{"operation":"document","citation":"CPF 420165020","title":"SUNOCO PIPELINE L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-06-02","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.401(b)(1), 195.402(a), 195.432(b), 195.432(d), 195.452(l)(1), 195.56(a), 195.579(a), 199.202.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420165020.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420165020.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420165020","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420165020","body":"Notice of Probable Violation involving SUNOCO PIPELINE L.P.. PHMSA's enforcement data identifies the cited regulations as 195.401(b)(1),  195.402(a),  195.432(b),  195.432(d),  195.452(l)(1),  195.56(a),  195.579(a),  199.202. The case was opened on 2016-06-02 and is reported as closed as of 2018-01-08. Proposed civil penalty: $169,200. Assessed civil penalty: $141,700. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420165020_Closure Letter_01082018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420165020/420165020_Closure%20Letter_01082018.pdf\n\n420165020_Closure Letter_01082018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420165020/420165020_Closure%20Letter_01082018_text.pdf\n\n420165020_Final Order_09152017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420165020/420165020_Final%20Order_09152017.pdf\n\n420165020_Final Order_09152017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420165020/420165020_Final%20Order_09152017_text.pdf\n\n420165020_NOPV PCP PCO_06022016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420165020/420165020_NOPV%20PCP%20PCO_06022016.pdf\n\n420165020_NOPV PCP PCO_06022016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420165020/420165020_NOPV%20PCP%20PCO_06022016_text.pdf\n\n420165020_Operator Response to Notice_07112016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420165020/420165020_Operator%20Response%20to%20Notice_07112016.pdf\n\n420165020_Final Order_09152017_text.pdf\n\nSeptember 15, 2017\nMr. Kelcy L. Warren\nChief Executive Officer\nSunoco Pipeline, LP\n8111 Westchester Drive\nDallas, TX 75225\nRe: CPF No. 4-2016-5020\nDear Mr. Warren:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $141,700, and specifies actions that need to be\ntaken by Sunoco Pipeline, LP, to comply with the pipeline safety regulations. This is to\nacknowledge partial payment of the civil penalty in the amount of $33,700 by wire transfer dated\nJuly 13, 2016, leaving a balance due of $108,000. The payment terms for the remaining penalty\nare set forth in the Final Order. When the civil penalty has been paid and the terms of the\ncompliance order completed, as determined by the Director, Southwest Region, this enforcement\naction will be closed. Service of the Final Order by certified mail is deemed effective upon the\ndate of mailing, or as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Ryan Coffey, Executive Vice-President – Operations, Sunoco Pipeline, LP, 800 E.\nSonterra Boulevard, San Antonio, TX 78258\nMr. Todd Nardozzi, Senior Manager, DOT Compliance, Sunoco Pipeline, LP\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nSunoco Pipeline, LP, ) CPF No. 4-2016-5020\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 24, 2014, to July 1, 2015, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Sunoco\nPipeline, LP (Sunoco or Respondent), throughout Texas. Sunoco is now an indirect subsidiary\nof Energy Transfer Partners, LP, and operates approximately 6,800 miles of pipeline transporting\nprimarily crude oil and refined products in Texas, Oklahoma, Pennsylvania, Michigan, and\nseveral other states.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated June 2, 2016, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Sunoco had committed various violations of 49 C.F.R. Part 195 and\nproposed assessing a civil penalty of $169,200 for the alleged violations. The Notice also\nproposed ordering Respondent to take certain measures to correct the alleged violations and\nincluded a warning pursuant to 49 C.F.R. § 190.205. The warning item required no further\naction but warned the operator to correct the probable violation or face future potential\nenforcement action.\nSunoco responded to the Notice by letter dated July 11, 2016 (Response). The company\ncontested several of the allegations, offered additional information in response to the Notice, and\nrequested that the proposed civil penalty be reduced. Respondent did not request a hearing and\ntherefore has waived its right to one.\n1 See Sunoco Logistics Partners, LP, website, at http://www.sunocologistics.com/ (last accessed August 18, 2017).