmarking requirements.1 Observations during the OPS inspection, as well as photographic\ninspection, but that the company needed to ensure full compliance with the regulatory and\nIn its Response, the company contended that “Magellan’s response may include but not\nnecessarily be limited to presenting information that applicable regulatory and procedural\nrequirements were being met.” Respondent, however, did not present any further information,\neither in its Response or subsequent letter withdrawing its request for a hearing. Therefore, after\nconsidering all the evidence, I find that Respondent violated 49 C.F.R. § 195.410(a)(1) by failing\nto place and maintain line markers over each buried pipeline in sufficient number so that its\nlocation would be accurately known.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.432, which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) . . . .\n(b) Each operator shall inspect the physical integrity of in-service\natmospheric and low-pressure steel aboveground breakout tanks according\nto section 4 of API Standard 653. However, if structural conditions\nprevent access to the tank bottom, the bottom integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3) . . .\n1 The LMP, dated September 2000, as amended, consists of detailed commitments and mitigation measures for the\nLonghorn Pipeline that address environmental and safety concerns raised by Federal agencies and the general public\nduring an environmental assessment of the Longhorn Partners Pipeline system. The LMP is incorporated into\nMagellan’s manual of written procedures for the operations and maintenance of the Longhorn Pipeline. Respondent\nis required to comply with such procedures pursuant to 49 C.F.R. § 195.402.\n\n\n\n3\nThe Notice alleged that Respondent violated § 195.432(b) by failing to inspect the physical\nintegrity of in-service atmospheric and low-pressure steel aboveground breakout tanks according\nprevent minor foundation cracks from becoming future structural problems.\nto section 4 of API Standard 653.2 Observations and photographs taken during the OPS\ninspection indicated a number of cracks in the foundations of breakout tanks that had not been\naddressed according to section 4 of API Standard 653, which requires measures be taken to\nIn its Response, the company contended that “Magellan’s response may include but not\nnecessarily be limited to presenting information with respect to applicable regulatory\nrequirements and factual matters.” Respondent, however, did not present any further\ninformation. Therefore, after considering all the evidence, I find that Respondent violated 49\nC.F.R. § 195.432(b) by failing to inspect the physical integrity of certain aboveground breakout\ntanks according to section 4 of API Standard 653.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.573, which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) . . . .\n(d) Breakout tanks. You must inspect each cathodic protection system\nused to control corrosion on the bottom of an aboveground breakout tank\nto ensure that operation and maintenance of the system are in accordance\nwith API Recommended Practice 651. However, this inspection is not\nrequired if you note in the corrosion control procedures established under\n§195.402(c)(3) why compliance with all or certain operation and\nmaintenance provisions of API Recommended Practice 651 is not\nnecessary for the safety of the tank . . . .\nThe Notice alleged that Respondent violated § 195.573(d) by failing to inspect each cathodic\nprotection system used to control corrosion on the bottom of aboveground breakout tanks, to\nensure that operation and maintenance of the system were in accordance with API\nRecommended Practice 651.3 Pipe-to-soil cathodic protection readings taken during the OPS\ninspection, as well as in Respondent’s own records, indicated the bottom of some aboveground\nbreakout tanks did not meet either the -850mV or the 100mV criteria specified in API\nRecommended Practice 651.4\nIn its Response, the company contended that “Magellan’s response may include but not\nnecessarily be limited to presenting information with respect to applicable regulatory\nrequirements and factual matters.” Respondent, however, did not present any further\ninformation. Therefore, after considering all the evidence, I find that Respondent violated 49\nC.F.R. § 195.573(d) by failing to inspect each cathodic protection system used to control\n2 American Petroleum Institute (API) Standard 653, “Tank Inspection, Repair, Alteration, and Reconstruction,” is\nincorporated by reference at 49 C.F.R. § 195.3.\n3 API Recommended Practice 651, “Cathodic Protection of Aboveground Petroleum Storage Tanks,” is\nincorporated by reference at 49 C.F.R. § 195.3.\n4 The -850mV and 100mV criteria are specified in API Recommended Practice 651 for determining whether\ncathodic protection is adequate.\n\n\n\n4\ncorrosion on the bottom of an aboveground breakout tank, to ensure that operation and\nmaintenance of the system were in accordance with API Recommended Practice 651.