{"operation":"document","citation":"CPF 420185001","title":"DELEK LOGISTICS OPERATING, LLC. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2018-02-07","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.214(a), 195.402(a), 195.432(b), 195.452(f)(3), 195.452(f)(7), 195.452(i)(1), 195.452(k), 195.54(a), 195.61.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420185001","body":"Notice of Probable Violation involving DELEK LOGISTICS OPERATING, LLC.. PHMSA's enforcement data identifies the cited regulations as 195.214(a),  195.402(a),  195.432(b),  195.452(f)(3),  195.452(f)(7),  195.452(i)(1),  195.452(k),  195.54(a),  195.61. The case was opened on 2018-02-07 and is reported as closed as of 2019-09-19. Proposed civil penalty: $129,600. Assessed civil penalty: $129,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420185001_Closure Letter_09192019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185001/420185001_Closure%20Letter_09192019.pdf\n\n420185001_Closure Letter_09192019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185001/420185001_Closure%20Letter_09192019_text.pdf\n\n420185001_Final Order_02042019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185001/420185001_Final%20Order_02042019.pdf\n\n420185001_Final Order_02042019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185001/420185001_Final%20Order_02042019_text.pdf\n\n420185001_NOPV PCP PCO_02072018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185001/420185001_NOPV%20PCP%20PCO_02072018.pdf\n\n420185001_NOPV PCP PCO_02072018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185001/420185001_NOPV%20PCP%20PCO_02072018_text.pdf\n\n420185001_Operator Response to Notice and Request for Time Extension_03072018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185001/420185001_Operator%20Response%20to%20Notice%20and%20Request%20for%20Time%20Extension_03072018.pdf\n\n420185001_Final Order_02042019_text.pdf\n\nFebruary 4, 2019\nMr. Ezra Uzi Yemin\nCEO and Chairman of the Board\nDelek Logistics Partners, LP\n7102 Commerce Way\nBrentwood, TN 37027\nRe: CPF No. 4-2018-5001\nDear Mr. Yemin:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nDelek Logistics Operating, LLC. It makes findings of violation, assesses a civil penalty of\n$129,600, and specifies actions that need to be taken by Delek to comply with the pipeline safety\nregulations. The penalty payment terms are set forth in the Final Order. When the civil penalty\nhas been paid and the terms of the compliance order completed, as determined by the Director,\nSouthwest Region, Office of Pipeline Safety, PHMSA, this enforcement action will be closed.\nService of the Final Order by certified mail is effective upon the date of mailing, as provided\nunder 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: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. John H. Warren, Vice President, Operations, Delek Logistics Operating, LLC, 1001\nSchool Street, El Dorado, AR 71730\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__________________________________________\nIn the Matter of )\nDelek Logistics Operating, LLC, ) CPF No. 4-2018-5001\na subsidiary of Delek Logistics Partners, LP, )\n)\n)\n)\nRespondent. )\n__________________________________________)\nFINAL ORDER\nOn multiple dates between February and April 2016, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of Delek Logistics Operating, LLC (Delek or Respondent), in El Dorado, Arkansas.1\nThe pipeline and transportation system subject to the inspection consisted of approximately 375\nmiles of crude-oil pipelines in Arkansas and Louisiana, with two breakout tanks located in\nMagnolia, Arkansas.2 Delek operates as a subsidiary of Delek Logistics Partners, LP.3\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated February 7, 2018, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to\n49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nDelek had committed seven violations of 49 C.F.R. Part 195 and proposed assessing a civil\npenalty of $129,600 for the alleged violations. The Notice also proposed ordering Respondent to\ntake certain measures to correct the alleged violations. The warning items required no further\naction but warned the operator to correct the probable violations or face possible future\nenforcement action.\nDelek responded to the Notice by letter dated March 7, 2018 (Response). The company neither\nadmitted nor denied the allegations of violation and did not contest the proposed civil penalty,\n1 Delek is now the operator of the facilities previously operated by “Lion” or “Lion Oil Trading & Transportation.”