ENBRIDGE PIPELINES (OZARK) L.L.C. — Notice of Probable Violation

party submissionOfficial PDF420155016_Operator Petition for Reconsideration Cover Letter_04192017.pdf#

party submissionOfficial PDF420155016_Operator Petition for Reconsideration_04192017.pdf#

party submissionOfficial PDF420155016_Operator Response to Notice_ 10022015.pdf#

420155016_Closure Letter_10242019_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED October 24, 2019 Brad Shamla Vice President, U.S. Operations Enbridge Storage (Cushing), LLC 1100 Louisiana Street, Suite 3300 Houston, Texas 77002 CPF 4-2015-5016 Dear Mr. Shamla: On multiple occasions between July 23, 2012 and April 20, 2015, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code conducted onsite inspections of the Enbridge Storage (Cushing) L.L.C (Enbridge) terminal in Cushing, Oklahoma, specifically procedures and records related to the Enbridge BP/Amoco Pipe Modification Project. As a result of these inspections, on August 25, 2015, a Notice of Probable Violation, Proposed Civil Penalty and Proposed Compliance Order (Notice) was issued to Enbridge Storage (Cushing), LLC (Enbridge, the Operator). On March 24, 2017, a Final Order was issued with a Compliance Order requiring the Operator to perform specified corrective actions, along with a civil penalty in the amount of $33,100. Enbridge paid the penalty, performed the specified corrective actions, and on August 26, 2019, requested closure of the case. Representatives of PHMSA performed inspections and found the corrective actions to be acceptable. This letter is to inform you no further action is necessary and this case is now closed. Thank you for your cooperation. Sincerely, Mary L. McDaniel, P.E. Director, Southwest Region Pipeline and Hazardous Materials Safety Administration#

420155016_Decision on Petition For Reconsideration_02092018_text.pdf, page 1Official PDFFebruary 9, 2018 Mr. Mark A. Maki President Enbridge Storage (Cushing), LLC 1100 Louisiana St., Suite 3300 Houston, Texas 77002 Re: CPF No. 4-2015-5016 Dear Mr. Maki: Enclosed is the Decision on the Petition for Reconsideration filed by Enbridge Storage (Cushing), LLC, in the above-referenced case. For the reasons explained therein, the Decision grants the Petition, in part, but affirms the civil penalty and compliance terms of the March 24, 2017 Final Order. The civil penalty was paid in full, by wire transfer, dated April 11, 2017. When the terms of the Compliance Order are completed, as determined by the Director, Southwest Region, this enforcement action will be closed. This Decision constitutes the final administrative action in this proceeding. Service of this Decision is made pursuant to 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure cc: Director, Southwest Region, Office of Pipeline Safety, PHMSA Mr. David Stafford, Senior Manager, U.S. Pipeline Compliance, Enbridge Energy Partners, LP, 119 North 25th Street East, Superior, WI 54880 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

420155016_Decision on Petition For Reconsideration_02092018_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 ) Enbridge Storage (Cushing), LLC, ) CPF No. 4-2015-5016 a subsidiary of Enbridge Energy Partners, LP, ) ) ) ) Petitioner. ) _________________________________________ ) DECISION ON PETITION FOR RECONSIDERATION Between July 23, 2012, and April 20, 2015, 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 Enbridge Storage (Cushing), LLC (Enbridge or Petitioner), in Cushing, Oklahoma, specifically the procedures and records related to the Enbridge BP/Amoco Pipe Modification Project (BP/Amoco Project). Enbridge operates a terminal facility in Cushing, Oklahoma, that is part of the Ozark Pipeline, which begins in Cushing and terminates in Wood River, Illinois. Enbridge has approximately 75 breakout tanks at the Cushing Terminal, with additional tanks under construction.1 As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Enbridge, by letter dated August 25, 2015, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Enbridge had violated 49 C.F.R. § 195.214, and proposed assessing a civil penalty of $40,300 for the alleged violation. The Notice also proposed ordering Enbridge to take certain measures to correct the alleged violation. Enbridge responded to the Notice by letter dated October 2, 2015 (Response). The company contested the allegation, offered additional information in response to the Notice, and requested that the proposed civil penalty be reduced or eliminated. Enbridge did not request a hearing. On March 24, 2017, pursuant to 49 C.F.R. § 190.213, PHMSA issued a Final Order in this proceeding, finding that Enbridge had committed one violation of § 195.214, as alleged in the 1 Pipeline Safety Violation Report (Aug. 25, 2015) (Violation Report) (on file with PHMSA), at 1.#

