{"operation":"document","citation":"CPF 420095009","title":"PLAINS PIPELINE, L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2009-07-29","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b), 195.436, 195.581.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420095009.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420095009.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420095009","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420095009","body":"Notice of Probable Violation involving PLAINS PIPELINE, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.432(b),  195.436,  195.581. The case was opened on 2009-07-29 and is reported as closed as of 2012-03-26. Proposed civil penalty: $88,400. Assessed civil penalty: $22,900. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420095009_Closure Letter_03262012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420095009/420095009_Closure%20Letter_03262012.pdf\n\n420095009_Closure Letter_03262012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420095009/420095009_Closure%20Letter_03262012_text.pdf\n\n420095009_FinalOrder_03152011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420095009/420095009_FinalOrder_03152011.pdf\n\n420095009_FinalOrder_03152011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420095009/420095009_FinalOrder_03152011_text.pdf\n\n420095009_NOPV NOPCP NOPCO_07292009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420095009/420095009_NOPV%20NOPCP%20NOPCO_07292009.pdf\n\n420095009_NOPV NOPCP NOPCO_07292009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420095009/420095009_NOPV%20NOPCP%20NOPCO_07292009_text.pdf\n\n420095009_Closure Letter_03262012_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMarch 26, 2012\nMr. Mark J. Gorman\nSenior Vice President\nOperation & Business Development\nPlains Pipeline, L.P.\n333 Clay St., Suite 1600\nHouston, Texas 77002\nCPF 4-2009-5009\nDear Mr. Gorman:\nOn March 15, 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Plains pipeline, L.P. a Final Order in the above-referenced case. This Order included a\nCompliance Order and Civil Penalty assessment. Based on our review of the documentation you\nprovided and confirmation of payment of the civil penalty, it has been determined that you have\ncomplied 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\n\n420095009_FinalOrder_03152011_text.pdf\n\nMAR 15 2011\nMr. Mark J. Gorman\nSenior Vice President\nOperations & Business Development\nPlains Pipeline, L.P.\n333 Clay St., Suite 1600\nHouston, TX 77002\nRe: CPF No. 4-2009-5009\nDear Mr. Gorman:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $22,900, and specifies actions that need to be taken\nby Plains Pipeline, L.P., to comply with the pipeline safety regulations. When the terms of the\ncompliance order have been completed, as determined by the Director, Southwest Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided under 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\nMr. Jordan Janek\nSenior Director, Environmental and Regulatory Compliance\nPlains Pipeline, L.P.\nP.O. Box 4648\nHouston, TX 77210-4648\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 1160 0001 0041 3634]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n___________________________________\nIn the Matter of )\nPlains Pipeline, L.P., ) CPF No. 4-2009-5009\n)\n)\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nBetween February 17 and March 12, 2009, pursuant to 49 U.S.C. § 60117, representatives of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an inspection of 29 breakout tanks operated by Plains Pipeline, L.P. (Plains or\nRespondent), in Texas, Oklahoma, and New Mexico. Plains, a subsidiary of Plains All\nAmerican Pipeline, L.P., operates approximately 3,500 miles of interstate crude oil and refined\npetroleum products pipelines.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated July 29, 2009, 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 violated 49 C.F.R. §§ 195.432, 195.436, and\n195.581 and proposed assessing a civil penalty of $88,400 for the alleged violations. The Notice\nalso proposed ordering Respondent to take certain measures to correct the alleged violations.\nPlains responded to the Notice by letter dated September 1, 2009 (Response). Respondent\ncontested two of the allegations and requested that the proposed civil penalty be reduced.\nRespondent did not request a hearing and therefore has waived its right to one. Respondent\nsubmitted a second letter, dated October 6, 2009, in which it described the steps it had taken and\nplanned to take to satisfy the proposed compliance order.\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. § 195.432(b), which at the time\nof the inspection, stated:\n\n\n\n2\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 . . . .\n1\nThe Notice alleged that Respondent failed to inspect the physical integrity of certain in-service\nevaluation of the suitability of existing tanks for continued service and for making decisions\nbreakout tanks according to Section 4 of API Standard 653.2 Section 4 provides for the\ninvolving repairs. Sections 4 references the tank inspection intervals contained in Section 6 of\nthe API Standard. The Notice alleged the following four groups of violations:\n1. Performance of monthly inspections. The Notice alleged that Plains failed to perform\nroutine in-service tank inspections at least once each month for three tanks at Hendrick\nStation and two tanks at Wink East Station during periods between 2007 and 2009, as\nrequired by Section 6.3.1.2 of API Standard 653.