# MAGELLAN PIPELINES HOLDINGS, LP — Notice of Probable Violation

- **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:** Not available
- **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.

Official case documents:

420135009_Closure_10082013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Closure_10082013.pdf

420135009_Closure_10082013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Closure_10082013_text.pdf

420135009_Final Order_08012013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Final%20Order_08012013.pdf

420135009_Final Order_08012013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Final%20Order_08012013_text.pdf

420135009_NOPV PCP PCO_04052013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_NOPV%20PCP%20PCO_04052013.pdf

420135009_NOPV PCP PCO_04052013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_NOPV%20PCP%20PCO_04052013_text.pdf

420135009_Operator_Response_to_Notice_05102013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420135009/420135009_Operator_Response_to_Notice_05102013.pdf

420135009_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. Michael C. Pearson
Vice President – Technical Services.
Magellan Pipeline Holdings, LP
One William Center
Tulsa, OK 74172
CPF 4-2013-5009
Dear Mr. Pearson:
During the months of April and November of 2012, a representative of the Pipeline and Hazardous
Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),pursuant to Chapter 601 of
49 United States Code inspected the Magellan Pipeline Holdings, LP (Magellan) pipelines and facilities
from Cushing to Drumright and from Drumright to Healdton all in the state of Oklahoma.
As a result of the inspection, it appears that you have committed probable violations of the Pipeline
Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable
violations are:
1. §195.49 Annual Report.
Each operator must annually complete and submit DOT Form PHMSA F 7000-1.1 for each
type of hazardous liquid pipeline facility operated at the end of the previous year. An
operator must submit the annual report by June 15 each year, except that for the 2010
reporting year the report must be submitted by August 15, 2011. A separate report is
required for crude oil, HVL (including anhydrous ammonia), petroleum products, carbon
dioxide pipelines, and fuel grade ethanol pipelines. For each state a pipeline traverses, an
operator must separately complete those sections on the form requiring information to be
reported for each state.



Magellan failed to accurately complete the DOT Form PHMSA F 7000-1.1 for OPID 31579, Magellan
Pipeline Holdings, L.P (Magellan). On September 1, 2010, Magellan purchased this asset from BP. As
per Magellan’s legal department, OPID 31579 (Magellan Pipeline Holding) is the owner of the Cushing
to Drumright to Healdton Oklahoma pipelines. However, Magellan reported this asset under OPID
22610 during 2011. Magellan’s compliance group was informed during the April 2012 inspection and
was advised to correct this by June 15, 2012. On June 15, 2012, Magellan reported to PHMSA that
there were no changes from last year’s final report information for OPID 31579 and 22610.
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.
Magellan failed to follow their written procedures on gathering pertinent data for evaluating and
managing rights-of-way. Magellan procedure 7.05-ADM-003 for ‘Right-of-way Maintenance Program’,
section 4.1.3 states “Annually, a company representative will accompany the aerial patrol pilot to
identify areas where excavation activity or leak detection cannot be identified by air”.
During the inspection, the PHMSA inspector reviewed the ‘Aerial Patrol Annual R/W Inspection’ record
dated June 28, 2011 and based on latitudes and longitudes documented on this form; it appears that
Magellan did not fly over their entire right-of-way of Healdton to Cushing system. Instead, Magellan
flew over from the approximate intersection of Shell Road and Longview Road in Carter County to
approximate intersection of W 201 Street South and E 770 Road in Creek/Lincoln County border. That
means Magellan was short approximately 17 miles on the south side of the system (Healdton) and
approximately 9 miles on the north side (Drumright). Magellan also did not fly over the entire right of
way of Cushing to Drumright pipeline.
During the calendar year 2012, Magellan did fly over Drumright to Cushing on October 19, 2012 and
had not performed fly over for the Drumright to Healdton right-of-way.
3. §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
2



