ENTERPRISE PRODUCTS OPERATING LLC — Notice of Amendment

party submissionOfficial PDF420175036M_Operator Response to Notice_02282018.pdf#

420175036M_Closure Letter_05162019_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED May 16, 2019 A.J. Teague Director and Chief Executive Officer Enterprise Products Partners, LP 1100 Louisiana Street Houston, Texas 77002 CPF 4-2017-5036M Dear Mr. Teague: On January 9 through May 24, 2017, a representative from the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, conducted an on-site pipeline safety inspection of Enterprise Products Operating, LLC procedures in Houston, Texas. As a result of the inspection, Enterprise Products Operating, LLC (Enterprise) was issued a Notice of Amendment on November 2, 2017, which proposed amendment of procedures. Based on Enterprise’s response to the Notice of Amendment received on March 01, 2018, an Order Directing Amendment was issued on March 27, 2019. Enterprise submitted its amended procedures on April 24, 2019. My staff reviewed the amended procedures and it appears that the inadequacies outlined in this Notice of Amendment have been corrected. 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#

420175036M_Order Directing Amendment_03272019_text.pdf, page 1Official PDFMarch 27, 2019 Mr. A. J. Teague Director and Chief Executive Officer Enterprise Products Partners, LP 1100 Louisiana Street, 10th Floor Houston, TX 77002 Re: CPF No. 4-2017-5036M Dear Mr. Teague: Enclosed please find the Order Directing Amendment issued in the above-referenced case to your subsidiary, Enterprise Products Operating, LLC. It makes findings of inadequate procedures and requires that Enterprise amend certain of its operating and maintenance procedures. When the amendment of procedures has been completed, as determined by the Director, Southwest Region, Office of Pipeline Safety, PHMSA, this enforcement action will be closed. Service of the Order by certified mail is effective upon the date of mailing 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: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA Mr. Graham W. Bacon, Executive Vice President, Operations and Engineering, Enterprise Products Partners, LP CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

420175036M_Order Directing Amendment_03272019_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ________________________________________________ In the Matter of ) Enterprise Products Operating LLC, ) CPF No. 4-2017-5036M a subsidiary of Enterprise Products Partners, LP, ) ) ) ) Respondent. ) ________________________________________________) ORDER DIRECTING AMENDMENT From January 9 through May 24, 2017, 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 procedures for operations and maintenance of Enterprise Products Operating, LLC (EPO or Respondent), in Houston, Texas. EPO is a wholly-owned subsidiary of Enterprise Partners, LP (Enterprise).1 Enterprise conducts substantially all of its operations through EPO, including more than 50,000 miles of pipeline and approximately 260 million barrels of hazardous liquid storage capacity.2 As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated November 2, 2017, a Notice of Amendment (Notice). In accordance with 49 C.F.R. § 190.206, the Notice alleged certain inadequacies in Respondent’s Operations and Maintenance program and proposed requiring EPO to amend its procedures to ensure safe operation of its pipeline facilities.3 After requesting and receiving an extension of time to respond, EPO responded to the Notice by letter dated February 28, 2018 (Response). The company contested the allegations of 1 Enterprise Products Partners, LP, Form 10-Q submitted to U.S. Securities and Exchange Commission, available at http://services.corporate- ir.net/SEC/Document.Service?id=P3VybD1hSFIwY0RvdkwyRndhUzUwWlc1cmQybDZZWEprTG1OdmJTOWti M2R1Ykc5aFpDNXdhSEEvWVdOMGFXOXVQVkJFUmlacGNHRm5aVDB4TWpNNU5UYzJOaVp6ZFdKemF XUTlOVGM9JnR5cGU9MiZmbj1FbnRlcnByaXNlUHJvZHVjdHNQYXJ0bmVyc0wucGRm (last accessed March 25, 2019). 2 Enterprise Products Partners, LP, website, available at https://www.enterpriseproducts.com/about-us/business- profile (last accessed March 25, 2019). 3 The Notice was issued in conjunction with a separate Notice of Probable Violation (CPF No. 4-2017-5035). A Final Order in that case will be issued separately.#

