{"operation":"document","citation":"CPF 420135004","title":"ENBRIDGE PIPELINES (OZARK) L.L.C. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2013-03-04","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b), 195.565, 195.571, 195.581.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420135004","body":"Notice of Probable Violation involving ENBRIDGE PIPELINES (OZARK) L.L.C.. PHMSA's enforcement data identifies the cited regulations as 195.432(b),  195.565,  195.571,  195.581. The case was opened on 2013-03-04 and is reported as closed as of 2016-11-07. Proposed civil penalty: $78,700. Assessed civil penalty: $45,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420135004_Closure Letter_ 11072016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Closure%20Letter_%2011072016_text.pdf\n\n420135004_Closure Letter_11072016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Closure%20Letter_11072016.pdf\n\n420135004_Decision on the Petition for Reconsideration_09022016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Decision%20on%20the%20Petition%20for%20Reconsideration_09022016.pdf\n\n420135004_Decision on the Petition for Reconsideration_09022016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Decision%20on%20the%20Petition%20for%20Reconsideration_09022016_text.pdf\n\n420135004_Final Order_10162015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Final%20Order_10162015.pdf\n\n420135004_Final Order_10162015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Final%20Order_10162015_text.pdf\n\n420135004_NOPV PCP PCO_03042013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_NOPV%20PCP%20PCO_03042013.pdf\n\n420135004_NOPV PCP PCO_03042013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_NOPV%20PCP%20PCO_03042013_text.pdf\n\n420135004_Operator Petition For Reconsideration_11062015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Operator%20Petition%20For%20Reconsideration_11062015.pdf\n\n420135004_Operator Response to Notice_04262013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135004/420135004_Operator%20Response%20to%20Notice_04262013.pdf\n\n420135004_NOPV PCP PCO_03042013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMarch 4, 2013\nMr. Richard Adams\nVice President, U. S. Operations\nEnbridge Pipelines, LLC\nCity Center Office\n1409 Hammond Ave.\nSuperior, WI 54880-5247\nCPF 4-2013-5004\nDear Mr. Adams:\nIn November 2011, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your\nEnbridge Pipeline, LLC Cushing Terminal (Enbridge) in Cushing, OK.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the\nprobable violation(s) are:\n1. §195.432 Inspection of in-service breakout tanks.\n(b) Each operator must inspect the physical integrity of in-service atmospheric and low-\npressure steel aboveground breakout tanks according to API Standard 653\n(incorporated by reference, see § 195.3). However, if structural conditions prevent\naccess to the tank bottom, the bottom integrity may be assessed according to a plan\nincluded in the operations and maintenance manual under § 195.402(c)(3).\n\n\n\nAPI Standard 653 “Tank Inspection, Repair, Alteration, and Reconstruction” (3rd edition,\nDecember 2001, includes addendum 1 (September 2003), addendum 2 (November 2005),\naddendum 3 (February 2008), and errata (April 2008)).\n6.3.2.1 All tanks shall be given a visual external inspection by an authorized inspector.\nThis inspection shall be called the external inspection and must be conducted at least\nevery 5 years or RCA/4N years (where RCA is the difference between the measured shell\nthickness and the minimum required thickness in mils, and N is the shell corrosion rate in\nmils per year) whichever is less. Tanks may be in operation during this inspection.\n(d) The intervals of inspection specified by documents referenced in paragraphs (b) and (c) of\nthis section begin on May 3, 1999, or on the operator's last recorded date of the inspection,\nwhichever is earlier.\nEnbridge did not properly determine the shell corrosion rates necessary to establish the\nexternal inspection intervals as required by API Standard 653, 6.3.2.1, incorporated by\nreference into Part 195. Paragraph 6.3.2.1 of API Standard 653 requires the external\ninspection interval to be determined by subtracting the minimum required shell thickness from\nthe measured shell thickness and dividing the result by four times the actual shell corrosion\nrate. The shell corrosion rate is calculated by dividing the measured metal loss by the time\nover which it occurred. The metal loss is determined by subtracting a more recent shell\nthickness measurement from a shell thickness measurement made earlier in time at the same\nlocation on the breakout tank. The change in shell thickness is then divided by the time\ninterval between measurements to determine a corrosion rate. Some of the Enbridge\ncalculations of metal loss were negative, indicating the shell plate had increased in thickness\nover time. This occurred because the methodology used by Enbridge to measure the shell\nplate thickness was flawed. Consequently, tanks #1014, #2228, and #3011 had improperly\ncalculated inspection intervals.