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.
§195.430 Firefighting equipment.
(a) In proper operating condition at all times;
Magellan failed to follow their procedures for inspecting fire extinguishers at the Tribbey pump station.
According to Magellan’s Portable Fire Extinguishers Administrative Procedure, 5.05-ADM-076,
“Employees shall: INSPECT monthly all portable fire extinguishers at each location per criteria listed on
the Portable Fire Extinguisher Checklist”. At the time of the inspection, Magellan did not provide
records associated with the monthly inspection on five (5) portable fire extinguishers located at Tribbey
Pump Station from September 2010 through February 2011. Magellan began inspecting these fire
extinguishers from March 29, 2011 and onwards.
4. § 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
(b) Located so that it is easily accessible during a fire.
Magellan did not maintain adequate firefighting equipment at the Drumright pump station. During the
field inspection on September 29, 2012, the PHMSA inspector noted that there were no fire
extinguishers or any other firefighting equipment at Drumright pump station area.
The Magellan Portable Fire Extinguishers Administrative Procedure, 5.05-ADM-076 states “DOT
JURISDICTIONAL PUMP STATIONS AND BREAKOUT TANK AREAS shall have adequate
firefighting equipment. This equipment shall be adequate to extinguish fires that are in the early stages
of development and in no case shall be expected to fight a fully engulfed fire”.
When the PHMSA inspector questioned Magellan personnel, they stated that all employees carry a fire
extinguisher in their truck. Magellan did not provide any documentation that fire protection devices
were not required at this facility.
5. § 195.420 Valve maintenance
3



(b) Each operator shall, at intervals not exceeding 7 1/2 months, but at least twice each
calendar year, inspect each mainline valve to determine that it is functioning properly.
At the time of the inspection, Magellan failed to provide a record indicating that a mainline valve was
inspected during the fall of 2010. Magellan did not inspect a mainline valve (S/N # 7749) on # 2 – 16”
Cushing to Drumright pipeline during the Fall of 2010. It was last inspected by BP on April 7, 2010 and
it was not again inspected again until March 25, 2011. As a result, Magellan exceeded 7 ½ month
timeframe. Magellan purchased this asset from BP on September 1, 2010.
6. § 195.589 What corrosion control information do I have to maintain?
(c) You must maintain a record of each analysis, check, demonstration, examination,
inspection, investigation, review, survey, and test required by this subpart in sufficient
detail to demonstrate the adequacy of corrosion control measures or that corrosion
requiring control measures does not exist. You must retain these records for at least 5
years, except that records related to Secs. 195.569, 195.573(a) and (b), and 195.579(b)(3)
and (c) must be retained for as long as the pipeline remains in service.
§195.573 What must I do to monitor external corrosion control?
(c) Rectifiers and other devices. You must electrically check for proper performance each device
in the first column at the frequency stated in the second column.
Device Check Frequency
Rectifier
Reverse current switch
Diode
Interference bond whose failure would
jeopardize structural protection
At least six times each calendar year, but with
intervals not exceeding 2 ½ months
Other interference bond At least once each calendar year, but with
intervals not exceeding 15 months
Magellan did not monitor interference bonds whose failure would jeopardize the structural protection six
times each calendar year, with intervals not exceeding 2 ½ months.
During the April 2012 field inspection, the PHMSA inspector noted a bond at several test stations on
Cushing to Drumright pipeline. When inquired whether these bonds are critical or non-critical, Magellan
personnel could not produce any documentation relating to the bond inspections conducted by Magellan
since purchase of this asset from BP, nor did they provide any records of inspections. When the
PHMSA inspector raised this issue during the inspection, Magellan advised that the company would
investigate.
4