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.402, which states:\n§ 195.402 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations\nand maintenance activities and handling abnormal operations and\nemergencies. This manual shall be reviewed at intervals not exceeding 15\nmonths, but at least once each calendar year, and appropriate changes\nmade as necessary to insure that the manual is effective. This manual\nshall be prepared before initial operations of a pipeline system commence,\nand appropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted . . . .\nThe Notice alleged that Respondent violated § 195.402(a) by failing to follow its manual of\nwritten procedures for conducting operations and maintenance activities. Specifically, the\nNotice alleged that Respondent did not follow requirements in the LMP pertaining to: leak\ndetection sensitivity and response time; continuous monitoring of pump stations using video\ncameras; maintenance of the right-of-way; and prevention of encroachments.\nIn its Response, the company contended that “Magellan’s response may include but not\nnecessarily be limited to presenting information with respect to applicable regulatory\nrequirements and factual matters, including but not limited to the following subjects: (a) Leak\nresponse time; (b) Leak detection sensitivity; (c) Video camera capabilities; [and] (d) ROW\ncondition and encroachments.” Respondent, however, did not present any further information.\nTherefore, after considering all the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.402(a) by failing to follow certain written procedures in the LMP for conducting\noperations and maintenance activities.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. The Notice proposed a total civil penalty of $66,000 for violations of\n49 C.F.R. §§ 195.410 (Item 1) and 195.402 (Item 6).\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that\n\n\n\n5\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require.\nItem 1: The Notice proposed a civil penalty of $25,000 for Respondent’s violation of 49 C.F.R.\n§ 195.410(a)(1), for failing to place and maintain line markers over each buried pipeline in\nsufficient number along each buried line so that its location would be accurately known. In its\nResponse, the company contended that “Magellan will also request and present information\nregarding the determination of both the proposed civil penalties and the Proposed Compliance\nOrder, and will move for the reduction, if not the elimination, of the proposed civil penalties.”\nRespondent, however, did not present any further information that would warrant mitigation of\nthe proposed civil penalty under the assessment criteria.\nThe nature, circumstances, and gravity of Respondent’s failure to adequately mark its pipeline\nsupport the proposed civil penalty. Respondent is culpable for the violations and has a history of\nprior offenses, as specified in the Pipeline Safety Violation Report, dated December 7, 2007\n(Violation Report). Respondent has not provided any evidence suggesting the company is not\nable to pay the proposed civil penalty; therefore, I find Respondent is able to pay the penalty\nwithout adversely affecting its ability to continue in business. I recognize Respondent’s good\nfaith in attempting to comply with the pipeline safety regulations, but find it does not warrant\nmitigation of the proposed penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $25,000 for the violation of 49 C.F.R. § 195.410(a)(1).\nItem 6: The Notice proposed a civil penalty of $41,000 for Respondent’s violation of 49 C.F.R.\n§ 195.402(a), for failing to follow certain written procedures in the LMP for conducting\noperations and maintenance activities. In its Response, the company contended that “Magellan\nwill also request and present information regarding the determination of both the proposed civil\npenalties and the Proposed Compliance Order, and will move for the reduction, if not the\nelimination, of the proposed civil penalties.” Respondent, however, did not present any further\ninformation that would warrant mitigation of the proposed civil penalty under the assessment\ncriteria.\nThe nature, circumstances, and gravity of Respondent’s failure to follow its procedures support\nthe proposed civil penalty. Respondent is culpable for the violations and has a history of prior\noffenses, as specified in the Violation Report. Respondent has not provided any evidence\nsuggesting the company is not able to pay the proposed civil penalty; therefore, I find\nRespondent is able to pay the penalty without adversely affecting its ability to continue in\nbusiness. I recognize Respondent’s good faith in attempting to comply with the pipeline safety\nregulations, but find it does not warrant mitigation of the proposed penalty.\n\n\n\n6\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $41,000 for the violation of 49 C.F.R. § 195.402(a).\nIn summary, having reviewed the record and considered the assessment criteria for all of the\nItems discussed above, I assess Respondent a total civil penalty of $66,000.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $66,000 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a United\nStates District Court.