{"operation":"document","citation":"CPF 420135009","title":"MAGELLAN PIPELINES HOLDINGS, LP — 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":null,"summary":"CLOSED notice of probable violation citing 195.402, 195.420, 195.430, 195.49, 195.589.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135009.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135009.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420135009","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420135009","body":"Notice of Probable Violation involving MAGELLAN PIPELINES HOLDINGS, LP. PHMSA's enforcement data identifies the cited regulations as 195.402,  195.420,  195.430,  195.49,  195.589. The case was opened on 2013-04-05 and is reported as closed as of 2013-10-08. Proposed civil penalty: $104,800. Assessed civil penalty: $104,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420135009_Closure_10082013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Closure_10082013.pdf\n\n420135009_Closure_10082013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Closure_10082013_text.pdf\n\n420135009_Final Order_08012013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Final%20Order_08012013.pdf\n\n420135009_Final Order_08012013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Final%20Order_08012013_text.pdf\n\n420135009_NOPV PCP PCO_04052013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_NOPV%20PCP%20PCO_04052013.pdf\n\n420135009_NOPV PCP PCO_04052013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_NOPV%20PCP%20PCO_04052013_text.pdf\n\n420135009_Operator_Response_to_Notice_05102013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Operator_Response_to_Notice_05102013.pdf\n\n420135009_NOPV PCP PCO_04052013_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nApril 5, 2013\nMr. Michael C. Pearson\nVice President – Technical Services.\nMagellan Pipeline Holdings, LP\nOne William Center\nTulsa, OK 74172\nCPF 4-2013-5009\nDear Mr. Pearson:\nDuring the months of April and November of 2012, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),pursuant to Chapter 601 of\n49 United States Code inspected the Magellan Pipeline Holdings, LP (Magellan) pipelines and facilities\nfrom Cushing to Drumright and from Drumright to Healdton all in the state of Oklahoma.\nAs a result of the inspection, it appears that you have committed probable violations of the Pipeline\nSafety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable\nviolations are:\n1. §195.49 Annual Report.\nEach operator must annually complete and submit DOT Form PHMSA F 7000-1.1 for each\ntype of hazardous liquid pipeline facility operated at the end of the previous year. An\noperator must submit the annual report by June 15 each year, except that for the 2010\nreporting year the report must be submitted by August 15, 2011. A separate report is\nrequired for crude oil, HVL (including anhydrous ammonia), petroleum products, carbon\ndioxide pipelines, and fuel grade ethanol pipelines. For each state a pipeline traverses, an\noperator must separately complete those sections on the form requiring information to be\nreported for each state.\n\n\n\nMagellan failed to accurately complete the DOT Form PHMSA F 7000-1.1 for OPID 31579, Magellan\nPipeline Holdings, L.P (Magellan). On September 1, 2010, Magellan purchased this asset from BP. As\nper Magellan’s legal department, OPID 31579 (Magellan Pipeline Holding) is the owner of the Cushing\nto Drumright to Healdton Oklahoma pipelines. However, Magellan reported this asset under OPID\n22610 during 2011. Magellan’s compliance group was informed during the April 2012 inspection and\nwas advised to correct this by June 15, 2012. On June 15, 2012, Magellan reported to PHMSA that\nthere were no changes from last year’s final report information for OPID 31579 and 22610.\n2. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a manual of\nwritten procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies. This manual shall be reviewed at\nintervals not exceeding 15 months, but at least once each calendar year, and appropriate\nchanges made as necessary to insure that the manual is effective. This manual shall be\nprepared before initial operations of a pipeline system commence, and appropriate parts\nshall be kept at locations where operations and maintenance activities are conducted.\nMagellan failed to follow their written procedures on gathering pertinent data for evaluating and\nmanaging rights-of-way. Magellan procedure 7.05-ADM-003 for ‘Right-of-way Maintenance Program’,\nsection 4.1.3 states “Annually, a company representative will accompany the aerial patrol pilot to\nidentify areas where excavation activity or leak detection cannot be identified by air”.\nDuring the inspection, the PHMSA inspector reviewed the ‘Aerial Patrol Annual R/W Inspection’ record\ndated June 28, 2011 and based on latitudes and longitudes documented on this form; it appears that\nMagellan did not fly over their entire right-of-way of Healdton to Cushing system. Instead, Magellan\nflew over from the approximate intersection of Shell Road and Longview Road in Carter County to\napproximate intersection of W 201 Street South and E 770 Road in Creek/Lincoln County border. That\nmeans Magellan was short approximately 17 miles on the south side of the system (Healdton) and\napproximately 9 miles on the north side (Drumright). Magellan also did not fly over the entire right of\nway of Cushing to Drumright pipeline.