As a result of the April 2012 PHMSA inspection finding, Magellan surveyed the Cushing to Drumright
pipeline on April 25 and 26 of 2012 and found four critical bonds that are protecting this pipeline.
These bonds are located at CPU 251(MP 1.559, HCA), J Box 600’ North at BP line (MP 7.510), CPU,
Texaco Road South side (MP 9.650) and East side of Oak Grove Road – CPU 252 (MP 4.300).
Magellan purchased this asset from BP on September 1, 2010, which included three breakout tanks at
Drumright, the Cushing to Drumright pipeline and the Drumright to Healdton pipeline (currently not in
service). Magellan inspected the critical bond on Drumright to Healdton pipeline and only once at MP
4.300 on Cushing to Drumright pipeline.
Magellan should have determined and documented which bonds failure would jeopardize the structural
protection, and monitor for proper performance at the required intervals. Magellan conducted the
inspection only after PHMSA inspector brought it to their attention.
7. § 195.589 What corrosion control information do I have to maintain?
(a) You must maintain a record of each analysis, check, demonstration, examination,
inspection, investigation, review, survey, and test required by this subpart in sufficient
detail to demonstrate the adequacy of corrosion control measures or that corrosion
requiring control measures does not exist. You must retain these records for at least 5
years, except that records related to Secs. 195.569, 195.573(a) and (b), and 195.579(b)(3)
and (c) must be retained for as long as the pipeline remains in service.
§195.583 What must I do to monitor atmospheric corrosion control?
(a) You must inspect each pipeline or portion of pipeline that is exposed to the atmosphere
for evidence of atmospheric corrosion, as follows:
If the pipeline is located: Then the frequency of inspection is:
Onshore At least once every 3 calendar years, but with intervals not
exceeding 39 months.
Offshore least once each calendar year, but with intervals not exceeding
15 months.
Magellan failed to maintain records of the Cushing to Drumright pipeline atmospheric corrosion
inspection, as required by §195.583(a) in sufficient detail to demonstrate the adequacy of corrosion
control measures.
5



During the April 2012 inspection, the PHMSA inspector requested that Magellan provide any and all
atmospheric corrosion inspection records for the Cushing to Drumright pipeline. Magellan personnel
could not produce any documentation relating to atmospheric corrosion inspection conducted by
Magellan since the purchase of this asset from BP, nor did they provide any records of such inspection
conducted by BP.
On April 18, 2012, the Magellan representative sent an e-mail stating. “It is our intention to conduct
atmospheric of above ground assets in accordance with 7.04-ADM-002”. Magellan surveyed this line on
April 26, 2012 for evidence of atmospheric corrosion and found fourteen locations where the pipeline is
exposed to the atmosphere. Of those fourteen locations, one location was noted as “1-G 50% rusted
(MP 6.900), needs coating.” Because Magellan could not provide any documentation of previous
inspections, the PHMSA inspector was unable to determine how long this condition has existed. During
the field inspection of this location, the PHMSA inspector observed that as of November 2012,
Magellan failed to clean and coat portions of pipeline in question which is exposed to the atmosphere.
Magellan purchased this asset from BP on September 1, 2010, which included three breakout tanks at
Drumright, the Cushing to Drumright pipeline and the Drumright to Healdton pipe (currently not in
service). Magellan inspected Drumright to Healdton pipeline for atmospheric corrosion but did not
inspect the Cushing to Drumright pipeline. Magellan conducted such inspection only after PHMSA
inspector brought it to their attention.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000 per
violation per day the violation persists up to a maximum of $2,000,000 for a related series of violations.
For violations occurring prior to January 3, 2012, the maximum penalty may not exceed $100,000 per
violation per day, with a maximum penalty not to exceed $1,000,000 for a related series of violations.
The Compliance Officer has reviewed the circumstances and supporting documentation involved in the
above probable violations and has recommended that you be preliminarily assessed a civil penalty of
$104,800 as follows:
Item number PENALTY
6 $63,900
7 $40,900
Warning Items
With respect to items 1, 2, 3, and 5 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 items. Be advised that
failure to do so may result in Magellan Pipeline Holdings, LP being subject to additional enforcement
action.
6



Proposed Compliance Order
With respect to items 4 and 7 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous
Materials Safety Administration proposes to issue a Compliance Order to Magellan Pipeline Holdings,
LP. 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. All material you
submit in response to this enforcement action may be 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 4-2013-5009 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
7



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration
(PHMSA) proposes to issue to Magellan Pipeline Holdings, LP (Magellan) a Compliance Order
incorporating the following remedial requirements to ensure the compliance of Magellan with the
pipeline safety regulations:
1. 2. 4. 5. In regard to Item Number 4 of the Notice pertaining to failure to maintain adequate
firefighting equipment at Drumright pump station area, Magellan must provide adequate
firefighting equipment or provide documentation to indicate that firefighting equipment is
not necessary at the Drumright pump station.
In regard to Item Number 7 of the Notice pertaining to the failure to document
atmospheric corrosion inspection of the Cushing to Drumright pipeline, Magellan must
provide documentation that at MP 6.900 has been re-evaluated and corrected as to
indicate that the pipe integrity is suitable for the maximum allowable operating pressure
of the pipeline system. The documentation should indicate the what action Magellan has
taken to correct the deficiency, while utilizing 49 CFR Part 195 and Magellan
procedures.
Within thirty (30) days after receipt of the Final Order related to this case Magellan must
complete and submit all documentation listed in items 4 and 7 of this Proposed
Compliance Order.
It is requested (not mandated) that Magellan 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.
8