420155016_Decision on Petition For Reconsideration_02092018_text.pdf, page 3CPF No. 4-2015-5016 Page 2 Notice.2 The agency assessed a reduced civil penalty of $33,100 for the violation and ordered that Enbridge take certain corrective actions, as set forth in the Compliance Order that was part of the Final Order. In accordance with § 190.243, Enbridge filed a “Petition for Reconsideration or, in the Alternative, Petition to Amend Language of the Final Order” on April 19, 2017. Enbridge did not seek reconsideration of the finding of violation, civil penalty assessment, or compliance order. Instead, Enbridge requested the amendment of certain language in the Final Order regarding two factual findings. STANDARD OF REVIEW Pursuant to 49 C.F.R. § 190.243, an operator may petition the Associate Administrator for reconsideration of a final order issued under § 190.213. Reconsideration does not constitute an appeal or an opportunity to seek a de novo review of the record. It is instead an opportunity for respondents to request that errors in the final order be corrected or to present information that was not previously available, provided the petitioner submits a valid reason explaining why such information was not presented prior to issuance of the final order. PHMSA may grant or deny, in whole or in part, a petition for reconsideration without further proceedings, but may request additional information or comment if deemed appropriate. Under § 190.243(b), the respondent must submit reasoning why any additional facts or arguments were not presented prior to issuance of the final order. DISCUSSION Item 1 in the Final Order found that Petitioner violated 49 C.F.R. § 195.214, which states: § 195.214 Welding procedures. (a) Welding must be performed by a qualified welder in accordance with welding procedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler and Pressure Vessel Code (incorporated by reference, see § 195.3). The quality of the test welds used to qualify the welding procedure shall be determined by destructive testing. (b) Each welding procedure must be recorded in detail, including the results of the qualifying test. This record must be retained and followed whenever the procedure is used.3 2 Enbridge Storage (Cushing), LLC, Final Order, CPF No. 4-2015-5016, 2017 WL 1363416 (Mar. 24, 2017) (available at www.phmsa.dot.gov/pipeline/enforcement). 3 See, 49 C.F.R. § 195.214 (2015). This section was amended, effective Oct. 1, 2015; however, because the violation occurred before the amendment was effective, the previous version of the regulation, as quoted above, applies in this case.#

420155016_Decision on Petition For Reconsideration_02092018_text.pdf, page 4CPF No. 4-2015-5016 Page 3 The Final Order determined the Petitioner had violated 49 C.F.R. § 195.214 by failing to ensure that certain welding was performed by a qualified welder in accordance with welding procedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler and Pressure Vessel Code (ASME IX). Specifically, the Final Order found that Enbridge violated 49 C.F.R. § 195.214 when it used two different welding procedures with different essential variables on the same weld, and therefore failed to perform the welding according to either qualified procedure. The Final Order assessed a civil penalty of $33,100 for the violation. Enbridge did not seek reconsideration of the finding of violation or the amount of the civil penalty, but specifically requested “that PHMSA amend the language regarding two of the [civil penalty] mitigating factors: economic benefit and good faith.”4 With respect to economic benefit, the Final Order found that Enbridge “probably realized an economic benefit by not removing the work done on the first part of the welding and simply completing the work using a different procedure.”5 The Final Order noted, however, that this finding did not have any impact on the penalty because “the proposed penalty was not designed to offset any economic benefit.”6 Petitioner requested that the language in the final order referring to a probable economic benefit be removed because it was irrelevant to the determination of the penalty and could be misinterpreted. Having reconsidered the record, I find that the evidence was insufficient for PHMSA to make any finding concerning economic benefit. While the Final Order stated that Enbridge “probably” realized an economic benefit by “not removing the work done on the first part of the welding and simply completing the work using a different procedure,” this finding was not supported by any probative evidence showing that Enbridge actually derived any tangible economic benefit from the process by which it completed the weld in question. Moreover, it was not necessary to conduct a factual inquiry into economic benefit because, as recognized in the Final Order, economic benefit was not actually considered by PHMSA in proposing the penalty amount. Accordingly, the finding in the Final Order that Petitioner probably realized an economic benefit from its noncompliance is hereby withdrawn. With respect to good faith, the Final Order found that Petitioner had not acted in furtherance of a reasonable, good-faith interpretation of the regulations that would warrant a reduction in the penalty. In so holding, the Final Order rejected an argument by Enbridge that its removal of the first welding crew due to a confined-space violation constituted “good faith,” noting that the operator was already required to remove the crew under such circumstances. Petitioner argued that “the removal of the welding crew for non-compliance with confined space rules was acting in good faith, even if that does not qualify for a good-faith reduction in the civil penalty,” and suggested that this finding in the Final Order could also be misinterpreted.7 4 Petition, at 2. 5 Final Order, at 10. 6 Id.. 7 Petition, at 3.#