\nDuring the calendar year 2012, Magellan did fly over Drumright to Cushing on October 19, 2012 and\nhad not performed fly over for the Drumright to Healdton right-of-way.\n3. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a manual of\nwritten procedures for conducting normal operations and maintenance activities and\nhandling abnormal operations and emergencies. This manual shall be reviewed at\n2\n\n\n\nintervals not exceeding 15 months, but at least once each calendar year, and appropriate\nchanges made as necessary to insure that the manual is effective. This manual shall be\nprepared before initial operations of a pipeline system commence, and appropriate parts\nshall be kept at locations where operations and maintenance activities are conducted.\n§195.430 Firefighting equipment.\n(a) In proper operating condition at all times;\nMagellan failed to follow their procedures for inspecting fire extinguishers at the Tribbey pump station.\nAccording to Magellan’s Portable Fire Extinguishers Administrative Procedure, 5.05-ADM-076,\n“Employees shall: INSPECT monthly all portable fire extinguishers at each location per criteria listed on\nthe Portable Fire Extinguisher Checklist”. At the time of the inspection, Magellan did not provide\nrecords associated with the monthly inspection on five (5) portable fire extinguishers located at Tribbey\nPump Station from September 2010 through February 2011. Magellan began inspecting these fire\nextinguishers from March 29, 2011 and onwards.\n4. § 195.430 Firefighting equipment.\nEach operator shall maintain adequate firefighting equipment at each pump station and\nbreakout tank area. The equipment must be–\n(a) In proper operating condition at all times;\n(b) Plainly marked so that its identity as firefighting equipment is clear; and\n(b) Located so that it is easily accessible during a fire.\nMagellan did not maintain adequate firefighting equipment at the Drumright pump station. During the\nfield inspection on September 29, 2012, the PHMSA inspector noted that there were no fire\nextinguishers or any other firefighting equipment at Drumright pump station area.\nThe Magellan Portable Fire Extinguishers Administrative Procedure, 5.05-ADM-076 states “DOT\nJURISDICTIONAL PUMP STATIONS AND BREAKOUT TANK AREAS shall have adequate\nfirefighting equipment. This equipment shall be adequate to extinguish fires that are in the early stages\nof development and in no case shall be expected to fight a fully engulfed fire”.\nWhen the PHMSA inspector questioned Magellan personnel, they stated that all employees carry a fire\nextinguisher in their truck. Magellan did not provide any documentation that fire protection devices\nwere not required at this facility.\n5. § 195.420 Valve maintenance\n3\n\n\n\n(b) Each operator shall, at intervals not exceeding 7 1/2 months, but at least twice each\ncalendar year, inspect each mainline valve to determine that it is functioning properly.\nAt the time of the inspection, Magellan failed to provide a record indicating that a mainline valve was\ninspected during the fall of 2010. Magellan did not inspect a mainline valve (S/N # 7749) on # 2 – 16”\nCushing to Drumright pipeline during the Fall of 2010. It was last inspected by BP on April 7, 2010 and\nit was not again inspected again until March 25, 2011. As a result, Magellan exceeded 7 ½ month\ntimeframe. Magellan purchased this asset from BP on September 1, 2010.\n6. § 195.589 What corrosion control information do I have to maintain?\n(c) You must maintain a record of each analysis, check, demonstration, examination,\ninspection, investigation, review, survey, and test required by this subpart in sufficient\ndetail to demonstrate the adequacy of corrosion control measures or that corrosion\nrequiring control measures does not exist. You must retain these records for at least 5\nyears, except that records related to Secs. 195.569, 195.573(a) and (b), and 195.579(b)(3)\nand (c) must be retained for as long as the pipeline remains in service.\n§195.573 What must I do to monitor external corrosion control?\n(c) Rectifiers and other devices. You must electrically check for proper performance each device\nin the first column at the frequency stated in the second column.\nDevice Check Frequency\nRectifier\nReverse current switch\nDiode\nInterference bond whose failure would\njeopardize structural protection\nAt least six times each calendar year, but with\nintervals not exceeding 2 ½ months\nOther interference bond At least once each calendar year, but with\nintervals not exceeding 15 months\nMagellan did not monitor interference bonds whose failure would jeopardize the structural protection six\ntimes each calendar year, with intervals not exceeding 2 ½ months.