ENTERPRISE PRODUCTS OPERATING LLC — Notice of Probable Violation

party submissionOfficial PDF420135011_Operator_Response_to_Notice_and_Request_for__Hearing_08282013.pdf#

420135011_Closure Letter_05102016_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED May 10, 2016 Mr. Graham Bacon Executive Vice President, Operating & Engineering 1100 Louisiana Street Houston, TX 77002-5227 CPF 4-2013-5011 Dear Mr. Bacon: On February 4, 2016, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Enterprise Products Operating, LLC a Final Order in the above-referenced case. The Order included a Compliance Order and Civil Penalty assessment. Based on our review of the documentation you provided to satisfy the Compliance Order (CO) and confirmation of payment of the civil penalty, 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, SW Region Pipeline and Hazardous Materials Safety Administration#

420135011_NOPV PCP PCO_05012013_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL- RETURN RECEIPT REQUESTED May 1, 2013 Mr. Terry Hurlburt Senior Vice President of Operations Enterprise Products Operating LLC 1100 Louisiana Street Houston, TX 77002 Dear Mr. Hurlburt: CPF 4-2013-5011 On multiple occasions between April 30 and August 24, 2012, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) was onsite and inspected Enterprise Products Operating, LLC (Enterprise) procedures, records, and pipeline facilities in Texas, Louisiana, and Arkansas operating areas pursuant to Chapter 601 of 49 United States Code. 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. §195.202 Compliance with specifications or standards: Each pipeline system must be constructed in accordance with comprehensive written specifications or standards that are consistent with the requirements of this part. Enterprise could not demonstrate that they followed all requirements of their specifications when constructing a tank in 2011. PHMSA requested that Enterprise provide the construction specifications along with the test results of the water quality used for the purpose of hydrostatic testing of breakout tank # 772. Tank 772 was to be built in accordance with API 650 as#

420135011_NOPV PCP PCO_05012013_text.pdf, page 2referenced by the Enterprise specifications. Specifically, API 650, 7.3.6.3 states, The purchaser shall be responsible for: Specifying the test water quality. Potable water is preferred for hydro-testing. This does not preclude the use of condensate, reverse osmosis water, well water, river water, or sea water. The purchaser shall consider issues such as low temperature brittle facture, freeze damage, amount of suspended solids, sanitation issues, animal/plant incubation and/or growth, acidity, general corrosion, pitting, protecting against cathodic cells, microbiologically-induced corrosion, material dependent sensitivity to trace chemical attack, disposal, rinsing, and residuals left in the tank after emptying. If the purchaser supplied test water causes corrosion, the purchaser is responsible for the required repairs. Enterprise provided only a water permit which does not contain a description of the quality of the water. 2. §195.202 Compliance with specifications or standards: Each pipeline system must be constructed in accordance with comprehensive written specifications or standards that are consistent with the requirements of this part. Enterprise could not demonstrate that they followed all requirements of their specifications when constructing a tank in 2011. PHMSA requested that Enterprise provide the construction specifications along with the Vacuum Box testing report of breakout tank# 772. Tank 772 was to be built in accordance with API 650 as referenced by the Enterprise specifications. Specifically, API 650, Section 8.6.6 states: “The metal surface temperature limits 4ºC and 52ºC, unless the film solution is proven to work at temperature outsides these limits either by testing or manufacturer’s recommendations.” API 650, Section 8.6.7 states: “A minimum light intensity of 1000 LUX at the point of examination is required during the application of the examination and evaluation for leaks.” API 650, Section 8.6.10 states: “A record or report of the test including a statement addressing temperature and light intensity shall be completed and furnished to the purchaser upon request.” The Vacuum Box test report of the breakout tank# 772 provided by Enterprise does not satisfy the requirements of API 650, Sections 8.6.6, 8.6.7, and 8.6.10. The report does not reflect the recording of metal surface temperature, minimum light intensity. 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. 2#

420135011_NOPV PCP PCO_05012013_text.pdf, page 3Enterprise could not demonstrate that they installed a cathodic protection system in accordance with API 651 following the construction of a tank in 2011. API 651, Section 5.3.2.1.k (Sand Pad Materials) states: Random testing of the sand material should be conducted at the supply source to determine if the electrical resistivity and chemical properties are at acceptable levels. … Upon request Enterprise failed to provide the chemical analysis of the sand materials backfilled underneath the breakout tank (# 772) bottom. According to §195.565, the installation of cathodic protection system in compliance with API Recommended Practice 651 is not required as long as Enterprise has the proper justification why compliance with all or certain provisions of API Recommended Practice 651 is not necessary for the safety of the tank. When requested, Enterprise could not provide documentation whether the chemical analysis of the sand materials was conducted or the justification for not complying with API recommended Practice 651 Standard. 4. §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. Enterprise could not demonstrate that they followed all requirements of their specifications when repairing a tank in 2008. PHMSA requested that Enterprise provide the Vacuum Box testing report as required by API 653 for breakout tank #741. API 653, Section 12.1.7.1 states: “ … In addition, all new welds, including the weld attaching a patch plate to the bottom, the areas of bottom plate restored by welding, and the restoration of welds found with defects during an internal inspection shall be inspected by one of the methods specified in API 650, Section 7.3.3. …” API 650, Section 7.3.3: Examination and Testing of the Tank Bottom states: “… In addition, all welds shall be tested by one of the following methods”. a) b) c) A vacuum-box test in accordance with 8.6 A tracer gas test in accordance with 8.6.11 After at least the lowest shell course has been attached … Enterprise chose to follow option (a) vacuum box test. API 650, Section 8.6.6 states that the metal surface temperature limits 4ºC and 52ºC, unless the film solution is proven to work at temperature outsides these limits either by testing or manufacturer’s recommendations. API 650, Section 8.6.7 states that a minimum light intensity of 1000 LUX at the point of examination is required during the application of the examination and evaluation for leaks. API 650, Section 3#

420135011_NOPV PCP PCO_05012013_text.pdf, page 48.6.10 states that “A record or report of the test including a statement addressing temperature and light intensity shall be completed and furnished to the purchaser upon request.” The Vacuum Box test report of breakout tank# 741 provided by Enterprise lacks the specificity required to show that the requirements of API 650 were met. 5. §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. Enterprise did not follow their O&M procedures for conducting post-accident investigations. Enterprise’s written O&M procedure in Section 702 (Investigations of Failures), revised on November 10, 2011, requires that “All Operational failures and accidents … shall be investigated …” The procedure goes on to state that information gained by investigation shall be considered and utilized to prevent recurrence of failures. The Operations Manager is responsible for ensuring this work is complete and documentation is made and retained. The local field office shall retain these reports and documents. Enterprise reported an accident to the National Response Center (NRC #996202) on November 22, 2011, in Sulphur, Louisiana. The Enterprise Sulphur facility was shut down due to a leak on a pig trap. During the inspection, PHMSA requested the post-accident review for this accident. Enterprise stated that this was never completed and could not provide the post-accident review. 6. §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. Enterprise failed to follow their written O&M procedure for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. Enterprise O&M procedure CPP-DR-01 (Deficiency Reporting and Remedial Action Development), Section 1.2 states: Deficiencies identified that are not immediately corrected should be documented and submitted by the corrosion technician within two weeks. Enterprise O&M procedure CPP-DR-01, Section 2.1 also states: 4#

