# HOLLY ENERGY PARTNERS - OPERATING, L.P. — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420105007
- **title:** HOLLY ENERGY PARTNERS - OPERATING, L.P. — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2010-02-26
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.571, 195.573(e).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-420105007.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420105007.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420105007
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420105007
**body:**

Notice of Probable Violation involving HOLLY ENERGY PARTNERS - OPERATING, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.571,  195.573(e). The case was opened on 2010-02-26 and is reported as closed as of 2010-12-07. Proposed civil penalty: $45,000. Assessed civil penalty: $45,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420105007_Closure_12072010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_Closure_12072010.pdf

420105007_Closure_12072010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_Closure_12072010_text.pdf

420105007_FinalOrder_10182010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_FinalOrder_10182010.pdf

420105007_FinalOrder_10182010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_FinalOrder_10182010_text.pdf

420105007_NOPV PCP PCO_02262010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_NOPV%20PCP%20PCO_02262010.pdf

420105007_NOPV PCP PCO_02262010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_NOPV%20PCP%20PCO_02262010_text.pdf

420105007_Response to NOPV PCP PCO_03292010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_Response%20to%20NOPV%20PCP%20PCO_03292010.pdf

420105007_Response to NOPV PCP PCO_05272010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420105007/420105007_Response%20to%20NOPV%20PCP%20PCO_05272010.pdf

420105007_FinalOrder_10182010_text.pdf

OCT 18 2010
Mr. Mark Cunningham
Vice President, Operations
Holly Energy Partners, L.P.
100 Crescent Court, Suite 1600
Dallas, TX 75201
Mr. Terry Hurlburt
Senior Vice President, Operations
Enterprise Products Operating, L.P.
P. O. Box 4324
Houston, TX 77210-4324
Re: CPF No. 4-2010-5007
Dear Mr. Cunningham and Mr. Hurlburt:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a civil penalty of $45,000, and specifies actions that need to be taken by Holly
Energy Partners, L.P., and Enterprise Products Operating, L.P., to comply with the pipeline
safety regulations. This is to acknowledge receipt of payment of the full penalty amount, by wire
transfer, dated March 31, 2010. When the terms of the compliance order have been completed,
as determined by the Director, Southwest Region, this enforcement action will be closed.
Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as
otherwise provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. R. M. Seeley, Director, Southwest Region, PHMSA
CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 1160 0001 0041 0282]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
Holly Energy Partners, L.P., ) CPF No. 4-2010-5007
)
and )
)
Enterprise Products Operating, L.P., )
)
Respondents. )
____________________________________)
FINAL ORDER
On November 3-7, 2008, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and
Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
conducted an on-site pipeline safety inspection of the Rio Grande Pipeline in Artesia, New
Mexico, which Holly Energy Partners, L.P. (Holly), operated and partially owned at the time of
the inspection.
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Holly, by
letter dated February 26, 2010, a Notice of Probable Violation, Proposed Civil Penalty, and
Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice
proposed finding that Holly had violated 49 C.F.R. §§ 195.571 and 195.573(e), and proposed
assessing a civil penalty of $45,000 for the alleged violations. The Notice also proposed that
Holly be required to take certain measures to correct the alleged violations.
Holly responded to the Notice by letter dated March 29, 2010 (Holly Response). The company
did not contest the allegations of violation and paid the proposed civil penalty of $45,000 as
provided in 49 C.F.R. § 190.227. Holly stated that it transferred operation of, and its majority
ownership in, the Rio Grande Pipeline on December 1, 2009, and that it would therefore be
unable to satisfy any terms of the proposed compliance order with respect to that facility. By
letter dated May 27, 2010, Enterprise Products Operating, L.P. (Enterprise), a subsidiary of
Enterprise Products Partners, L.P., informed PHMSA that it was the new operator and majority
owner of the Rio Grande Pipeline (Enterprise Response). The company explained that it had
received the Notice and stated that it intended to satisfy the terms of the proposed compliance
order. Neither Holly nor Enterprise requested a hearing, and therefore they have each waived
their right to one.