420155016_Decision on Petition For Reconsideration_02092018_text.pdf, page 5CPF No. 4-2015-5016 Page 4 To clarify the finding in the Final Order, when considering an operator’s “good faith” in attempting to achieve compliance for the purpose of potentially reducing a proposed civil penalty, PHMSA looks at whether the operator attempted to comply with the cited regulation based upon “a reasonable interpretation of the requirement.”8 In this case, the Final Order determined that Enbridge’s actions to comply with other safety regulations, such as confined- space safety requirements, were already required and therefore did not qualify as a basis for reducing the proposed penalty. Further, to the extent that Enbridge “believed the regulation permitted different welding procedures to be combined along the same seam, Respondent’s interpretation was unreasonable and does not justify reducing the penalty.”9 Having reconsidered this finding, I find no grounds to amend the Final Order, but trust this clarification addresses Petitioner’s concern. CONCLUSION For the reasons stated above, the Petition for Reconsideration is granted in part and denied in part. The finding of violation in the Final Order, the associated penalty of $33,100, and the associated compliance terms are hereby affirmed. Enbridge paid the civil penalty in full by wire transfer dated April 11, 2017. The Compliance Order was not stayed by the filing of the Petition and must be completed in accordance with the original terms of the March 24, 2017 Final Order. This Decision on Reconsideration is the final administrative action in this proceeding. February 9, 2018 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety 8 Violation Report, at 11. See also, White Cliffs Pipeline, LLC, Final Order, CPF No. 3-2011-5012, at 6, 2013 WL 1247518, at *4 (Feb. 5, 2013). 9 Final Order, at 10.#

420155016_NOPV PCP PCO_08252015_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY And PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED August 25, 2015 Mr. Brad Shamla Vice President, U.S. Operations Enbridge Storage (Cushing) L.L.C. 1100 Louisiana Street, Suite 3300 Houston, TX 77002 CPF 4-2015-5016 Dear Mr. Shamla: On multiple occasions between July 23, 2012 and April 20, 2015, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code were onsite and conducted inspections of the Enbridge Storage (Cushing) L.L.C (Enbridge) terminal in Cushing, Oklahoma, specifically procedures and records related to the Enbridge BP/Amoco Pipe Modification Project (BP/Amoco Project), AFE#1490541118. The project is ongoing and inspections are continuing. 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:#

420155016_NOPV PCP PCO_08252015_text.pdf, page 21. §195.214 Welding Procedures. (a) Welding must be performed by a qualified welder in accordance with welding procedures qualified under Section 5 API 1104 or Section IX of the ASME Boiler and Pressure vessel Code (incorporated by reference, see §195.3). The quality of the test welds used to qualify the welding procedure shall be determined by destructive testing. (b) Each welding procedure must be recorded in detail, including the results of the qualifying test. This record must be retained and followed whenever the procedure is used. Enbridge failed ensure that welding was performed by a qualified welder in accordance with qualified welding procedures for the BP/Amoco Project. This welding procedure, 106 LT, limited the maximum time between filler passes to no more than 15 minutes. On the afternoon of March 6, 2015 at approximately 3:45 PM, Enbridge was performing welding on the BP/Amoco project. Welders completed the root bead and a portion of the hot pass on a tie-in weld when Enbridge personnel stopped the process after determining that welding personnel may have failed to follow confined space procedures on a previous weld. After a lengthy discussion among Enbridge personnel a decision was made that there was a violation of the Enbridge confined space procedure and at approximately 6:30 PM the welding personnel were sent offsite to be drug tested in accordance with Enbridge procedures. At approximately 8:30 PM, Enbridge brought in another team of welders to complete the weld. These welders, who were normally assigned to perform maintenance welding, were not provided procedure 106 LT and were instructed to complete the weld as they described it “like other welds we had made.” Rather than grinding out the partially completed weld and re-welding (because more than 15 minutes had elapsed between passes) the welders were instructed to complete the weld, disregarding the requirements of the qualified welding procedure. According to the second set of welders, they completed the weld using a completely different welding procedure than was used to start the weld. They used maintenance welding procedure DB 48. This procedure differed from the 106 LT procedure that had been used to start the weld in that DB 48 was qualified under ASME IX and 106 LT was qualified under API 1104. The procedures also differed in some essential variables, including but not limited to, the filler metal, the speed of travel, and the preheat temperature. DB 48 also required the hot pass be started within 5 minutes of the root bead pass. Enbridge mixed welding procedures with different essential variables on the same weld and failed to perform the welding according to the qualified procedure. In addition, the second set of welders that completed the weld had not qualified to weld the 106 LT procedure and stated that no readings were taken during the welding to ensure the heat input was consistent with the requirements of the qualified welding procedure. 2#

420155016_NOPV PCP PCO_08252015_text.pdf, page 3Proposed 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 4, 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 $40,300. Proposed Compliance Order With respect to items 1 pursuant to 49 United States Code §60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Enbridge Storage (Cushing) L.L.C. 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 4-2015-5016 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, R. M. Seeley Director, SW Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 3#