\n(Response, at 1).\n2 Pipeline Safety Violation Report (Violation Report), (February 6, 2018) (on file with PHMSA), at 1.\n3 Company Overview of Delek Logistics Operating, LLC, available at\nhttps://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=233828860 (last accessed June 13,\n2018).\n\n\n\nCPF No. 4-2018-5001\nPage 2\nbut provided information concerning the corrective actions it had taken and requested additional\ntime to complete certain of the proposed compliance actions. Respondent did not request a\nhearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nIn its Response, Delek did not contest the allegations in the Notice that it violated 49 C.F.R. Part\n195, as follows:\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) . . . .\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto [American Petroleum Institute (API)] Std 653 (except section 6.4.3,\nAlternative Internal Inspection Interval) (incorporated by reference, see\n§ 195.3). However, if structural conditions prevent access to the tank\nbottom, its integrity may be assessed according to a plan included in the\noperations and maintenance manual under § 195.402(c)(3). The risk-based\ninternal inspection procedures in API Std 653, section 6.4.3 cannot be used\nto determine the internal inspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks\naccording to API Standard 653. Specifically, the Notice alleged that Delek failed to perform an\nexternal tank inspection for Breakout Tank #2002 within the maximum five-year interval, as\nrequired in API Standard 653, section 6.3.2.1. According to Delek’s documentation at the time\nof the PHMSA inspection (March 2016), Delek had conducted the most recent external\ninspection in December 2008. As such, the inspection interval was exceeded by 27 months.\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. § 195.432(b) by failing to inspect the\nphysical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks\naccording to API Standard 653.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:\n§ 195.402 Procedural manual for operations, maintenance, and\nemergencies.\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. 4-2018-5001\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. § 195.402(a) by failing to follow for each\npipeline system a manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies. Specifically, the\nNotice alleged that Delek failed to follow its own procedure, LTP-OP-110.0: Floating Roof\nSafety, Access/Ignition 195.405, dated February 11, 2015. Section 6.5 of that procedure states:\nUpon accessing the roof, one of the first actions shall be to verify that\nthe tank and roof are properly electrically bonded (grounded) to assure\nthere is no static potential between the roof and shell. Normally there\nshould be a bond wire between the tank shell and roof that may also be\nbonded to or through the rolling stairs. Roof seal grounded/bond strips\nshould also be inspected to make sure the seal, roof and shell are all\nelectrically bonded (at the same static voltage).\nBased on the PHMSA inspector’s review of the Floating Roof Seal Inspection Checklist,\nRespondent failed to inspect the tank and roof to ensure they were electrically bonded and to\nassure there was no static potential between the roof and shell, as required by procedure LTP-\nOP-110.0. This inspection was not performed for tank #2002 from 2011-2015, or for tank #437\nfrom 2013-2015.\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. § 195.402(a) by failing to follow for\neach pipeline system its own manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.214(a), which states:\n§ 195.214 Welding procedures.\n(a) Welding must be performed by a qualified welder or welding\noperator in accordance with welding procedures qualified under section 5,\nsection 12, or Appendix A of API Std 1104 (incorporated by reference, see\n§ 195.3), or section IX of the ASME Boiler and Pressure Vessel Code\n(BPVC) (incorporated by reference, see § 195.3). The quality of the test\nwelds used to qualify welding procedures must be determined by\ndestructive testing.4\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.214(a) by failing to have welding\nperformed by a qualified welder or welding operator in accordance with welding procedures\nqualified under section 5, section 12, or Appendix A of API Standard 1104, or section IX of the\n4 49 C.F.R. § 195.214(a) was amended in January 2017 to include Appendix B of API Standard 1104.