\n2. §195.432 Inspection of in-service breakout tanks.\n(b) Each operator must inspect the physical integrity of in-service atmospheric and low-\npressure steel aboveground breakout tanks according to API Standard 653\n(incorporated by reference, see § 195.3). However, if structural conditions prevent\naccess to the tank bottom, the bottom integrity may be assessed according to a plan\nincluded in the operations and maintenance manual under § 195.402(c)(3).\n(d) The intervals of inspection specified by documents referenced in paragraphs (b) and\n(c) of this section begin on May 3, 1999, or on the operator's last recorded date of the\ninspection, whichever is earlier.\n2\n\n\n\nAPI Standard 653 “Tank Inspection, Repair, Alteration, and Reconstruction” (3rd\nedition, December 2001, includes addendum 1 (September 2003), addendum 2\n(November 2005), addendum 3 (February 2008), and errata (April 2008)).\n6.9.3.2 It is the responsibility of the owner/operator to review the inspection findings and\nrecommendations, establish a repair scope, if needed, and determine the appropriate\ntiming for repairs, monitoring, and/or maintenance activities. Typical timing\nconsiderations and examples of repairs are: a. Prior to returning the tank to service—\nrepairs critical to the integrity of the tank (e.g., bottom or shell repairs). b. After the\ntank is returned to service—minor repairs and maintenance activity (e.g., drainage\nimprovement, painting, gauge repairs, grouting, etc.). c. At the next scheduled internal\ninspection—predicted or anticipated repairs and maintenance (e.g., coating renewal,\nplanned bottom repairs, etc.). d. Monitor condition for continued deterioration—(e.g.,\nroof and/or shell plate corrosion, settlement, etc.). The owner/operator shall ensure that\nthe disposition of all recommended repairs and monitoring is documented in writing and\nthat reasons are given if recommended actions are delayed or deemed unnecessary.\n4.5.2 Foundation Repair or Replacement\n4.5.2.1 If there is a need for foundation repair or replacement, foundations shall be\nrestored to the tolerance limits of 10.5.6.\n4.5.2.2 Concrete pads, ringwalls, and piers, showing evidence of spalling, structural\ncracks, or general deterioration, shall be repaired to prevent water from entering the\nconcrete structure and corroding the reinforcing steel.\nC.1.1.1 Concrete Ring\nd. Check that runoff rainwater from the shell drains away from tank.\nC.1.1.5 Site Drainage\na. Check site for drainage away from the tank and associated piping and manifolds.\nEnbridge did not complete some breakout tank repairs identified by the API 653 standard and\nthe required inspections as necessary to maintain a tank condition suitable for safe operation\nor in the alternative provide engineering justification for not making the repairs. The issues\ninclude failing to make repairs to cracked or deteriorated ringwalls and failing to modify the\ngrade so that water drains away from the tanks. Inadequate repairs were found on tanks\n#1014, #1015, #1016, #1153, and #1154.\n3. §195.432 Inspection of in-service breakout tanks.\n(b) Each operator must inspect the physical integrity of in-service atmospheric and low-\npressure steel aboveground breakout tanks according to API Standard 653\n(incorporated by reference, see § 195.3). However, if structural conditions prevent\naccess to the tank bottom, the bottom integrity may be assessed according to a plan\nincluded in the operations and maintenance manual under § 195.402(c)(3).\n3\n\n\n\n(d) The intervals of inspection specified by documents referenced in paragraphs (b) and\n(c) of this section begin on May 3, 1999, or on the operator's last recorded date of the\ninspection, whichever is earlier.\nAPI Standard 653 “Tank Inspection, Repair, Alteration, and Reconstruction” (3rd\nedition, December 2001, includes addendum 1 (September 2003), addendum 2\n(November 2005), addendum 3 (February 2008), and errata (April 2008)).