\n2. Performance of remedial actions. The Notice alleged that Plains failed to timely\nremediate certain tank integrity issues, including some issues that were identified and\ndocumented during inspections of the tanks, as required by Section 6.3.1.3 of API\nStandard 653. The issues included:\n• a grounding cable that was unattached;\n• leaking tank rivets;\n• inoperable alarms;\n• inoperable valves;\n• damaged and compromised tank foundations; and\n• integrity issues regarding tank shell and Chime Ring.\n3. Documentation of repairs. The Notice alleged that Plains failed to document certain\n“makeshift” repairs to breakout tanks and their foundations, but the Notice did not cite a\nspecific provision in Section 4 of API Standard 653 alleged to be violated. The\nundocumented repairs observed by PHMSA inspectors included:\n• recently placed, non-compacted soils around certain tanks;\n• fusion bonded, epoxy-like material applied onto rivets; and\n• application of house bricks placed for support as the foundation of a tank.\n4. Performance of five-year inspection. The Notice alleged that Plains failed to perform an\nexternal inspection by an authorized inspector at least every five years at Cimarron Tank\n#41085, as required by Section 6.3.2.1 of API Standard 653. Specifically, the Notice\nalleged that the inspection was performed 118 days after the five-year period expired.\n1 Section 195.432(b) was amended after the inspection. It presently reads: “Each operator must inspect the physical\nintegrity of in-service atmospheric and low-pressure steel aboveground breakout tanks according to API Standard\n653 . . . .” Pipeline Safety: Periodic Updates of Regulatory References to Technical Standards and Miscellaneous\nEdits, 75 Fed. Reg. 48,593, 48,607 (Aug. 11, 2010).\n2 American Petroleum Institute (API) Standard 653, “Tank Inspection, Repair, Alteration, and Reconstruction,” is\nincorporated by reference. See § 195.3.\n\n\n\n3\nPerformance of monthly inspections.\nWith respect to the first allegation, Plains acknowledged that it did not conduct certain monthly\ninspections of the five tanks at Hendrick and Wink East stations, but the company contended that\nit was not required to conduct monthly inspections under § 195.432(b) because the tanks were\nnot in-service. According to Plains, the tanks were empty, “in the process of being permanently\nremoved from service,” and that “the piping connecting these tanks to their pipeline systems was\nbeing physically removed during these periods.”\nSection 195.432(b) requires “in-service” breakout tanks to be inspected in accordance with API\nStandard 653, including section 6.3.1, which requires routine inspections at least every month. A\nbreakout tank continues to be in service until it is physically disconnected from the pipeline\nsystem by, for example, removing or locking a valve. A tank is not considered out of service\nsimply because it is empty or idle, or because an operator intends to take it out of service.\nMissing from the Response is any explanation by Plains of when, or if, these tanks had ever\nphysically been taken out of service. Respondent claimed that the tanks were “in the process of\nbeing” taken out of service, and that piping “was being physically removed,” but never stated\nthat those actions had been completed by the time Plains started foregoing monthly inspections.\nFor example, Plains made no claim, and submitted no documentation, that the piping connecting\nthese tanks to their pipeline systems had actually been physically removed.\nThe evidence in Exhibit A attached to the Violation Report contains Respondent’s inspection\nreports for the five breakout tanks at issue. Based on this evidence, it appears that Plains\nconsidered the tanks to be out of service during the time in question and stopped performing\nmonthly inspections until early 2009, when the company decided that it wished to return the\ntanks to service. Given that Respondent has not described or documented any actual physical\ndisconnection of each tank from the pipeline system during the period in question, I find the\ntanks continued to be in-service, and therefore Respondent was obligated to perform monthly\ninspections in accordance with § 195.432(b).\nAccordingly, I find that Plains violated § 195.432(b) by failing to perform monthly inspections\nof the five breakout tanks.\nPerformance of remedial actions.\nWith respect to the second allegation relating to Respondent’s failure to perform timely remedial\nactions, Plains contested some of the alleged conditions of tanks, argued that some of the\nconditions did not present a safety issue, and further argued that “there is no regulatory, standard\nor code requirement for performing remedial action on items noted during a tank inspection\nwithin specified times.”\nSection 4 of API Standard 653 does contain remediation requirements. For example, Section 4.2\nmandates certain tank roof repairs and replacements. Section 4.3 requires certain tank shell\ncorrosion and damage to be repaired. Cracks in shell-to-bottom welds must be removed and\nrepaired. Section 4.5 requires structural cracks and general foundation deterioration to be\nrepaired.\n\n\n\n4\nRespondent is correct, however, that neither § 195.432(b) nor Section 4 of the referenced API\nStandard 653 contain time requirements for such repairs. Section 6.3.1.3, cited in the Notice,\nspecifies what type of conditions should be documented during an inspection, but does not\nestablish a time period for remediation. Although an entirely different regulation, 49 C.F.R.