420155016_NOPV PCP PCO_08252015_text.pdf, page 4PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Enbridge Storage (Cushing) L.L.C. A Compliance Order incorporating the following remedial requirements to ensure the compliance of Enbridge Storage (Cushing) L.L.C. (Enbridge) with the pipeline safety regulations: 1. 2. 3. Related to Item Number 1 of the Notice pertaining to Enbridge failing to properly perform welding according to a qualified welding procedure with qualified welders, Enbridge must review all welding records associated with the Enbridge Cushing, OK terminal, and remove and re-weld all welds not made according to a specific, applicable, appropriate qualified welding procedure using properly qualified welders. This must include the weld performed on March 6, 2015 that is the subject of this violation. Enbridge must provide PHMSA copies of all of the welding records reviewed, weld maps showing locations of each weld, and documentation of all welds removed and re-welded including but not limited to the qualified welding procedure used, the welder qualification records, the visual inspection records, inspection records showing that the welding was performed according to the essential variables and parameters of the qualified welding procedure, and NDE records showing that no defects were present in the welds greater than allowed by API 1104 (ibr). The records must be organized so that it is clear to PHMSA which welding records apply to each weld on the weld maps. Item 1 shall be submitted to PHMSA no later than 30 days from the issuance of the Final Order in this case. It is requested (not mandated) that Enbridge 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. 4#

420155016_Final Order_03242017_text.pdf, page 1Official PDFMarch 24, 2017 Mr. Mark A. Maki President Enbridge Energy Partners, LP 1100 Louisiana St., Suite 3300 Houston, Texas 77002 Re: CPF No. 4-2015-5016 Dear Mr. Maki: Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of violation, assesses a reduced civil penalty of $33,100, and specifies actions that need to be taken by Enbridge Storage (Cushing) LLC, a subsidiary of Enbridge Energy Partners, LP, 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 effective as provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure cc: Mr. Rodrick Seeley, Director, Southwest Region, OPS Mr. David Stafford, Senior Manager, U.S. Pipeline Compliance, Enbridge Energy Limited Partnership, 119 North 25th Street East, Superior, WI 54880 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

420155016_Final Order_03242017_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 ) Enbridge Storage (Cushing), LLC, ) CPF No. 4-2015-5016 a subsidiary of Enbridge Energy Partners, LP, ) ) ) ) Respondent. ) ________________________________________________) FINAL ORDER Between July 23, 2012 and April 20, 2015, 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 Enbridge Storage (Cushing), LLC (Enbridge or Respondent), in Cushing, Oklahoma. The inspection focused specifically on the procedures and records related to the Enbridge BP/Amoco Pipe Modification Project (BP/Amoco Project). Enbridge operates a terminal facility in Cushing, Oklahoma, that is part of the Ozark Pipeline, which begins in Cushing and terminates in Wood River, Illinois. Enbridge has approximately 75 breakout tanks in the Cushing Terminal, with additional tanks under construction.1 As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated August 25, 2015, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Enbridge had violated 49 C.F.R. § 195.214, and proposed assessing a civil penalty of $40,300 for the alleged violation. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violation. Enbridge responded to the Notice by letter dated October 2, 2015 (Response). The company contested the allegation, offered additional information in response to the Notice, and requested that the proposed civil penalty be reduced or eliminated. Enbridge did not request a hearing and has therefore waived its right to one. 1 Pipeline Safety Violation Report (Violation Report), (Aug. 25, 2015) (on file with PHMSA), at 1.#