420135011_NOPV PCP PCO_05012013_text.pdf, page 5The corrosion technician will report the deficiency or deficiencies on the Company Remedial Action Form with recommendations on how the deficiency is to be corrected. During the inspection, PHMSA reviewed the Remedial Action Forms on line P-1(16” Baytown to Beaumont) and P-63(20” Baytown to Beaumont). The review revealed that all the Deficiency Action Forms did not reflect any submission dates to the corrosion supervisor which should be within two (2) weeks after the discovery as mentioned in Section 1.2. Delayed reporting of deficiencies could lengthen the time of necessary repairs and could jeopardize the integrity of the pipeline system. 7. §195.404 Maps and Records (b) Each operator shall maintain for at least 3 years daily operating records that indicate – (2) Any emergency or abnormal operation to which the procedures under §195.402 apply. Enterprise failed to maintain a record of an abnormal operation. Enterprise O&M Procedure, Section 811(Abnormal Operation Procedures) states: Note - When field personnel have given notification to Control Room that they are at a site and are testing or “DOT’ing” equipment in the field, and they cause a critical alarm which is false, this will not require an AOC. However, after verifying with the field personnel that the conditions associated with those alarms truly are false, the controller is required to match Electronic Logger entry explaining personnel on site caused the false alarm. Enterprise O&M Procedure, HCC-PCOT-002(Abnormal Operating Condition), Section 1.4 states: Make an entry in the Electronic Logger of all the abnormal operating conditions. These will then be reported to the affected field technician. If an abnormal condition occurs at any facility manned or unmanned, and if the problem is corrected by the field, the field personnel are responsible for completing the AOC form on the Electronic Logger. If the AOC is corrected by the Network Operations Center or a controller, the Controller will fill out the AOC form on the Electronic Logger. On May 3, 2012, during the field evaluation of the Orange pump station, PHMSA and Enterprise created an abnormal operation with the two gas detectors being tested at 20% LEL. One was tested at 2:38 PM and other was tested at 2:48 PM. On May 8, 2012, PHMSA requested the alarm log sheet of the events that were created on May 3, 2012. The Controller could not provide the acknowledgement of the second gas detector activation (activated at 2:48 PM). When questioned about the missing acknowledgement of the gas detector activation, the Controller contended that there would be the possibility of not having properly activated the gas detector or not activated the gas detector at all. 8. §195.505 Qualification program Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) Identify covered tasks; (b) Ensure through evaluation that individuals performing covered tasks are qualified 5#

420135011_NOPV PCP PCO_05012013_text.pdf, page 6(h) After December 16, 2004, provide training, as appropriate, to ensure that individuals performing covered tasks have the necessary knowledge and skills to perform the tasks in a manner that ensures the safe operation of pipeline facilities; and Enterprise did not ensure that individuals performing covered tasks had the necessary knowledge and skills. Enterprise has in its Operator Qualification (OQ) program a covered task identified as “1.1 Measure structure to soil potentials”. At Enterprise’ Baytown terminal this task was performed by a Mr. Olason on several tanks. During the inspection in 2012, PHMSA observed that several breakout tanks in the Baytown Tank terminal, have zinc reference electrodes permanently installed underneath the tank bottom. The OQ program is limited to measuring catholic protection by utilizing a Copper/Copper Sulfate reference half-cell. The Enterprise OQ program did not provide a written qualification program specifically dealing with the measurement of cathodic protection systems which utilize zinc reference electrodes. Enterprise contended that the field technicians are well trained on zinc reference electrodes conversion. During the field visit, technicians could not interpret the zinc conversion accurately. Because the zinc reference electrodes are not covered in the OQ program, Enterprise did not ensure through evaluation that individuals performing this covered task were qualified and had the knowledge required to perform this covered task. 9. §195.573 What must I do to monitor external corrosion control? (d) Breakout tanks. You must inspect each cathodic protection system used to control corrosion on the bottom of an aboveground breakout tank to ensure that operation and maintenance of the system are in accordance with API Recommended Practice 651. However, this inspection is not required if you note in the corrosion control procedures established under Sec. 195.402(c)(3) why compliance with all or certain operation and maintenance provisions of API Recommended Practice 651 is not necessary for the safety of the tank. Enterprise failed to properly inspect the cathodic protection system of breakout tanks for three years. Enterprise O&M Procedure, CP-13 (Onshore Pipeline and Facility Annual Cathodic Protection Survey), revised on June 24, 2011, states: Section 2.8 (Cathodic Protection Criteria): A negative (cathodic) potential of at least -850mV with cathodic protection applied (Cu/CuSO4 reference electrode). This criterion shall be used as the primary criteria for all facilities. This criterion must take voltage drops (IR) into consideration. Note: NACE SP0169-2007 states a negative (cathodic) potential of at least -850 mV with the cathodic protection applied. Section 2.8.1Considering IR Drop for -850 mV Criterion “Voltage drops other than those across the structure-to-electrolyte boundary must be considered for valid interpretation of IR-Drop measurement. One method is to conduct the annual survey while all CP current sources are interrupted. This method will be utilized at all Company pipelines/facilities on a rotating 5 to 7 year schedule.” 6#