\nOn April 28, 2017, Sunoco’s general partner, Sunoco Logistics Partners, LP, announced a merger with Energy\nTransfer Partners, LP,which Sunoco Logistics Partners, LP, has changed its name to Energy Transfer Partners, LP.\n\n\n\nCPF No. 4-2016-5020\nPage 2\nFINDINGS OF VIOLATION\nUNCONTESTED\nIn its Response, Sunoco did not contest the allegations in the Notice that it violated 49 C.F.R.\nPart 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.56(a), which states:\n§ 195.56 Filing safety-related condition reports.\n(a) Each report of a safety-related condition under §195.55(a) must be\nfiled (received by OPS) within five working days (not including Saturday,\nSunday, or Federal Holidays) after the day a representative of the operator\nfirst determines that the condition exists, but not later than 10 working days\nafter the day a representative of the operator discovers the condition.\nSeparate conditions may be described in a single report if they are closely\nrelated. Reports may be transmitted by electronic mail\nto InformationResourcesManager@dot.gov, or by facsimile at (202) 366-\n7128.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.56(a) by failing to file safety-\nrelated condition reports with PHMSA within five working days after determining conditions\nexisted that met the criteria of a safety-related condition. Specifically, the Notice alleged that on\nDecember 3, 2013, Sunoco discovered nine anomalies in high consequence areas (HCAs),\nincluding KLLR-CORS 13-2A, KLLR-CORS 13-3A, KLLR-CORS 13-4A, and 13-4B, and\ndocumented the anomalies as “immediate conditions” due to physical damage to the pipeline.\nThe KLLR-CORS 13-3A, KLLR-CORS 13-4A, and 13-4B conditions were repaired on\nDecember 18, 2013, which exceeded five working days from December 4, 2013, the date Sunoco\ndetermined safety-related conditions existed. Further, the KLLR-CORS 13-2A condition was\nrepaired on December 19, 2013, which also exceeded five working days after the December 4,\n2013 determination of the condition.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.56(a) by failing to file safety-\nrelated condition reports with PHMSA within five working days after determining conditions\nexisted that met the criteria of a safety-related condition.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:\n§ 195.402 emergencies.\nProcedural manual for operations, maintenance, and\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations\nand maintenance activities and handling abnormal operations and\nemergencies. This manual shall be reviewed at intervals not exceeding 15\nmonths, but at least once each calendar year, and appropriate changes made\n\n\n\nCPF No. 4-2016-5020\nPage 3\nas necessary to insure that the manual is effective. This manual shall be\nprepared before initial operations of a pipeline system commence, and\nappropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\nThe Notice alleged that Respondent violated 49 C.F.R. § 194.402(a) by failing to follow its own\nwritten procedures for tank maintenance. Specifically, the Notice alleged that Sunoco failed to\nfollow Subpart F, § 195.432 of its Operations and Maintenance Manual, Inspection of In-Service\nBreakout Tanks procedure, by not documenting conditions that could affect safe operation of its\nbreakout tanks. The requisite documentation was allegedly not completed in the following\ninstances:\n1. During the PHMSA field inspection at Sunoco’s Ringgold facility in September 2014, the\nPHMSA inspector found a crack on the Tank 2703 ringwall that had been discovered by\nSunoco in February 2014. Sunoco’s monthly inspection reports for Tank 2703 from\nFebruary 2014 to September 2014 demonstrated that Sunoco failed to document the crack\non the ringwall.\n2. Tank 5 at Sunoco’s Colorado City facility was found to have approximately 10 feet of the\nringwall foundation severely damaged, which was noted on the tank’s post-inspection\nrepair report in December 2011. Sunoco’s monthly inspection reports for Tank 5\ndemonstrated that personnel failed to document the tank’s ringwall damage on its\nmonthly reports from August 2012 to December 2013. The damage was repaired in 2014\nafter the PHMSA inspector inquired about the damage.\n3. During a PHMSA field inspection at Sunoco’s Corsicana facility in September 2014,\nTank 2602 was found to have a half-inch crack on the ringwall foundation. Tank 2602\nmonthly reports from September 2013 to August 2014 showed that Sunoco had failed to\ndocument any ringwall damage during that time. The crack was repaired in October\n2014 after the PHMSA inspector inquired about the damage.