420175036M_Order Directing Amendment_03272019_text.pdf, page 3CPF No. 4-2017-5036 Page 2 inadequacy, provided a summary of its position, and included information concerning changes that it had made to its procedures. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF INADEQUACY The Notice alleged that Respondent’s procedures were inadequate with regard to 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 195.505(i), which states: § 195.505 Qualification program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) . . . . (i) After December 16, 2004, notify the Administrator or a state agency participating under 49 U.S.C. Chapter 601 if the operator significantly modifies the program after the administrator or state agency has verified that it complies with this section. Notifications to PHMSA may be submitted by electronic mail to InformationResourcesManager@dot.gov, or by mail to ATTN: Information Resources Manager DOT/PHMSA/OPS, East Building, 2nd Floor, E22-321, New Jersey Avenue SE, Washington, DC 20590. The Notice alleged that Respondent’s procedures for determining what constitutes a significant change to EPO’s Operator Qualification (OQ) program were inadequate. Specifically, the Notice alleged that during the 2017 PHMSA inspection, PHMSA discovered certain inadequacies in EPO’s procedures. Specifically, the Notice alleged that EPO failed to notify PHMSA on two occasions after making changes that should have been considered significant and provided notification to PHMSA on four occasions after making changes that Respondent did not consider significant. First, in 2011, EPO failed to notify PHMSA after making a change to its OQ program that was designated as significant under the company’s own OQ Addendum. Second, in 2010, EPO failed to notify PHMSA of several changes to the company’s OQ program, including removal of T2 training and qualification methods for various tasks that the company did not consider significant. The changes made in 2010 should have been considered significant in light of PHMSA’s December 7, 2009 advisory bulletin, ADB-09-03.4 Additionally, EPO notified PHMSA in 2012, 2013, 2014, and 2015 of changes that the operator did not consider significant. In its Response, EPO contested these allegations and provided information concerning its practice of notifying PHMSA about changes to the company’s OQ program. Respondent stated that, beginning in 2011, it simply submitted an updated copy of the company’s OQ program to PHMSA on an annual basis “to ensure that the Company complied with the requirement to 4 74 Fed. Reg. 64123 (Dec. 7, 2009).#

420175036M_Order Directing Amendment_03272019_text.pdf, page 4CPF No. 4-2017-5036 Page 3 communicate significant changes.” Respondent further argued that the term “significant” was vague and that 49 C.F.R. § 195.505 did not require operators to define that term in its OQ procedures. However, Respondent amended Appendix D – Glossary of its OQ program to include a definition of “significant” and submitted the revised Appendix to the Director. Having considered the record, I find that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 195.505(i) because they failed to ensure safe operation of a pipeline facility by clarifying when Respondent must notify PHMSA after making significant changes to the OQ program. The Director reviewed Respondent’s amended Appendix D and found the amendments acceptable. Accordingly, no further action is required on Respondent’s part and this item is now closed. Item 2: The Notice alleged that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 195.452(e)(1), which states, in relevant part: § 195.452 Pipeline integrity management in high consequence areas. (a) . . . . (e) What are the risk factors for establishing an assessment schedule (for both the baseline and continual integrity assessments)? (1) An operator must establish an integrity assessment schedule that prioritizes pipeline segments for assessment (see paragraphs (d)(1) and (j)(3) of this section). An operator must base the assessment schedule on all risk factors that reflect the risk conditions on the pipeline segment. The factors an operator must consider include, but are not limited to: . . . . The Notice alleged that Respondent’s procedures for Integrity Management (IM) were inadequate because the risk factors being considered may not reflect the actual risk conditions on the pipeline segment at a particular time. Specifically, the Notice alleged that Respondent’s IM Procedure 2-01L, Line Pipe Risk Analysis, required EPO’s Pipeline Integrity Engineering Manager, Pipeline Integrity Engineering Supervisor, or Pipeline Integrity Engineer to review, on an annual basis, the risk results for line pipe segments in which data for the “significant” risk factors have changed. The Notice further alleged that the same procedure required the same EPO personnel to update the risk results once every five years. The Notice maintained that procedure 2-01L was inadequate because it did not reflect EPO’s actual practice of updating its risk-ranking analysis at least once per year. In its Response, EPO argued that OPS had misinterpreted Procedure 2-01L, and requested that PHMSA withdraw Item 2. Specifically, Respondent argued that Procedure 2-01L contained two different requirements for updating risk analyses. First, Respondent argued that section 2-01.2.4, subsection 2-01.2.1.15 of the procedure required EPO to conduct an annual review of all risk 5 I note that the numbering system used in Respondent’s Procedure 2-01L is not intuitive and is difficult to reference specifically. While each first-level section heading follows the convention “2-01.1,” “2-01.2,” etc., and each second-level heading the convention “2-01.2.1,” “2-01.2.2,” etc., all lower-level headings fail to follow a cognizant enumeration system. For instance, each new third-level heading begins with “2-01.2.1.1,” regardless of the second-level heading under which it is placed. Accordingly, there are numerous subsections of Procedure 2-01L#

