# PLAINS PIPELINE, L.P. — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420135007
- **title:** PLAINS PIPELINE, L.P. — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2013-04-05
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.205(a), 195.402(a), 195.430, 195.432(a), 195.563, 195.571.
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-420135007.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420135007.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420135007
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420135007
**body:**

Notice of Probable Violation involving PLAINS PIPELINE, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.205(a),  195.402(a),  195.430,  195.432(a),  195.563,  195.571. The case was opened on 2013-04-05 and is reported as closed as of 2017-12-28. Proposed civil penalty: $103,400. Assessed civil penalty: $102,900. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420135007_Closure Letter_12282017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135007/420135007_Closure%20Letter_12282017.pdf

420135007_Closure Letter_12282017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135007/420135007_Closure%20Letter_12282017_text.pdf

420135007_Final Order_05222015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135007/420135007_Final%20Order_05222015.pdf

420135007_Final Order_05222015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135007/420135007_Final%20Order_05222015_text.pdf

420135007_NOPV PCP PCO_04052013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135007/420135007_NOPV%20PCP%20PCO_04052013.pdf

420135007_NOPV PCP PCO_04052013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135007/420135007_NOPV%20PCP%20PCO_04052013_text.pdf

420135007_Operator Response and Request for a Hearing_05102013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135007/420135007_Operator%20Response%20and%20Request%20for%20a%20Hearing_05102013.pdf

420135007_NOPV PCP PCO_04052013_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
April 5, 2013
Mr. Troy Valenzuela
Vice President, Environmental, Health, & Safety
Plains Pipeline, L.P.
P.O. Box 4648
Houston, TX 77210-4648
CPF 4-2013-5007
Dear Mr. Valenzuela:
On various dates in 2011 and 2012, a representative of the Pipeline and Hazardous Materials Safety
Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your Plains
Pipeline, L.P., Cushing Terminal (Plains, the Operator) in Cushing, OK.
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
violation(s) are:
1. §195.205 Repair, alteration and reconstruction of aboveground breakout tanks that have been
in service.
(a) Aboveground breakout tanks that have been repaired, altered, or reconstructed and returned
to service must be capable of withstanding the internal pressure produced by the hazardous liquid
to be stored therein and any anticipated external loads. (b) After October 2, 2000, compliance
with paragraph (a) of this section requires the following for the tanks specified: (1) For tanks
designed for approximately atmospheric pressure constructed of carbon and low alloy steel,
welded or riveted, and non-refrigerated and tanks built to API Standard 650 or its predecessor
Standard 12C, repair, alteration, and reconstruction must be in accordance with API Standard
653.



Plains does not have complete documentation showing that all repairs recommended by the API 653
inspections were completed or alternatively if the Operator decided that certain recommended repairs
were not necessary, the engineering justification for why the repairs were not made. In some cases the
Operator has bid proposals from vendors and Authorization for Expenditure (AFE) documents, but these
documents do not clearly show that the work was actually completed.
2. §195.402 Procedural manual for operations, maintenance, and emergencies.
(a) General. Each operator shall prepare and follow for each pipeline system a manual of written
procedures for conducting normal operations and maintenance activities and handling abnormal
operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months,
but at least once each calendar year, and appropriate changes made as necessary to insure that the
manual is effective. This manual shall be prepared before initial operations of a pipeline system
commence, and appropriate parts shall be kept at locations where operations and maintenance
activities are conducted.
Plains did not follow its procedure, P – 195.432(b), Inspection of In-Service Breakout Tanks, which
according to Item 1m of its inspection procedure, in place at the time of the PHMSA inspection,
required a security inspection as part of the monthly breakout tank inspection. However, the Plains
monthly Tank Inspection record, Form 505, did not include any documentation that the security
inspections had been performed. The Operator also did not have other records showing that the monthly
security inspections had been performed.
3. §195.430 Firefighting equipment.
Each operator shall maintain adequate firefighting equipment at each pump station and breakout
tank area. The equipment must be-
(a) In proper operating condition at all times;
(b) Plainly marked so that its identity as firefighting equipment is clear; and,
(c) Located so that it is easily accessible during a fire.
§195.10 Responsibility of operator for compliance with this part.
An operator may make arrangements with another person for the performance of any action required by
this part. However, the operator is not thereby relieved from the responsibility for compliance with any
requirement of this part.
Plains does not maintain adequate firefighting equipment at their Cushing Terminal but instead relies on
the local public firefighting agency (Cushing Fire Department) and a volunteer alliance of area pipeline
operators (Safety Alliance of Cushing, SAC) to provide equipment to satisfy this requirement. The
Operator’s policy allows employees to attempt to extinguish only small fires using small portable fire
extinguishers but requires personnel to call on the local firefighting agency to respond to larger fires.
But, Plains does not have adequate verification that the local public firefighting agency and SAC have
adequate capability to respond to a fire at the Plains Cushing Terminal.
2