\n\n\n\nCPF No. 4-2018-5001\nPage 4\nASME BPVC. Specifically, the Notice alleged that during the inspection, the PHMSA inspector\nreviewed anomaly #S60273 (8.93% deformation in a High Consequence Area (HCA) on a 6-inch\noutside-diameter 0.280” WT Smackover pipeline) repair sheet. In July 2015, three welds (XR53,\nXR54, and XR55) were made to replace 84.04 feet of pipe in order to remove six anomalies,\nincluding #S60273. The PHMSA inspector reviewed a pipeline repair sheet and radiographic\nweld report but neither document listed the welder identification or the welder’s name.\nRespondent also could not provide visual weld-inspection reports for these three welds, as\nrequired by API Standard 1104. As a result, the welder(s) could not be identified or their\nqualifications confirmed.\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. § 195.214(a) by failing to have\nwelding performed by a qualified welder or welding operator in accordance with welding\nprocedures qualified under section 5, section 12, or Appendix A of API Standard 1104, or\nsection IX of the ASME BPVC.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(i) What preventive and mitigative measures must an operator take to\nprotect the high consequence area?\n(1) General requirements. An operator must take measures to prevent\nand mitigate the consequences of a pipeline failure that could affect a high\nconsequence area. These measures include conducting a risk analysis of the\npipeline segment to identify additional actions to enhance public safety or\nenvironmental protection. Such actions may include, but are not limited to,\nimplementing damage prevention best practices, better monitoring of\ncathodic protection where corrosion is a concern, establishing shorter\ninspection intervals, installing EFRDs on the pipeline segment, modifying\nthe systems that monitor pressure and detect leaks, providing additional\ntraining to personnel on response procedures, conducting drills with local\nemergency responders and adopting other management controls.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1) by failing to take\nmeasures to prevent and mitigate the consequences of a pipeline failure that could affect an\nHCA. Specifically, the Notice alleged that Delek failed to perform an adequate risk analysis of\nits pipeline segments to determine the appropriate preventive and mitigative (P&M) measures.\nDelek uses its procedure, IMP Section 11: Identification of Preventive/ Mitigative Measures, as\nthe process and methodology to evaluate its pipeline system and identify these P&M measures\nthat could potentially reduce the risk of a failure and/or limit the consequence of a failure.\nSection 11.3 of this procedure states:\nThe following events will cause the Integrity Data Specialist to form a\nP&M Evaluation Team within six months of their occurrence:\n\n\n\nCPF No. 4-2018-5001\nPage 5\n- Notification that new assessment or inspection results have been\nreceived;\n- Identification of a previously unknown threat to a pipeline segment\nthat is serious enough to warrant attention to ensure continued pipeline\nintegrity, such as an approved Field Report on Potential New High\nConsequence Area Along Pipeline Route (see Sec. 2.4), an aerial or ground\npatrol discovery of significant third party activity, a leak or rupture from an\nunsuspected threat mechanism.\n-Receipt of any other information which could affect the results of\nprevious P&M reviews or otherwise impact the integrity of the pipeline\nsection.\nAccording to the Notice, Delek utilized multiple in-line inspection (ILI) tools to assess the\nintegrity of various pipeline segments between September 6, 2012, and September 8, 2015. On\nat least seven separate occasions, Delek allegedly failed to follow its IMP Section 11.0 procedure\nupon receipt of ILI inspection results. The Notice further alleged that Respondent failed to\ndocument the P&M actions that were taken to enhance public safety or environmental protection.\nBased on records provided to the PHMSA inspector, Respondent allegedly had not followed its\nown process or methodology since April 3, 2005.\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. § 195.452(i)(1) by failing to take\nmeasures to prevent and mitigate the consequences of a pipeline failure that could affect an\nHCA.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(k), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(b) What program and practices must operators use to manage\nintegrity? Each operator of a pipeline covered by this section must:\n(1) . . .\n(5) Implement and follow the program. . .