420135009_Closure_10082013_text.pdf

CERTIFIED MAIL – RETURN RECEIPT REQUESTED
October 8, 2013
Mr. Michael C. Pearson
Vice President – Technical Services
Magellan Pipeline Holdings, L.P.
One Williams Center
Tulsa, OK 74172
CPF 4-2013-5009
Dear Mr. Pearson:
On April 8, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued
to Magellan Pipeline Holdings, L.P. a Final Order in the above-referenced case. This Order
included a Compliance Order and Civil Penalty assessment. Payment of the Civil Penalty was
received on August 16, 2013. Based on our review of the documentation you provided, it has
been determined that you have complied with the terms of this Order.
Accordingly, this case is now closed and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
R. M. Seeley
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration

420135009_Final Order_08012013_text.pdf

AUGUST 1, 2013
Mr. Michael Mear
Chief Executive Officer
Magellan Pipeline Holdings, L.P.
One Williams Center
Tulsa, OK 74172
Re: CPF No. 4-2013-5009
Dear Mr. Mear:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a civil penalty of $104,800.00, and specifies actions that need to be taken by
Magellan Pipeline Holdings, L.P., to comply with the pipeline safety regulations. 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 by certified mail is deemed
effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. R.M. Seeley, Director, Southwest Region, OPS
Mr. Michael C. Pearson, Vice President – Technical Services, Magellan Pipeline
Holdings, L.P.
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 )
)
Magellan Pipeline Holdings L.P., ) CPF No. 4-2013-5009
)
Respondent. )
____________________________________)
FINAL ORDER
During the months of April and November 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 facilities and records of
Magellan Pipeline Holdings, L.P.,
1 (Magellan or Respondent) from Cushing to Drumright,
Oklahoma and from Drumright to Healdton, Oklahoma. Magellan operates approximately 11
miles of 16-inch crude oil products pipelines from Cushing to Drumright in Oklahoma and three
(3) breakout tanks at the Drumright facility. Magellan also has 146 miles of 20-inch pipeline
from Drumright to Healdton, which is currently idle and has been purged with Nitrogen.2
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated April 5, 2013, a Notice of Probable Violation, Proposed Civil
Penalty (Notice), Proposed Compliance Order (Notice), and included warnings pursuant to
49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding
Magellan committed violations of 49 C.F.R. Part 195 and proposed assessing a civil penalty of
$104,800 for the alleged violations. The Notice also proposed ordering Respondent to take
certain measures to correct the alleged violations. The warning items require no further action,
but warn the operator to correct the probable violations.
In its Response, Magellan did not contest the allegations in the Notice that it violated 49 C.F.R.
Part 195, as follows:
FINDINGS OF VIOLATION
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.430, which states:
1 Magellan Pipeline Holdings, L.P., is a wholly owned subsidiary of Magellan Midstream Partners, L.P.
2 See, Pipeline Safety Violation Report (Violation Report), (April 5, 2013) (on file with PHMSA), at 1.