\n6.3.1.2 The interval of such inspections shall be consistent with conditions at the\nparticular site, but shall not exceed one month.\nEnbridge did not perform the monthly inspections of its breakout tanks as required by 49 CFR\n195 and API Standard 653, incorporated by reference. According to the Enbridge Work Order\nList Report for monthly breakout tank inspections, breakout tank 1181 was inspected on\nJanuary 4, 2011 but not inspected again until March 1, 2011, a span of 56 days with no\nFebruary inspection. Breakout tank 1182 was inspected on January 29, 2011 but not inspected\nagain until March 7, 2011, a span of 37 days with no February inspection. The January Work\nOrder List indicates that breakout tank 3364 was not inspected until February 1 but inspected\nagain on February 28 with no January inspection. There are several additional Cushing\nTerminal breakout tanks where the inspections are not being performed according to the API\nStandard 653 requirement. Enbridge must modify its inspection schedule to meet the\nrequirement of performing API Standard 653 routine in-service inspections.\n4. §195.565 How do I install cathodic protection on breakout tanks?\nAfter October 2, 2000, when you install cathodic protection under Sec. 195.563(a) to\nprotect the bottom of an aboveground breakout tank of more than 500 barrels\n(79.5m3) capacity built to API Specification 12F, API Standard 620, or API Standard\n650 (or its predecessor Standard 12C), you must install the system in accordance with\nAPI Recommended Practice 651. However, installation of the system need not comply\nwith API Recommended Practice 651 on any tank for which you note in the corrosion\ncontrol procedures established under Sec. 195.402(c)(3) why compliance with all or\ncertain provisions of API Recommended Practice 651 is not necessary for the safety of\nthe tank.\n§195.571 What criteria must I use to determine the adequacy of cathodic protection?\nCathodic protection required by this Subpart must comply with one or more of the\napplicable criteria and other considerations for cathodic protection contained in\nparagraphs 6.2 and 6.3 of NACE SP 0169 (incorporated by reference, see § 195.3).\n4\n\n\n\nEnbridge did not meet at least one of the applicable criteria for cathodic protection on some\nCushing Terminal breakout tanks as required by API RP 651 and NACE SP 0169. The\nOperator uses the 100 mV polarization criterion on a portion of the breakout tanks and the\n-850 mV with consideration of IR drop criterion on others. The inspection found several\nbreakout tanks where Enbridge was not meeting the specified criteria or had not taken the\nappropriate measurements to determine if the specified criterion was being met.\nFor example, Enbridge states that the 100mV criterion is being used tank #1153 but only\nenergized (on) readings were taken during the 2011 annual survey. To determine if the 100\nmV criterion is being met, the operator must compare the polarized measurement, eliminating\nIR drop, (instant off) to the depolarized measurement. However, no instant off readings were\ntaken in 2011 to determine if the 100mV of polarization was achieved. Without instant off\nreadings, the only check that can be made is against the -850mV with consideration of IR drop\ncriterion (energized reading). Several of the energized readings taken using the profile tube\ndid not meet the -850mV criterion even before considering IR drop (20 feet, -625mV, 25 feet,\n-607mV, 30 feet, -684mV, 40 feet, -702mV).\nAs another example, the records for tank #1295 do not show any depolarization measurements\nso one of the -850mV criteria must be applied. Some of the structure-to-soil measurements\ndid not meet either of the -850mV criteria listed in NACE SP0169 or API RP651 for 2009,\n2010, or 2011. Enbridge records indicate that a new groundbed was installed in 2010 but\nsome of the 2011 structure-to-soil readings were still not meeting one of the -850 mV criteria.\nTank #2211, which was cited in a previous enforcement action (CPF 4-2010-5008) for\nexceeding the API 653 internal inspection interval, was diagnosed with a depleted groundbed\nas early as 2007. The tank was scheduled to be taken out of service in 2012 but Enbridge\ncontinued to operate the tank with deficient cathodic protection in 2009, 2010, and 2011.\nOther examples of tanks not meeting one of the cathodic protection criteria include #1182,\n#2218, #1320, #2212, #2215, and #2223.\n5. §195.581Which pipelines must I protect against atmospheric corrosion and what\ncoating material may I use?