\n(k) What methods to measure program effectiveness must be used? An\noperator’s program must include methods to measure whether the program\nis effective in assessing and evaluating the integrity of each pipeline\nsegment and in protecting the high consequence areas. See Appendix C of\nthis part for guidance on methods that can be used to evaluate a program’s\neffectiveness.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(k) by failing to measure\nwhether its integrity management program (IMP) was effective in assessing and evaluating the\nintegrity of each pipeline segment and in protecting HCAs. Specifically, the Notice alleged that\nDelek’s IMP Manual, Section 12.4: Evaluation of Performance Measures (Manual), states:\n\n\n\nCPF No. 4-2018-5001\nPage 6\nThe [Delek] Integrity Management Review Board will annually evaluate\nthe effectiveness of its integrity assessment methods, and the preventive and\nmitigation risk control activities, including repair. Performance measures\nwill be compared to previous years' metrics to look for trends. The Integrity\nManagement Review Board will review the metrics for continued tracking\nand add any additional metrics to aid in the evaluation of the effectiveness\nof the IMP. The Integrity Management Review Board will also evaluate the\neffectiveness of its management systems and processes in supporting\nintegrity management decisions. A combination of performance measures\nand system audits are [sic] necessary to evaluate the overall effectiveness\nof an IMP. The Integrity Management Review Board will issue a written\nreport documenting discussions and findings.\nWhile the Manual required an annual review of the IMP’s effectiveness, Respondent allegedly\ncould not demonstrate that such a review had been performed for the calendar years 2011, 2013,\nor 2015.5\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. § 195.452(k) by failing to measure\nwhether its IMP was effective in assessing and evaluating the integrity of each pipeline segment\nand in protecting HCAs.\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(f) and (g), which state,\nin relevant part:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(f) What are the elements of an integrity management program? . . .An\noperator must include, at minimum, each of the following elements in its\nwritten integrity management program: . . .\n(3) An analysis that integrates all available information about the\nintegrity of the entire pipeline and the consequences of a failure (see\nparagraph (g) of this section): . .\n(g) What is an information analysis? In periodically evaluating the\nintegrity of each pipeline segment (paragraph (j) of this section), an operator\nmust analyze all available information about the integrity of the entire\npipeline and the consequences of a failure. This information includes:\n(1) Information critical to determining the potential for, and preventing,\ndamage due to excavation, including current and planned damage\n5 The Notice also noted, based on PHMSA’s review of Delek’s 2012 and 2014 records, that Respondent failed to\napply the guidance provided in Part 195, Appendix C, Section V, to measure its IMP’s performance and that Delek’s\nperformance metrics did not provide meaningful insight into its performance. While operators are not required to\nfollow the guidance in Appendix C and this particular statement in the Notice does not constitute part of the\nallegation of violation, the “methods” used by an operator to evaluate program effectiveness must be able to\naccomplish this performance-based requirement.\n\n\n\nCPF No. 4-2018-5001\nPage 7\nprevention activities, and development or planned development along the\npipeline segment;\n(2) Data gathered through the integrity assessment required under this\nsection;\n(3) Data gathered in conjunction with other inspections, tests,\nsurveillance and patrols required by this Part, including, corrosion control\nmonitoring and cathodic protection surveys; and\n(4) Information about how a failure would affect the high consequence\narea, such as location of the water intake.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(f) and (g) by failing to conduct\nan information analysis as part of its IMP that analyzed all available information about the\nintegrity of the entire pipeline and the consequences of a failure. Specifically, the Notice alleged\nthat Delek did not analyze all relevant risk categories and operating conditions when evaluating\nindividual pipeline-segment risks. Respondent’s procedure, IMP Section 3.0: Risk Assessment\nProcedures, Section 3.2: Risk Ranking Methodology, states:\n[Delek] has developed a relative risk ranking model based on the guidelines\nand techniques developed by W. Kent Muhlbauer 1, who is a recognized\nauthority on pipeline risk management. As indicated in Figure 3-1, this\nmodel scores various mechanisms for pipeline failure to develop a relative\nprobability index score for a release from a given pipeline segment. A\nseparate scoring is developed for the relative consequences for the pipe\nsegment release. The product of these two indices (Probability Index X\nConsequence Index) generates the relative risk index score for the pipeline\nsegment. Higher scores with this model represent higher risks when\ncomparing two or more pipeline segments.