420155016_Final Order_03242017_text.pdf, page 3CPF No. 4-2015-5016 Page 2 FINDING OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.214, 2 which states: § 195.214 Welding procedures. (a) Welding must be performed by a qualified welder in accordance with welding procedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler and Pressure Vessel Code (incorporated by reference, see § 195.3). The quality of the test welds used to qualify the welding procedure shall be determined by destructive testing. (b) Each welding procedure must be recorded in detail, including the results of the qualifying test. This record must be retained and followed whenever the procedure is used. The Notice alleged that Respondent violated 49 C.F.R. § 195.214 by failing to ensure that welding was performed by a qualified welder in accordance with welding procedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler and Pressure Vessel Code (ASME IX). Specifically, the Notice alleged that on March 6, 2015, at approximately 3:45 PM, Enbridge performed welding on its BP/Amoco project. After completion of the root bead on a tie-in weld, the welders started the second pass or “hot-pass,” but stopped before the welding was completed for a potential violation of confined space procedures on a previous weld. Only the root bead and approximately half of the hot pass weld had been completed when the welding was stopped. Welding Procedure 106 LT limits the maximum time between filler passes to no more than 15 minutes. Approximately five hours later, a second team of welders was brought in by Enbridge to complete the weld using Maintenance Welding Procedure DB-48. These welders were not provided Welding Procedure 106 LT. Rather than grinding out the partially completed weld and re-welding (because more than 15 minutes had elapsed between passes), the welders were instructed to complete the weld, disregarding the requirements of the qualified welding procedure. The second set of welders was not qualified to weld in accordance with Welding Procedure 106 LT. Maintenance Welding Procedure DB-48 differs from Welding Procedure 106 LT procedure in that Maintenance Welding Procedure DB-48 is qualified under ASME IX, while Welding Procedure 106 LT is qualified under API 1104. The procedures also differ in some essential variables, including, but not limited to, the filler metal, the speed of travel, and the preheat temperature. Maintenance Welding Procedure DB-48 also requires that the hot pass be started within five minutes of the root bead pass. OPS stated that “Enbridge mixed welding procedures with different essential variables on the 2 49 C.F.R. § 195.214 (2015). Note, this section was amended, effective Oct. 1, 2015; however, because the violation occurred before the amendment was effective, the previous version of the regulation applies here.#

420155016_Final Order_03242017_text.pdf, page 4CPF No. 4-2015-5016 Page 3 same weld and failed to perform the welding according to the qualified procedure.”3 In its Response, Enbridge argued that § 195.214 does not contain a prohibition against the use of more than one welding procedure. It stated that “[i]n this case, both welds were qualified in accordance with the referenced standards and all welders were qualified to perform the procedures they were executing.”4 Enbridge asserted that when welding resumed after the delay, Maintenance Welding Procedure DB-48 “was the governing procedure.” While an essential variable for Welding Procedure 106 LT contains “a 15 minute maximum interpass time between the first (root) and the second (hot) passes,”5 this is not an essential variable for Maintenance Welding Procedure DB-48.6 Instead, Maintenance Welding Procedure DB-48 contains “a requirement to commence the hot pass within 5 minutes of completing the root pass as an engineering best practice requirement for avoidance of hydrogen cracking in the vulnerable lone root pass,” but this is not an essential variable for Maintenance Welding Procedure DB-48.7 Enbridge argued that because “the maximum interpass time of DB-48 was not an essential variable per the governing standard (ASME IX), the final weldment was dispositioned in accordance with engineering judgement...”8 Enbridge consulted a subject matter expert in its Pipeline Integrity Department, who “determined that the weld met the standard of acceptability and was not an integrity concern.”9 Enbridge concluded that “combining two similar weld procedures is not prohibited under PHMSA or consensus standards.”10 OPS responded that once Enbridge originated the weld using the Welding Procedure 106 LT, it “had to follow the procedure or remove the weld and start over” to be in compliance with § 195.214.11 OPS argued that Welding Procedure 106 LT governed the procedure because it was used to initiate the weld.12 It continued to oppose Enbridge’s statement that because the interpass time was not an essential variable, it did not have to be followed. “An essential variable change requires the procedure to be completely requalified but this does not mean that 3 Notice, at 2. 4 Response, at 2. 5 API 1104 WPS 106LT, Section 5.4.2.8. 6 Response, at 2. 7 Id. 8 Id. 9 Id., at 2-3. 10 Id., at 3. 11 Region Recommendation, at 3. 12 Id., at 7.#

420155016_Final Order_03242017_text.pdf, page 5CPF No. 4-2015-5016 Page 4 the other specifications on the qualified welding procedure required by the standard don’t have to be followed.”13 OPS stated that Welding Procedure 106 LT prescribes the performance of an entire weld.14 Similarly, Maintenance Welding Procedure DB-48 is for an entire weld and is qualified under the ASME IX Code.15 Enbridge completed approximately half of the weld using Welding Procedure 106 LT then completed it with the Maintenance Welding Procedure DB-48.16 Neither procedure allows the welding “to be stopped partially through the weld and resumed outside of the maximum time between passes… with a completely different procedure qualified under a different standard.”17 While ASME IX Code permits using multiple Welding Procedure Specifications on the same weld joint, it also requires that “all essential, nonessential, and supplementary essential variables be followed and that welding procedures used on the same joint be qualified under the ASME IX Code. Consequently, a welding procedure qualified under API 1104 could not be part of an ASME Welding Procedure Specification, and therefore could not be used on the same weld joint as an ASME qualified procedure.”18 Therefore, OPS alleged that neither welding procedure was properly followed.19 In response to Enbridge’s argument that because the essential variables for the welding procedures are different and it only needed to follow the essential variables of the second welding procedure, OPS stated that § 195.214 specifies that the welding procedure must be followed, not that “only essential variables must be followed and the rest of the procedure can be ignored.”20 OPS argued that even if Enbridge were permitted to combine procedures, it “was still required to weld according to the procedure specifications, including the interpass time.”21 OPS disagreed with Enbridge’s argument that it could “indiscriminately mix and match any number of procedures on the same weld joint without regard to following the incorporated standards, procedure specifications, essential variables, welding parameters, and welder qualification requirements is completely contrary to the requirements of 49 CFR [§] 195.214 and 13 Id., at 7. 14 Id., at 3. 15 Id., at 5. 16 Id., at 5. 17 Id., at 3. 18 Id., at 7. 19 Id., at 5. 20 Id., at 5-6. 21 Id., at 6.#