\nRespondent did not contest these allegations of violation. Accordingly, based upon a review of\nall of the evidence, I find that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow its\nown written procedures for tank maintenance.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.432, which states, in\nrelevant part:\n§ 195.432 (a)…\nInspection of in-service breakout tanks.\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see §195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\n\n\n\nCPF No. 4-2016-5020\nPage 4\nunder §195.402(c)(3). The risk-based internal inspection procedures in API\nStd 653, section 6.4.3, cannot be used to determine the internal inspection\ninterval . . . .\n(d) The intervals of inspection specified by documents referenced in\nparagraphs (b) and (c) of this section begin on May 3, 1999, or on the\noperator's last recorded date of the inspection, whichever is earlier.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) and (d) by failing to\nperform internal inspections of in-service breakout tanks within the maximum interval of 10\nyears prescribed by API 653, Section 6.4.2.2, which states: “When corrosion rates are not known\nand similar service experience is not available to estimate the bottom plate minimum thickness at\nthe next inspection, the internal inspection interval shall not exceed 10 years.” Specifically, the\nNotice alleged that Sunoco could not provide the out-of-service internal inspection reports for\ntanks 2601, 2603, 42, and 2720 to confirm that an internal inspection had been performed and\ncorrosion rates had been established.\nAccording to the Notice, if the date of the last inspection cannot be determined based on\navailable records, an operator should perform an API 653 inspection immediately after acquiring\na breakout tank from another operator. Since Sunoco acquired ownership of tanks 2601, 2603,\nand 2720 on August 1, 2005, and tank 42 on February 17, 2006, and could not determine when\nthe last internal inspections were performed, and the corrosion rates of the tanks were not known,\nan internal inspection allegedly should have been performed immediately upon acquisition and\nthen at an interval not exceeding 10 years. The aforementioned internal-inspection reports had\nalso been requested by PHMSA during a 2007 inspection but Sunoco had been unable to provide\nthem at that time.\nIn addition, the Notice alleged that Tank 44 had been constructed in 1992 but had not had its first\nout-of-service internal inspection performed until 2012. Since Tank 44 did not have a corrosion\nrate established, Sunoco needed to perform an internal inspection on Tank 44 in 2009, 10 years\nafter PHMSA adopted API 653 in 1999. Sunoco allegedly failed to perform an internal\ninspection within this required time frame.\nFinally, the type of liner for Tank 2703 was unknown. The last internal inspection of the tank\nwas performed on September 15, 1995, by the previous owner. The 1995 inspection report\nstated that there was internal corrosion found on the tank bottom, but no corrosion rate had been\nestablished. Sunoco scheduled the next internal inspection for 2015, an interval of 20 years,\neven though Sunoco did not know what liner was applied during the tank’s repairs. Since the\nmaterial and thickness of the liner were not known and the corrosion rate was also unknown, the\ninspection interval could not be more than 10 years and therefore Sunoco needed to perform an\ninternal inspection by 2005. Sunoco failed to perform an internal inspection within this 10-year\ninterval.\nRespondent did not contest these allegations of violation. Accordingly, based upon a review of\nall of the evidence, I find that Respondent violated 49 C.F.R. § 195.432(b) and (d) by failing to\nperform internal inspections within the maximum interval of 10 years prescribed by API 653.\n\n\n\nCPF No. 4-2016-5020\nPage 5\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.579(a), which states:\n§ 195.579 What must I do to mitigate internal corrosion?\n(a) General. If you transport any hazardous liquid or carbon dioxide that\nwould corrode the pipeline, you must investigate the corrosive effect of the\nhazardous liquid or carbon dioxide on the pipeline and take adequate steps\nto mitigate internal corrosion.