3
In their Responses, the Respondents did not contest the following allegations in the Notice:
Item 1: The Notice alleged that Holly violated 49 C.F.R. § 195.471, which states:
§ 195.471 What criteria must I use to determine the adequacy of
cathodic protection?
Cathodic protection required by this Subpart must comply with one or
more of the applicable criteria and other considerations for cathodic
protection contained in paragraphs 6.2 and 6.3 of NACE SP 0169
(incorporated by reference, see §195.3).
The Notice alleged that Holly failed to ensure that cathodic protection complied with applicable
195.571 specifies that cathodic protection must comply with one or more of the criteria
criteria in paragraphs 6.2 and 6.3 of NACE Standard RP 0169 (NACE RP 0169).1 Section
established in paragraphs 6.2 and 6.3 of NACE RP 0169. Paragraph 6.2.2.1.1 of NACE RP0169
establishes one of the criteria as a negative potential of at least 850 mV with the cathodic
protection applied.
The Notice alleged, based on records of pipe-to-soil readings, that thirteen specific test points on
Holly’s system did not meet the -850 mV cathodic protection criterion at various points during
the period from 2005 to 2008. Holly did not contest this allegation of violation.
Records of pipe-to-soil readings indicated that Holly failed to maintain adequate cathodic
protection levels at the thirteen locations identified in the Notice. Accordingly, based upon a
review of all of the evidence, I find that Holly violated 49 C.F.R. § 195.471 by failing to ensure
that cathodic protection complied with the -850 mV criterion contained in paragraph 6.2 of
NACE RP 0169.
Item 2: The Notice alleged that Holly violated 49 C.F.R. § 195.573(e), which states:
§ 195.573 -- What must I do to monitor external corrosion control?
(a) . . . .
(e) Corrective action. You must correct any identified deficiency in
corrosion control as required by §195.401(b). However, if the deficiency
involves a pipeline in an integrity management program under §195.452,
you must correct the deficiency as required by §195.452(h).
The Notice alleged that Holly violated 49 C.F.R. § 195.573(e) by failing to correct identified
deficiencies in corrosion control as required by § 195.401(b). As described in Item 1, Holly
failed to demonstrate that adequate cathodic protection levels were maintained for the thirteen
locations identified in the Notice. Pipe-to-soil readings at ten of those locations exceeded the
-850 mV criterion for at least two consecutive years. Any such inadequate reading constitutes a
deficiency in corrosion control that, per § 195.401(b), must be corrected “within a reasonable
1 NACE International Standard Recommended Practice 0169, “Control of External Corrosion on Underground or
Submerged Metallic Piping Systems,” incorporated by reference at § 195.3.



4
time,” which PHMSA has interpreted to mean before the next annual cathodic protection
inspection cycle.2 The Notice alleged further that Holly’s corrosion control procedures did not
specify a timeline for correction of identified deficiencies in corrosion control.
In its Response, Holly did not contest the allegation of violation, but it described the actions it
had taken to address the inadequate pipe-to-soil readings. Holly stated that, after it took over
operations of the Rio Grande Pipeline in 2005, it recognized the deficiencies indicated by the
inadequate readings. The company stated that it attempted to address these inadequate readings
by installing new impressed current cathodic protection systems and by replacing and upgrading
existing anode beds. According to the company, these steps failed to correct the pipe-to-soil
readings, and therefore it conducted an internal inspection tool assessment. Because this
assessment showed no defects that met the criteria for repair, Holly determined that the
inadequate pipe-to-soil readings did not indicate conditions that were detrimental to the safety of
the pipeline.
Although Holly took certain corrective actions in response to the low readings, the record
demonstrates, and Holly did not contest, that the cathodic protection deficiencies were not
corrected within a reasonable time pursuant to §§ 195.573(e) and 195.401(b).
Accordingly, based upon a review of all of the evidence, I find that Holly violated 49 C.F.R.
§ 195.573 by failing to correct identified deficiencies in corrosion control within a reasonable
time.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Holly.
Having reviewed the record and considered the assessment criteria, I assess Holly a civil penalty
of $45,000 for the violations, which has already been paid.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for
violations of 49 C.F.R. §§ 195.571 and 195.573(e), respectively. Under 49 U.S.C. § 60118(a),
each person who engages in the transportation of hazardous liquids or who owns or operates a
pipeline facility is required to comply with the applicable safety standards established under
chapter 601.
Because Enterprise received the Notice and is now the operator of the Rio Grande Pipeline, it is
responsible for satisfying the terms of the Compliance Order relating to the pipeline system at
issue in this proceeding. Holly is responsible for complying with the terms of the Compliance
Order relating to its own procedures.
2 See, e.g., In the Matter of Colonial Pipeline Co., Final Order, CPF 1-2002-5009, 2003 WL 25429887 (Dec. 10,
2003) (finding violations of § 195.401(b) for cathodic protection deficiencies lasting two or three consecutive years).