\nYou must clean and coat each pipeline or portion of pipeline that is exposed to the\natmosphere, except pipelines under paragraph (c) of this section. (b) Coating\nmaterial must be suitable for the prevention of atmospheric corrosion. (c) Except\nportions of pipelines in offshore splash zones or soil-to-air interfaces, you need not\nprotect against atmospheric corrosion any pipeline for which you demonstrate by\ntest, investigation, or experience appropriate to the environment of the pipeline that\ncorrosion will- (1) Only be a light surface oxide; or (2) Not affect the safe operation\nof the pipeline before the next scheduled inspection.\n5\n\n\n\n§195.583 What must I do to monitor atmospheric corrosion control?\n(c) If you find atmospheric corrosion during an inspection, you must provide\nprotection against the corrosion as required by Sec. 195.581.\nEnbridge has not consistently applied coating material (paint) to all of its breakout tanks in the\nCushing Terminal suitable for the prevention of atmospheric corrosion as required by\n195.581(a). Enbridge has several tanks at their Cushing, OK terminal that have not been\ncompletely painted and have an atmospheric corrosion scale on the unpainted exterior surface.\nEnbridge argues that the corrosion scale is a form of protective coating and that the tanks do\nnot need to be painted to protect them from atmospheric corrosion. However, according to the\nOperator, the bottom four feet on these tanks has been painted “to protect the floor-to-shell\n(“chime”) weld and appurtenance area.” The acknowledgment that a portion of the tank had to\nbe painted for protection from atmospheric corrosion indicates that corrosion damage is\noccurring and constitutes a contradiction to the Operator’s argument that the corrosion scale is\nadequate protection from atmospheric corrosion.\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 $78,700 as follows:\nItem number PENALTY\n1 $33,700\n4 $45,000\nWarning Items\nWith respect to item(s) 2, 3, and 5 we have reviewed the circumstances and supporting\ndocuments involved in this case and have decided not to conduct additional enforcement action\nor penalty assessment proceedings at this time. We advise you to promptly correct these item(s).\nBe advised that failure to do so may result in Enbridge Pipeline being subject to additional\nenforcement action.\nProposed Compliance Order\nWith respect to item(s) 1 and 4 pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to Enbridge\nPipeline. Please refer to the Proposed Compliance Order, which is enclosed and made a part of\nthis Notice.\n6\n\n\n\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.\nIn your correspondence on this matter, please refer to CPF 4-2013-5004 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 Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n7\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 Enbridge a Compliance Order incorporating the\nfollowing remedial requirements to ensure the compliance of Enbridge with the pipeline safety\nregulations:\n1. 2. 3. 4. In regard to Item Number 1 of the Notice pertaining to improperly determining\nthe shell corrosion rates, Enbridge must modify its program to correctly determine\nthe shell thicknesses and corrosion rates on all of the breakout tanks in the\nCushing Terminal and re-determine the external inspection intervals for each\nbreakout tank.\nIn regard to Item Number 4 of the Notice pertaining to failing to achieve adequate\ncathodic protection on some of the breakout tanks and piping in the Cushing\nTerminal, Enbridge must take appropriate actions to remedy all cathodic\nprotection deficiencies and show by structure-to-soil measurements that one or\nmore of the cathodic protection criteria listed in NACE SP0169 or API RP651 has\nbeen achieved.\nIn regard to Item Number 1 of the Notice, Enbridge must submit, for PHMSA\napproval, a shell thickness measurement procedure within 30 days of receipt of\nthis Order. The Operator must then complete shell thickness re-measurements\naccording to the approved procedure for all Cushing Terminal breakout tanks\nwithin 180 days of receiving PHMSA approval for the procedure. The Operator\nmust also propose an initial shell re-measurement interval appropriate to\ndetermine a valid shell corrosion rate, and once the second measurement has been\ncompleted, recalculate the external inspection interval for all Cushing Terminal\nbreakout tanks. Enbridge must complete the entire process to properly determine\nthe external inspection intervals within 60 months from of receipt of this Order.