\n§ 195.401(b), requires operators who discover “any condition that could adversely affect the safe\noperation of its pipeline system, [to] correct it within a reasonable time,\n” the Notice did not\ncontain a statement that alleged a violation of § 195.401(b).\nBased upon the foregoing, I order the allegation that Respondent violated § 195.432(b) by failing\nto perform timely remedial actions to be withdrawn.\nDocumentation of repairs.\nWith respect to the third allegation relating to Respondent’s failure to document certain repairs,\nPlains contested some of the alleged conditions, argued that some of the conditions did not\npresent a safety issue, and further argued that “[t]here is no regulatory requirement to document\nrepairs of this nature unless the unsatisfactory conditions were noted on tank inspection Form\n505, which they were not in this case.”\nRespondent is correct that neither § 195.432(b) nor Section 4 of the referenced API Standard 653\ncontain any appreciable repair documentation requirement. A different section of API Standard\n653, Section 13.2, requires operators to maintain certain information about tank repairs. In\naddition, 49 C.F.R. § 195.404 requires operators to maintain the records of repairs to parts of the\npipeline system for at least 1 year. The Notice, however, did not contain a statement that either\nof these provisions had been violated.\nBased upon the foregoing, I order the allegation that Respondent violated § 195.432(b) by failing\nto document certain repairs to be withdrawn.\nPerformance of five-year inspection.\nPlains did not contest the allegation that it had failed to perform an external inspection of\nCimarron Tank #41085 within the required five-year interval specified in section 6.3.2 of API\nStandard 653. Therefore, I find that Plains violated § 195.432(b) by failing to perform an\nexternal inspection at the required interval.\nIn summary, after considering all of the evidence and legal issues presented, I find that\nRespondent violated 49 C.F.R. § 195.432(b) by failing to perform monthly inspections of five\nbreakout tanks and by failing to perform a five-year external inspection of an additional tank. I\norder the remaining allegations that Respondent violated § 195.432(b) be withdrawn.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.436, which states:\n§ 195.436 Security of facilities.\nEach operator shall provide protection for each pumping station and\nbreakout tank area and other exposed facility (such as scraper traps) from\nvandalism and unauthorized entry.\n\n\n\n5\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.436 by failing to provide protection\nfor two pumping stations from vandalism and unauthorized entry. Specifically, the Notice\nalleged that one side of Cimarron Station was not protected by a fence or other barrier against\nunauthorized entry. The Notice alleged further that there was no protection at Wheeler Station\nagainst unauthorized entry to the roofs of the breakout tanks.\nIn its Response, Plains did not contest this allegation of violation. Accordingly, after considering\nall of the evidence, I find that Respondent violated 49 C.F.R. § 195.436 by failing to provide\nprotection for two pumping stations from vandalism and unauthorized entry.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.581, which states in\nrelevant part:\n§ 195.581 Which pipelines must I protect against atmospheric\ncorrosion and what coating material may I use?\n(a) You must clean and coat each pipeline or portion of pipeline that is\nexposed to the atmosphere, except pipelines under paragraph (c) of this\nsection.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.581 by failing to coat an exposed\nsegment of pipe connected to a tank at Cimarron Station was not painted.\nIn its Response, Respondent contended that the pipeline segment at issue connects the tank to a\ntruck manifold, and therefore the pipe is not subject to § 195.581(c). In support of this assertion,\nRespondent submitted an interagency agreement between PHMSA and the Environmental\nProtection Agency (EPA) that clarified jurisdictional issues with regard to transportation and\nnon-transportation-related pipeline facilities.\ndiagrams, one of which shows that a pipeline connecting a breakout tank to a truck loading area\nis under the regulatory responsibility of EPA, rather than PHMSA.\n3 The agreement includes several clarifying\nThe few photographs in the record suggest that the pipe does extend from the breakout tank to a\ntruck loading area, however, the limited evidence is not conclusive. Missing from the record is a\npipeline schematic or other definitive proof of the configuration of the facility. Thus, based on\nthe limited evidence in the record, it appears as though the pipe segment at issue falls under\nEPA’s regulatory oversight as a non-transportation-related pipeline rather than under PHMSA’s.\nAccordingly, after considering all of the evidence, I order the allegation that Respondent violated\n49 C.F.R. § 195.581 be withdrawn for insufficient evidence.\nPursuant to § 190.213(c), this withdrawal does not preclude PHMSA from determining in a\nfuture matter based on additional information that the pipe is indeed subject to the pipeline safety\nregulations in 49 C.F.R. Part 195.\n3 Memorandum from Richard B. Felder, Associate Administrator, Office of Pipeline Safety, and Stephen D. Luftig,\nOffice of Emergency and Remedial Response, U.S. Environmental Protection Agency, February 4, 2000,\nAttachment 4.\n\n\n\n6\nThe above 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.