2
§ 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.
The Notice alleged that Respondent violated 49 C.F.R. § 195.430 by failing to ensure that all
pump stations and breakout tank areas have adequate firefighting equipment. Specifically, the
Notice alleged that Magellan failed to follow the procedures set forth in 5.05-ADM-076
requiring fire extinguishers at the Drumright pump station. The inspection found no fire
extinguishers or firefighting equipment at the Drumright pump station. Respondent did not
contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I
find that Respondent violated 49 C.F.R. § 195.430 by failing to provide fire extinguishers and
firefighting equipment at the Drumright pump station, despite the expressly written procedures
of 5.05-ADM-076 requiring all pump stations and breakout tank areas to have adequate
firefighting equipment.
Item 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.589, which states in
relevant part:
§ 195.589 What corrosion control information do I have to maintain?
(a) …
(c) You must maintain a record of each analysis, check, demonstration,
examination, inspection, investigation, review, survey, and test required
by this subpart in sufficient detail to demonstrate the adequacy of
corrosion control measures or that corrosion requiring control measures
does not exist. You must retain these records for at least 5 years, except
that records related to §§195.569, 195.573(a) and (b), and 195.579(b)(3)
and (c) must be retained for as long as the pipeline remains in service.
§195.573 What must I do to monitor external corrosion control?
(c) Rectifiers and other devices. You must electrically check for proper
performance each device in the first column at the frequency stated in the
second column.
Device Check Frequency
Rectifier……………………
Reverse current switch.
Diode.
Interference bond whose failure would
jeopardize structural protection.
At least six times each
calendar year, but with
intervals not exceeding 2 ½
months
Other interference
bond……………...
At least once each calendar
year, but with intervals not
exceeding 15 months



3
The Notice alleged that Respondent violated 49 C.F.R. § 195.589 by failing to produce any
records relating to the inspection of four (4) interference bonds whose failure would jeopardize
the pipeline’s structural protection. Specifically, the Notice alleged that Magellan failed to
provide any records that it monitored any of the interference bonds from Cushing to Drumright
and from Drumright to Healdton, from September 1, 2010 until April 2012. Respondent did not
contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I
find that Respondent violated 49 C.F.R. § 195.589 by failing to properly retain records
documenting the inspection of the four (4) interference bonds from Cushing to Drumright and
from Drumright to Healdton, between September 1, 2010 until April 2012.
Item 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.589, which states in
relevant part:
§ 195.589 What corrosion control information do I have to maintain?
(a) …
(c) You must maintain a record of each analysis, check, demonstration,
examination, inspection, investigation, review, survey, and test required
by this subpart in sufficient detail to demonstrate the adequacy of
corrosion control measures or that corrosion requiring control measures
does not exist. You must retain these records for at least 5 years, except
that records related to §§195.569, 195.573(a) and (b), and 195.579(b)(3)
and (c) must be retained for as long as the pipeline remains in service.
§195.583 What must I do to monitor atmospheric corrosion control?
(a) You must inspect each pipeline or portion of pipeline that is
exposed to the atmosphere for evidence of atmospheric corrosion, as
follows:
If the pipeline is located: Then the frequency of inspection is:
Onshore………………… At least once every 3 calendar years,
but with intervals not exceeding 39
months.
Offshore………………… At least once each calendar year, but
with intervals not exceeding 15
months.
The Notice alleged that Respondent violated 49 C.F.R. § 195.589 by failing to maintain records
of the Cushing to Drumright pipeline inspections needed to demonstrate the adequacy of its
corrosion control measures. Specifically, Magellan failed to produce any records establishing
that it inspected the Cushing to Drumright pipeline for atmosphere corrosion since it purchased
the line on September 1, 2010. Additionally, Magellan could not provide any records from the
previous owner (BP) indicating when the line was last inspected for atmospheric corrosion.
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.589 by failing to provide any
records that show it monitored its pipeline for atmospheric corrosion once every three years.



