{"operation":"document","citation":"CPF 420105003","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":"2010-01-19","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420105003.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420105003.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420105003","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420105003","body":"Notice of Probable Violation involving MAGELLAN PIPELINE COMPANY, LP. PHMSA's enforcement data identifies the cited regulation as 195.402(a). The case was opened on 2010-01-19 and is reported as closed as of 2012-01-06. Proposed civil penalty: $51,000. Assessed civil penalty: $20,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420105003_Closure Letter_01062012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105003/420105003_Closure%20Letter_01062012.pdf\n\n420105003_Closure Letter_01062012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105003/420105003_Closure%20Letter_01062012_text.pdf\n\n420105003_FinalOrder_04142011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105003/420105003_FinalOrder_04142011.pdf\n\n420105003_FinalOrder_04142011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105003/420105003_FinalOrder_04142011_text.pdf\n\n420105003_NOPV PCP PCO_01192010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105003/420105003_NOPV%20PCP%20PCO_01192010.pdf\n\n420105003_NOPV PCP PCO_01192010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105003/420105003_NOPV%20PCP%20PCO_01192010_text.pdf\n\n420105003_Response to NOPV PCP PCO_02232010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105003/420105003_Response%20to%20NOPV%20PCP%20PCO_02232010.pdf\n\n420105003_FinalOrder_04142011_text.pdf\n\nAPR 14 2011\nMr. Larry Davied\nSenior Vice President, Operations and Technical Services\nMagellan Pipeline Company, L.P.\nA subsidiary of Magellan Midstream Partners, L.P.\nOne Williams Center\nP.O. Box 22186\nTulsa, OK 74121-2186\nRe: CPF No. 4-2010-5003\nDear Mr. Davied:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation, assesses a reduced civil penalty of $20,000, and specifies actions that must be taken by\nMagellan Pipeline Company, L.P. to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order 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. R.M. Seeley, Director, Southwest Region, PHMSA\nMr. Paul Pratt, Associate General Counsel, Magellan Midstream Partners, L.P.\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [ 7005 1160 0001 0075 8827]\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 )\nMagellan Pipeline Company, L.P., ) CPF No. 4-2010-5003\n)\n)\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nOn December 17, 2009, the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nOffice of Pipeline Safety (OPS), received a letter from Magellan Pipeline Company, L.P.\n(Magellan or Respondent) requesting an extension of time for certain smart pigging requirements\ncontained in the company’s written procedures. Those requirements are specified in the\nLonghorn Mitigation Plan (LMP), a set of operating and maintenance procedures specifically-\ntailored for the Longhorn Pipeline. The Longhorn Pipeline transports refined petroleum\nproducts from Galena Park, Texas, near the Houston Ship Channel to El Paso, Texas. Magellan\nhas operated the pipeline since its start-up in 2005. Magellan also owns or operates\napproximately 10,000 miles of pipelines transporting hazardous liquids in the midcontinent\nregion of the United States.\nAs a result of a review of Respondent’s letter, pursuant to 49 U.S.C. § 60117, the Director,\nSouthwest Region, OPS (Director), issued to Respondent, by letter dated January 19, 2010, a\nNotice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice),\nwhich also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R.\n§ 190.207, the Notice proposed finding that Magellan had violated 49 C.F.R. § 195.402(a) by\nfailing to follow written procedures specified in its LMP, proposed a civil penalty of $51,000,\nand proposed to require that Respondent take certain corrective action to comply with the\nregulation. The warning item required no further action, but warned the operator to correct the\nprobable violation.\nMagellan responded to the Notice by letter dated February 23, 2010 (Response). The company\ncontested the allegation of violation, offered additional information in response to the Notice,\nand requested that the proposed compliance order be eliminated. Respondent did not request a\nhearing and therefore has waived its right to one.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\n\n\n\n2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), 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 . . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow the\nLMP contained in its manual of written procedures. The relevant portion of the LMP states: “As\npart of the Longhorn Continuing Integrity Commitment, [Magellan] has agreed to implement and\nbe bound by . . . the Mitigation Commitments described in Section 1.2 hereof.”1 Mitigation Commitment (LMC) 39, the pertinent Mitigation Commitment in Section 1.2 of the\nLMP, states:\nLonghorn\nAt the time [Magellan] submits any proposed changes or modifications to\nthe Longhorn Mitigation Plan for DOT review and approval, the proposed\nchanges or modifications along with [Magellan’s] justifications therefore\nshall (a) be made available to the public by posting the same on the\n[Magellan] corporate Internet website and (b) be provided to the General\nManager of the Lower Colorado River Authority and to the Mayors of\nHouston, Austin, and El Paso.2\nThe Notice alleged that Magellan did not comply with LMC 39 when it sent a letter to OPS\nproposing to change or modify the LMP because it failed to make the proposal available to the\npublic on the company’s website or provide it to the named local authorities at the same time.\nSpecifically, Magellan sent its letter to the Director on December 17, 2009, requesting\n“PHMSA’s approval to extend the UT inspection timing requirement [in LMC 12] to December,\n2010.” The Notice alleged that this request constituted a proposal to change or modify LMC 12\nof the LMP. That provision requires Respondent to perform an in-line inspection of the pipeline\n“no more than 5 years after system startup.” System start occurred on January 27, 2005, making\nthe deadline in LMC 12 for the in-line inspection January 27, 2010.\nIn its Response, Magellan argued that the company’s December 17, 2009, letter did not\nconstitute a proposal to change or modify the LMP and therefore the company did not need to\ncomply with the requirements in LMC 39. Respondent explained that the letter did not propose a\nmodification, because it did not propose “a permanent change to the [procedures] that becomes\nincorporated into the [procedures] as a new, lasting, and legally binding standard that is\nenforceable by the regulator.\n”\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.\n2 Violation Report, Exhibit A (Longhorn Mitigation Plan excerpt).\n\n\n\n3\nI find Magellan’s argument unconvincing. The deadline itself is a fundamental part of the\nrequirement to perform the in-line inspection. A proposal to change the deadline, therefore,\nnecessarily equates to a proposal to change that key part of the requirement. For this reason,\nMagellan’s proposal to change the deadline to December 2010, which was submitted for\nPHMSA review and approval, constituted a proposal to change the LMP. This conclusion is no\ndifferent under Magellan’s own theory of “modification,” since any new deadline resulting from\nthe company’s request would be “a new, lasting, and legally binding standard that is enforceable\nby the regulator.” Furthermore, it is important to consider the purpose of LMC 39 is to ensure\nthe public and specified parties remain fully informed of any potential changes to the terms of\nthe LMP.\nAs such, LMC 39 required Magellan to make its proposal available to the public and provide it to\nthe local authorities at the same time the request was submitted to PHMSA for review and\napproval. The evidence demonstrates Magellan did not comply with this requirement. The\ncompany did not post its extension request on the company’s website or provide it to the local\nauthorities until January 26, 2010—prior to the deadline for performing the in-line inspection,\nbut more than a month after the request was submitted to PHMSA. Accordingly, after\nconsidering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.402(a) by failing\nto follow its written procedures specified in LMC 39 for proposing changes to the LMP.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.3\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 $51,000 for the violation\nof § 195.402(a) (Notice Item 1).\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\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.\n3 Magellan also contested an allegation in Item 1 of the Notice that it had reduced the availability of public\ninformation about the Longhorn pipeline by allowing it to become cumbersome and difficult to find the information\non the company’s website. In its Response, Magellan indicated that it has made changes to the website to ensure\neasy access to the information by the public, but argued nevertheless that any reduced availability did not rise to the\nlevel of a violation. Since the issue of general availability of information does not directly pertain to the issue of\nwhether or not Magellan complied with LMC 39 on December 17, 2009, this allegation is not considered part of the\nviolation.\n\n\n\n4\nAlthough Respondent contested the allegation of violation, the company did not direct any of its\narguments to the civil penalty assessment criteria. That said, as a part of my review pursuant to\n49 C.F.R. § 190.213(c), I have determined that the proposed civil penalty for this violation\nshould be reduced.