4. §195.432 Inspection of in-service breakout tanks.
(a) Except for breakout tanks inspected under paragraphs (b) and (c) of this section, each
operator shall, at intervals not exceeding 15 months, but at least once each calendar year, inspect
each in-service breakout tank.
(b) Each operator must inspect the physical integrity of in-service atmospheric and low-pressure
steel aboveground breakout tanks according to API Standard 653 (incorporated by reference, see
§ 195.3). However, if structural conditions prevent access to the tank bottom, the bottom integrity
may be assessed according to a plan included in the operations and maintenance manual under §
195.402(c)(3).
The breakout tank internal inspection intervals for thirty (30) tanks initially presented to PHMSA during
the inspection were not correctly established according to the requirements of API Standard 653. For
example, Plains records showed that tanks 2300, 2400, 2500, and 2600 were completed on July 1, 2002
and had an internal inspection interval established of fourteen (14) years. Plains did not have a similar
service assessment performed according to Appendix H of API Standard 653 and did not have
procedures for establishing the internal inspection intervals using a risk-based methodology according to
paragraph 6.4.3 of API Standard 653. Consequently, the Operator was required to establish the internal
inspection interval according to paragraph 6.4.2.2 of the version of API Standard 653 incorporated by
reference, which states, “When corrosion rates are not known and similar service experience is not
available to estimate the bottom plate minimum thickness at the next inspection, the internal inspection
interval shall not exceed 10 years.” This required internal inspections of the tanks with a construction
date of July 1, 2002 to be completed by July 1, 2012. The internal inspection intervals for twenty six
additional tanks (2700 through 5300) had similar issues and require initial internal inspections be
performed by dates ranging from July 1, 2013 to April 7, 2020 depending on the construction date.
Plains revised the inspection intervals and provided new data to PHMSA.
5. §195.563 Which pipelines must have cathodic protection?
(d) Bare pipelines, breakout tank areas, and buried pumping station piping must have cathodic
protection in places where regulations in effect before January 28, 2002 required cathodic
protection as a result of electrical inspections. See previous editions of this part in 49 CFR, parts
186 to 199.
§195.565 How do I install cathodic protection on breakout tanks?
After October 2, 2000, when you install cathodic protection under Sec. 195.563(a) to protect the bottom
of an aboveground breakout tank of more than 500 barrels (79.5m3) capacity built to API Specification
12F, API Standard 620, or API Standard 650 (or its predecessor Standard 12C), you must install the
system in accordance with API Recommended Practice 651. However, installation of the system need
not comply with API Recommended Practice 651 on any tank for which you note in the corrosion
control procedures established under Sec. 195.402(c)(3) why compliance with all or certain provisions
of API Recommended Practice 651 is not necessary for the safety of the tank.
§195.553 What special definitions apply to this subpart?
Buried means covered or in contact with soil.
3