4
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.3 In determining the amount of a civil penalty under 49 U.S.C.
§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,
circumstances, and gravity of the violation, including adverse impact on the environment; the
degree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect
that the penalty may have on its ability to continue doing business; and the good faith of
Respondent in attempting to comply with the pipeline safety regulations. In addition, I may
consider the economic benefit gained from the violation without any reduction because of
subsequent damages, and such other matters as justice may require. The Notice proposed a total
civil penalty of $104,800 for the violations cited above.
Item 6: The Notice proposed a civil penalty of $63,900.00 for Respondent’s violation of
49 C.F.R. § 195.589, for failing to retain the records pertaining to the inspection of four (4)
interference bonds from Cushing to Drumright and from Drumright to Healdton, between
September 1, 2010 until April 2012.
Magellan neither contested the allegation nor presented any evidence or argument justifying an
elimination of the proposed penalty. Without the proper documentation one cannot tell if
Magellan inspected the interference bonds, the condition of the interference bonds and whether
they are in need of repair. Should an interference bond fail it would jeopardize the structural
protection of the pipeline. Accordingly, having reviewed the record and considered the
assessment criteria, I assess Respondent a civil penalty of $63,900 for violation of 49 C.F.R.
§195.589.
Item 7: The Notice proposed a civil penalty of $40,900.00 for Respondent’s violation of 49
C.F.R. § 195.589, for failing to maintain records of any atmospheric corrosion tests for three (3)
years. Magellan neither contested the allegation nor presented any evidence or argument
justifying an elimination of the proposed penalty. Magellan’s failure to maintain any records
regarding when the pipeline was last tested for atmospheric corrosion, prevents an inspector or
even a Magellan employee from knowing what effects atmospheric corrosion may be having on
the pipeline. Whether the pipeline is in serious need of repair is unknown, based upon
Magellan’s lack of records, and represents a potential serious threat. Accordingly, having
reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of
$40,900 for violation of 49 C.F.R. §195.589.
In summary, having reviewed the record and considered the assessment criteria for each of the
3 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.
1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per
violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.



5
Items cited above, I assess Respondent a total civil penalty of $104,800.00.
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike
Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The
Financial Operations Division telephone number is (405) 954-8893.
Failure to pay the $104,800 civil penalty will result in accrual of interest at the current annual
rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if
payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty
may result in referral of the matter to the Attorney General for appropriate action in a district
court of the United States.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 4 and 7 in the Notice for
violations of 49 C.F.R. §§ 195.430, and 195.589, respectively. Under 49 U.S.C. § 60118(a),
each person who engages in the transportation of hazardous liquids or who owns or operates a
pipeline facility is required to comply with the applicable safety standards established under
chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217,
Respondent is ordered to take the following actions to ensure compliance with the pipeline safety
regulations applicable to its operations:
1. With respect to the violation of § 195.589 (Item 4), Respondent must provide the
proper firefighting equipment, in compliance with 5.05-ADM-076 of Magellan’s procedures,
at the Drumright pump station area.
2. With respect to the violation of § 195.589 (Item 7), Respondent must provide
documentation demonstrating that it has evaluated MP 6,900 for atmospheric corrosion and
corrected any deficiencies utilizing 49 CFR Part 195 and Magellan procedures. The
documentation must show that the pipe integrity is suitable for the maximum allowable
operating pressure of the pipeline system.
3. Within thirty (30) days after receipt of this Final Order, Magellan must complete and
submit all documentation listed in items 4 and 7 of this Compliance Order.
4. It is requested (not mandated) that Respondent maintain documentation of the safety
improvement costs associated with fulfilling this Compliance Order and submit the total to
Mr. 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



6
cost associated with replacements, additions and other changes to pipeline infrastructure.
The Director may grant an extension of time to comply with any of the required items upon a
written request timely submitted by the Respondent and demonstrating good cause for an
extension.
Failure to comply with this Order may result in the administrative assessment of civil penalties
not to exceed $200,000 for each violation for each day the violation continues or in referral to the
Attorney General for appropriate relief in a district court of the United States.
WARNING ITEMS
With respect to Items 1, 2, 3 and 5, the Notice alleged probable violations of Part 195 but did not
propose a civil penalty or compliance order for these items. Therefore, these are considered to
be warning items. The warnings were for:
49 C.F.R. § 195.49 (Item 1) ─ Respondent’s alleged failure to accurately
complete the DOT Form PHMSA F7000-1.1 identifying the proper owner of the
Cushing to Drumright to Healdton, Oklahoma pipelines; and
49 C.F.R. § 195.402 (Item 2) ─ Respondent’s alleged failure to follow its written
procedure 7.05-ADM-003 on gathering pertinent data for evaluating and
managing right-of-ways; and
49 C.F.R. § 195.402 (Item 3) ─ Respondent’s alleged failure to follow its
procedures for inspecting fire extinguishers at the Tribbey pump station; and
49 C.F.R. § 195.420 (Item 5) ─ Respondent’s alleged failure to provide a record
indicating that it had inspected a mainline valve was inspected during the fall of
2010.
If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be
subject to future enforcement action.
The terms and conditions of this Final Order are effective upon service in accordance with
49 C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety
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