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.579(a) by failing to have\nprocedures for mitigating internal corrosion by identifying the potential for internal corrosion at\nlow points, changes in elevation, sharp bends, infrequently-used piping, pump stations, and\n“dead legs” and by assessing, monitoring, and, mitigating the effects of internal corrosion at\nthose identified locations. Specifically, the Notice alleged that Sunoco’s procedures addressing\ninternal corrosion were developed and implemented in 2011 and were designed to “mitigate\nfacility releases and improve asset reliability and availability.” The procedures specifically\nmentioned that the purpose of the plan was to assess and learn the general condition of both\nactive and idle piping within the facility. While this manual was put in place to require internal-\ncorrosion assessments, the plan allegedly lacked specific and detailed information regarding the\nactions necessary to perform adequate assessments on the facility piping. The procedure was\nunder revision at the time of the PHMSA inspection and a draft had been prepared to expand the\nscope and application of the procedure. The procedure had not, however, been finalized or\nimplemented.\nFinally, the Notice alleged that Sunoco’s existing procedure that addressed internal corrosion in\ndead legs and low-flow pipelines was issued in 2013. The Dead Leg Removals and Line\nFlushing Procedure OPER-PR-0008 was created to determine the extent of lines that would\nrequire attention as part of the integrity program based on operating conditions. The procedure\nrequired identification of dead legs and actions necessary to manage those identified pipelines.\nThe procedure, as written, allegedly did not include provisions for reevaluation after changes or\nmodifications had been made within a station or on the pipelines that could affect its operating\nconditions. According to the Notice, Sunoco’s pipeline system had had several accidents where\nreleases occurred due to internal corrosion, including several in dead legs and low spots in its\nfacilities, with eight reportable accidents occurring on terminal piping since 2010.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.579(a) by failing to have\nprocedures for mitigating internal corrosion, by identifying the potential for internal corrosion at\nlow points, changes in elevation, sharp bends, infrequently-used piping, pump stations, and dead\nlegs and by assessing, monitoring and, mitigating the effects of internal corrosion at those\nidentified locations.\nCONTESTED\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.401(b)(1), which states:\n\n\n\nCPF No. 4-2016-5020\nPage 6\n§ 195.401 General requirements.\n(a)…\n(b) An operator must make repairs on its pipeline system according to\nthe following requirements:\n(1) Non Integrity management repairs. Whenever an operator discovers\nany condition that could adversely affect the safe operation of its pipeline\nsystem, it must correct the condition within a reasonable time. However, if\nthe condition is of such a nature that it presents an immediate hazard to\npersons or property, the operator may not operate the affected part of the\nsystem until it has corrected the unsafe condition.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.401(b)(1) by failing to correct,\nwithin a reasonable time, conditions that could adversely affect the safe operation of its pipeline\nsystem. Specifically, the Notice alleged that Sunoco failed to correct or repair two conditions\nthat could adversely affect the safe operation of its breakout tanks.\nFirst, during the PHMSA field inspection of Sunoco’s Colorado City facility in July 2014, Tank\n5 was allegedly found to have approximately 10 feet of the ringwall foundation severely\ndamaged. The ringwall had been damaged during the tank’s out-of-service repairs in 2011,\nwhich was noted on Sunoco’s “Tank 5 Out of Service Post-Repair Report” in December 2011.\nSunoco, however, did not repair the ringwall foundation until August 2014, after the PHMSA\ninspector had inquired during the 2014 field inspection about the ringwall’s damage. The Notice\nalleged that Sunoco did not correct the condition “within a reasonable time” because it waited\ntwo years and seven months to conduct the repair.\nSecond, during the PHMSA field inspections at Sunoco’s Ringgold and Corsicana facilities in\nSeptember 2014, Tank 2703 and Tank 2602 were allegedly found to have half-inch cracks on\ntheir ringwall foundations. The crack on Tank 2703 had been discovered by Sunoco during the\ntank’s In-Service Inspection in February 2014. The cracks were repaired on October 25, 2014,\nafter being noted during the PHMSA field inspection in September 2014. The Notice alleged\nthat Sunoco had failed to correct these conditions that could adversely affect the safe operation\nof its pipeline system “within a reasonable time” because it waited eight months to complete the\nrepair.