5
Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Enterprise is ordered
to take the following actions to ensure compliance with the pipeline safety regulations applicable
to its operations:
1. Enterprise must provide documentation to the Director, Southwest Region, that
substantiates that the Rio Grande Pipeline system throughout West Texas is in
compliance with § 195.573. This documentation must include the pipe-to-soil test
points listed in Tables I and II of the Notice.
2. Within 30 days of receipt of this Final Order, Enterprise must provide the
documentation described above to the Director, Southwest Region, Office of Pipeline
Safety, PHMSA, 8701 South Gessner, Suite 1110, Houston, TX 77074.
3. Enterprise must maintain documentation of the safety improvement costs associated
with fulfilling this Compliance Order and submit that total to the Director, Southwest
Region. Costs shall be reported in two categories: (1) total cost associated with
preparation and revision of plans, procedures, studies, and analyses, and (2) total cost
associated with replacements, additions, and other changes to pipeline infrastructure.
Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Holly is ordered to
take the following actions to ensure compliance with the pipeline safety regulations applicable to
its operations:
1. Holly must provide documentation to the Director, Southwest Region, demonstrating
that its corrosion control procedures contain language that specifies a timeline for
correction of identified deficiencies in corrosion control, as indicated by inadequate
pipe-to-soil readings. These procedures must be consistent with the requirements of
§§ 195.401(b) and 195.452(h).
2. Within 30 days of receipt of this Final Order, Holly must provide the documentation
described above to the Director, Southwest Region, Office of Pipeline Safety,
PHMSA, 8701 South Gessner, Suite 1110, Houston, TX 77074.
3. Holly must maintain documentation of the safety improvement costs associated with
fulfilling this Compliance Order and submit that total to the Director, Southwest
Region. Costs shall be reported in two categories: (1) total cost associated with
preparation and revision of plans, procedures, studies, and analyses, 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 either Respondent and 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.



6
Under 49 C.F.R. § 190.215, each Respondent has a right to submit a Petition for Reconsideration
of this Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline
Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC
20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA
will accept petitions received no later than 20 days after receipt of this Final Order by the
Respondents, provided they contain a brief statement of the issue(s) and meet all other
requirements of 49 C.F.R. § 190.215. Unless the Associate Administrator, upon request, grants a
stay, the terms and conditions of this Final Order are effective upon service in accordance with
49 C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety

420105007_Closure_12072010_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
December 7, 2010
Mr. Mark Cunningham
Vice President, Operations
Holly Energy Partners, L.P.
100 Crescent Court, Suite 1600
Dallas, TX 75201
Mr. Terry Hurlburt
Senior Vice President, Operations
Enterprise Products Operating, L.P.
P.O. Box 4324
Houston, TX 77210-4324
CPF 4-2010-5007
Dear Mr. Cunningham and Mr. Hurlburt:
On October 18, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued to Holly Energy Partners, L.P. and Enterprise Products Operating, L.P. a Final Order in
the above-referenced case. This Order makes findings of violations and specified actions that
needed to be taken by Holly Energy Partners, L.P. and Enterprise Products Operating, L.P. in a
Compliance Order. Based on our review of the documentation you provided, it has been
determined that you have complied with the terms of this Order.
Accordingly, this case is now closed and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
R. M. Seeley
Director, Southwest Region
Pipeline and Hazardous
Materials Safety Administration

420105007_NOPV PCP PCO_02262010_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
February 26, 2010
Mr. Mark Cunningham
Vice President, Operations
Holly Energy Partners
100 Crescent Ct., Suite 1600
Dallas, Texas 75201
CPF 4-2010-5007
Dear Mr. Cunningham:
On November 3 – 7, 2008, a representative of the Pipeline and Hazardous Materials Safety
Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code inspected Holly
Energy Partners (HEP) Rio Grande Pipeline Company’s records and procedures in Artesia,
New Mexico.
As a result of the inspection, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and
the probable violations are:
1. §195.571 Cathodic protection required by this subpart must comply with one or
more of the applicable criteria and other considerations for cathodic protection
contained in paragraphs 6.2 and 6.3 of NACE Standard RP 0169 (incorporated by
reference, see §195.3).
During the records review of the Rio Grande Pipeline, the PHMSA inspector asked HEP for
their corrosion control procedures and pipe-to-soil records. After reviewing the corrosion
control procedures and pipe-to-soil records, the PHMSA inspector found several test points
that did not meet the -0.850 V corrosion criteria early in 2008 (see Table I) and for two and
four consecutive years between 2005 and 2008 (see Table II). HEP’s procedure referred to in
their O&M manual as 6.0 HEP-O&M-195.563 (Cathodic Protection) states that the following:



“Sufficient current must flow from soil to pipe to maintain a constant voltage difference at the
soil-metal interface of 0.25 volt (approximately -0.85 volt between pipe and copper sulfate
electrode in contact with soil) or more.”
HEP failed to demonstrate adequate cathodic protection levels were maintained for the
locations identified in Tables I and II below by failing to meet the criteria specified in their
corrosion control procedures.
Table I
850 mV Criteria - 2008 Low Pipe-to-Soil Data
Relative
Milepost
Location
Description
Pipe-to-Soil
Reading (V)
2005
Pipe-to-Soil
Reading (V)
2006
Pipe-to-Soil
Reading (V)
2007
Pipe-to-Soil
Reading (V)
2008
114.800 Test Lead
Marker #172
- 0.894 - 0.970 - 1.202 - 0.770
121.600 Booster Sta.
& Block Valve
- 0.850 - 0.900 - 0.895 -0.707
121.900 Kinder
Morgan 20”
Crossing
- 1.130 - 0.913 - 0.891 -0.751
2. §195.573(e) Corrective action. You must correct any identified deficiency in
corrosion control as required by §195.401(b). However, if the deficiency involves a
pipeline in an integrity management program under §195.452, you must correct the
deficiency as required by §195.452(h).
During the records review of the Rio Grande Pipeline, the PHMSA inspector asked HEP for
their corrosion control procedures and pipe-to-soil records. After reviewing the pipe-to-soil
records, the PHMSA inspector found several test points that did not meet the -0.850 V
corrosion criteria for two and four consecutive years (see Table II). Pipelines having
inadequate test readings for two consecutive years or more of annual survey data cannot
provide adequate levels of cathodic protection. The operator should have the evaluations and
decisions made and action started within a few months (proportionately less where required
monitoring is less than a year), and correction completed by the next scheduled monitoring.
Additionally, HEP’s corrosion control procedures do not contain language that specifying the
timing of corrective actions or the definition of “prompt action” or “reasonable time” as it
pertains to the correction of pipe to soil readings that fail to meet the minimum criteria.
2