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a reduced civil penalty of $20,000.\nPayment of the civil penalty must be made within 20 days of receipt of this Final Order. Federal\nregulations (49 C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the\nFederal Reserve Communications System (Fedwire), to the account of the U.S. Treasury.\nDetailed instructions are contained in the enclosure. Questions concerning wire transfers should\nbe directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration,\nMike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-\n8893.\nFailure to pay the $20,000 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 Item 1 in the Notice for the violation of\n49 C.F.R. § 195.402(a).\nUnder 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids\nby pipeline or who owns or operates a hazardous liquid pipeline facility is required to comply\nwith the applicable safety standards established under chapter 601. Pursuant to the authority of\n49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following\nactions to ensure compliance with the pipeline safety regulations applicable to its operations.\nWith respect to the violation of § 195.402(a) (Notice Item 1), Respondent must perform each of\nthe following. To the extent an item has already been performed, submit documentation to the\nDirector demonstrating that such has been completed:\n1. Revise Magellan’s System Integrity Plan to incorporate the requirements of the LMP,\nspecifically LMC 39, and submit a copy of the revised procedures to the Director.\n2. Following development of the procedure in Item 1 of this Compliance Order, revise\nMagellan’s request for extending the deadline in the LMP with respect to LMC 12 and\nresubmit it to the Director in accordance with LMC 39 and the other items in this\nCompliance Order. The resubmission must provide a detailed justification for not\nmeeting the original deadline, and developed alternative actions to be taken until the\nperformance of the internal inspection by ultrasonic wall measurement tool in accordance\nwith LMC 12 can be completed.\n\n\n\n5\n3. Revise the Longhorn Corporate Internet site to make the LMP and other public\ninformation required by the LMP readily apparent and available. Post the revised change\nrequest and associated justifications and alternatives developed under this Compliance\nOrder on the Internet site at the same time they are submitted to the Director for review\nand approval.\n4. Notify the entities identified in LMC 39 regarding the status of compliance with LMC 12,\nand provide to those entities a copy of the revised change request and associated\njustifications and alternatives to be developed under this Compliance Order at the same\ntime they are submitted to the Director for review and approval.\n5. Identify the alternatives and the associated costs for each alternative considered in lieu of\nmeeting the original timing requirements of LMC 12 and submit the alternative cost\nanalysis to the Director.\n6. Provide a detailed schedule for the timing of the inspections (and applicable proposed\nalternatives to the inspections) required under both LMC 12 and LMC 12A for each\npipeline segment on the Longhorn System.\n7. Upon approval by the Director of the revised change request and associated justification\nand alternatives to be developed under this Compliance Order, provide monthly updates\nto the Director regarding the status of approved activities, costs, and schedule for the\ncompletion of LMC 12 (and applicable alternatives) and LMC 12A, until such time that\nthe alternatives or the requirements of LMCs 12 and 12A are complete and the Director\nno longer requires updates be provided.\n8. Complete each of the above items and submit necessary documentation to demonstrate\ncompliance within 45 days of receipt of this Final Order. The revised change request,\nassociated justification and alternatives, shall be subject to the review and approval of the\nDirector. The Director will consider any comments from those entities named in LMC\n39 in his review and approval determination. Documentation shall be submitted to the\nDirector, Southwest Region, Office of Pipeline Safety, 8701 South Gessner, Suite 1110,\nHouston, TX 77074-2949.\n9. 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.\nThe Director may grant an extension of time to comply with any of the requirements of the\nCompliance Order upon a written request timely submitted by the Respondent demonstrating\ngood 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.\n\n\n\n6\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of Part 195 and specifically\nconsidered this to be a warning item. The warning was for:\n49 C.F.R. § 195.402(a) (Item 2) – Respondent’s alleged failure to meet the requirements\nin LMC 12, which required the company to perform an in-line inspection by January 27,\n2010. Magellan allegedly failed to provide timely notice to PHMSA that an extension\nwas needed, as the preparations alone for such an in-line inspection would require more\nthan the time between December 17, 2009, when Respondent requested the extension,\nand the original deadline of January 27, 2010.