\nIn its Response, Sunoco acknowledged that the damage to the concrete ringwalls was not\naddressed at the time of the inspections in July and September 2014, respectively. However, it\ncontended that the damage to the ringwalls was superficial in nature and did not pose any\nsignificant or adverse risk to the safe operation of its pipeline system.\nThe company further stated that at the time of the 2011 post-repair inspection of Tank 5, the\ndamage to the tank’s ringwall did not pose a concern to the structural integrity or the safe\noperation of the tank. A review of the tank-settlement measurements from inspection reports\nconducted on Tank 5 in 2006 and again in 2011 indicated that there was no evidence of active\nsettlement and that the deflection and settlement readings were within API allowable limits. The\n\n\n\nCPF No. 4-2016-5020\nPage 7\nshell-settlement survey was again confirmed as having no unacceptable settlement or deflection\nduring the January 2016 inspection report.\nWith respect to the ringwall cracks observed on Tanks 2703 at Ringgold and 2602 at Corsicana,\nSunoco likewise contended that the cracks in the ringwalls did not pose a concern to the\nstructural integrity or safe operation of the tanks. Sunoco argued that, in general, surface cracks\non concrete ringwalls do not pose a serious threat to the stability of a tank unless enough of a\nringwall section is missing so as to create a large enough area where the downward forces of the\ntank shell can cause a significant out-of-plane deflection.\nAlthough the company’s “API 653 In-Service Inspection Report for Tank 2703” noted a crack in\nthe ringwall, the condition was noted to be appropriate for “consideration” for repair, not as a\ncompliance deficiency. Sunoco stated that consideration was given to the nature of the crack,\nand it was determined that it did not pose a serious threat to the stability or the continued safe\noperation of the tank.\nSunoco further argued that it took steps to remediate the conditions of the ringwall of each tank\nand provided documentation to OPS subsequent to the repairs while the inspection was ongoing.\nIt argued that the phrase “within a reasonable time” is subjective and discretionary, and that\nbased on its evaluation of the seriousness of the cracks, it took appropriate action in compliance\nwith the pipeline safety regulations. Sunoco stated that its internal subject-matter experts at no\ntime concluded that the ringwall damage posed any significant or adverse risk to the safe\noperation of the pipeline system. Accordingly, Sunoco requested that this Item and the\nassociated Proposed Compliance Order be withdrawn, as well as the associated proposed civil\npenalty.\nIn its recommendation, OPS disagreed with Sunoco’s response that the damage and cracks found\non the tanks were “superficial in nature and did not pose any significant or adverse risk to the\nsafe operation of its pipeline system,” and that the phrase “reasonable time” was subjective and\ndiscretionary with respect to the timing of the repairs. OPS stated that a “reasonable time”\nneeded to be defined in an operator’s procedures, and that, as seen in Item 1 of the Notice,\nSunoco’s procedures failed to do so. According to OPS, Sunoco acknowledged that its DOT\nMaintenance Manual Procedure 195.432 should define the term “reasonable” with respect to the\ntiming of repairs for conditions found during tank inspection, including monthly, external,\nultrasound (UT), and internal inspections.2 Moreover, Sunoco’s own “In-Service Inspection\nReport for Tank 2703” stated: “There was moderate to severe cracking in the concrete,”\ncontradicting Sunoco’s claim that the damage was superficial.\nAnalysis\nI have reviewed the record and find that Sunoco failed to repair the two conditions within a\nreasonable time. Section 195.401(b)(1) requires each operator to correct a discovered condition\n2 Response, at 3.\n\n\n\nCPF No. 4-2016-5020\nPage 8\nwithin a reasonable time if the condition could adversely affect the safe operation of its pipeline\nsystem. In this case, for Tank 5, the “HMT Final API 653 Out-of-Service Inspection Report,\nTank No. 5” included photographs demonstrating the damage to the ringwall foundation.3 The\ncompany’s inspection report also noted that “minor cracks should be sealed to minimize further\ndegradation.”4 Photographs by the PHMSA inspector of Tank 5 taken on July 30, 2014, 5 Tank\n2703 at the Ringold facility taken on September 17, 2014,6 and Tank 2602 taken on September\n18, 2014,7 all reveal the extent of the damage to the ringwall.\nSection 3.2.1 of Sunoco’s own “In-Service Inspection Report for Tank 2703” stated: “There was\nmoderate to severe cracking in the concrete. Consider repairing the cracks in the concrete.” 