\nDuring the April 2012 field inspection, the PHMSA inspector noted a bond at several test stations on\nCushing to Drumright pipeline. When inquired whether these bonds are critical or non-critical, Magellan\npersonnel could not produce any documentation relating to the bond inspections conducted by Magellan\nsince purchase of this asset from BP, nor did they provide any records of inspections. When the\nPHMSA inspector raised this issue during the inspection, Magellan advised that the company would\ninvestigate.\n4\n\n\n\nAs a result of the April 2012 PHMSA inspection finding, Magellan surveyed the Cushing to Drumright\npipeline on April 25 and 26 of 2012 and found four critical bonds that are protecting this pipeline.\nThese bonds are located at CPU 251(MP 1.559, HCA), J Box 600’ North at BP line (MP 7.510), CPU,\nTexaco Road South side (MP 9.650) and East side of Oak Grove Road – CPU 252 (MP 4.300).\nMagellan purchased this asset from BP on September 1, 2010, which included three breakout tanks at\nDrumright, the Cushing to Drumright pipeline and the Drumright to Healdton pipeline (currently not in\nservice). Magellan inspected the critical bond on Drumright to Healdton pipeline and only once at MP\n4.300 on Cushing to Drumright pipeline.\nMagellan should have determined and documented which bonds failure would jeopardize the structural\nprotection, and monitor for proper performance at the required intervals. Magellan conducted the\ninspection only after PHMSA inspector brought it to their attention.\n7. § 195.589 What corrosion control information do I have to maintain?\n(a) You must maintain a record of each analysis, check, demonstration, examination,\ninspection, investigation, review, survey, and test required by this subpart in sufficient\ndetail to demonstrate the adequacy of corrosion control measures or that corrosion\nrequiring control measures does not exist. You must retain these records for at least 5\nyears, except that records related to Secs. 195.569, 195.573(a) and (b), and 195.579(b)(3)\nand (c) must be retained for as long as the pipeline remains in service.\n§195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed to the atmosphere\nfor evidence of atmospheric corrosion, as follows:\nIf the pipeline is located: Then the frequency of inspection is:\nOnshore At least once every 3 calendar years, but with intervals not\nexceeding 39 months.\nOffshore least once each calendar year, but with intervals not exceeding\n15 months.\nMagellan failed to maintain records of the Cushing to Drumright pipeline atmospheric corrosion\ninspection, as required by §195.583(a) in sufficient detail to demonstrate the adequacy of corrosion\ncontrol measures.\n5\n\n\n\nDuring the April 2012 inspection, the PHMSA inspector requested that Magellan provide any and all\natmospheric corrosion inspection records for the Cushing to Drumright pipeline. Magellan personnel\ncould not produce any documentation relating to atmospheric corrosion inspection conducted by\nMagellan since the purchase of this asset from BP, nor did they provide any records of such inspection\nconducted by BP.\nOn April 18, 2012, the Magellan representative sent an e-mail stating. “It is our intention to conduct\natmospheric of above ground assets in accordance with 7.04-ADM-002”. Magellan surveyed this line on\nApril 26, 2012 for evidence of atmospheric corrosion and found fourteen locations where the pipeline is\nexposed to the atmosphere. Of those fourteen locations, one location was noted as “1-G 50% rusted\n(MP 6.900), needs coating.” Because Magellan could not provide any documentation of previous\ninspections, the PHMSA inspector was unable to determine how long this condition has existed. During\nthe field inspection of this location, the PHMSA inspector observed that as of November 2012,\nMagellan failed to clean and coat portions of pipeline in question which is exposed to the atmosphere.\nMagellan purchased this asset from BP on September 1, 2010, which included three breakout tanks at\nDrumright, the Cushing to Drumright pipeline and the Drumright to Healdton pipe (currently not in\nservice). Magellan inspected Drumright to Healdton pipeline for atmospheric corrosion but did not\ninspect the Cushing to Drumright pipeline. Magellan conducted such inspection only after PHMSA\ninspector brought it to their attention.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000 per\nviolation per day the violation persists up to a maximum of $2,000,000 for a related series of violations.\nFor violations occurring prior to January 3, 2012, the maximum penalty may not exceed $100,000 per\nviolation per day, with a maximum penalty not to exceed $1,000,000 for a related series of violations.\nThe Compliance Officer has reviewed the circumstances and supporting documentation involved in the\nabove probable violations and has recommended that you be preliminarily assessed a civil penalty of\n$104,800 as follows:\nItem number PENALTY\n6 $63,900\n7 $40,900\nWarning Items\nWith respect to items 1, 2, 3, and 5 we have reviewed the circumstances and supporting documents\ninvolved in this case and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to promptly correct these items. Be advised that\nfailure to do so may result in Magellan Pipeline Holdings, LP being subject to additional enforcement\naction.