\nIn the event that OPS finds a violation of this provision in a subsequent inspection, Respondent\nmay be subject to future enforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. If submitting a petition, the petition must be sent to: Associate Administrator,\nOffice of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor,\nWashington, DC 20590, and a copy sent to the Chief Counsel, PHMSA, at the same address.\nThe petition must be received within 20 days of service, but may be considered timely if\nreceived within 20 days of Respondent’s receipt of this Final Order. The petition must contain a\nbrief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. The filing\nof the petition automatically stays the payment of any civil penalty assessed. All other terms of\nthe order, including any required corrective action, shall remain in full force and effect unless the\nAssociate Administrator, upon request, grants a stay. The terms and conditions of this Final\nOrder are effective upon service in accordance with 49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420105003_NOPV PCP PCO_01192010_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 19, 2010\nMr. Rick Olson\nSenior Vice President, Operations and Technical Services\nMagellan Midstream Partners, L.P.\nOne Williams Center\nP. O. Box 22186\nTulsa, OK 74172-2186\nCPF 4-2010-5003\nDear Mr. Olson:\nThe Pipeline and Hazardous Materials Safety Administration’s (PHMSA) SW Region Office has\nreviewed the Magellan Midstream Partners, L.P. (Magellan) letter dated December 17, 2009,\nregarding the Longhorn Mitigation Plan, Commitment Number 12 (LMC 12 Letter). That letter\nrequests an extension of time for the completion of the UT inspection specified in the Longhorn\nMitigation Plan (LMP) Longhorn Mitigation Commitment (LMC) Number 12. This constitutes\na modification to the LMP, and is subject to the requirements set forth in the First Supplement to\nthe LMP, more specifically LMC 39 which requires that any changes or modifications proposed\nby Longhorn to the LMP shall be for the purpose of adapting to changing technology and\ncircumstances.\nLMC 39 contains explicit requirements for submitting proposed changes or modifications:\n\n\n\n“At the time Longhorn submits any proposed changes or modifications to the Longhorn\nMitigation Plan for DOT [PHMSA] review and approval, the proposed changes or\nmodifications along with Longhorn’s justification therefore shall (a) be made available\nto the public by posting the same on the Longhorn corporate Internet website and (b) be\nprovided to the General Manager of the Lower Colorado River Authority and to the\nMayors of Houston, Austin, and El Paso.”\nFurthermore, Magellan is reminded that the LMP and associated Pipeline System Integrity Plan\nand Operational Reliability Assessment shall be considered part of Longhorn’s written\nprocedures for conducting normal operations and maintenance activities, as specified under 49\nCFR §195.402 and any violation of the Longhorn Mitigation Plan is subject to enforcement\nunder 49 CFR Part 190.\nOn January 5, 2010, a PHMSA representative contacted Mr. Doug Chabino by telephone, at\nwhich time it was confirmed that Magellan had not provided notification of your proposed\nchange to the LMP to the parties requiring notification of any such proposed changes to the\nLMP. Additionally, it was confirmed that Magellan is not proposing alternative actions to the\nrequirements of LMC 12.\nBased on the LMC 12 Letter, and the telephone conversation of January 5, 2010, it appears that\nMagellan has committed probable violations of the Pipeline Safety Regulations, Title 49, Code\nof Federal Regulations. The items observed and the probable violation(s) are:\n1. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies.\nMagellan has failed to follow the procedure in LMC 39 for requesting changes to the LMP by\nfailing to post the proposed changes on its corporate Internet site, and failing to make notification\nto the entities required by LMC 39. Magellan has also removed the LMP and the System\nIntegrity Plan information that is to be made available to the public from the Longhorn Corporate\nInternet site the, instead referring the public to the EPA website.\nMagellan has redirected the former Longhorn Partners Pipeline corporate website\nhttp://www.longhornpipeline.com/ to the Magellan Corporate Internet site, but does not identify\nLonghorn Partners Pipeline on the Magellan homepage. Magellan has made it cumbersome and\ndifficult for the public to obtain information regarding the Longhorn Mitigation Plan and the\nLonghorn Mitigation Commitments by burying them under the safety/environment tab. The\nSystem Integrity Plan that is accessible at this tab is the Magellan System Integrity Plan, and is\nnot the Longhorn Mitigation Plan System Integrity Plan referenced in LMC 39.