420135011_NOPV PCP PCO_05012013_text.pdf, page 7While reviewing the records for the cathodic protection of several breakout tanks PHMSA noted that for three years (2009, 2010, and 2011) the records indicate that Enterprise failed to properly consider IR-Drop. Enterprise could not provide any documentation where they measured the IR- drop on these facilities in order to properly consider it in the annual measurements. Enterprise also stated that this IR-Drop measurement has never been performed. The locations and tanks where with improper cathodic protection measurements are: • 3 breakout tanks at McRae, AR • 1 breakout tank at Jacksonville, AR • 2 breakout tanks at N. Little Rock, AR • 21 breakout tanks at El Dorado, AR • 13 Breakout tanks at Baytown, TX* • 4 Breakout tanks at Shreveport, LA** * Enterprise provided the records of IR-drop measurement taken on July 11, 2012 (which was during the PHMSA audit). Considering this the measurements satisfy the -850 mV criterion. ** Enterprise provided the records of IR-drop measurement taken on September 28, 2012 (which was after the PHMSA audit). Considering this the measurement satisfy the -850 mV criterion. 10. §195.573 What must I do to monitor external corrosion control? (d) Breakout tanks. You must inspect each cathodic protection system used to control corrosion on the bottom of an aboveground breakout tank to ensure that operation and maintenance of the system are in accordance with API Recommended Practice 651. However, this inspection is not required if you note in the corrosion control procedures established under Sec. 195.402(c)(3) why compliance with all or certain operation and maintenance provisions of API Recommended Practice 651 is not necessary for the safety of the tank. Enterprise failed to inspect the cathodic protection system used to control corrosion on the bottom of the aboveground breakout tank # 1305 to ensure that operation and maintenance of the system are in accordance with API Recommended Practice 651. Enterprise O&M Procedure, Section 1307 (Breakout tanks, Miscellaneous Operating Procedure) states: Inspection of Cathodic Protection System on Breakout Tanks: Where cathodic protection is used to protect the bottoms of breakout tanks (with capacities of more than 500 barrels, built to API specification 12F, API Standard 620, API Standard 650 or API Standard 12c), inspections of the cathodic protection system shall be conducted in accordance with API Recommended Practice 651 and the Company Corrosion Prevention Program. Breakout tank # 1305 at McRae terminal has the permanently installed reference electrodes underneath its bottom. PHMSA requested that Enterprise provide three years (2009, 2010, and 2011) of records of the cathodic protection inspection (annual pipe-to-soil readings) to verify the adequacy of the cathodic protection of the entire span of the tank bottom. According to the records, PHMSA noted that Enterprise has been ignoring the use of reference electrodes 7#

420135011_NOPV PCP PCO_05012013_text.pdf, page 8underneath the tank bottom and only performing the cathodic protection inspection utilizing the tank’s perimeter in the past several years. Even though, the annual pipe-to-soil readings of the tank perimeter meet the – 850 mV criterion, it does not ensure that the center and/or middle of the tank bottom is cathodically protected. Breakout tank# 1305 was built in 2007 and is scheduled for internal inspection in 2016. According to §195.573, the installation of cathodic protection system in compliance with API Recommended Practice 651 is not required as long as Enterprise has the proper justification why compliance with all or certain provisions of API Recommended Practice 651 is not necessary for the safety of the tank. PHMSA also advised Enterprise to provide the O&M procedure where the justification for not complying with API Recommended Practice 651 Standard has been noted. Enterprise could not provide answer. 11. §195.581 Which pipelines must I protect against atmospheric corrosion and what coating material may I use? (a) You must clean and coat each pipeline or portion of pipeline that is exposed to the atmosphere, except pipelines under paragraph (c) of this section. (b) Coating material must be suitable for the prevention of atmospheric corrosion. During the September field visit of Fitch pump station, in Louisiana, PHMSA noted that the bolts and nuts of the valve’s flange and the residual sample collection pipe on the ILI receiver side have been experiencing coating deterioration and rusted. PHMSA noted this to field personnel who responded that the issue has already been captured during the routine survey and placed in company’s 2012 budget. 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 $106,100 as follows: Item number PENALTY 5 $28,700 8 $26,200 9 $51,200 Warning Items With respect to item 1, 2, 3, 4, 6, 7, 10 and 11 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 8#

420135011_NOPV PCP PCO_05012013_text.pdf, page 9correct these item(s). Be advised that failure to do so may result in Enterprise Products Operating LLC being subject to additional enforcement action. Proposed Compliance Order With respect to item(s) 8 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Enterprise Products Operating LLC. 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 4-2013-5011 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 9#

420135011_NOPV PCP PCO_05012013_text.pdf, page 10Proposed Compliance Order Pursuant to 49 United States Code §60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Enterprise Products Operating, LLC (Enterprise) a Compliance Order incorporating the following remedial requirements to ensure the compliance of Enterprise with the pipeline safety regulations: 1. In regard to Item 8 of the Notice pertaining to no written qualification program for qualifying individuals being responsible for the testing and maintenance of zinc reference electrodes, the operator is to develop a written program specifically for testing and maintenance of the zinc reference electrodes. This is also to include taking steps to qualify the individuals to ensure that each individual understands the zinc reference electrodes, instead of the copper/copper sulfate electrode and the conversion factor equivalent to copper/copper sulfate reference electrode. This shall be completed within 90 days following receipt of the Final Order. 2. It is requested (not mandated) that Enterprise Products Operating LLC maintains 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. 10#

420135011_Final Order_02042016_text.pdf, page 1Official PDFFebruary 4, 2016 Mr. Michael A. Creel Chief Executive Officer Enterprise Products Operating LLC 1100 Louisiana Street Houston, TX 77002 Re: CPF No. 4-2013-5011 Dear Mr. Creel: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, withdraws one allegation, assesses a reduced civil penalty of $77,400, 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, PHMSA, OPS Mr. Vince Murchison, Murchison Law Firm, PLLC 325 N Saint Paul St, Suite 2700, Dallas, TX 75201-3892 CERTIFIED MAIL – RETURN RECEIPT REQUESTED#

420135011_Final Order_02042016_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ___________________________________ In the Matter of ) Enterprise Products Operating LLC, ) CPF No. 4-2013-5011 ) ) ) Respondent. ) ___________________________________ ) FINAL ORDER Between April 30 and August 24, 2012, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an inspection of the pipeline facilities and records of Enterprise Products Operating LLC (Enterprise or Respondent) in Texas, Louisiana, and Arkansas. 1 As a result of the inspection, the Director, Southwest Region, OPS, issued a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order on May 1, 2013 (Notice). In accordance with 49 C.F.R. § 190.207, the Notice alleged three violations of the hazardous liquid pipeline safety standards, proposed a civil penalty of $106,100, and proposed a compliance order. In accordance with § 190.205, the Notice also included eight warning items. Enterprise responded on August 28, 2013, and requested a hearing. Additional written materials were submitted by Respondent on January 27, 2014. In accordance with 49 C.F.R. § 190.211, a hearing was held in Houston, Texas, on February 6, 2014, before a Presiding Official from the Office of Chief Counsel, PHMSA. After the hearing, Enterprise submitted further written materials on April 30 and November 12, 2014. Pursuant to § 190.209(b)(7), the Director submitted a written evaluation of Respondent’s response material on June 16, 2014. FINDINGS OF VIOLATION Items 5, 8, and 9 of the Notice alleged that Respondent committed violations of the pipeline safety standards in 49 C.F.R. Part 195. The alleged violations were as follows: 1 Enterprise is a subsidiary of Enterprise Products Partners L.P. and operates about 23,000 miles of pipeline transporting primarily highly volatile liquids, as reported by Respondent for calendar year 2014.#