420155016_Final Order_03242017_text.pdf, page 6CPF No. 4-2015-5016 Page 5 the incorporated standards.”22 OPS explained that Maintenance Welding Procedure DB-48 differed from Welding Procedure 106 LT “in filler metals, speed of travel, and several other essential variables.”23 Regarding Enbridge’s reliance on its subject matter expert’s advice in using two different welding procedures, OPS responded that the subject matter expert’s opinion could not “eliminate the requirement that an operator must follow the qualified welding procedure” required by 49 C.F.R. § 195.214.24 The central issue in this case is whether an operator is permitted to combine two welding procedures qualified under different standards on the same joint. I find that Enbridge violated 49 C.F.R. § 195.214 when it used two different welding procedures with different essential variables on the same weld, and therefore failed to perform the welding according to either qualified procedure. The regulatory requirement to follow the qualified welding procedure in 49 C.F.R. § 195.214 is based on the fact that performing welding by following the requirements of the qualified welding procedure is the only way that an operator can have the necessary assurance that the completed weld will have the required strength and mechanical properties.25 A welding procedure is qualified by first welding the proposed procedure, then destructively testing weld coupons in order to ensure that the procedure will result in the weld having the proper strength and mechanical properties for the intended application. This process is performed under strict compliance with the requirements of one of the standards incorporated by reference into Part 195, and relies on establishing parameters for all essential variables and other welding procedure specification information that must be followed every time the procedure is used.26 Consequently, the only assurance that welds in the field will have the strength and mechanical properties comparable to the qualifying welds is to follow the essential variables and other welding procedure specification information written in the qualified welding procedure.27 Replicating the welding procedure “recipe” each time a weld is made in the field is the only way that an operator can have any certainty that each weld will have the strength and mechanical properties comparable to the qualifying weld.28 22 Id., at 6-7. 23 Id. 24 Id., at 9. 25 Id., at 3. 26 Id. 27 Id., at 4. 28 Id., at 3.#

420155016_Final Order_03242017_text.pdf, page 7CPF No. 4-2015-5016 Page 6 Section 195.214 states that “[w]elding must be performed by a qualified welder in accordance with welding procedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler and Pressure Vessel Code.29 The regulation does not contemplate, or permit, an operator to partially weld with one welding procedure and then complete the work with another procedure.30 Each procedure must be completed fully or restarted from scratch. API Standard 1104, Section 5.4.l, states that “[a] welding procedure must be re-established as a new procedure specification and must be completely requalified when any of the essential variables listed in 5.4.2 are changed.”31 Likewise, the two welding procedures are not compatible, and neither contains provisions for re-initiating welding using a different welding procedure qualified under a different standard with different essential variables. Welding Procedure 106 LT limits the maximum time between filler passes to no more than 15 minutes. Outside of this time frame, an operator cannot restart the welding process without removing the original welding and start from scratch. According to API Standard 1104, Section 5.4.2.8, the length of time between passes is an essential variable and any changes require the welding procedure to be completely requalified. Restarting the welding after over five hours had elapsed disregarded Welding Procedure 106 LT’s essential variable of maximum time between passes. When Enbridge stopped the welding and failed to re-initiate the next welding pass within the 15-minute time period as specified by the qualified procedure, the partially-completed weld was required to be ground out and the entire weld redone because there were no provisions in the procedure for an interpass time exceeding 15 minutes. Enbridge therefore violated § 195.214 by failing to perform the welding according to API Standard 1104. Essential variables are those welding variables that have the most significant influence on the strength and mechanical properties of the weld, such as tensile strength and ductility.32 Before any changes can be made to an essential variable, the welding procedure must be completely requalified. Enbridge also did not comply with the Maintenance Welding Procedure DB-48, which does not permit completing a weld initiated using another welding procedure with different essential variables. For Enbridge to use Maintenance Welding Procedure DB-48, which was qualified under a different standard (ASME IX) with different essential, non-essential, and supplemental variables, they would have had to remove the weld, material deposited using Welding Procedure 106 LT, re-bevel the pipes, and re-weld the joint. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.214 by failing to ensure that welding was performed by a qualified welder in accordance with welding procedures qualified under Section 5 API 1104 or Section IX of the ASME Boiler 29 49 C.F.R. § 195.214(a) (emphasis added). 30 API Standard 1104 defines a weld in Paragraph 3.2.19 as follows: “The completed weld joining two sections of pipe, a section of pipe to a fitting, or two fittings.” Region Recommendation, at 4. 31 Id. 32 Id.#