Plains did not maintain cathodic protection on at least sixteen (16) Cushing Terminal breakout tanks
according to the requirements of 49 CFR 195.563(d) and 49 CFR 195.565, and did not have supporting
documentation needed to adequately justify why compliance with the provisions of API 651 is not
necessary for the safety of the tank. The Operator originally installed impressed current cathodic
protection systems on breakout tanks in the Cushing Terminal at the time of construction. Consistent
with the requirements of 49 CFR 195.563(d), the installation of impressed current cathodic protection
systems on these tanks indicates that Plains had determined that cathodic protection of the tank bottoms
was needed. At a later date, Plains discontinued the cathodic protection and instead implemented the
use of Vapor Phase Corrosion Inhibitor but did not provide supporting documentation justifying these
actions.
6. §195.571 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).
§195.565 How do I install cathodic protection on breakout tanks?
After October 2, 2000, when you install cathodic protection under Sec. 195.563(a) to protect the bottom
of an aboveground breakout tank of more than 500 barrels (79.5m3) capacity built to API Specification
12F, API Standard 620, or API Standard 650 (or its predecessor Standard 12C), you must install the
system in accordance with API Recommended Practice 651. However, installation of the system need
not comply with API Recommended Practice 651 on any tank for which you note in the corrosion
control procedures established under Sec. 195.402(c)(3) why compliance with all or certain provisions
of API Recommended Practice 651 is not necessary for the safety of the tank.
Plains did not meet one or more of the applicable criteria for cathodic protection on twenty seven (27)
breakout tanks in the Cushing Terminal as required by 49 CFR 195.571 and 49 CFR 195.565. For
example, the annual 2010 and 2011 reference cells survey shows that there was no cathodic protection
on tank 1800. Another example is on tank 2000 where one of the year 2011 energized readings was -
0.657 mV and the IR free reading was -0.483 mV. The Operator has a note that the 100 mV criterion
was used, but there was not adequate information (native potential) on the Operator’s record to
determine if the 100 mV criterion was met. Other examples where at least one of the reference cells
during the 2011 survey were not meeting one of the criteria include tanks 1900, 2100, 2200, 2300, 2400,
2500, 2600, 2700, 2800, 2900, 3000, 3100, 3200, 3300, 3400, 3500, 3600, 3700, 3800 3900, 4000, 4300,
4400, 5000, and 5300.
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 violation(s) and has recommended that you be preliminarily assessed a
civil penalty of $103,400 as follows:
Item number PENALTY
4



5 $32,800
6 $70,600
Warning Items
With respect to item(s) 1 through 4, we have reviewed the circumstances and supporting documents
involved in this case and have decided not to conduct additional enforcement action or penalty
assessment proceedings at this time. We advise you to promptly correct these item(s). Be advised that
failure to do so may result in Plains being subject to additional enforcement action.
Proposed Compliance Order
With respect to item(s) 5 and 6 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous
Materials Safety Administration proposes to issue a Compliance Order to Plains. 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 4-2013-5007 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
5



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration
(PHMSA) proposes to issue to Plains a Compliance Order incorporating the following remedial
requirements to ensure the compliance of Plains with the pipeline safety regulations:
1. 2. 3. 4. In regard to Item Number 5 of the Notice pertaining to Plains failing to install cathodic
protection on some of its breakout tanks, the Operator must install cathodic protection to
protect the bottom of each unprotected breakout tank as required by the applicable
provisions in 49 CFR 195. Volatile Corrosion Inhibitor (VCI) may be used in
conjunction with cathodic protection but cannot be used as a substitute for a cathodic
protection system.
In regard to Item Number 6 of the Notice pertaining to failing to achieve adequate
cathodic protection on some of the breakout tanks in the Cushing Terminal, Plains must
take appropriate actions to remedy all cathodic protection deficiencies and show by
structure-to-soil measurements that one or more of the cathodic protection criteria listed
in NACE SP0169 or API RP651 has been achieved.
In regard to Item Number 5 of the Notice, Plains must submit, for PHMSA approval, a
plan to install cathodic protection on each unprotected breakout tank within 30 days of
receipt of this Order. The Operator must then complete installation of the cathodic
protection systems within 1 year of receiving PHMSA approval for the plan. In regard to
Item Number 6 of the Notice, Plains must submit to PHMSA within 1 year, structure-to-
soil readings for every tank in the Cushing Terminal that show that at least one of the
cathodic protection criteria required by 49 CFR 195 has been met.
It is requested (not mandated) that Plains 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. It is requested that these costs 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.
6