420135011_Final Order_02042016_text.pdf, page 3CPF No. 4-2013-5011 Page 2 Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states: § 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 . . . . (c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations . . . (5) Analyzing pipeline accidents to determine their causes. (6) Minimizing . . . the possibility of recurrence of accidents analyzed under paragraph (c)(5) of this section. The Notice alleged that Respondent violated § 195.402(a) by failing to follow its written procedures when investigating an accident. Specifically, the Notice alleged that Respondent’s procedures required that all accidents be investigated and that additional actions be taken to prevent recurrence. When OPS inspectors requested documentation related to an accident that had occurred on November 22, 2011, in Sulphur, Louisiana, OPS inspectors concluded that Respondent never completed a post-accident review. At the hearing, OPS explained that Respondent conducted a preliminary investigation of the accident and prepared a report titled Preliminary Incident Report (PIR) 11410. OPS contended the PIR proved Respondent did not perform a complete incident investigation because Respondent had checked a box labeled “No” next to the phrase “Incident Investigation.”2 OPS also stated that the title of the PIR has the word “Preliminary” in it, implying the document itself is not a complete investigation report. Finally, OPS noted that a Company employee said that an investigation was not conducted. In response, Respondent argued that it complied with its procedures. The Company stated that it had completed an investigation of the accident, identified the root cause, documented the investigation in the PIR, and took action to prevent recurrence by having a safety meeting with operating personnel. Respondent explained that the box checked “No” in the PIR simply indicated that no further investigation was required. Likewise, Respondent explained the word “Preliminary” in the title of the PIR was not in regard to the report’s completeness, but rather reflected the purpose of the report, which is to determine whether additional investigation is required. Respondent denied an employee had ever said an investigation was not completed, claiming that the employee had provided the PIR to OPS. 2 Violation Report, Exhibit A-5: Enterprise Preliminary Incident Report (PIR) 11410 (Nov. 22, 2011).#

420135011_Final Order_02042016_text.pdf, page 4CPF No. 4-2013-5011 Page 3 Applicable Safety Standards Section 195.402 of the hazardous liquid pipeline safety standards requires pipeline operators to prepare a manual of written procedures for the operation and maintenance (O&M) of their pipeline facility. The manual must include procedures for analyzing pipeline accidents to determine their cause and for minimizing the possibility of recurrence. 3 Operators are required to follow their written O&M procedures.4 Analysis PHMSA reviews the record to determine whether Respondent followed its written procedures for investigating the accident that occurred on November 22, 2011. Respondent’s O&M manual contained Section 702, titled “Investigation of Failures.”5 Section 702 stated that all accidents “shall be investigated and analyzed for the purpose of determining the cause and to minimize the potential for hazards and possibility of a recurrence.”6 The procedure required that the information acquired from an investigation be “utilized as soon as possible to prevent a recurrence of failures or accidents from the same cause.”7 Section 702 also specified that accidents must be “documented using Company forms or reports where applicable. These forms or reports shall be supplemented by a written report when requested by Pipeline Management.”8 These are the procedures that governed Respondent’s investigation of the accident that occurred on November 22, 2011. On the day of the accident, Respondent’s personnel responded to the station where the accident occurred and found a leak on a pig trap door.9 The station was shut down and the pig trap was closed, which stopped the leak. The root cause of the leak was determined to be the o-ring on the trap door, and the o-ring was replaced. Respondent completed the PIR form the same day. The form stated that a discussion would take place with all employees at a safety meeting. That safety meeting was held on December 6, 2011, and covered the cause of the accident and instructions for preventing recurrence. 10 PHMSA finds the evidence demonstrates that Respondent performed an accident investigation, which identified the cause of the failure, and Respondent took action to prevent recurrence by 3 § 195.402(c)(5) and (c)(6). 4 § 195.402(a). 5 Violation Report, Exhibit A-5: Enterprise Procedures Manual for Hazardous Liquids Pipeline Operations, Maintenance, and Emergencies (OM&E): Section 702 (Investigation of Failures). 6 OM&E Section 702. 7 Id. 8 Id. 9 PIR 11410. 10 Respondent Hearing Exhibit 7: Enterprise Form SF30 “Safety Meeting Minutes” (Dec. 6, 2011).#

420135011_Final Order_02042016_text.pdf, page 5CPF No. 4-2013-5011 Page 4 discussing the information with personnel. These actions were consistent with Respondent’s written procedures in Section 702 of the O&M manual. Although OPS took issue with the box checked “No” next to the phrase “Incident Investigation” on the PIR form, the evidence shows that Respondent did perform an investigation for the purpose of completing the form, consistent with its procedures for documenting an accident investigation. Under these procedures, an additional written supplement to the PIR form could be prepared, but was only required “when requested by Pipeline Management.”11 In this case, Respondent had determined that supplementing the form was not necessary because the root cause had already been identified and actions were planned to prevent recurrence. The word “Preliminary” in the title of PIR form cannot be the sole basis for a violation, as Respondent has plausibly explained how the form is used to determine whether or not additional investigation is needed, which is consistent with its procedures. Respondent is encouraged, however, to amend its Section 702 to clarify when appropriate boxes should be checked and under what circumstances management will request supplementing the PIR form. Having found that Respondent investigated and analyzed the accident, determined the cause, completed the designated investigation form, and took action to minimize the potential for recurrence, there is insufficient evidence to prove Respondent failed to follow its procedures. Accordingly, the allegation that Respondent violated § 195.402(a) is withdrawn. Item 8: The Notice alleged that Respondent violated 49 C.F.R. § 195.505, which states in relevant part: § 195.505 Qualification program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) Identify covered tasks; (b) Ensure through evaluation that individuals performing covered tasks are qualified . . . (h) After December 16, 2004, provide training, as appropriate, to ensure that individuals performing covered tasks have the necessary knowledge and skills to perform the tasks in a manner that ensures the safe operation of pipeline facilities . . . . §195.501 Scope. (a) . . . . (b) For the purpose of this subpart, a covered task is an activity, identified by the operator, that: (1) Is performed on a pipeline facility; (2) Is an operations or maintenance task; (3) Is performed as a requirement of this part; and 11 OM&E Section 702.#