\n6\n\n\n\nProposed Compliance Order\nWith respect to items 4 and 7 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Magellan Pipeline Holdings,\nLP. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. All material you\nsubmit in response to this enforcement action may be made publicly available. If you believe that any\nportion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along\nwith the complete original document you must provide a second copy of the document with the portions\nyou believe qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond\nwithin 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations\nin this Notice 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 4-2013-5009 and for each document you\nsubmit, 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 Administration\n(PHMSA) proposes to issue to Magellan Pipeline Holdings, LP (Magellan) a Compliance Order\nincorporating the following remedial requirements to ensure the compliance of Magellan with the\npipeline safety regulations:\n1. 2. 4. 5. In regard to Item Number 4 of the Notice pertaining to failure to maintain adequate\nfirefighting equipment at Drumright pump station area, Magellan must provide adequate\nfirefighting equipment or provide documentation to indicate that firefighting equipment is\nnot necessary at the Drumright pump station.\nIn regard to Item Number 7 of the Notice pertaining to the failure to document\natmospheric corrosion inspection of the Cushing to Drumright pipeline, Magellan must\nprovide documentation that at MP 6.900 has been re-evaluated and corrected as to\nindicate that the pipe integrity is suitable for the maximum allowable operating pressure\nof the pipeline system. The documentation should indicate the what action Magellan has\ntaken to correct the deficiency, while utilizing 49 CFR Part 195 and Magellan\nprocedures.\nWithin thirty (30) days after receipt of the Final Order related to this case Magellan must\ncomplete and submit all documentation listed in items 4 and 7 of this Proposed\nCompliance Order.\nIt is requested (not mandated) that Magellan maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total\nto R. M. Seeley, Director, Southwest Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories: 1) total cost\nassociated with preparation/revision of plans, procedures, studies and analyses, and 2)\ntotal cost associated with replacements, additions and other changes to pipeline\ninfrastructure.\n8\n\n420135009_Closure_10082013_text.pdf\n\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED\nOctober 8, 2013\nMr. Michael C. Pearson\nVice President – Technical Services\nMagellan Pipeline Holdings, L.P.\nOne Williams Center\nTulsa, OK 74172\nCPF 4-2013-5009\nDear Mr. Pearson:\nOn April 8, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Magellan Pipeline Holdings, L.P. a Final Order in the above-referenced case. This Order\nincluded a Compliance Order and Civil Penalty assessment. Payment of the Civil Penalty was\nreceived on August 16, 2013. Based on our review of the documentation you provided, it has\nbeen determined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nR. M. Seeley\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n\n420135009_Final Order_08012013_text.pdf\n\nAUGUST 1, 2013\nMr. Michael Mear\nChief Executive Officer\nMagellan Pipeline Holdings, L.P.\nOne Williams Center\nTulsa, OK 74172\nRe: CPF No. 4-2013-5009\nDear Mr. Mear:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $104,800.00, and specifies actions that need to be taken by\nMagellan Pipeline Holdings, L.P., to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Southwest Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. R.M. Seeley, Director, Southwest Region, OPS\nMr. Michael C. Pearson, Vice President – Technical Services, Magellan Pipeline\nHoldings, L.P.\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)\nMagellan Pipeline Holdings L.P., ) CPF No. 4-2013-5009\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nDuring the months of April and November 2012, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of\nMagellan Pipeline Holdings, L.P.,\n1 (Magellan or Respondent) from Cushing to Drumright,\nOklahoma and from Drumright to Healdton, Oklahoma. Magellan operates approximately 11\nmiles of 16-inch crude oil products pipelines from Cushing to Drumright in Oklahoma and three\n(3) breakout tanks at the Drumright facility. Magellan also has 146 miles of 20-inch pipeline\nfrom Drumright to Healdton, which is currently idle and has been purged with Nitrogen.2\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated April 5, 2013, a Notice of Probable Violation, Proposed Civil\nPenalty (Notice), Proposed Compliance Order (Notice), and included warnings pursuant to\n49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding\nMagellan committed violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of\n$104,800 for the alleged violations. The Notice also proposed ordering Respondent to take\ncertain measures to correct the alleged violations. The warning items require no further action,\nbut warn the operator to correct the probable violations.\nIn its Response, Magellan did not contest the allegations in the Notice that it violated 49 C.F.R.