420135007_Final Order_05222015_text.pdf

May 22, 2015
Harry N. Pefanis
President
Plains All American Pipeline, L.P.
Plains Pipeline, L.P.
333 Clay Street, Suite 1600
Houston, TX 77002
Re: CPF No. 4-2013-5007
Dear Mr. Pefanis:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a reduced civil penalty of $102,900, and specifies corrective action that must
be completed. The penalty payment terms are set forth in the Final Order. When the civil
penalty has been paid and the terms of the compliance order completed, as determined by the
Director, Southwest Region, this enforcement action will be closed. Service of the Final Order is
made pursuant to 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, OPS
Mr. Trent M. Doyle and Mr. Eric P. Gotting, Keller and Heckman LLP
1001 G Street NW, Ste 500 West, Washington, D.C. 20001
CERTIFIED MAIL – RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
___________________________________
In the Matter of )
Plains Pipeline, L.P., ) CPF No. 4-2013-5007
)
)
)
Respondent. )
___________________________________ )
FINAL ORDER
During 2011 and 2012, 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 records and procedures of Plains Pipeline,
L.P. (Plains or Respondent) in Cushing, Oklahoma.1
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued a Notice of
Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order on April 5, 2013
(Notice). In accordance with 49 C.F.R. § 190.207, the Notice alleged that Respondent
committed two violations of the pipeline safety regulations, proposed a civil penalty of $103,400,
and proposed certain corrective action. In addition, the Notice included several warning items
advising Respondent to correct other probable violations.
Plains responded to the Notice and requested a hearing by letter dated May 10, 2013 (Response).
Plains submitted additional documents on July 29, 2013 (Pre-hearing Submission). In
accordance with 49 C.F.R. § 190.211, a hearing was held on August 7, 2013, in Houston, Texas,
before a Presiding Official from the Office of Chief Counsel, PHMSA. After the hearing,
Respondent submitted additional documentation on September 13, 2013 (Post-hearing Brief) and
May 29, 2014 (Second Post-hearing Statement).
FINDINGS OF VIOLATION
The Notice alleged that Respondent committed two violations of the hazardous liquid pipeline
safety regulations in 49 C.F.R. Part 195, as follows:
1 Plains is a subsidiary of Plains All American Pipeline, L.P., and operates approximately 6,000 miles of
pipeline transporting crude oil and refined products in Oklahoma, Wyoming, and other states, as reported
by Plains for 2013 pursuant to 49 C.F.R. § 195.49.