\nIn regard to Item Number 4 of the Notice, Enbridge must submit to PHMSA, a\nplan, with dates, to correct all cathodic protection deficiencies within 30 days of\nreceipt of this Order. The Operator must complete correction of all deficiencies\nwithin 12 months of receipt of this Order.\nIt is requested (not mandated) that Enbridge Pipeline, LLC maintain\ndocumentation of the safety improvement costs associated with fulfilling this\nCompliance Order and submit the total to R. M. Seeley, Director, Southwest\nRegion, Pipeline and Hazardous Materials Safety Administration. It is requested\nthat these costs be reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses, and 2) total cost\nassociated with replacements, additions and other changes to pipeline\ninfrastructure.\n8\n\n420135004_Decision on the Petition for Reconsideration_09022016_text.pdf\n\nSeptember 2, 2016\nMr. Mark Maki\nPresident\nEnbridge Pipelines (Ozark), LLC\n1100 Louisiana Street\nSuite 3300\nHouston, TX 77002\nRe: CPF No. 4-2013-5004\nDear Mr. Maki:\nEnclosed is the Decision on the Petition for Reconsideration filed by Enbridge Pipelines (Ozark),\nLLC, in the above-referenced case. For the reasons explained therein, the Decision grants the\nPetition and modifies the civil penalty and compliance terms of the October 16, 2015 Final\nOrder. The penalty terms are set forth in the Decision. When the civil penalty has been paid and\nthe terms of the compliance order completed, as determined by the Director, Southwest Region,\nthis enforcement action will be closed. This Decision constitutes the final administrative action\nin this proceeding. Service of this Decision is made pursuant to 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nActing Associate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. R. M. Seeley, Regional Director, Southwest Region, OPS\nMr. Darren Hunter, Counsel for Enbridge Pipelines (Ozark), LLC, Rooney Rippie &\nRatnaswamy, LLP, Kingsbury Center, Suite 600, 350 W. Hubbard Street, Chicago,\nIllinois 60654\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\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)\nEnbridge Pipelines (Ozark), LLC, ) CPF No. 4-2013-5004\na subsidiary of Enbridge, Inc., )\n)\nPetitioner. )\n____________________________________)\nDECISION ON PETITION FOR RECONSIDERATION\nIn November 2011, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Enbridge Pipelines\n(Ozark), LLC (Enbridge or Petitioner), at the company’s Cushing Terminal in Cushing,\nOklahoma. The Cushing Terminal includes 87 crude oil storage tanks with approximately 20\nmillion barrels in shell capacity.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued a Notice of\nProbable Violation, Proposed Civil Penalty and Proposed Compliance Order (Notice) to\nEnbridge on March 3, 2013, which alleged certain violations of the pipeline safety regulations\nand proposed a civil penalty of $78,700.2 The Notice also proposed ordering Petitioner to take\ncertain measures to correct the alleged violations.\nEnbridge responded to the Notice by letter dated April 26, 2013 (Response).3 The company\ncontested one of the allegations of violation, provided certain information regarding the\ncorrective actions it had taken, but did not request a hearing.4\nOn October 16, 2015, pursuant to 49 C.F.R. § 190.213, PHMSA issued a Final Order in this\nproceeding.5 The agency found that Enbridge had committed violations of § 195.432(b) (Item 1)\n1 See www.enbridge.com. Current as of May 9, 2016.\n2 Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice), C.P.F. No. 4-\n2013-5004, (Mar. 4, 2013) (on file with PHMSA).\n3 Respondent’s Response to Notice (Response), (Apr. 26, 2013) (on file with PHMSA).\n4 Id.\n\n\n\nCPF No. 4-2013-5004\nPage 2\nand §§ 195.565 and 195.571 (Item 4), as alleged in the Notice.6 The Final Order assessed a civil\npenalty of $33,700 for Item 1 and $45,000 for Item 4 and ordered corrective actions for both\nitems, set forth in the compliance order that was part of the Final Order.7 The Final Order also\nissued warnings for probable violations of 49 C.F.R. § 195.432 (b) and (c) (Items 2 and 3) and §\n195.581 (Item 5).8\nIn accordance with § 190.243, Enbridge filed a timely Petition for Reconsideration of the Final\nOrder on November 9, 2015, seeking reconsideration of the finding of violation in Item 1 and its\nassociated civil penalty and compliance terms.9 For the reasons stated below, I find that the\nfinding of violation, civil penalty and compliance terms for Item 1 should be withdrawn for lack\nof sufficient evidence. Accordingly, as noted below, I am granting the Petition by withdrawing\nItem 1 of the Final Order in its entirety. The other provisions of the Final Order are otherwise\naffirmed without modification.