\nAdditionally, Respondent’s IMP Section 3.6: Validation and Recalculation of Risk, states:\nValidation of the risk assessment model and corresponding results is an\nimportant and ongoing process in an IMP. The [Delek]\nMaintenance/Engineering Superintendent will oversee this validation\nprocess using the Integrity Data Specialist as appropriate. The\nMaintenance/Engineering Superintendent will assure that the data and\nmethods being used are correct, comprehensive and that the results\ngenerated by the model make sense and are consistent with operator\nexperiences. A modification to the risk assessment process or a\nrecalculation of the relative risks will be performed when sufficient\nadditional objective data are available to affect the outcome and\ncorresponding ranking of affected HCA segments for assessment purposes.\nNOTE that for pipeline systems under the jurisdiction of the Texas Railroad\nCommission, current regulations (16TAC §8.101) require that the Risk\nAssessment be re-performed every three years.\n\n\n\nCPF No. 4-2018-5001\nPage 8\nThe PHMSA inspector reviewed Delek’s Figure 3-1: Relative Risk Analysis Method and risk-\nanalyses results for randomly-selected covered segments. Based on this review, the Notice\nalleged that Respondent failed to analyze relevant risks related to equipment, weather,\nmanufacture, and outside-force threats. Respondent performed its most recent risk analysis in\n2010, after determining which of its pipeline segments were in areas unusually sensitive to\nenvironmental damage. Since the date of this determination, Respondent allegedly had not\nupdated its risk-analysis data for pipe re-routing and replacement, new ILI data, third-party\ndamage, leak history, and incidents.\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. § 195.452(f) and (g) by failing to\nanalyze all available information about the integrity of its entire pipeline and the consequences of\na failure.\nItem 10: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) . . . .\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\nunder § 195.402(c)(3). The risk-based internal inspection procedures in\nAPI Std 653, section 6.4.3 cannot be used to determine the internal\ninspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks\naccording to API Standard 653. Specifically, the Notice alleged that Delek failed to perform an\ninitial internal inspection for Breakout Tank #2002 within the maximum 10-year interval, as\nrequired in API Standard 653, section 6.4.2.1. Breakout Tank #2002 was allegedly placed in\nservice on or about July 2, 2003, but as of March 2016, Delek had still not performed an internal\ninspection as required by section 6 of API Standard 653.\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. § 195.432(b) by failing to inspect the\nphysical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks\naccording to API Standard 653.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\n\n\n\nCPF No. 4-2018-5001\nPage 9\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\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.6 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 in business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $129,600 for the violations cited above.\nItem 5: The Notice proposed a civil penalty of $36,000 for Respondent’s violation of 49 C.F.R.\n§ 195.452(i)(1), for failing to take measures to prevent and mitigate the consequences of a\npipeline failure that could affect an HCA. Delek neither contested the allegation nor presented\nany evidence or argument justifying elimination of the proposed penalty. Accordingly, having\nreviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of\n$36,000 for violation of 49 C.F.R. § 195.452(i)(1).\nItem 6: The Notice proposed a civil penalty of $36,000 for Respondent’s violation of 49 C.F.R.\n§ 195.452(k), for failing to measure whether its IMP was effective in assessing and evaluating\nthe integrity of each pipeline segment and in protecting HCAs. Delek neither contested the\nallegation nor presented any evidence or argument justifying elimination of the proposed\npenalty. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $36,000 for violation of 49 C.F.R. § 195.452(k).\nItem 7: The Notice proposed a civil penalty of $36,000 for Respondent’s violation of 49 C.F.R.\n§ 195.452(f) and (g), for failing to analyze all available information about the integrity of the\nentire pipeline and the consequences of a failure. Delek neither contested the allegation nor\npresented any evidence or argument justifying elimination of the proposed penalty. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $36,000 for violation of 49 C.F.R. § 195.452(f) and (g).\nItem 10: The Notice proposed a civil penalty of $21,600 for Respondent’s violation of\n49 C.F.R. § 195.432(b), for failing to inspect the physical integrity of in-service atmospheric and\nlow-pressure steel above-ground breakout tanks according to API Standard 653. Delek neither\ncontested the allegation nor presented any evidence or argument justifying elimination of the\nproposed penalty. Accordingly, having reviewed the record and considered the assessment\ncriteria, I assess Respondent a civil penalty of $21,600 for violation of 49 C.F.R. § 195.432(b).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\n6 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum\nCivil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).\n\n\n\nCPF No. 4-2018-5001\nPage 10\nItems cited above, I assess Respondent a total civil penalty of $129,600.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $129,600 civil penalty will result in accrual of interest at the current annual\nrate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 2, 3, 4, 5, 6, 7, and 10 in the\nNotice for violations of 49 C.F.R. §§ 195.432(b), 195.402(a), 195.214(a), 195.452(i)(1),\n195.452(k), 195.452(f) and (g), and 195.432(b), respectively. Under 49 U.S.C. § 60118(a), each\nperson who engages in the transportation of hazardous liquids or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601. The Director has indicated that Respondent has taken the following actions to\naddress one of the cited violations:\n1. With respect to the violation of § 195.432(b) (Item 2), Respondent has performed\nan external inspection for Breakout Tank #2002 in accordance with API Standard\n653, Section 6.3.2.1.\nAccordingly, I find that compliance has been achieved with respect to this violation. Therefore,\nthe compliance terms proposed in the Notice for Item 2 are not included in this Order.\nAs for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and 49\nC.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with\nthe pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.402(a) (Item 3), Respondent must inspect its\nbreakout tanks for electrical bond and revise its Floating Roof Seal Inspection\nChecklist to include the inspection of electric bond, to assure there is no static\npotential between the roof and shell during operation and maintenance activities;\n2. With respect to the violation of § 195.214(a) (Item 4), Respondent must develop a\nprocess to capture information that indicates welding has been performed by a\n\n\n\nCPF No. 4-2018-5001\nPage 11\nqualified welder in accordance with welding procedures qualified under section 5 of\nAPI Standard 1104. Respondent must also develop a form for the visual inspection of\nwelds;\n3. With respect to the violation of § 195.452(i)(1) (Item 5), Respondent must\nconduct an adequate risk analysis to determine measures to prevent and mitigate the\nconsequence of a pipeline failure that could affect an HCA;\n4. With respect to the violation of § 195.452(k) (Item 6), Respondent must establish\nmethods to annually measure IMP effectiveness to ensure the program is effective in\nassessing and evaluating the integrity of each of its pipeline segments and in\nprotecting HCAs;\n5. With respect to the violation of § 195.452(f) and (g) (Item 7), Respondent must\nanalyze all relevant risk categories and operating conditions and evaluate individual\npipeline segment risks in analyzing and integrating all available information about the\nintegrity of its covered pipeline segments and consequences of a failure; and\n6. With respect to the violation of § 195.432(b) (Item 10), Respondent must perform\nan internal inspection of Breakout Tank #2002 and must incorporate the correct\nedition of API Standard 653 as set forth in 49 CFR § 195.3.\n7. Respondent must submit to the Director, within 30 days following receipt of the\nFinal Order, written documentation of steps taken to satisfy Compliance Order Items\n1 and 2 above.