420135011_Final Order_02042016_text.pdf, page 6CPF No. 4-2013-5011 Page 5 (4) Affects the operation or integrity of the pipeline. §195.503 Definitions. Qualified means that an individual has been evaluated and can: (a) Perform assigned covered tasks and (b) Recognize and react to abnormal operating conditions. The Notice alleged that Respondent violated § 195.505 by failing to have a written operator qualification (OQ) program to ensure that individuals were qualified to perform a covered task. Specifically, the Notice alleged Respondent’s OQ program identified the covered task of measuring cathodic protection in regard to a copper reference half-cell. At the Baytown terminal, several breakout tanks used zinc reference electrodes, not copper. Measurements from a zinc reference electrode require a conversion for determining the adequacy of cathodic protection with regard to a copper reference. The Notice alleged that Respondent’s OQ program did not ensure individuals were qualified to perform that data conversion when using zinc reference electrodes. The evidence in the record offered by OPS to support the allegation included Respondent’s cathodic protection survey report with specific tanks highlighted to show readings were taken using zinc reference electrodes.12 OPS documented observations that zinc reference electrodes were permanently installed underneath certain tank bottoms.13 Respondent’s procedures document use of the -850mV criteria for determining adequacy of cathodic protection.14 In response, Respondent acknowledged that its OQ program identified the covered task of measuring cathodic protection, including the reporting of cathodic protection deficiencies. Respondent contended, however, that its OQ program is not limited to copper reference electrodes as alleged in the Notice, but is generally applicable to all electrodes.15 Rather than distinguishing among different types of electrodes, the Company’s covered task relates to the measurement of cathodic protection voltage and the reporting of cathodic protection deficiencies. Deficiencies include a wide range of issues, such as equipment damage, low cathodic protection levels, and environmental conditions. In addition, Respondent argued that conversion of data from zinc electrodes is not specifically mentioned in the OQ program because that activity does not meet the definition of a covered task.16 A covered task is defined in the regulations as an activity that is “performed on a pipeline 12 Violation Report, Exhibit A-8: Enterprise Annual Pipe to Soil Potential Survey Report (Jul. 17, 2012). 13 Violation Report at 53. 14 Violation Report, Exhibit A-9: Enterprise Corrosion Prevention Program, Document CP13 (rev. 3) at 5 (Jun. 24, 2011) (stating the primary criteria for all facilities is a cathodic potential of at least -850mV with regard to a copper/copper sulfate reference electrode). 15 Enterprise Post-hearing Brief at 29–30 (Apr. 30, 2014). 16 Enterprise Post-hearing Brief at 31.#

420135011_Final Order_02042016_text.pdf, page 7CPF No. 4-2013-5011 Page 6 facility.”17 Data conversion, Respondent argued, can be performed in an office by another individual. Since the activity is not a covered task, Respondent reasoned that it is not required to be in the OQ program. Applicable Safety Standards Pipeline operators are required to have a written OQ program that includes provisions to ensure individuals performing covered tasks are qualified.18 Covered tasks are operations or maintenance activities, identified by the operator, that are performed on a pipeline facility as a requirement of the safety regulations, which could affect the operation or integrity of the pipeline.19 Individuals are qualified if they have been evaluated and can perform the assigned covered task and recognize and react to abnormal operating conditions.20 Analysis PHMSA reviews the record to determine whether Respondent’s OQ program had provisions to ensure that individuals measuring cathodic protection were evaluated on their ability to perform the task and to recognize and react to abnormal operating conditions. Respondent’s OQ program identified the covered task “1.1 Measure Structure to Soil Potentials.”21 This covered task included a list of activities and steps, including among other things: connecting the leads of the multi-meter; recording the value of the voltage displayed; completing documentation; and making required notifications of deficiencies found.22 The OQ program also identified low potential readings as an abnormal operating condition, which required documentation and notification of a supervisor.23 The applicable criteria Respondent used to determine the adequacy of cathodic protection was the -850mV criteria.24 This criteria requires measurement with respect to a copper/copper sulfate 17 § 195.501. 18 § 195.505(b). 19 §195.501. 20 § 195.503. 21 See, e.g., Respondent Hearing Exhibit 8: Enterprise Evaluation Guide/Checklist (for covered task “1.1 Measure Structure to Soil Potentials”) (Feb. 14, 2011). 22 Enterprise Evaluation Guide/Checklist at 2. 23 Enterprise Evaluation Guide/Checklist at 3 (listing abnormal operating conditions, including “low potential readings”). See also API RP 1161 Recommended Practice for Pipeline Operator Qualification (Jan. 2014), cited by Respondent in its Post-hearing Brief at 33. API RP 1161, Annex B at 20 lists “voltage less than minimum requirements” as an abnormal operating condition that could be encountered while performing the covered task of measuring cathodic protection. 24 Violation Report, Exhibit A-9: Enterprise Corrosion Prevention Program Document CP13 (rev. 3) at 5 (Jun. 24, 2011).#

420135011_Final Order_02042016_text.pdf, page 8CPF No. 4-2013-5011 Page 7 reference electrode. 25 The use of a different type of reference electrode, such as zinc, requires a conversion of the data to determine if the level of cathodic protection meets the -850mV criteria. 26 A potential measurement with reference to zinc must be converted to a potential measurement with reference to copper/copper sulfate. When performing the covered task of measuring cathodic protection, a qualified individual must be able to identify and document low readings that do not meet the -850mV criteria. This means that when taking readings with zinc reference electrodes, the individual must be able to accurately convert the data to a copper/copper sulfate reference measurement. 27 The data conversion process necessary to determine if the reading is outside applicable criteria is integral to both the completion of the covered task and recognition of abnormal operating conditions. Respondent’s argument that data conversion, by itself, does not meet the definition of a covered task is beside the point. The covered task of measuring cathodic protection is comprised of a series of steps and actions each of which must be performed by the qualified individual to complete the covered task. It is not material if one of those steps does not itself meet the definition of a covered task. What is material is whether Respondent’s OQ program provided for the evaluation of an individual to ensure they are qualified and can recognize abnormal operating conditions. A qualified individual measuring cathodic protection must be able to identify low readings with regard to the applicable criteria when using zinc electrodes. Therefore, the data conversion process is a necessary element of the covered task and must be included in the OQ program for that task. Respondent’s argument that the conversion process could be performed in the office by someone other than the individual at the pipeline provides no additional support. Section 195.505 requires each qualified individual performing a covered task to be able to recognize and react to abnormal operating conditions. Respondent’s OQ program also requires qualified individuals to be able to recognize measurements that are outside applicable criteria. Respondent cannot avoid these requirements by having different individuals perform different parts of a single covered task. 25 Section 6.2.2.1.1 of NACE SP0169; section 8.2.2.1 of API RP 651 (both incorporated by reference at § 195.3). See also Enterprise Corrosion Prevention Program Document CP13 at 5 (requiring cathodic potential of at least -850mV with respect to “Cu/CuSO4 [copper/copper sulfate] reference electrode”). 26 See, e.g., Post-hearing Brief, Exhibit 24: Declaration of Kyle L. Costlow at 2 (stating “to convert from a potential measurement with reference to zinc to a potential measurement with reference to copper/copper sulfate, it is a function of subtracting an established factor (number) from the measured voltage potential with reference to zinc”). See also Post-hearing Brief, Exhibit 17: Enterprise Corrosion Prevention Program, Document CP13 (rev. 5), Appendix A at 15 (Feb. 4, 2013) (providing a conversion table for five types of electrodes). 27 Respondent suggested that the conversion is a matter of simple subtraction and that an inadequate reading using zinc electrodes can never be misinterpreted as adequate cathodic protection. This assumes, however, that the person taking the reading is qualified to do the conversion accurately in the first place.#