\nStandard of Review\nPursuant to 49 C.F.R. § 190.243, an operator may petition for reconsideration of a final order\nissued under § 190.213 and PHMSA may consider additional facts or arguments if the petitioner\nsubmits a valid reason explaining why such information was not presented prior to issuance of\nthe final order. PHMSA may grant or deny, in whole or in part, a petition for reconsideration\nwithout further proceedings, but may request additional information or comment if deemed\nappropriate.\nDiscussion\nItem 1 in the Final Order found that Petitioner violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) …\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel aboveground breakout tanks according\nto API Standard 653 (incorporated by reference, see § 195.3). However, if\nstructural conditions prevent access to the tank bottom, the bottom\nintegrity may be assessed according to a plan included in the operations\nand maintenance manual under § 195.402(c)(3).\n5 In the Matter of Enbridge Pipelines (Ozark), LLC, Final Order, C.P.F. No. 4-2013-5004 (Oct. 16, 2015) (Final\nOrder) (available at www.phmsa.dot.gov/pipeline/enforcement).\n6 Id.\n7 Id.\n8 Id.\n9 Petitioner’s Petition for Reconsideration (Petition), (Nov. 9, 2015) (on file with PHMSA). Enbridge did not seek\nreconsideration of Items 2 through 5.\n\n\n\nCPF No. 4-2013-5004\nPage 3\nThe Final Order determined the Petitioner had violated § 195.432(b) by failing to inspect the\nphysical integrity of three in-service breakout tanks at its Cushing, Oklahoma facility, in\naccordance with American Petroleum Institute (API) Standard 653 (Standard).10 Specifically,\nPHMSA found that the Petitioner violated section 6.3.2.1 of the Standard by failing to properly\ndetermine the corrosion growth rates for several tanks in the Cushing facility.11 To illustrate, the\nFinal Order noted that recorded shell-plate corrosion growth rates for three tanks in the Cushing\nfacility were negative, indicating the methodology used by the Petitioner was flawed and\ninconsistent with the Standard.12 The Final Order further explained that even when considering\npertinent variables such as steel tolerances and measurement differentials, the Petitioner’s\nmethodology could only be effective if corrosion rates were completely uniform across the\ntanks.13 The Order also found that the negative values showed the company’s methodology for\ncalculating the corrosion growth rates was not in accordance with sound engineering principles.\nIn its Petition, Enbridge contends it did not violate § 195.432(b) and PHMSA wrongly concluded\nthat the negative corrosion growth rates recorded for the three Cushing Terminal tanks implied\nthat the company had employed an incorrect methodology.14 Enbridge argues that it applied the\nformula for corrosion growth rates as prescribed in the Standard and that the recorded negative\nvalues did not indicate noncompliance. Enbridge explains that it calculated metal loss, a\ncomponent of the corrosion growth-rate calculation, by using the minimum (thinnest) thickness\nmeasurement taken on each tank and comparing it to the thickness measurements from the\nprevious inspection for each tank.15 Enbridge further explains that using the minimum thickness\nmeasurement “add[ed] conservatism” to the metal-loss and corrosion-rate calculations.16\nIn its Petition, Enbridge further argues that the Notice erroneously alleged that the Standard\nrequired corrosion growth rates to be calculated by determining metal loss at the same location\non each tank during each inspection.17 The Petition includes expert opinions stating that\n“tak[ing] measurements at random locations on the tank to determine general corrosion rates” is\ncompliant with the Standard.18\n10 API Standard 653, “Tank Inspection Repair, Alteration, and Reconstruction” (3rd edition, December 2001,\nincludes addendum 1 (September 2003), addendum 2 (November 2005), addendum 3 (February 2008) and errata\n(April 2008)), has been incorporated by reference into 49 C.F.R. Part 195 under 49 C.F.R. § 195.3.\n11 Final Order, at 2.\n12 Id. at 3.\n13 Id.\n14 Petition, at 3.\n15 Petition, at 3-4; Response, at 2.\n16 Response, at 2.\n17 Petition, at 3.\n18 Id. at 4.