420155016_Final Order_03242017_text.pdf, page 8CPF No. 4-2015-5016 Page 7 and Pressure Vessel Code. This finding of violation will be considered a prior offense 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. 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 $40,300 for the violations cited above. Item 1: The Notice proposed a civil penalty of $40,300 for Respondent’s violation of 49 C.F.R. § 195.214, for failing to ensure that welding was performed by a qualified welder in accordance with welding procedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler and Pressure Vessel Code. Respondent argued that “[the factors of Section 190.225], taken together, do not support the imposition of a penalty in this case. The nature, circumstances and gravity of the alleged violation do not warrant a penalty.”33 It requested that the proposed penalty be eliminated or reduced. OPS responded that “[t]he actions by the Operator may have compromised the strength and mechanical properties of the weld and as a consequence potentially placed the safety of their employees and the public in danger. The actions by Enbridge justify the imposition of a civil penalty.”34 Nature and Circumstances Respondent offered no reason for reducing the proposed penalty based on the nature of the violation. Based on the evidence, I find that there is no justification for reducing the proposed penalty based on the nature of the violation. With regard to circumstances, I note that the 33 Response, at 4. 34 Region Recommendation, at 11.#

420155016_Final Order_03242017_text.pdf, page 9CPF No. 4-2015-5016 Page 8 violation was discovered by OPS rather than being self-reported by the operator.35 I find that there is no justification for reducing the proposed penalty based on circumstances. Gravity Respondent argued that the proposed penalty should be reduced based on the gravity of the alleged violation, stating that “both welding procedures were acceptable and were welded by qualified welders for their respective procedure. The welds were properly inspected and were determined to meet the standard of acceptability. Enbridge engaged a welding subject matter expert to ensure that safety and pipeline integrity had not been compromised.”36 The Violation Report categorized the gravity of the alleged violation as “Pipeline safety or integrity was compromised in areas other than [a High Consequence Area (HCA)] or an HCA ‘could affect’ segment.”37 It continued that “The compromise to integrity due to the Operator not following the qualified welding procedures is not specifically known without destructive testing of the weld.” By failing to follow proper welding procedures, Respondent compromised the integrity of its pipeline. Contrary to Respondent’s claims that “both welding procedures were acceptable and were welded by qualified welders for their respective procedure,” combining different welding procedures is not acceptable. In considering the gravity of the violation, I find that pipeline safety or integrity was compromised by Respondent’s violation. I therefore find that there is no justification for reducing the proposed penalty based on the gravity of the violation. Culpability Respondent stated that its degree of culpability was “low” because “[a]t all times, Enbridge reasonably believed that it acted in compliance with all PHMSA and industry standards….Enbridge removed the first crew for violating confined-space rules, and then assigned a second crew who was qualified on a different but very similar procedure. Enbridge believed that these actions were acceptable and compliant.”38 When evaluating an operator’s culpability, PHMSA considers the extent to which the operator was responsible for the violation that occurred.39 An operator is expected to be cognizant of the regulatory requirements applicable to its operations and is held responsible for complying with those requirements. An operator will generally be considered culpable for any failure to comply with the requirements absent some justification for the failure, such as an 35 Violation Report, at 9. 36 Response, at 4. 37 Violation Report, at 9. 38 Response, at 4. 39 Belle Fourche Pipeline Co., CPF No. 5-2009-5042, at 19, 2011 WL 7006607 (Nov. 21, 2011).#