CPF No. 4-2013-5007
Page 2
Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.563, which states:
§ 195.563 Which pipelines must have cathodic protection?
(a) Each buried or submerged pipeline that is constructed, relocated,
replaced, or otherwise changed after the applicable date in §195.401(c)
must have cathodic protection. The cathodic protection must be in
operation not later than 1 year after the pipeline is constructed, relocated,
replaced, or otherwise changed, as applicable . . . .
(d) Bare pipelines, breakout tank areas, and buried pumping station
piping must have cathodic protection in places where regulations in effect
before January 28, 2002 required cathodic protection as a result of
electrical inspections. See previous editions of this part in 49 CFR, parts
186 to 199.
§ 195.565 How do I install cathodic protection on breakout tanks?
After October 2, 2000, when you install cathodic protection under
§ 195.563(a) to protect the bottom of an aboveground breakout tank . . . .
you must install the system in accordance with API Recommended
Practice 651. However, installation of the system need not comply with
API Recommended Practice 651 on any tank for which you note in the
corrosion control procedures established under § 195.402(c)(3) why
compliance with all or certain provisions of API Recommended Practice
651 is not necessary for the safety of the tank.
The Notice alleged that Respondent failed to have cathodic protection in accordance with
§ 195.563 on breakout tanks at the Cushing Terminal. Specifically, the Notice alleged that
between 2007 and 2011, Respondent replaced cathodic protection systems on at least 16 tanks
with systems that used volatile corrosion inhibitors and resistance probes (VCI). The Notice
alleged that §§ 195.563 and 195.565 require cathodic protection and do not permit the use of
VCI as a substitute for cathodic protection. The Notice further alleged Respondent did not have
supporting documentation in its corrosion control procedures under § 195.565 to justify why
compliance with the provisions of API Recommended Practice 651 (API RP 651) was not
2
necessary.
In its written submissions and at the hearing, Respondent contested the alleged violation and
argued that the use of VCI in lieu of cathodic protection is permitted under §§ 195.563 and
195.565. Respondent explained that it began using VCI in 2006 when the original cathodic
protection systems on certain breakout tanks became difficult to maintain. The tanks were
originally constructed with dielectric high density polyethylene (HDPE) liners approximately
one foot below each tank bottom. Due to the presence of the liners, Respondent found there was
inadequate space to easily replace the cathodic protection anodes as they began to deteriorate.
Retrofitting the tanks with new cathodic protection systems was found to be cost prohibitive, as
it would involve taking the tank out of service, removing the tank bottom and liner, and installing
2 API RP 651 is incorporated by reference at § 195.3.



CPF No. 4-2013-5007
Page 3
a new tank floor.3 Also, since the HDPE liner was non-conductive, Respondent could not simply
increase the impressed current.
Respondent concluded that VCI was an available alternative to cathodic protection. VCI
involves the injection of a vapor corrosion inhibitor slurry into the space between the tank floor
and liner. Electrical resistance probes are installed to monitor corrosion rates in real-time.
Respondent stated that it installed VCI on 22 tanks between 2006 and 2012. For some of the
tanks equipped with VCI, where possible, Respondent kept the original cathodic protection
system in operation. For other tanks, VCI completely replaced cathodic protection. According
to Respondent, VCI is a “proven technology with an established history of providing corrosion
protection.”4
Respondent argued that §§ 195.563 and 195.565 allow operators to use VCI instead of cathodic
protection. Respondent noted that § 195.565 allows operators to document “why compliance
with all or certain provisions of API Recommended Practice 651 is not necessary for the safety
of the tank.”5 Respondent stated that cathodic protection is not necessary for its tanks because
VCI provides adequate corrosion control. Respondent produced documentation, including its
procedures for using VCI, a memorandum from a VCI vendor with information about the
technology, expert reports, technical and engineering documentation, and a summary of
corrosion rate monitoring data for the breakout tanks.
Respondent also argued that its own use of VCI at the Cushing Terminal was previously audited
and approved by OPS in 2009. By approving the Company’s procedures for using VCI, Plains
contended that OPS adopted the position that VCI is an acceptable substitute for cathodic
protection. Respondent argued further that OPS may not change its position to accept VCI.
At the hearing, OPS denied ever taking a position during the prior audit that Respondent could
discontinue the use of cathodic protection without a special permit.
6
A. Whether §§ 195.563 and 195.565 allow the use of VCI in lieu of cathodic protection
To determine whether it was permissible for Respondent to replace cathodic protection with
VCI, PHMSA examines the plain language of the rule. PHMSA has adopted safety standards in
49 C.F.R. Part 195, Subpart H (§§ 195.551 – 195.589) to reduce the risks of pipeline accidents
caused by corrosion. Among other things, the standards govern corrosion prevention, inspection,
monitoring, corrosion repair, and employee qualifications.
3 Post-hearing Brief at 2.
4 Respondent also indicated that VCI has been specifically accepted by various States as an alternative to
cathodic protection for “storage tanks.” Response at 5.
5 § 195.565.
6 See § 190.341. A special permit is an order by which PHMSA waives compliance with a pipeline
safety regulation upon a showing by the operator that it would not be inconsistent with pipeline safety.