\n\n\n\nCPF No. 4-2013-5004\nPage 4\nThe crux of this Petition involves the question of what constitutes the proper methodology for\ncalculating external inspection intervals and tank-shell corrosion growth rates, which are\nprescribed by the Standard. Section 6.3.2.1 of the Standard states that external inspections shall\noccur at least every five years, or RCA/4N years (where RCA is the difference between the\nmeasured shell thickness and the minimum required thickness in shells, and N is the shell\ncorrosion rate in mils per year), whichever is less. Section 3.11 of the Standard defines corrosion\nrate (N) as “[t]he total metal loss divided by the period of time over which the metal loss\noccurred.” To calculate the corrosion rate (N) for a tank shell, metal loss must first be\ndetermined. The Standard, however, does not prescribe a specific methodology for calculating\nmetal loss, nor does it specify a methodology for determining the thicknesses of tank shell-plates,\nan essential component of the metal loss calculation.\nIn this case, OPS bears the burden of proving, by a preponderance of the evidence, that the\nPetitioner failed to calculate the inspection interval in accordance with the Standard. The “Shell\nThickness Evaluation” reports (Reports) provided by the Petitioner during the PHMSA\ninspection show that the inspection intervals for the three tanks at issue were set at five years or\nless.19 The reports show that Enbridge had recorded shell-plate thickness measurements for each\ncourse of the individual tanks during the most recent inspections.20 The evidence does not reflect\nthat Enbridge inspectors took more than a single shell-plate thickness measurement for each tank\ncourse; however, the Petitioner asserts that several shell-plate thickness measurements were\ntaken and the smallest (thinnest) readings were recorded in the report as the thickness\ndeterminations for each course.21 Further, the Reports show that corrosion rates were calculated\nfor each tank course based on these minimum shell-plate thickness readings by utilizing the\nformula prescribed in Section 3.11 of the Standard, total metal loss divided by the period of time\nover which the metal loss occurred.22 The Reports also show that the formula prescribed in\nSection 6.3.2.1 was applied as prescribed in calculating the inspection intervals for the three\nsubject tanks.23 Finally, the Reports reflect that the ultimate inspection interval for each tank\nwas based on the shortest interval calculated from all of the individual tanks’ courses.24\n19 Pipeline Safety Violation Report (Violation Report), (Jul. 9, 2012), at 39-41.\n20 Id.\n21 Response, at 2.\n22 See Violation Report, at 39, the calculations for Tank 1014 are as follows: RCA = (.593) – (.5198) = .07\ncorrosion allowance, N = .028 / 5.62 = .0049 mils / year, .07 / 4 (.0049) = 3.73 years (report reflects 3.67 years);\nViolation Report at 40, the calculations for Tank 2228 are as follows: RCA = (1.078 ) – (.8910) = .187 corrosion\nallowance, N = .091 / 9.80 = .009 mils / year, .187 / 4 (.009) = 5.05 years (report reflects 5.04 years); Violation\nReport at 41, the calculations for Tank 3011 are as follows: RCA = (.934) – (.8616) = .0724 corrosion allowance, N\n= .038 / 9.08 = .004 mils / year, .0724 / 4 (.004) = 4.525 years (report reflects 3.67 years).\n23 Id.\n24 Id. at 39-41.\n\n\n\nCPF No. 4-2013-5004\nPage 5\nI have carefully reviewed the entire record in this case and cannot determine that the\nmethodology used by Enbridge to calculate the tank inspection intervals under the Standard was\nwrong or that it violated 49 C.F.R. § 195.432(b). First, I agree with the Petitioner that the\nnegative corrosion growth rates recorded by Enbridge inspectors do not show that the company’s\nmethodology was inherently flawed.25 Negligible or negative corrosion rates may occur while\nproperly employing the corrosion-rate calculation set forth in the Standard, as argued by the\nPetitioner and its experts.26 This is because the calculations for tank shell corrosion rates and\nmetal loss include shell-plate thickness measurements that can be affected by several variables,\nincluding steel tolerances, measurement differentials, and differing rates of corrosion. Those\nvariables can result in negative metal loss calculations, even when the Standard is followed\nappropriately.