\nPart 195, as follows:\nFINDINGS OF VIOLATION\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.430, which states:\n1 Magellan Pipeline Holdings, L.P., is a wholly owned subsidiary of Magellan Midstream Partners, L.P.\n2 See, Pipeline Safety Violation Report (Violation Report), (April 5, 2013) (on file with PHMSA), at 1.\n\n\n\n2\n§ 195.430 Firefighting equipment.\nEach operator shall maintain adequate firefighting equipment at each\npump station and breakout tank area. The equipment must be –\n(a) In proper operating condition at all times;\n(b) Plainly marked so that its identity as firefighting equipment is\nclear; and\n(c) Located so that it is easily accessible during a fire.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.430 by failing to ensure that all\npump stations and breakout tank areas have adequate firefighting equipment. Specifically, the\nNotice alleged that Magellan failed to follow the procedures set forth in 5.05-ADM-076\nrequiring fire extinguishers at the Drumright pump station. The inspection found no fire\nextinguishers or firefighting equipment at the Drumright pump station. Respondent did not\ncontest this allegation of violation. Accordingly, based upon a review of all of the evidence, I\nfind that Respondent violated 49 C.F.R. § 195.430 by failing to provide fire extinguishers and\nfirefighting equipment at the Drumright pump station, despite the expressly written procedures\nof 5.05-ADM-076 requiring all pump stations and breakout tank areas to have adequate\nfirefighting equipment.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.589, which states in\nrelevant part:\n§ 195.589 What corrosion control information do I have to maintain?\n(a) …\n(c) You must maintain a record of each analysis, check, demonstration,\nexamination, inspection, investigation, review, survey, and test required\nby this subpart in sufficient detail to demonstrate the adequacy of\ncorrosion control measures or that corrosion requiring control measures\ndoes not exist. You must retain these records for at least 5 years, except\nthat records related to §§195.569, 195.573(a) and (b), and 195.579(b)(3)\nand (c) must be retained for as long as the pipeline remains in service.\n§195.573 What must I do to monitor external corrosion control?\n(c) Rectifiers and other devices. You must electrically check for proper\nperformance each device in the first column at the frequency stated in the\nsecond column.\nDevice Check Frequency\nRectifier……………………\nReverse current switch.\nDiode.\nInterference bond whose failure would\njeopardize structural protection.\nAt least six times each\ncalendar year, but with\nintervals not exceeding 2 ½\nmonths\nOther interference\nbond……………...\nAt least once each calendar\nyear, but with intervals not\nexceeding 15 months\n\n\n\n3\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.589 by failing to produce any\nrecords relating to the inspection of four (4) interference bonds whose failure would jeopardize\nthe pipeline’s structural protection. Specifically, the Notice alleged that Magellan failed to\nprovide any records that it monitored any of the interference bonds from Cushing to Drumright\nand from Drumright to Healdton, from September 1, 2010 until April 2012. Respondent did not\ncontest this allegation of violation. Accordingly, based upon a review of all of the evidence, I\nfind that Respondent violated 49 C.F.R. § 195.589 by failing to properly retain records\ndocumenting the inspection of the four (4) interference bonds from Cushing to Drumright and\nfrom Drumright to Healdton, between September 1, 2010 until April 2012.\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.589, which states in\nrelevant part:\n§ 195.589 What corrosion control information do I have to maintain?\n(a) …\n(c) You must maintain a record of each analysis, check, demonstration,\nexamination, inspection, investigation, review, survey, and test required\nby this subpart in sufficient detail to demonstrate the adequacy of\ncorrosion control measures or that corrosion requiring control measures\ndoes not exist. You must retain these records for at least 5 years, except\nthat records related to §§195.569, 195.573(a) and (b), and 195.579(b)(3)\nand (c) must be retained for as long as the pipeline remains in service.\n§195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is\nexposed to the atmosphere for evidence of atmospheric corrosion, as\nfollows:\nIf the pipeline is located: Then the frequency of inspection is:\nOnshore………………… At least once every 3 calendar years,\nbut with intervals not exceeding 39\nmonths.\nOffshore………………… At least once each calendar year, but\nwith intervals not exceeding 15\nmonths.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.589 by failing to maintain records\nof the Cushing to Drumright pipeline inspections needed to demonstrate the adequacy of its\ncorrosion control measures. Specifically, Magellan failed to produce any records establishing\nthat it inspected the Cushing to Drumright pipeline for atmosphere corrosion since it purchased\nthe line on September 1, 2010. Additionally, Magellan could not provide any records from the\nprevious owner (BP) indicating when the line was last inspected for atmospheric corrosion.