CPF No. 4-2013-5007
Page 4
Cathodic protection is a method of protecting steel pipelines from corrosion by making the pipe
act as the cathode of an electrochemical cell. Section 195.563 is titled “Which pipelines must
have cathodic protection?” and states that “each buried or submerged pipeline . . . must have
cathodic protection.”7 The term buried means covered or in contact with the soil.8 The term
pipeline means all parts of the pipeline facility through which hazardous liquids move, including
breakout tanks.9 Accordingly, this rule states that each breakout tank in contact with the soil
must have cathodic protection.10
The next regulation, § 195.565 is titled “How do I install cathodic protection on breakout tanks?”
and states that when operators install cathodic protection to protect the bottom of an
aboveground breakout tank as required under § 195.563(a), the installation must be consistent
with API RP 651, Cathodic Protection of Aboveground Petroleum Storage Tanks. API RP 651
is a consensus standard containing recommended practices and procedures for designing,
operating, and maintaining cathodic protection systems on the bottom of breakout tanks.
Compliance with API RP 651 is not always required, however. Section 195.565 states that an
operator is not required to follow the provisions of API RP 651 if the operator demonstrates that
all or certain provisions of the recommended practice are not necessary for the safety of the tank.
Respondent argued that § 195.565 allows operators to protect against corrosion using something
other than cathodic protection.11 Respondent bases this assertion on the fact that § 195.565
permits operators under certain circumstances to forego compliance with API RP 651. In
addition, certain provisions in the recommended practice recognize that cathodic protection may
not be appropriate in some situations, such as when there is an impervious liner.12 Respondent
noted the recommended practice is not particularly prescriptive and “identifies factors to
consider when deciding whether or not to use cathodic protection.”13
PHMSA finds § 195.563 is clear from its title and text of the rule that each breakout tank in
contact with the soil must have cathodic protection. Cathodic protection is explicitly required by
the regulation and there is no qualification or exception to this statement in the rule.
PHMSA disagrees with Respondent’s interpretation that § 195.565 allows it to employ VCI in
lieu of cathodic protection. Section 195.565 reaffirms the requirement to have cathodic
protection by stating in the first sentence: “when you install cathodic protection under
§ 195.563(a) . . . .” The title of § 195.565 also clarifies that the purpose of the rule is to explain
7 § 195.563(a). The applicability date for interstate pipelines was March 31, 1970. § 195.401(c).
8 § 195.553.
9 § 195.2.
10 In addition, under § 195.563(d) certain other types of facilities, such as bare pipelines and certain
breakout tank areas must have cathodic protection in places where regulations in effect before January 28,
2002, required cathodic protection as a result of electrical inspections.
11 Pre-hearing Submission at 5-6.
12 Pre-hearing Submission at 6-7.
13 Post-hearing Brief at 10.