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Notice Items 1, 4, 5, and 6, pertaining to\nviolations of §§ 195.410, 195.432, 195.573, and 195.402, respectively. Under 49 U.S.C.\n§ 60118(a), each person who engages in the transportation of hazardous liquids or who owns or\noperates a pipeline facility is required to comply with the applicable safety standards established\nunder chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217,\nRespondent is ordered to take the following actions to ensure compliance with the pipeline safety\nregulations applicable to its operations. Respondent must:\n1. Demonstrate that Magellan has adequate pipeline markers along the route of the\nLonghorn Pipeline in accordance with the requirements of § 195.410 and the LMP\n(Notice Item 1).\n2. Demonstrate that cracks in the ringwall foundations of the breakout tanks located at the\nEl Paso terminal facility have been addressed according to API Standard 653, as required\nby § 195.432(b) (Notice Item 4).\n3. Demonstrate that at least one of the applicable cathodic protection criteria specified in\nAPI Recommended Practice 651 is met for the breakout tanks on the Longhorn Pipeline\nin accordance with § 195.573(d) (Notice Item 5).\n4. Demonstrate that the procedural compliance issues identified in the Notice have been\naddressed in accordance with the LMP, and that such procedures and being followed in\naccordance with § 195.402(a) (Notice Item 6).\n\n\n\n7\n5. Maintain documentation of the safety improvement costs associated with fulfilling this\nCompliance Order and report the total cost as follows: (a) total cost associated with\npreparation and revision of plans and procedures, and performance of studies and\nanalyses; and (b) total cost associated with physical changes, if any, to the pipeline\ninfrastructure, including replacements and additions.\n6. Complete each of the above items and submit documentation of compliance within 30\ndays of receipt of this Final Order. Documentation shall be submitted to the Director,\nSouthwest Region, Office of Pipeline Safety, 8701 South Gessner Dr, Suite 1110,\nHouston, TX 77074-2949.\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.\nWARNING ITEMS\nWith respect to Items 2, 3 and 7, the Notice alleged probable violations of Part 195 but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 195.420(b) (Notice Item 2) – Respondent’s alleged failure to inspect two\nmainline valves at intervals not exceeding 7½ months, but at least twice each calendar\nyear. The inspections allegedly exceeded the specified interval by a few days.\n49 C.F.R. § 195.420(c) (Notice Item 3) – Respondent’s alleged failure to provide\nprotection for each valve from unauthorized operation and vandalism. While the\nmajority of aboveground valves were located inside locked fences, some valves were\nallegedly not fenced to protect against vandalism.\n49 C.F.R. § 195.436 (Notice Item 7) – Respondent’s alleged failure to provide protection\nfor the El Paso Terminal facility from vandalism and unauthorized entry. While the\nfacility had a security fence and electrically-operated gates, an OPS representative\nallegedly observed personnel entering the facility without positive identification.\nHaving considered such information, I find, pursuant to 49 C.F.R. § 190.205, that probable\nviolations of §§ 195.420(b) (Notice Item 2), 195.420(c) (Notice Item 3), and 195.436 (Notice\nItem 7) have occurred and Respondent is hereby advised to correct such conditions. In the event\nthat OPS finds a violation for any of these items in a subsequent inspection, Respondent may be\nsubject to future enforcement action.\n\n\n\n8\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590. The petition must be received within 20 days of Respondent’s receipt of this Final Order\nand must contain a brief statement of the issue(s) and meet all other requirements of 49 C.F.R.\n§ 190.215. The filing of the petition automatically stays the payment of any civil penalty\nassessed. All other terms of the order, including any required corrective action, shall remain in\nfull force and effect unless the Associate Administrator, upon request, grants a stay. The terms\nand conditions of this Final Order are effective upon service in accordance with 49 C.F.R.\n§ 190.5.\n____________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420075050_Closure_07132010_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJuly 13, 2010\nMr. Richard A. Olson\nSenior Vice President, Operations and Technical Services\nMagellan Midstream Partners, L.P.\nMagellan Pipeline Company, L.P.\nOne Williams Center, MD-27\nTulsa, OK 74172\nCPF 4-2007-5050\nDear Mr. Olson:\nOn December 20, 2007, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Magellan Midstream Partners, L.P. a Final Order in the above-referenced case. This\nOrder included a Compliance Order and Civil Penalty assessment. Based on our review of the\ndocumentation you provided and confirmation of payment of the civil penalty, it has been\ndetermined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous\nMaterials Safety Administration","truncated":false,"body_characters":24832}