\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; Respondent’s ability to pay the penalty and any effect that the\npenalty may have on its ability to continue doing business; and the good faith of Respondent in\nattempting 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.\nThe Notice proposed a total civil penalty of $88,400 for the violations cited in Item 1 and Item 3\nabove.\nItem 1: The Notice proposed a civil penalty of $46,700 for Respondent’s violation of 49 C.F.R.\n§ 195.432(b), for failing to inspect the physical integrity of in-service breakout tanks according\nto section 4 of API Standard 653.\nRespondent’s failure to perform monthly inspections of five breakout tanks presented a safety\nrisk. Even though the tanks may have been empty at the time, the tanks were still connected to\nthe pipeline system and Plains was apparently able to utilize the tanks if necessary for storing\nhazardous liquids incidental to transportation. The use of these tanks, even for temporary\nstorage, would have presented a greater risk of failure if integrity issues were allowed to develop\nwithout proper attention and remediation provided by monthly inspections.\nIn addition, Respondent’s failure to perform a five-year external inspection of the Cimarron Tank\npresented a similar risk to safety, although Plains eventually performed the inspection\napproximately 118 days after the five-year interval had expired.\nFor the above reasons, I find a civil penalty for these violations is warranted. Since certain other\nalleged violations of § 195.432(b) in Item 1 were withdrawn, however, a corresponding\nreduction to the proposed civil penalty is appropriate.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a reduced civil penalty of $22,900 for violation of 49 C.F.R. § 195.432(b).\nItem 3: The Notice proposed a civil penalty of $41,700 for Respondent’s violation of 49 C.F.R.\n§ 195.581, for failing to coat certain pipeline segments exposed to the atmosphere.\nBecause I ordered that the allegations contained in Item 3 be withdrawn, no civil penalty will be\nassessed for that Item.\n\n\n\n7\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $22,900.\nPayment of the civil penalty must be made within 20 days of service of this Final Order.\nPayment may be made by sending a certified check or money order (containing the CPF Number\nfor this case), made payable to “U.S. Department of Transportation,” to the Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, Financial Operations Division (AMZ-\n341), P.O. Box 269039, Oklahoma City, Oklahoma 73125. Federal regulations (49 C.F.R.\n§ 89.21(b)(3)) also permit payment to be made by wire transfer through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions\nare contained in the enclosure. Questions concerning wire transfers should be directed to:\nFinancial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney\nAeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial\nOperations Division telephone number is (405) 954-8893.\nFailure to pay the $22,900 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 district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, and 3 in the Notice for\nviolations of 49 C.F.R. §§ 195.432, 195.436, and 195.581, 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. Because Plains has taken the Cimarron Station permanently out of service,\nthe proposed compliance terms relating to that station are not included in this order. Further,\nbecause I ordered that Item 3 and portions of Item 1 be withdrawn, the proposed compliance\nterms for those violations are not included in this order.\nWith respect to the violation of § 195.436, Plains has indicated that it reviewed the remaining\nstations in its system where breakout tanks are located, and provided a summary of its findings\nand a plan to provide adequate security for each tank or facility. Accordingly, this aspect of the\nproposed compliance order is not included in this order.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following remaining actions to ensure compliance with the pipeline safety\nregulations applicable to its operations:\n1. With respect to the violation of § 195.436 (Item 2), Respondent must, within 60 days\nof receipt of this Final Order, provide evidence of adequate protection at Wheeler\nStation.\n\n\n\n8\n2. It is requested that Plains maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and report the total cost as follows:\n(a) total cost associated with preparation and revision of plans and procedures, and\nperformance of studies and analyses; and (b) total cost associated with physical\nchanges, if any, to the pipeline infrastructure, including replacements and additions.\n3. Documentation of compliance must be submitted to the Director, Southwest Region,\nOffice of Pipeline Safety, 8701 South Gessner, Suite 1110, Houston, 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 the administrative assessment of civil penalties\nnot to 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.\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, D.C.\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept a petition received no later than 20 days after receipt of this Final Order by\nRespondent, provided it contains a brief statement of the issue(s) and meet all other requirements\nof 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of any civil\npenalty assessed. Unless the Associate Administrator, upon request, grants a stay, all other 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","truncated":false,"body_characters":25574}