420175036M_Order Directing Amendment_03272019_text.pdf, page 5CPF No. 4-2017-5036 Page 4 results for which a “significant risk factor” had changed. Respondent noted that a change to a significant risk factor might result in EPO updating other risk results under subsection 2-01.2.1.3 of the procedure. Second, Respondent contended that subsection 2-01.2.1.4 required EPO to evaluate the need to review and update risk analysis scores at least once every five years, independent of any changes to significant risk factors. According to EPO, the two review timelines (annual significant-change-driven and five-year change-independent) were clearly stated and in compliance with 49 C.F.R. § 195.452(e). Having considered the record, I find that Respondent’s procedures were inadequate to assure safe operation because they failed to state clearly that a significant risk-factor change required EPO to update its risk analysis results; subsection 2-01.2.1.3 stated only that EPO “may” update the analysis. To ensure pipeline safety, Procedure 2-01L must clearly outline the company’s two risk-analysis review timelines, especially with respect to the requirement for a change- independent review of risk results at least once every five years. This clarification will ensure that EPO personnel are aware that a yearly review of risk analyses is required, and how the five- year review would be performed under Procedure 2-01L. Having considered the record, I find that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 195.452(e) because they failed to clarify when EPO personnel were required to conduct various reviews and updates of risk analyses. AMENDMENT OF PROCEDURES Accordingly, I find that EPO’s procedures were inadequate to ensure safe operation of its pipeline system. Pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206, EPO is ordered to make the following revisions to its procedures. Respondent must: 1. Amend its Procedure 2-01L to clarify its practice of conducting annual updates of risk analyses where a significant risk factor has changed and of conducting a review and update of all risk-analysis scores at least once every five years, regardless of any change to risk factors. 2. Submit the amended procedures to the Director within 30 days following receipt of this Order. 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 administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a sharing the same third-level headings cited in this Order; however, all such citations refer to text under section 2- 01.2.4.#

420175036M_Order Directing Amendment_03272019_text.pdf, page 6CPF No. 4-2017-5036 Page 5 district court of the United States. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Order to the 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, no later than 20 days after receipt of this Order Directing Amendment by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The terms of the order remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Order are effective upon service in accordance with 49 C.F.R. § 190.5. March 27, 2019 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

420175036M_Notice Of Amendment_11022017_text.pdf, page 1Official PDFNOTICE OF AMENDMENT CERTIFIED MAIL - RETURN RECEIPT REQUESTED November 2, 2017 Mr. Bacon Graham Executive Vice President Enterprise Products Operating 1100 Louisiana Street, Houston Texas 77002 CPF 4-2017-5036M Dear Mr. Graham: On January 09, 2017 through May 24, 2017, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected Enterprise Products Operating LLC (Enterprise) procedures for Operations and maintenance in Houston, Texas. On the basis of the inspection, PHMSA has identified the apparent inadequacies found within Enterprise’s plans or procedures, as described below:#