420135011_Final Order_02042016_text.pdf, page 9CPF No. 4-2013-5011 Page 8 Respondent also argued that OPS failed to prove Respondent’s OQ program did not already encompass measuring cathodic protection using zinc electrodes. 28 PHMSA finds the evidence demonstrates that Respondent used a criteria that requires reference to copper/copper sulfate reference. PHMSA also find that the covered task identified in the OQ program requires reporting deficiencies, and does not encompass conversion or interpretation of cathodic protection data.29 Having reviewed Respondent’s OQ program, PHMSA finds the program did not have provisions to ensure that individuals measuring cathodic protection with zinc electrodes were evaluated on their ability to accurately identify low potentials by converting the data to a potential measurement with reference to copper/copper sulfate. Finally, Respondent contended that it did not have adequate notice of the alleged violation until the hearing, at which point OPS alleged there were issues with Respondent’s data entry and the identification of deficiencies. By its terms, the Notice alleged that Respondent “did not provide a written qualification program specifically dealing with the measurement of cathodic protection systems which utilize zinc reference electrodes.”30 The Notice also referenced whether “field technicians are well trained on zinc reference electrodes conversion” and whether they could “interpret the zinc conversion accurately.” PHMSA finds Respondent was appropriately apprised of the nature of the allegation.31 For the above reasons, PHMSA finds Respondent violated § 195.505 by failing to have a written qualification program that includes provisions to ensure through evaluation that individuals measuring cathodic protection with zinc reference electrodes are qualified. Item 9: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(d), which states: § 195.573 What must I do to monitor external corrosion control? (a) Protected pipelines. You must do the following to determine whether cathodic protection required by this subpart complies with § 195.571: (1) Conduct tests on the protected pipeline at least once each calendar year, but with intervals not exceeding 15 months . . . . (d) Breakout tanks. You must inspect each cathodic protection system used to control corrosion on the bottom of an aboveground breakout tank to ensure that operation and maintenance of the system are in accordance with API Recommended Practice 651. However, this inspection is not 28 Post-hearing Brief at 29-30. 29 Respondent acknowledges this. Post-hearing Brief at 30. 30 Notice at 6. 31 The Parties also argued about whether, during the inspection, certain employees could in fact perform the data conversion process. It is not necessary to decide whether those employees could have accurately converted the data at the time of the inspection.#

420135011_Final Order_02042016_text.pdf, page 10CPF No. 4-2013-5011 Page 9 required if you note in the corrosion control procedures established under § 195.402(c)(3) why compliance with all or certain operation and maintenance provisions of API Recommended Practice 651 is not necessary for the safety of the tank. The Notice alleged that Respondent violated § 195.573(d) by failing to inspect each cathodic protection system on a breakout tank to ensure it meets the criteria in API Recommended Practice 651 (API RP 651). The Notice alleged that in 2009, 2010, and 2011, Respondent used the -850mV criteria to determine if cathodic protection was adequate at certain tanks, but Respondent failed to consider voltage drop (IR drop) for valid interpretation of the measurements. During the OPS inspection, Respondent could not provide documentation to show the Company had measured the IR drop for 27 breakout tanks at various locations in Arkansas. Respondent did not contest the allegation in the Notice concerning the breakout tanks located in Arkansas. 32 Accordingly, PHMSA finds Respondent violated § 195.573(d) by failing to consider IR drop when inspecting cathodic protection systems on 27 breakout tanks in 2009, 2010, and 2011. The findings of violation in this order will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122 (2011), Respondent is subject to an administrative civil penalty not to exceed $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any related series of violations.33 The Notice proposed a total civil penalty of $106,100 for the violations cited above. In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, PHMSA 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; the good faith of Respondent in attempting to comply with the pipeline safety regulations; and the effect on Respondent’s ability to continue in business. In addition, PHMSA may consider the economic benefit gained from violation and such other matters as justice may require. 32 The Notice referenced some other thanks in Texas and Louisiana, but OPS clarified at the hearing that these tanks were not part of the alleged violation or the proposed penalty. 33 Subsequent to the actions that gave rise to this case, the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a), 125 Stat. 1905 (Jan. 3, 2012), increased the maximum civil penalty for a pipeline safety violation to $200,000 per violation for each day up to a maximum of $2,000,000 for a related series.#

420135011_Final Order_02042016_text.pdf, page 11CPF No. 4-2013-5011 Page 10 Respondent argued that as a general matter the proposed penalty must be withdrawn because Enterprise was not offered an opportunity to confront evidence supporting the penalty amount. Specifically, Respondent complained that it did not have an opportunity to examine either the Agency employee who calculated the proposed penalty or the employee’s penalty calculation worksheet. Respondent argued there was “no way to know how the proposed civil penalties were determined” without access to this information.34 At the hearing, OPS explained that as a general matter, the compliance officer who prepares a proposed penalty will attend an enforcement hearing by telephone to answer any questions about the penalty in that case. In this matter, however, the compliance officer had taken another position within the Agency. Therefore, OPS made available another compliance officer who had reviewed the relevant information and who could answer questions about the specific penalty or the process in general. In response to Respondent’s request for a copy of internal calculation documentation, the compliance officer explained that it is Agency policy not to release that material. 35 OPS did provide a guidance document that explains how the Agency calculates civil penalties under the statutory assessment criteria.36 Having considered Respondent’s position, PHMSA finds that Enterprise had access to sufficient information about the penalty to allow a meaningful and targeted response. The assessment factors that influence a civil penalty are listed in § 190.225 and are explained in more detail in the Violation Report. The Violation Report describes the particular facts in this case that were considered under each assessment factor to support the proposed penalty. Respondent had an opportunity to offer any information relevant to the assessment factors, and if appropriate, to disprove any of the factual assertions that influenced the penalty amount. The guidance document Respondent received also discusses each of the assessment factors, explains the range of penalties that may be assessed under each factor, and explains the type of evidence or facts that will result in higher or lower penalties under each assessment factor. This information corresponds directly to the particular facts of each violation that were noted in the Violation Report. Respondent can discern where the alleged facts of its case fall on the range of conduct and how that influenced the proposed penalty. For these reasons, PHMSA finds Respondent had access to sufficient evidence about the penalty to allow a meaningful response. 34 Post-hearing Brief at 9. 35 See BP Pipelines (North America), Inc., CPF No. 3-2010-5007, at 5, 2012 WL 6946973, at *6 (Dec. 27, 2012) (rejecting an operator’s request to receive the “specific penalty calculations used,” but providing a copy of the Agency’s civil penalty guidelines). See also Administrative Procedures; Updates and Technical Corrections, 78 FR 58897, 58904 (Sept. 25, 2013) (explaining that PHMSA explains its penalty calculation process primarily through the violation report, which defines and applies the assessment factors to the alleged facts of the case). 36 See 78 Fed. Reg. at 58901 (explaining that a general outline of how civil penalties are calculated can be provided upon request).#