\n8. Respondent must submit to the Director, within 90 days following receipt of the\nFinal Order, written documentation of steps taken to satisfy Compliance Order Items\n3 through 6 above.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nIt is requested that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\n\n\n\nCPF No. 4-2018-5001\nPage 12\nWARNING ITEMS\nWith respect to Items 1, 8, and 9, the Notice alleged probable violations of Part 195 but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 195.402(a) (Item 1) ─ Respondent’s alleged failure to follow its own\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies, specifically,\nRespondent’s Integrity Management Plan, Section 6.0: Conducting\nAssessments/Results Review required by §195.452(b)(1);\n49 C.F.R. § 195.61 (Item 8) ─ Respondent’s alleged failure to submit geospatial\ndata to PHMSA on or before June 15, 2015; and\n49 C.F.R. § 195.54(a) (Item 9) ─ Respondent’s alleged failure to file an accident\nreport on DOT Form 7000-1 within 30 days of the discovery of a reportable\nrelease at its Smackover Station.\nIf PHMSA finds a violation of any of these items in a subsequent inspection, Respondent may be\nsubject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\nFebruary 4, 2019\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420185001_Closure Letter_09192019_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nSeptember 19, 2019\nMichael Odigie\nVice President Asset integrity and Reliability\nDelek Logistics Operating, LLC\n12700 Park Central Drive\nDallas, Texas 75251\nCPF 4-2018-5001\nDear Mr. Odigie:\nOn February 4, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Delek Logistics Operating, LLC (Delek), a Final Order in the above-referenced case.\nThis Order included a Compliance Order and Civil Penalty assessment. Delek submitted the\nrequired information on July 30, 2019. Based on our review of the documentation provided, a\nsubsequent meeting with Delek officials to provide additional clarification on actions taken, and\nconfirmation of payment of the civil penalty, it has been determined that Delek has complied with\nthe terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nOffice of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\n\n420185001_NOPV PCP PCO_02072018_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nFebruary 7, 2018\nDelek Logistics Operating, LLC\nMr. John Warren, Vice President - Operations\n1001 School Street\nEl Dorado, AR 71730\nCPF 4-2018-5001\nDear Mr. Warren:\nOn multiple dates between February 19 and April 1, 2016, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of\n49 United States Code inspected Delek Logistics Operating, LLC’s (Lion) Magnolia and Arkansas\npipeline systems in El Dorado, Arkansas.\nAs a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety\nRegulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation(s)\nare:\n1. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a manual of written\nprocedures for conducting normal operations and maintenance activities and handling abnormal\noperations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months,\nbut at least once each calendar year, and appropriate changes made as necessary to ensure that the\nmanual is effective. This manual shall be prepared before initial operations of a pipeline system\n\n\n\ncommence, and appropriate parts shall be kept at locations where operations and maintenance\nactivities are conducted.\nLion failed to follow their Integrity Management Plan, Section 6.0: Conducting Assessments/Results\nReview required by §195.452 (b) (1).\nLion’s IMP Plan Section 6.6: Recordkeeping and Distribution states, \"All anomaly investigations will be\ndocumented using Exposed Pipe Inspection Report form (see Appendix G) and additional forms as\nappropriate (see Section 8.0 –Repair Procedures). The Pipeline Specialist will forward these forms to the\nRegional Engineer for inclusion in the pipeline segment file.\"\nWhile reviewing, records associated with 17.9 miles of 16” crude pipeline (Finny, Segment # 1002) smart\npig run in September 2012, it was noted that Lion had not reported any condition to this pipeline that\npresents a potential threat to the integrity of the pipeline. Lion made two validation digs (Anomaly #\n40000002 and Anomaly # 40000046). For both these digs, Lion failed to provide exposed pipe inspection\nreport form.\n2. §195.432 Inspection of in-service breakout tanks.\n(b) Each operator must inspect the physical integrity of in-service atmospheric and low-pressure\nsteel a","truncated":true,"body_characters":64066}