CPF No. 4-2013-5007
Page 5
how cathodic protection is to be installed on breakout tanks. Even if API RP 651 itself discusses
alternative corrosion control methods or recognizes certain instances where another method may
be used, the requirements stated in the regulations control. In this instance, the regulations
explicitly require cathodic protection. VCI does not meet the regulatory requirement.
PHMSA rejects Respondent’s suggestion that when an operator determines it is unnecessary to
comply with API RP 651, as permitted by § 195.565, that means the operator may use something
other than cathodic protection.14 PHMSA finds no basis in the regulation to support this
contention. An operator who documents why it is unnecessary to comply with API RP 651 when
installing cathodic protection is permitted to install the cathodic protection in a manner that does
not follow the recommended practice. Nothing in the regulation permits an operator to avoid
installation of cathodic protection entirely.
Moreover, when PHMSA adopted API RP 651 and other consensus standards in 1999, there was
already a 30-year history of explicitly requiring cathodic protection on breakout tanks.15 There
is no support in the regulatory history, as Respondent might suggest, that PHMSA ever intended
to create a new exception to the longstanding requirement in 1999. In fact, the regulatory history
demonstrates that PHMSA permitted operators to document if a recommended practice is not
necessary because such recommended practices do not have the same level of prescriptiveness as
other types of consensus standards.16
Respondent pointed out that another regulation, § 195.573(d) “envisions circumstances where
operators are using something other than cathodic protection.” The title of that regulation also
refers more broadly to “corrosion control” instead of cathodic protection.17
Respondent’s argument ignores the fact that like § 195.565, § 195.573(d) confirms the
requirement for operator’s to have cathodic protection. The regulation requires operators to
“inspect each cathodic protection system” for breakout tanks. The title of the section may be
worded more broadly because a separate provision concerns unprotected pipe.18
For the above reasons, PHMSA finds the plain language of § 195.563 requires cathodic
protection for each breakout tank in contact with the soil. Section 195.565 confirms the
requirement to install cathodic protection, but provides that the cathodic protection may or may
14 Post-hearing Brief at 10.
15 Section 195.242(a) (1970) stated “a cathodic protection system must be installed for all buried facilities
to mitigate corrosion deterioration that might result in structural failure.” Pipeline meant “all parts of a
carrier’s physical facilities . . . including, but not limited to . . . breakout tankage.” § 195.2 (1970).
16 Adoption of Industry Standards for Breakout Tanks, 63 Fed. Reg. 27903, 27905 (proposed May 21,
1998) (stating that “codes” and “specifications” were required to be complied with as though they were
printed in full into Part 195, but recommended practices were only expected to be followed unless the
operator documented why compliance is not necessary for safety). See also Adoption of Consensus
Standards for Breakout Tanks, 64 Fed. Reg. 15926, 15929 (Apr. 2, 1999).
17 Post-hearing Brief at 13.
18 § 195.573(b).



CPF No. 4-2013-5007
Page 6
not have to comply with API RP 651 depending on whether the operator can demonstrate it is
not necessary to use the consensus standard. These rules do not permit operators to forgo having
cathodic protection entirely.
B. Prior Enforcement Activity
Respondent argued that during a previous enforcement proceeding, OPS inspected and approved
the Company’s practice of using VCI in place of cathodic protection. Specifically, in April
2008, representatives of OPS conducted an inspection of the pipeline facilities, records, and
procedures of Plains. The inspection involved reviewing the Company’s procedures for
operations and maintenance (O&M). During the inspection, Respondent contended, Plains and
OPS discussed the use of VCI as an alternative to cathodic protection and OPS did not express
any concerns.19
Following the inspection, the Director issued to Plains a Notice of Amendment on March 4, 2009
(NOA). The NOA contained approximately 20 items of apparent inadequacies in the Company’s
procedures. One of the alleged inadequacies, Item 5H, concerned the procedures for using VCI.
The Item cited § 195.565 and alleged that “Plains does not have procedures for the installation or
monitoring of the VpCI system, nor does Plains have it noted why the use of cathodic protection
is not needed for the tank bottom protection due to the use of the VpCI system.”20
Item 5H stated further that “Plains must modify the procedures to provide specific details within
the O&M manual to include VpCI,” but a separate paragraph at the end of the NOA stated that
no further action was necessary on this issue. The paragraph read, “In regard to Items . . . 5G
through 5O, listed above, Plains provided finalized documentation . . . of various changes made
to their O&M Manual. After considering the material provided, PHMSA deemed the
modifications adequate, and no further action is required in response to this Notice.”21
In February 2010, the Director issued a follow-up letter closing the NOA. The closure letter
stated that Plains had provided amended procedures in response to all the items. It stated further
that after reviewing the amended procedures, “it appears that the inadequacies outlined in this
Notice of Amendment have been corrected.” The letter concluded by saying “no further action is
necessary and this case is now closed.”22
19 Pre-hearing Submission at 2-3.
20 Pre-hearing Submission, Exhibit F, Notice of Amendment at 8. VpCI is a proprietary VCI system.
21 Pre-hearing Submission, Exhibit F, Notice of Amendment at 12. Respondent indicated that its
modified procedures noted explicitly that breakout tanks with HDPE liners were exempt from cathodic
protection requirements. Pre-hearing Submission at 4.
22 Pre-hearing Submission, Exhibit H, Closure Letter. Respondent also noted that in conjunction with the
NOA, OPS issued a separate notice of probable violation. That case alleged only one violation
concerning the use of VCI, but the violation was limited to the identification of “covered tasks” under the
operator qualification rules. Pre-hearing Submission at 4.