420155016_Final Order_03242017_text.pdf, page 10CPF No. 4-2015-5016 Page 9 unforeseeable event outside of its control. Finding an operator culpable does not increase the level of the penalty, but if there is a lesser degree of blameworthiness, such as where there is some justification for a failure to comply, PHMSA may find it appropriate to propose or assess a reduced penalty. The Violation Report categorized Respondent’s culpability as “[t]he operator made a conscious decision not to comply with a requirement that was clearly applicable.”40 Properly completing welding procedures is fundamental to ensuring pipeline integrity and safety. Respondent made a conscious decision to begin its welding project with one procedure and then complete it with a different procedure, despite neither procedure permitting the procedures to be combined or not completed in full. I find that there is no justification for a reduction of the proposed penalty based on culpability. History of Prior Offenses Respondent stated that its “compliance history also does not support the imposition of a penalty.”41 It stated that OPS inspectors had not inspected the BP/Amoco project prior to April 2015, and therefore violations found in any previous inspections were inapplicable.42 Further, Respondent stated that “[t]he inspections that are referenced in the NOPV between 2012 and 2015 were performed on other larger breakout tank construction projects which involved a material number of welds. PHMSA performed field and record (including welding records) audits for these projects, with no documented or material findings.”43 The history of an operator’s offenses is not based on individual projects, but the compliance history of the operator as a whole. Respondent is mistaken in asserting that because the inspection, which identified the alleged violation at issue, was the only inspection on the BP/Amoco project, then this is the only history PHMSA can or should consider. PHMSA considers the operator’s compliance history for all of its pipeline facilities during the five-year period prior to the approximate date of the Notice. In this case, the Violation Report contains no history of prior offenses relating to Respondent. The proposed penalty inadvertently included a penalty for prior offenses. Based on this error, I find justification for reducing the proposed civil penalty. I therefore find that Respondent’s history of prior offenses supports a reduction in the proposed penalty. 40 Violation Report, at 10. 41 Response, at 4. 42 Id. 43 Id.#

420155016_Final Order_03242017_text.pdf, page 11CPF No. 4-2015-5016 Page 10 Economic Benefit Respondent contended that it “did not derive any economic benefit as a result of the alleged non- compliance. To the contrary, Enbridge removed a crew for not complying with confined space procedures, and brought in another qualified crew to complete the work.”44 OPS disagreed, stating that “The actions taken by Enbridge was a short-cut done to avoid the time and cost required to remove the partial weld initiated using the 106LT procedure, re-bevel the pipes, and re-weld the joint. Consequently, Enbridge did derive economic benefit from the decision to not comply with Part 195 requirements.”45 I find that Respondent probably realized an economic benefit by not removing the work done on the first part of the welding and simply completing the work using a different procedure. However, economic benefit was not considered in the proposed civil penalty. Accordingly, the proposed penalty was not designed to offset any economic benefit, and the penalty should not be mitigated on those grounds. Good Faith Respondent contended that it made a reasonable, good-faith interpretation of the pipeline safety welding regulation.46 The Violation Report stated, under the “Good Faith” penalty criteria, that “[t]he operator did not make a reasonable interpretation of the requirement.”47 When considering the good faith of Respondent in attempting to comply with the pipeline safety regulations, PHMSA looks at whether the operator made a reasonable interpretation of the requirement.” Complying with pipeline safety regulations by removing a welding crew due to a confined space violation is not acting in good faith. The operator is required to remove a crew in these circumstances. Respondent’s interpretation that the regulation permitted the mixing of two different welding procedures is not reasonable because neither the welding procedures nor the regulation permitted this conduct. In addition, this compromised the regulations’ safety purpose. To the extent Respondent believed the regulation permitted different welding procedures to be combined along the same seam, Respondent’s interpretation was unreasonable and does not justify reducing the penalty. In summary, having reviewed the record and considered the assessment criteria for each of the Items cited above, I assess Respondent a total civil penalty of $33,100. 44 Id. 45 Region Recommendation, at 12. 46 Response, at 4. 47 Violation Report, at 12.#

420155016_Final Order_03242017_text.pdf, page 12CPF No. 4-2015-5016 Page 11 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, OK 79169. The Financial Operations Division telephone number is (405) 954-8845. Failure to pay the $33,100 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 Item 1 in the Notice for a violation of 49 C.F.R. § 195.214. 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 § 195.214 (Item 1), Respondent must review all welding records associated with BP/Amoco Project, and remove and re-weld welds not made according to a specific, applicable, appropriate qualified welding procedure using properly qualified welders, including the weld performed on March 6, 2015 that is the subject of this violation. Enbridge must provide PHMSA copies of all of the welding records reviewed, weld maps showing locations of each weld, and documentation of all welds removed and re-welded, including, but not limited to, the qualified welding procedure used, the welder qualification records, the visual inspection records, inspection records showing that the welding was performed according to the essential variables and parameters of the qualified welding procedure, and NDE records showing that no defects were present in the welds greater than allowed by API 1104 (incorporated by reference). The records must be organized so that it is clear to PHMSA which welding records apply to each weld on the weld maps. 2. Documentation demonstrating compliance with Item 1 shall be submitted to PHMSA no later than 30 days from the issuance of the Final Order in this case.#

420155016_Final Order_03242017_text.pdf, page 13CPF No. 4-2015-5016 Page 12 It is requested (not mandated) that Enbridge 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. 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. Under 49 C.F.R. § 190.243, Respondent has a right to submit a Petition for Reconsideration of this Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA will accept petitions received no later than 20 days after receipt of service of this Final Order by the Respondent, provided they contain a brief 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. Unless the Associate Administrator, upon request, grants a stay, all other terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. March 24, 2017 ___________________________________ _________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#