8\nThe report included a photograph showing the severity of the crack.9 I find the contemporaneous\nphotographs and Sunoco’s own “In-Service Inspection Report for Tank 2703” persuasive as to\nthe severity of the damage to the ringwall. The report also characterized the cracks as “moderate\nto severe,” not superficial. The evidence in the photographs and Sunoco’s own reports all\nsupport a finding that the cracks were not insignificant or insubstantial.\nCracks in a ringwall can be potential access points for moisture and water seepage that could\neventually result in corrosion of the reinforcing steel and further damage to the ringwall.\nAccordingly, I find the damage to ringwalls at issue in this matter could adversely affect the safe\noperation of Respondent’s pipeline system and therefore needed to be repaired within a\nreasonable time frame to prevent them from becoming an even bigger safety issue.\nSunoco knew about the damaged ringwalls but failed to make repairs for a time period ranging\nfrom almost a year to over two-and-a-half years. Given the extent of the cracking, I find that it\nwas not reasonable for Sunoco to wait this amount of time before making these repairs.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.401(b)(1) by failing to correct within a reasonable time conditions that could adversely\naffect the safe operation of its pipeline system.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\n3 Violation Report, Ex. B, at 115 (“HMT Final API 653 Out-of-Service Inspection Report, Tank No. 5, January 2001\nand December 7, 2011, Section 8 Post Repair Photographs”).\n4 Id., Ex. B, at 6 (“HMT Final API 653 Out-of-Service Inspection Report, Tank No. 5, January 2001 and December\n7, 2011).\n5 Id.,, Ex. B, at 127-28.\n6 Id., Ex. B, at 135-36.\n7 Id., Ex. B, at 189.\n8 Id., Ex. B, at 143 (Tank 2703 API 653 In-Service Inspection Report by Mott Tank (Feb. 26, 2014)).\n9 Id., Ex. B, at 185 (Tank 2703 API 653 In-Service Inspection Report by Mott Tank (Feb. 26, 2014)).\n\n\n\nCPF No. 4-2016-5020\nPage 9\nWITHDRAWN\nPipeline integrity management in high consequence areas.\n(l) What records must an operator keep to demonstrate compliance? (1)\nAn operator must maintain, for the useful life of the pipeline, records that\ndemonstrate compliance with the requirements of this subpart. At a\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(l), which states, in\nrelevant part:\n§ 195.452 (a)…\nminimum, an operator must maintain the following records for review\nduring an inspection:\n(i) A written integrity management program in accordance with\nparagraph (b) of this section.\n(ii) Documents to support the decisions and analyses, including any\nmodifications, justifications, deviations and determinations made,\nvariances, and actions taken, to implement and evaluate each element of the\nintegrity management program listed in paragraph (f) of this section. . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(l) by failing to maintain\nrecords to support actions taken to implement and evaluate each element of its integrity\nmanagement program established under 49 C.F.R. Subpart F. Specifically, the Notice alleged\nthat Sunoco failed to provide records of the field changes made to the safety-related set points\nwhen a 20 percent pressure reduction took place because of anomalies identified by in-line\ninspection runs.\nIn its Response, Sunoco submitted Management of Change records (MOCs), along with Action\nItems and Point-to-Point Short Forms for each MOC referenced in Item 6. Sunoco indicated the\ncreation of the MOC, along with the completion of the associated Field and SCADA Action\nItems, served as the documentation required to show that field-related set points had been\nchanged and Point-to-Point verification with the field device and SCADA screen had taken\nplace.\nOPS reviewed Sunoco’s submitted Action Items and Point-to-Point Short Forms for each MOC,\nwhich had not been provided during the PHMSA inspection. The documentation was reviewed\nand accepted by OPS as demonstrating that the changes to safety-related set points that had been\nverified. OPS therefore recommended that this Item be withdrawn.\nAccordingly, Item 6 is withdrawn from the Notice, along with the associated compliance order\nand proposed civil penalty.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n\n\n\nCPF No. 4-2016-5020\nPage 10\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $169,200 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $33,700 for Respondent’s violation of 49 C.F.R.\n§ 195.56(a), for failing to file safety-related condition reports with PHMSA within five working\ndays after determining conditions existed that met the criteria of a safety-related condition.