420175036M_Notice Of Amendment_11022017_text.pdf, page 21. 195.505– Qualification Program (i) Each operator shall have and follow a written qualification program. The program shall include provisions to After December 16, 2004, notify the Administrator or a state agency participating under 49 U.S.C. Chapter 601 if operator significantly modifies the program after the administrator or state agency has verified that it complies with this section. Notifications to PHMSA may be submitted by electronic mail to informationResourcesManager@dot.gov or by mail to ATTN: Information Resources Manager DOT/PHMSA? OPS, East Building, 2nd Floor, E22-321, New Jersey Avenue SE., Washington, DC 20590. Enterprise Products Operating LLC failed on separate occasions in its process for notifying PHMSA of significant changes made to the OQ program. First instance was a failure in communicating across changes operator considered significant in 2011(3/16/2011) as shown on the OQ Addendum within the plan. while on the other hand operator notified PHMSA in 2012, 2013, 2014 and 2016 of changes that operator did not consider significant (referenced within Addendum as not considered significant). Another failure of the process as seen in the Addendum within the OQ plan are records of some changes made within the plan that were not considered significant such as the removal of T2 training and qualification methods for various tasks (on 03/25/2010) that have been clarified in PHMSA’s ADB-09-0349 and should have been considered significant. These occurrences (notifications for non-significant changes and no notifications for significant changes) can be attributed to the lack of definition and clarification within the plan for what Enterprise considers to be significant changes. Enterprise has failed to update its OQ program to include a definition or clarification for what constitutes a significant change and has not incorporated into its OQ plan clarifications set forth as significant in PHMSA’s ADB 2009-0349 and required in 192.805 (i). 2. 195.452 – Pipeline Integrity management in high consequence areas (e) (1) What are the risk factors for establishing an assessment schedule (for both the baseline and continual integrity assessments)? An operator must establish an integrity assessment schedule that prioritizes pipeline segments for assessment (see paragraphs (d)(1) and (j)(3) of this section). An operator must base the assessment schedule on all risk factors that reflect the risk conditions on the pipeline segment. The factors the operator must consider include but are not limited to: 2#

420175036M_Notice Of Amendment_11022017_text.pdf, page 3In reviewing Enterprise’s Line Pipe Risk Analysis procedure (2-01L) in section 2-01.2.4 under the topic of “updating risk assessment” it shows that all risk factors being considered may not reflect the risk conditions on the pipeline segment at any given time as required under the pipeline safety rules. Reason being that while the procedure states under 2-01.2.1.1 of the section that “The Pipeline Integrity Engineering Manager, Pipeline Integrity Engineering Supervisor, or Pipeline Integrity Engineer is responsible, on an annual basis, for reviewing the risk results on line pipe segment(s) in which data for the “significant” risk factors have changed. The same section of the procedure under 2-01.2.1.4 then states that “the need to update the risk results once every 5 years would be evaluated by either the Pipeline Integrity Engineering Manager, Pipeline Integrity Engineering Supervisor, or Pipeline Integrity Engineer”. This procedure needs to be updated to reflect the need to update risk results in which data for the significant risk factors are discovered to have changed after the risk analysis within a more reasonable time frame and that reflects the current practice (Enterprise’s personnel stated the updates are actually carried out more frequently than stated in the procedure). Response to this Notice This Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. 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. Be advised that all material you submit in response to this enforcement action is subject to being 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). Following the receipt of this Notice, you have 30 days to submit written comments, revised procedures, or a request for a hearing under §190.211. 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 an Order Directing Amendment. If your plans or procedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C.F.R. § 190.206). If you are not contesting this Notice, we propose that you submit your amended procedures to my office within 30 days of receipt of this Notice. This period may be extended by written request for good cause. Once the inadequacies identified herein have been addressed in your amended procedures, this enforcement action will be closed. 3#

420175036M_Notice Of Amendment_11022017_text.pdf, page 4It is requested (not mandated) that Enterprise Products Operating LLC maintain documentation of the safety improvement costs associated with fulfilling this Notice of Amendment (preparation/revision of plans, procedures) and submit the total to Terri Binns, Acting Director, Southwest Region, Pipeline and Hazardous Materials Safety Administration. In correspondence concerning this matter, please refer to CPF 4-2017-5036M and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Frank Causey Acting Director, Southwest Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Options for Pipeline Operators in Compliance Proceedings 4#