Table II
850 mV Criteria - Consecutive Low Pipe-to-Soil Data
Relative
Milepost
Location
Description
Pipe-to-Soil
Reading (V)
2005
Pipe-to-Soil
Reading (V)
2006
Pipe-to-Soil
Reading (V)
2007
Pipe-to-Soil
Reading (V)
2008
75.300 Test Lead
Marker #132
- 0.622 - 0.594 - 0.771 - 0.667
96.000 Test Lead
Marker #153
N/R N/R - 0.844 -0.683
96.400 Test Lead N/R N/R - 0.661 -0.506
96.500 Test Lead N/R -0.827 - 0.620 -0.550
97.000
Test Lead
Marker #154
KM#60
N/R N/R - 0.670 -0.515
100.000 Test Lead
Marker #157
KM#57
- 0.712 - 0.735 - 0.724 -0.640
103.000 Test Lead
Marker #160
- 0.754 - 0.719 N/R N/R
107.900
Test Lead
Marker #165 - 0.773 - 0.815 - 0.700 -0.704
112.900
Test Lead
Marker #170 - 0.638 - 0.844 - 0.798 -0.552
113.800 Test Lead
Marker #171
KM#43
- 0.680 - 0.800 - 0.832 -0.494
N/R - Not Relevant to establish the non-compliance.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed
$100,000 for each violation for each day the violation persists up to a maximum of $1,000,000
for any related series of violations. The Compliance Officer has reviewed the circumstances
and supporting documentation involved in the above probable violations and has
recommended that you be preliminarily assessed a civil penalty of $45,000 as follows:
Item number PENALTY
1 $22,500
2 $22,500
Proposed Compliance Order
With respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and
Hazardous Materials Safety Administration proposes to issue a Compliance Order to Holly3



Energy Partners. Please refer to the Proposed Compliance Order, which is enclosed and
made a part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline
Operators in Compliance Proceedings. Please refer to this document and note the response
options. 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 copy of the document with the portions you
believe qualify for confidential treatment redacted and an explanation of why you 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 right to
contest the allegations in this Notice and authorizes 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.
In your correspondence on this matter, please refer to CPF 4-2010-5007 and for each
document you submit, please provide a copy in electronic format whenever possible
Sincerely,
R. M. Seeley
Director, Southwest Region
Pipeline and Hazardous
Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
4



PROPOSED COMPLIANCE ORDER
Pursuant to 49 U.S.C. § 60118, the Office of Pipeline Safety proposes to issue to Holly Energy
Partners a Compliance Order incorporating the following requirements to assure the
compliance of Holly Energy Partners with the pipeline safety regulations applicable to its
operations.
1. In regard to Items 1 and 2 of the Notice, Holly Energy must provide this office
documentation that substantiates that the Rio Grande Pipeline system throughout
West Texas is in compliance with 49 CFR §195.573. This demonstration must
include those pipe-to-soil test points specifically noted on Tables I and II of this letter.
Additionally, Holly Energy must provide this office its corrosion control procedure
ensuring that it contains language that specifies the timing of corrective as it pertains
to the correction of pipe to soil readings that fail to meet the minimum criteria.
2. Submit the results of the Proposed Compliance Order item above to the Region
Director, Southwest Region, Office of Pipeline Safety, Pipeline and Hazardous
Materials Safety Administration, 8701 South Gessner, Suite 1110, Houston, Texas
77074. This is to be accomplished within 30 days following receipt of the Final
Order.
3. Holly Energy shall maintain documentation of the safety improvement costs
associated with fulfilling this Compliance Order and submit the total to R. M. Seeley
Director, Southwest Region, Pipeline and Hazardous Materials Safety
Administration. Costs shall be reported in two categories: 1) total cost associated
with preparation/revision of plans, procedures, studies and analyses, and 2) total
cost associated with replacements, additions and other changes to pipeline
infrastructure.
5
- **truncated:** false
- **body characters:** 24341