CPF No. 4-2013-5007
Page 7
Respondent argued that by reviewing its procedures and closing the case, OPS officially
accepted the Company’s use of VCI as a substitute for cathodic protection. Respondent
contended that “after reviewing the updated procedures, PHMSA approved them without
limitation . . . and as a result interpreted [§] 195.565 to mean that operators like Plains can
replace cathodic protection with another technology.”23
PHMSA disagrees with this contention for several reasons. First, PHMSA dismisses the general
notion that by reviewing a company’s procedures in connection with an inspection or notice of
amendment, PHMSA must thereby adopt the operator’s regulatory interpretations. OPS
inspectors routinely review operators’ procedures during inspections—procedures which may
differ widely due to the specific nature of an operator’s system. It is not reasonable to presume
that PHMSA subscribes to an operator’s regulatory interpretations implemented in its
procedures, even if the agency finds the operator’s procedures are adequate for safety.
PHMSA also dismisses the assertion that the NOA and closure letter constituted a regulatory
interpretation. PHMSA issues official interpretations through the process codified at 49 C.F.R.
§ 190.11.24 PHMSA may also interpret a regulation in an enforcement case if necessary to
resolve conflicting assertions about a regulation’s application.
25 Whether issued as a standalone
interpretation or as part of an enforcement decision, a written interpretation will contain clear
language that it is the agency’s purpose to decide a question of regulatory application. The
interpretation will explain the reasoning behind the particular decision, and if an alternative
interpretation was considered and rejected, it will explain why it was not adopted.
The 2009 NOA and closure letter documents issued to Plains contained no language indicating
an interpretation of §§ 195.563 or 195.565. The NOA only contains allegations of procedural
inadequacies and both documents contain statements of general applicability, such as “the
inadequacies outlined in this Notice of Amendment have been corrected.” These do not
constitute a definitive interpretation of any regulation. Likewise, any conversations between
Plains and individual inspectors during the audit did not constitute an official interpretation by
the agency.
Furthermore, the NOA proceeding never adjudicated whether Respondent’s procedures complied
with §§ 195.563 or 195.565. A notice of amendment issued pursuant to § 190.206 alleges that an
operator’s plans or procedures are inadequate to assure safe operation of a pipeline facility.26 If
there is a finding in the case, it is whether or not the procedures are adequate for safety.
23 Post-hearing Brief at 9.
24 Section 190.11 states that operators may obtain a regulatory interpretation by submitting a written
request to PHMSA.
25 See, e.g., Magellan Pipeline Company, CPF No. 4-2012-5010, Item 1, 2014 WL 5431188 (Sept. 2,
2014) (interpreting § 195.575(a) to require that operators clear shorted casings, unless the pipeline and
casing are electrically interconnected and cathodically protected as a single unit.)
26 This differs from a notice of probable violation issued pursuant to § 190.207, which alleges an operator
committed a violation of the safety regulations.



CPF No. 4-2013-5007
Page 8
Contrary to Respondent’s assertions, there were never any findings rendered in the earlier
proceeding that “concluded that Plains had complied with Section 195.565.”27
For the above reasons, PHMSA rejects Respondent’s contention that the 2009 NOA and closure
letter constituted an official adoption of agency position by PHMSA. Likewise, the agency
rejects the
- **truncated:** true
- **body characters:** 78237