\nRespondent neither contested the allegation nor presented any evidence or argument justifying\nelimination of the proposed penalty. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $33,700 for violation of 49 C.F.R.\n§ 195.56(a), which amount has already been paid.\nItem 2: The Notice proposed a civil penalty of $33,500 for Respondent’s violation of 49 C.F.R.\n§ 195.401(b)(1), for failing to correct conditions that could adversely affect the safe operation of\nits pipeline system within a reasonable time. As noted above, I found that Sunoco failed to\nrepair cracks in the ringwall foundations of two breakout tanks in a timely manner.\nWith regard to the penalty assessment criteria noted in the Violation Report, I find that the\nnature, circumstances, gravity, and culpability factors have been considered appropriately and I\nconfirm the proposed penalty. In particular, cracks in a ringwall can be potential access points\nfor moisture and water seepage that could eventually result in corrosion of the reinforcing steel\nand further damage to the ringwall. Damage to ringwalls need to be repaired in a reasonable\ntime frame to prevent them from becoming an even bigger safety issue. The Violation Report\nacknowledged that pipeline safety was minimally affected by Respondent’s violation; as a result,\nthis mitigating factor was already taken into account in the proposed penalty. Based upon the\nforegoing, I assess Respondent a civil penalty of $33,500 for violation of 49 C.F.R. § 195.401(b).\nItem 3: The Notice proposed a civil penalty of $36,700 for Respondent’s violation of 49 C.F.R.\n§ 195.402(a), for failing to follow its written procedures for tank maintenance. Sunoco argued\nthat the proposed penalty should be reduced because the proposed civil penalty “does not\nappropriately reflect assessment considerations.”10 Sunoco argued that, compared to Item 2 of\nthe Notice, the proposed civil penalty for Item 3 was disproportionately higher and that the\nviolation resulted in “no injuries or fatalities, no explosion(s), no wildlife impact, and no water\ncontamination and, accordingly, no impact on health, and little (if any) impact on the\nenvironment, which was short term and promptly remediated.”11\n10 Response, at 5.\n11 Id.\n\n\n\nCPF No. 4-2016-5020\nPage 11\nI disagree. Having reviewed the record, I find that the penalty amount proposed in the notice is\nwarranted, considering the nature, circumstances, and gravity of the violation and Respondent’s\nlevel of culpability. PHMSA calculates each penalty individually, based on the unique facts and\ncircumstances of the specific violation, using the same penalty criteria and logarithm. The\nhigher penalty for this violation, as opposed to Item 2, is based, at least in part, on the fact that\nthis violation compromised pipeline safety or integrity to a greater extent. A more serious\ngravity factor warrants a higher penalty amount.\nSunoco has failed to provide any justification for reducing the proposed penalty based on the\nassessment criteria. Accordingly, having reviewed the record and considered the assessment\ncriteria, I assess Respondent a civil penalty of $36,700 for violation of 49 C.F.R. § 195.402(a).\nItem 4: The Notice proposed a civil penalty of $37,800 for Respondent’s violation of 49 C.F.R.\n§ 195.432(b) and (d), for failing to perform internal inspections within the maximum interval of\n10 years prescribed by API 653. Sunoco did not contest this allegation of violation but argued\nthat the penalty should be reduced because the out-of-service internal inspection reports for\nTanks 2720 and 42 were not available during the PHMSA inspection, but were included as part\nof the Response. Sunoco stated that Tank 2720’s 2005 internal inspection report established a\ncorrosion rate on the prior tank bottom. Sunoco also stated that when the new tank bottom was\ninstalled in 2005, a new internal inspection interval was calculated to be 20 years, using the\nestablished corrosion rate of the old bottom that had been replaced. As for Tank 42, Sunoco\nstated that it was evaluating repair records “associated with the December 14, 1995 internal\ninspection…..to validate the internal inspection interval of 20 years.”12\nI reject Sunoco’s argument for a penalty reduction. As for Tank 2720, Sunoco set a new\ninspection rate of 20 years that was based on the established corrosion rate for the old tank\nbottom. Since Sunoco replaced the tank bottom with a new bottom, the corrosion rate from the\nold bottom could not be used for calculating the internal inspection interval. The new tank\nbottom, however, had an unknown corrosion rate, so the internal inspection interval would be 10\nyears and the internal inspection for Tank 2720 should have been performed in 2005. As for\nTank 42, the Response did not include any documentation that would validate a 20-year internal\ninspection interval.