\n2\n\n\n\nThe Longhorn Pipeline Management Commitment expressly requires the “operations,\nmaintenance, and improvement activities will be governed by an overall system integrity and risk\nmanagement process through adoption of this LPSIP,” found in the LMP Section 3.2 which\nfurther requires the LPSIP information to be available to the public.\nLMP Section 3.2.14 states that “As part of the Longhorn Continuing Integrity Commitment,\nLonghorn has agreed to implement and be bound in the future by (a) the System Integrity\ncommitments set out in Section 3.2 hereof, (b) the Mitigation Commitments described in Section\n1.2 hereof…” and further states that “Through the reports made available to the public, the\npublic will be able to monitor Longhorn’s continuing commitment to maintain the integrity of the\npipeline at levels equivalent to those in place at start up.”\nMagellan appears to have reduced the availability of the reports and information that is available\nto the public through modifications to the Longhorn Corporate Internet site and removal of\ninformation previously available to the public on that site.\n2. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies.\nBy virtue of the LMC 12 Letter, Magellan has identified its failure to meet the requirements of\nLMC 12 within the specified time. Specifically, Magellan has not completed an in-line\ninspection of the existing pipeline (Valve J-1 to Crane) with an ultrasonic wall measurement tool\nno more than 5 years after system startup. System startup of the Longhorn Pipeline occurred on\nJanuary 27, 2005, making the deadline for performance of LMC 12 within the specified timeline\nJanuary 27, 2010. Magellan has failed to provide timely notice for a revision to the LMP as just\nthe preparations for such an in-line inspection require more than the time between December 17,\n2009 and January 27, 2010.\nFurther, Magellan has not provided an alternative proposal to ensure equivalent levels of safety\nare maintained as required by LMP 3.2.14.\nMagellan is further reminded that LMC 12A requires that no more than three years shall pass\nwithout an in-line inspection being performed using an in-line tool capable of detecting third\nparty damage (e.g. TFI, HRMFL, or geometry). Based upon the annual status reports submitted\nby Longhorn to PHMSA, SW Region, it appears that these dates will fall sometime within the\ncalendar year of 2010, but no later than January 27, 2011, depending upon the date of the last\ntool run for each segment on the Longhorn system.\n3\n\n\n\nAs a direct result of the actions described herein, DOT/PHMSA cannot approve Magellan’s\nrequest for a time extension to LMC 12 until such time that Magellan has followed the\nnotification requirements of LMC 39, including justification for the change and proposed\nalternatives to ensure equivalent levels of safety are maintained.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000\nfor each violation for each day the violation persists up to a maximum of $1,000,000 for any\nrelated series of violations. The Compliance Officer has reviewed the circumstances and\nsupporting documentation involved in the above probable violation(s) and has recommended that\nyou be preliminarily assessed a civil penalty of $51,000 as follows:\nItem number PENALTY\n1 $51,000\nWarning Item\nWith respect to item 2, we have reviewed the circumstances and supporting documents involved\nin this case and have decided not to conduct additional enforcement action or penalty assessment\nproceedings at this time. We advise you to promptly correct these item(s). Be advised that\nfailure to do so may result in HEP being subject to additional enforcement action.\nProposed Compliance Order\nWith respect to item 1, pursuant to 49 United States Code § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Magellan. Please refer\nto the Proposed Compliance Order, which is enclosed and made a part of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators\nin Compliance Proceedings. Please refer to this document and note the response options. Be\nadvised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted information\nqualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days\nof receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this\nNotice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in\nthis Notice without further notice to you and to issue a Final Order.\n4\n\n\n\nIn your correspondence on this matter, please refer to CPF 4-2010-5003 and for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous\nMaterials Safety Administration\ncc: Larry Davied Doug Chabino\nVice President, Technical Services Manager, Asset Integrity Engineering\nMagellan Midstream Partners, L.P. Magellan Midstream Partners, L.P.