\nSecond, I agree with Enbridge that API 653 does not require that shell-plate thickness\nmeasurements be taken at the same location on each tank during each inspection when\ndetermining metal loss. Rather, the Standard is silent on the exact methodology that must be\nused for making the metal loss determination. While Enbridge’s methodology of using a\nminimum thickness reading for each tank course to determine a general corrosion rate may not\nbe considered the optimal practice because single, anomalous readings can skew general\ncorrosion rates, the Petitioner’s methodology did not expressly violate 49 C.F.R. § 195.432 or\nAPI 653.27\nThe Notice and Final Order found fault with Petitioner’s practice of taking shell-plate thickness\nmeasurements across each tank shell and using the lowest reading in the metal loss calculation\nfor that tank. While the evidence shows Enbridge inspectors did not calculate the average shell-\nplate thicknesses when determining metal loss of the tanks in accordance with sound engineering\npractices, the Petitioner’s methodology does not expressly violate the requirements of Sections\n6.3.2.1 or 3.11 of the Standard, as neither directly prescribes a methodology for determining\nshell-plate thickness measurements. Based on the evidence of record, I find there is insufficient\nevidence to show that Enbridge violated either the Standard or § 195.432(b). Accordingly, I\ngrant the Petition for Reconsideration with respect to Item 1 of the Final Order. The finding of\nviolation, the proposed penalty of $33,700, and the associated terms of the compliance order are\nhereby withdrawn.\n25 Id. The Enbridge “Shell Thickness Evaluation” reports include shell corrosion rates for each tank course on the\nsubject tanks. Several corrosion rates recorded for the tank courses were negative, in negligible amounts.\n26 Petition, at 3.\n27 Enbridge even argues that “there are variables that affect the [shell corrosion rate] calculation” in support of their\nargument that measuring in the same location on each tank is not the correct methodology. Petition, at 5.\n\n\n\nCPF No. 4-2013-5004\nPage 6\nConclusion\nFor the reasons stated above, the Petition for Reconsideration is granted. The finding of\nviolation in Item 1 of the Final Order, the associated penalty of $33,700, and the associated\ncompliance terms are hereby withdrawn. All other terms of the Final Order and Compliance\nOrder remain in effect as set forth therein.\nThis Decision on Reconsideration is the final administrative action in this proceeding.\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nActing Associate Administrator\nfor Pipeline Safety\n\n420135004_Closure Letter_ 11072016_text.pdf\n\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED\nNovember 7, 2016\nMr. Brad Shamla\nVice President, U.S. Operations\nEnbridge Storage (Cushing) L.L.C.\n1100 Louisiana Street, Suite 3300\nHouston, TX 77002\nRe: CPF No. 4-2013-5004\nDear Mr. Shamla:\nOn October 16, 2015, a Final Order was issued in the above-referenced case. The Final Order\nmade a finding of violation and specified actions to be taken by Enbridge Storage (Cushing)\nL.L.C. (Enbridge).\nOn September 2, 2016, a Decision on the Petition for Reconsideration was issued in the above-\nreferenced case. The Decision on the Petition for Reconsideration withdrew Item 1 of the Final\nOrder.\nBased on a PHMSA review it has been determined that Enbridge has completed the requirements\nof the Final Order. This letter is to inform you that no further action is necessary and this case is\nnow closed. Thank you for your cooperation.\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n\n420135004_Final Order_10162015_text.pdf\n\nOctober 16, 2015\nMr. Mark Maki\nPresident\nEnbridge Pipelines (Ozark), LLC\n1100 Louisiana Street\nSuite 3300\nHouston, TX 77002\nRe: CPF No. 4-2013-5004\nDear Mr. Maki:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $78,700, and specifies actions that need to be taken by\nEnbridge Pipelines (Ozark), LLC, 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. Rodrick Seeley, Regional Director, Southwest Region, OPS\nMr. Shaun Kavajecz, Senior Manager, US Pipeline Compliance, Enbridge Energy\nCompany, Inc. 26 E. Superior Street, Suite 309 Duluth, MN 55811\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\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 )\nEnbridge Pipelines (Ozark), LLC, )\na subsidiary of Enbridge, Inc., ) CPF No. 4-2013-5004\n)\n)\n)\nRespondent. )\n_____________________________________)\nFINAL ORDER\nDuring November 2011, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Enbridge Pipelines\n(Ozark), LLC (Enbridge or Respondent), at the company’s Cushing Terminal in Cushing,\nOklahoma. Enbridge is a subsidiary of Enbridge, Inc., an international energy company involved\nin the generation, transport, storage and distribution of oil, gas and electricity assets, with its\ncorporate headquarters in Calgary, Canada, and a United States headquarters in Houston, Texas.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter da","truncated":true,"body_characters":59734}