420135011_Final Order_02042016_text.pdf, page 12CPF No. 4-2013-5011 Page 11 Item 5: The Notice proposed a civil penalty of $28,700 for the alleged violation of 49 C.F.R. § 195.402(a). As discussed above, this alleged violation is withdrawn. Therefore, the civil penalty proposed in the Notice for this item is not assessed. Item 8: The Notice proposed a civil penalty of $26,200 for Respondent’s violation of 49 C.F.R. § 195.505. Respondent failed to include provisions in its OQ program to ensure that individuals measuring cathodic protection with zinc electrodes were qualified. The proposed penalty was based on assertions in the Notice and Violation Report relevant to the penalty assessment criteria in § 190.225. With regard to the nature of the violation, the Violation Report noted this violation concerned an inadequate program, which is more serious than a records violation, but less serious than a failure of equipment or a pipeline facility. With regard to circumstances, it noted the violation was discovered by PHMSA rather than being self- reported by the Operator. With regard to gravity, the Violation Report suggested there was a low level of gravity because the violation “minimally affected” pipeline integrity or safe operation. Respondent objected to the gravity rating, arguing there was no rational connection between this rating and the facts. Respondent explained that the zinc electrodes were duplicative measurements and that redundant copper/copper sulfate measurements were also available. Respondent argued the violation had no effect on safety because the operator could use measurements other than the zinc electrodes. In evaluating Respondent’s objection, PHMSA begins by recognizing the Violation Report has alleged the lowest possible level of gravity for this violation. The OQ regulations are designed to ensure covered tasks are performed safely and that abnormal operating conditions are identified. Respondent’s failure to comply with the OQ regulations did pose some level of risk because individuals measuring cathodic protection with zinc electrodes could misidentify inadequate cathodic protection. Therefore a civil penalty is appropriate. Respondent’s assertion that redundant cathodic protection measurements were available supports the current level of penalty because the violation only “minimally affected” safety as opposed to being a more serious safety violation. Since the proposed penalty already takes into account the low gravity, no further reduction to the penalty is warranted under this factor. The nature, circumstances, and gravity of the violation support the proposed penalty amount. With regard to the degree of Respondent’s culpability and good faith, the Violation Report suggested no reduction to the penalty under these factors. Respondent contended that it should not be found culpable for the violation because it had redundant copper/copper sulfate electrode measurements available. Respondent also argued that it acted in good faith by identifying the covered task of measuring cathodic protection consistent with industry standards and by reasonably interpreting those standards and the regulation.#

420135011_Final Order_02042016_text.pdf, page 13CPF No. 4-2013-5011 Page 12 When evaluating an operator’s culpability, PHMSA considers the extent to which the operator was responsible for the violation.37 Respondent is culpable for the violation in this case because the Company failed to include provisions in its OQ program to ensure individuals measuring cathodic protection with zinc electrodes could, among other things, identify deficient corrosion control with respect the criteria being used. The availability of redundant copper electrodes does not lessen Respondent’s culpability for the violation. When considering good faith in attempting to comply, PHMSA looks at the attempt to comply with the cited regulation prior to the occurrence of the violation.38 If an operator made a clear, demonstrable effort to comply with a reasonable interpretation of the cited regulation when the violation occurred, PHMSA may find it appropriate to reduce the civil penalty. Respondent’s good faith attempt to comply by preparing an OQ program that identified the covered task of measuring cathodic protection is recognized. PHMSA finds, however, that it does not justify a reduction in penalty because Respondent did not take any demonstrable measures to ensure that individuals using zinc electrodes to measure cathodic protection could identify deficient corrosion control. To the extent Respondent believed the regulation did not require individuals to be qualified to identify deficient corrosion control when using zinc reference electrodes, Respondent’s interpretation was in error and does not justify reducing the penalty. With regard to the history of Respondent’s prior offenses, the Violation Report noted a total of 27 prior offenses in the five-year period prior to issuance of the Notice. This is a significant number of prior offenses that supports full assessment of the proposed amount. PHMSA finds the proposed penalty amount is appropriate under the required assessment factors. Accordingly, having reviewed the record and considered the assessment criteria, PHMSA assesses a civil penalty of $26,200 for the violation of 49 C.F.R. § 195.505. Item 9: The Notice proposed a civil penalty of $51,200 for Respondent’s violation of 49 C.F.R. § 195.573(d). Respondent failed to consider IR drop when inspecting cathodic protection systems on 27 breakout tanks in 2009, 2010, and 2011. The proposed penalty was based on assertions in the Notice and Violation Report relevant to the penalty assessment criteria in § 190.225. With regard to the nature of the violation, the Violation Report stated this was a records violation. With regard to circumstances, it noted the violation was discovered by PHMSA. With regard to gravity, the Violation Report suggested the violation “significantly compromised” pipeline integrity or safe operation. Respondent argued that OPS offered no evidence to support this assertion, but PHMSA finds it is already well-understood that failing to verify adequate 37 Sunoco Pipeline L.P., CPF No. 1-2012-5013, at 12-13, 2014 WL 5431181, at *9 (Aug. 27, 2014). 38 Id.#

420135011_Final Order_02042016_text.pdf, page 14CPF No. 4-2013-5011 Page 13 cathodic protection may result in significant safety risks, including corrosion failures that threaten life, property, and the environment.39 The large number of tanks and the extended length of time of these violations support finding that Respondent’s failure to verify the adequacy of cathodic protection posed a significant safety threat. Accordingly, the nature, circumstances, and gravity of the violation support the proposed penalty amount. With regard to the degree of Respondent’s culpability and good faith, the Violation Report suggested no reduction to the penalty under these factors. Respondent contended that it had acted in good faith by having procedures for consideration of IR drop and by having a program for conducting interrupted surveys to measure IR drop. Respondent stated that despite these efforts, certain field personnel did not understand they were supposed to conduct interrupted surveys. PHMSA does not find Respondent’s efforts warrant a reduction to the penalty because Respondent failed to consider IR drop on a large number of tanks at four different terminal facilities over the course of three years. This represents a lapse in compliance for which Respondent’s good faith efforts to have procedures do not justify a penalty reduction. The Violation Report also noted 27 prior offenses. Accordingly, having reviewed the record and considered the assessment criteria, PHMSA assesses a civil penalty of $51,200 for the violation of § 195.573(d). In summary, having reviewed the record and considered the assessment criteria for each of the Items cited above, PHMSA assesses Respondent a total civil penalty of $77,400. 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 (AMK-325), Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845. Failure to pay the $77,400 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. 39 See, e.g., Williams Gas Pipeline Co., CPF No. 1-2009-1007, 2009 WL 7812788 (Nov. 17, 2009) (assessing a penalty for failing to have adequate cathodic protection that resulted in corrosion causing an explosion, fire, hospitalization of persons, and destruction of homes).#