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.589 by failing to provide any\nrecords that show it monitored its pipeline for atmospheric corrosion once every three years.\n\n\n\n4\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.3 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $104,800 for the violations cited above.\nItem 6: The Notice proposed a civil penalty of $63,900.00 for Respondent’s violation of\n49 C.F.R. § 195.589, for failing to retain the records pertaining to the inspection of four (4)\ninterference bonds from Cushing to Drumright and from Drumright to Healdton, between\nSeptember 1, 2010 until April 2012.\nMagellan neither contested the allegation nor presented any evidence or argument justifying an\nelimination of the proposed penalty. Without the proper documentation one cannot tell if\nMagellan inspected the interference bonds, the condition of the interference bonds and whether\nthey are in need of repair. Should an interference bond fail it would jeopardize the structural\nprotection of the pipeline. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $63,900 for violation of 49 C.F.R.\n§195.589.\nItem 7: The Notice proposed a civil penalty of $40,900.00 for Respondent’s violation of 49\nC.F.R. § 195.589, for failing to maintain records of any atmospheric corrosion tests for three (3)\nyears. Magellan neither contested the allegation nor presented any evidence or argument\njustifying an elimination of the proposed penalty. Magellan’s failure to maintain any records\nregarding when the pipeline was last tested for atmospheric corrosion, prevents an inspector or\neven a Magellan employee from knowing what effects atmospheric corrosion may be having on\nthe pipeline. Whether the pipeline is in serious need of repair is unknown, based upon\nMagellan’s lack of records, and represents a potential serious threat. Accordingly, having\nreviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of\n$40,900 for violation of 49 C.F.R. §195.589.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\n3 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.\n1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per\nviolation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.\n\n\n\n5\nItems cited above, I assess Respondent a total civil penalty of $104,800.00.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $104,800 civil penalty will result in accrual of interest at the current annual\nrate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 4 and 7 in the Notice for\nviolations of 49 C.F.R. §§ 195.430, and 195.589, respectively. Under 49 U.S.C. § 60118(a),\neach person who engages in the transportation of hazardous liquids or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217,\nRespondent is ordered to take the following actions to ensure compliance with the pipeline safety\nregulations applicable to its operations:\n1. With respect to the violation of § 195.589 (Item 4), Respondent must provide the\nproper firefighting equipment, in compliance with 5.05-ADM-076 of Magellan’s procedures,\nat the Drumright pump station area.\n2. With respect to the violation of § 195.589 (Item 7), Respondent must provide\ndocumentation demonstrating that it has evaluated MP 6,900 for atmospheric corrosion and\ncorrected any deficiencies utilizing 49 CFR Part 195 and Magellan procedures. The\ndocumentation must show that the pipe integrity is suitable for the maximum allowable\noperating pressure of the pipeline system.\n3. Within thirty (30) days after receipt of this Final Order, Magellan must complete and\nsubmit all documentation listed in items 4 and 7 of this Compliance Order.\n4. It is requested (not mandated) that Respondent maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total to\nMr. R. M. Seeley, Director, Southwest Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories: 1) total cost\nassociated with preparation/revision of plans, procedures, studies and analyses; and 2) total\n\n\n\n6\ncost associated with replacements, additions and other changes to pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nWARNING ITEMS\nWith respect to Items 1, 2, 3 and 5, the Notice alleged probable violations of Part 195 but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 195.49 (Item 1) ─ Respondent’s alleged failure to accurately\ncomplete the DOT Form PHMSA F7000-1.1 identifying the proper owner of the\nCushing to Drumright to Healdton, Oklahoma pipelines; and\n49 C.F.R. § 195.402 (Item 2) ─ Respondent’s alleged failure to follow its written\nprocedure 7.05-ADM-003 on gathering pertinent data for evaluating and\nmanaging right-of-ways; and\n49 C.F.R. § 195.402 (Item 3) ─ Respondent’s alleged failure to follow its\nprocedures for inspecting fire extinguishers at the Tribbey pump station; and\n49 C.F.R. § 195.420 (Item 5) ─ Respondent’s alleged failure to provide a record\nindicating that it had inspected a mainline valve was inspected during the fall of\n2010.\nIf OPS finds a violation of any of these items in a subsequent inspection, Respondent may be\nsubject to future enforcement action.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":37237}