\nConsidering that the Notice listed nine breakout tanks, for which Sunoco admittedly failed to\nperform internal inspections within the maximum interval of 10 years, as prescribed by API 653,\nI see no basis for a penalty reduction. Having reviewed the record, I find that the penalty amount\nproposed in the notice is warranted considering the nature, circumstances, and gravity of the\nviolation and Respondent’s level of culpability.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $37,800 for violation of 49 C.F.R. § 195.432(b) and (d).\nItem 6: The Notice proposed a civil penalty of $27,500 for Respondent’s violation of 49 C.F.R.\n§ 195.452(l) by failing to maintain documents to support actions taken to implement and\n12 Response, at 7.\n\n\n\nCPF No. 4-2016-5020\nPage 12\nevaluate each element of its integrity management program. This item has been withdrawn and,\ntherefore, there is no penalty associated with it.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total reduced civil penalty of $141,700, of which\n$33,700 has already been paid.\nPayment of the remaining civil penalty must be made within 20 days of service. Federal\nregulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through\nthe Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury.\nDetailed instructions are contained in the enclosure. Questions concerning wire transfers should\nbe directed to: Financial Operations Division (AMK-325), Federal Aviation Administration,\nMike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, OK 79169. The\nFinancial Operations Division telephone number is (405) 954-8845.\nFailure to pay the remaining penalty of $108,000 will result in accrual of interest at the current\nannual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23.\nPursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be\ncharged if payment is not made within 110 days of service. Furthermore, failure to pay the civil\npenalty may result in referral of the matter to the Attorney General for appropriate action in a\ndistrict court of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 2, 4, 6, and 7 in the Notice for\nviolations of 49 C.F.R. §§ 195.401(b)(1), 195.432(b) and (d), 195.452(l), and 195.579(a),\nrespectively. Since Item 6 has been withdrawn, the associated provisions in the Proposed\nCompliance Order for that item are not included.\nUnder 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids\nor who owns or operates a pipeline facility is required to comply with the applicable safety\nstandards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance\nwith the pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.401(b)(1) (Item 2), Respondent must further\ndefine in its procedures reasonable time frames for the repair of conditions that may\nbe found during tank inspections, including monthly, external, UT, and internal\ninspections of tanks.\nSunoco submitted procedure 195.432 Inspection of In-Service Breakout Tanks to\naddress part of this item in the Compliance Order. Sunoco addressed the integrity\ninspection plan for tanks with concrete bottoms or liners in Section 195.432(3)(VII).\n\n\n\nCPF No. 4-2016-5020\nPage 13\nOPS reviewed Sunoco’s submitted 195.432 procedure, which addresses part of the\nCompliance Order for Item 2. The Section 195.432(3)(VII) Sunoco submitted was\nunchanged from the previous procedure PHMSA had reviewed during the inspection,\nand is not acceptable. Therefore, Sunoco must resubmit amended procedures to\ncomply with this Order.\n2. With respect to the violation of § 195.432(b), (d) (Item 4), Respondent must\nperform internal inspections on its breakout tanks that have exceeded 10 years, as\nrequired by § 195.432, and must also perform internal inspections on tanks 2601,\n2603, 42, and 2720 as soon as possible or provide the previous actual internal\ninspection reports to verify internal inspections were performed. Sunoco must also\ndevelop and implement a bottom-integrity inspection plan for its tanks that have\nconcrete liners and reevaluate the time interval for tanks with unknown corrosion\nrates. Sunoco must provide the Southwest Region with the integrity inspection plan,\nand a plan and time frame for performing internal inspections as required.\nSince the time of the PHMSA inspection, Sunoco stated that it had made revisions to\nits Dead Leg Removals and Line Flushing, and its Facility Integrity Program\nprocedures. Sunoco submitted t","truncated":true,"body_characters":71749}