420135011_Final Order_02042016_text.pdf, page 15CPF No. 4-2013-5011 Page 14 COMPLIANCE ORDER The Notice proposed a compliance order with respect to the violation of § 195.505 (Item 8). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids by pipeline or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Respondent noted that under 49 C.F.R. § 190.217, OPS may only issue a compliance order “if the nature of the violation and the public interest so warrant.”40 Respondent argued that OPS has made no demonstration in this case that the nature of the violation and the public interest warrant issuance of a compliance order. PHMSA has already discussed above the importance of ensuring cathodic protection is measured accurately and deficiencies in corrosion control are identified. Significant accidents can occur on pipelines as a result of inadequate cathodic protection. Therefore, it is necessary to issue an order to require that Respondent comply with § 195.505. Respondent also asserted that the proposed compliance order is arbitrary and capricious because it goes beyond the scope of the violation. Specifically, Respondent argued that the scope of the violation in Item 8 is limited to the issue of data conversion, but the Notice proposes to require a more expansive program for testing and maintaining zinc reference electrodes. PHMSA agrees that the violation in Item 8 concerned Respondent’s failure to have a program to ensure individuals were qualified to measure cathodic protection when using zinc reference electrodes. There was no allegation that Respondent violated the regulation by failing to maintain the electrodes. The compliance order is therefore modified to address conduct that resulted in the violation of § 195.505. Respondent also contended that the proposed compliance order is vague and ambiguous because it requires Enterprise to ensure that each individual “understands” zinc reference electrodes. PHMSA agrees that some degree of clarification is appropriate. It is essential under Respondent’s OQ program that qualified individuals understand, at a minimum, the difference between zinc reference electrodes and copper reference electrodes when measuring cathodic protection, because data must be converted to determine if measurements are adequate. The compliance order is amended to clarify that qualified individuals must possess this level of understanding. Accordingly, 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: 40 Post-hearing Brief at 45.#

420135011_Final Order_02042016_text.pdf, page 16CPF No. 4-2013-5011 Page 15 1. 2. 3. With respect to the violation of § 195.505 (Item 8), Enterprise must include provisions in its written qualification program to ensure through evaluation that individuals measuring cathodic protection with zinc reference electrodes are qualified. Qualified means that an individual has been evaluated and can measure cathodic protection using zinc electrodes and recognize and react to abnormal operating conditions, including low cathodic protection readings under applicable criteria. The provisions must include the steps necessary to ensure that each qualified individual understands the differences between zinc reference electrodes and copper/copper sulfate reference electrodes, as well as the conversion factors necessary to determine the adequacy of cathodic protection with respect to a copper/copper sulfate reference electrode. Enterprise must submit documentation to demonstrate satisfaction of Paragraph 1 of this Compliance Order within 90 days following receipt of this Order. Submissions must be made to the Director, Southwest Region, Office of Pipeline Safety, 8701 S Gessner, Suite 1110, Houston, TX 77074. It is requested that Enterprise maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. 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. The Director, Southwest Region, OPS 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, 4, 6, 7, 10 and 11, the Notice alleged probable violations of Part 195, but considered them to be warning items. Pursuant to 49 C.F.R. § 190.205, a warning may be issued by a Regional Director to notify an operator of a potential issue, which if found in a future inspection may subject the operator to future enforcement. An operator may respond to a warning, but is not required to. The warnings in the Notice were for: 49 C.F.R. § 195.202 (Item 1) – Respondent’s alleged failure to have documentation of the quality of water used for a hydrostatic test of breakout tank #772. Information on#

420135011_Final Order_02042016_text.pdf, page 17CPF No. 4-2013-5011 Page 16 water quality was needed to demonstrate the tank was constructed in accordance with API Standard 650. 49 C.F.R. § 195.202 (Item 2) – Respondent’s alleged failure to have documentation of the metal surface temperature and minimum light intensity used for Vacuum Box testing of breakout tank #772. This information was needed to demonstrate the tank was constructed in accordance with API Standard 650. 49 C.F.R. § 195.565 (Item 3) – Respondent’s alleged failure to have documentation of the chemical analysis of sand backfilled underneath breakout tank #772. This information was needed to demonstrate cathodic protection was installed in accordance with API RP 651. 49 C.F.R. § 195.205 (Item 4) – Respondent’s alleged failure to have documentation of the metal surface temperature and minimum light intensity used for Vacuum Box testing of breakout tank #741. This information was needed to demonstrate the tank was repaired in accordance with API Standard 650. 49 C.F.R. § 195.402(a) (Item 6) – Respondent’s alleged failure to follow its procedures for documenting the date certain forms were submitted to a corrosion supervisor for action. The forms identified cathodic protection deficiencies that needed correction. 49 C.F.R. § 195.404(b)(2) (Item 7) – Respondent’s alleged failure to maintain daily operating records that included documentation of an abnormal operation that occurred on May 3, 2012. The abnormal operation was created during the OPS inspection by testing a gas detector. 49 C.F.R. § 195.573(d) (Item 10) – Respondent’s alleged failure to test cathodic protection reference electrodes underneath the bottom of breakout tank #1305. Respondent had allegedly only tested the tank’s perimeter. 49 C.F.R. § 195.581(a), (b) (Item 11) – Respondent’s alleged failure to clean and coat several bolts, nuts, and a collection pipe using a coating material suitable for the prevention of atmospheric corrosion. The areas were allegedly observed to have coating deterioration and rust. Respondent is warned that if a probable violation of these provisions is identified in the future, Respondent may be subject to additional enforcement. Under 49 C.F.R. § 190.243, Respondent may submit a petition for reconsideration of this Final Order to the Associate Administrator for Pipeline Safety, PHMSA, 1200 New Jersey Avenue SE, East Building, 2nd Floor, Washington, D.C. 20590, no later than 20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of any civil penalty assessed. All other terms of the order, including corrective action, remain in effect unless the Associate Administrator, upon request, grants a stay.#

420135011_Final Order_02042016_text.pdf, page 18CPF No. 4-2013-5011 Page 17 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#