\nOne Williams Center One Williams Center\nP. O. Box 22186 P. O. Box 22186\nTulsa, OK 74172-2186 Tulsa, OK 74172-2186\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n5\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Magellan Midstream Partners, L. P. (Magellan) a\nCompliance Order incorporating the following remedial requirements to ensure the compliance\nof Magellan with the pipeline safety regulations:\n1. In regard to Item Number 1 of the Notice pertaining to failure to follow its operating\nmanual which includes the procedures specified in the Longhorn Mitigation Plan\n(LMP),\na. Magellan shall revise its System Integrity Plan to incorporate the requirements\nof the LMP, specifically Longhorn Mitigation Commitment (LMC) 39, and\nprovide a copy of the revised procedures to PHMSA, Southwest (SW) Region.\nb. Following the procedure developed in Item 1a, above, Magellan shall revise its\nrequest for revision of the LMP with respect to LMC 12 and resubmit it to\nPHMSA, SW Region, in accordance with items 1d though 1h of this Compliance\nOrder.\nc. Magellan shall revise the Longhorn Corporate Internet site to make the LMP\nand other public information required by the LMP readily apparent and available.\nMagellan shall then post the revised change request and associated justifications\nand alternatives to be developed under this Compliance Order, to the Internet site.\nd. Magellan shall provide a detailed justification for not performing the\nrequirements of LMC 12 in accordance with the LMP, and develop alternative\nactions to be taken until the performance of the internal inspection by ultrasonic\nwall measurement tool in accordance with LMC 12 can be completed.\ne. Magellan shall notify the entities identified in LMC 39 of the LMP regarding\nits failure to meet the timing requirements of LMC 12, and provide a copy of the\njustification and proposed alternatives to LMC 12 to those entities.\nf. Magellan shall identify the alternatives and the associated costs for each\nalternative it has considered in lieu of meeting the timing requirements of LMC\n12 and submit its alternative cost analysis to PHMSA, SW Region.\ng. Magellan shall provide a detailed schedule for the timing of the inspections (or\nproposed alternatives to the inspections) required under both LMC 12 and LMC\n12A for each pipeline segment on the Longhorn System.\nh. Upon approval of Magellan’s proposal by PHMSA, SW Region, Magellan shall\nprovide monthly updates on its activities, costs and schedule for the completion of\nthe alternatives to the completion of LMC 12 and scheduling of LMC 12A, until\nsuch time that the alternatives or the requirements of LMCs 12 and 12A are\ncomplete and PHMSA, SW Region no longer requires updates be provided.\n6\n\n\n\n2. Magellan shall submit its proposed alternatives and cost analysis to PHMSA, SW\nRegion no later than thirty (30) days from the Final Order. Magellan’s proposal shall\nbe subject to the review and approval of PHMSA, SW Region. Magellan’s submittal\nto PHMSA shall identify and copy all entities in LMC 39. PHMSA, SW Region will\nconsider the comments from the LMC 39 entities in its review and approval of\nMagellan’s alternative to meeting the timing requirements of LMC 12.\nMagellan shall post its justification and proposed alternatives to its corporate Internet\nsite at the same time it makes notification to PHMSA, SW Region.\n3. Magellan shall maintain documentation of the safety improvement costs associated\nwith fulfilling this Compliance Order and submit the total to R. M. Seeley, Director,\nSW Region, Pipeline and Hazardous Materials Safety Administration. Costs shall be\nreported in two categories: 1) total cost associated with preparation/revision of plans,\nprocedures, studies and analyses, and 2) total cost associated with replacements,\nadditions and other changes to pipeline infrastructure.\n7\n\n420105003_Closure Letter_01062012_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJanuary 6, 2012\nMr. Larry Davied\nSenior Vice President, Operations and Technical Services\nMagellan Pipeline Company, L.P.\nA subsidiary of Magellan Midstream Partners, L.P.\nOne Williams Center\nTulsa, OK 74172-2186\nCPF 4-2010-5003\nDear Mr. Davied:\nOn April 14, 2011, the Pipeline and Hazardous Materials Administration issued a Final Order to\nMagellan Midstream Partners, L.P. (“Magellan”) in the referenced case. Based on review of the\ndocumentation you provided and confirmation that the administrative civil penalty has been paid,\nit has been determined that Magellan has complied with the terms and conditions of the Final\nOrder.\nAccordingly, PHMSA now considers this case closed and no further action is contemplated with\nrespect to the maters involved in this case.\nThank you for your cooperation in this matter.\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous\nMaterials Safety Administration","truncated":false,"body_characters":34585}