{"operation":"document","citation":"CPF 420185005","title":"HOLLY ENERGY PARTNERS - OPERATING, L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2018-06-20","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.403(b), 195.446(h)(1), 195.452(j)(2), 195.573(a)(2), 195.573(d), 195.577(a), 195.583(b), 195.583(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185005.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185005.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185005","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420185005","body":"Notice of Probable Violation involving HOLLY ENERGY PARTNERS - OPERATING, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.403(b),  195.446(h)(1),  195.452(j)(2),  195.573(a)(2),  195.573(d),  195.577(a),  195.583(b),  195.583(c). The case was opened on 2018-06-20 and is reported as closed as of 2020-07-08. Proposed civil penalty: $227,200. Assessed civil penalty: $55,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420185005_Closure Letter_07082020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Closure%20Letter_07082020.pdf\n\n420185005_Closure Letter_07082020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Closure%20Letter_07082020_text.pdf\n\n420185005_Final Order_08082019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Final%20Order_08082019.pdf\n\n420185005_Final Order_08082019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Final%20Order_08082019_text.pdf\n\n420185005_NOPV PCP PCO-06202018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_NOPV%20PCP%20PCO-06202018.pdf\n\n420185005_NOPV PCP PCO_06202018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_NOPV%20PCP%20PCO_06202018_text.pdf\n\n420185005_Operator Response to Notice and Request For Hearing _08292018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Operator%20Response%20to%20Notice%20and%20Request%20For%20Hearing%20_08292018.pdf\n\n420185005_NOPV PCP PCO_06202018_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 20, 2018\nMark Cunningham\nSenior Vice President, Engineering & Technical Services\nHolly Energy Partners-Operating, L.P.\n2828 N. Harwood, Suite 1300\nDallas, Texas 75201\nCPF 4-2018-5005\nDear Mr. Cunningham:\nFrom November 28, 2016 through May 19, 2017, representatives of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter\n601 of 49 United States Code (U.S.C.) inspected your Holly Energy Partners-Operating, L.P.\n(HEP) facilities in New Mexico, Oklahoma, and Texas.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n1. §195.403 Emergency Response Training.\n(b) At the intervals not exceeding 15 months, but at least once each calendar year, each\noperator shall:\n\n\n\n(1) Review with personnel their performance in meeting the objectives of the emergency\nresponse training program set forth in paragraph (a) of this section; and\n(2) Make appropriate changes to the emergency response training program as necessary to\nensure that it is effective.\nHEP failed to review with personnel their performance in meeting the objectives of the emergency\nresponse training program and make appropriate changes to the emergency response training\nprogram as necessary to ensure that it is effective.\nDuring the inspection, PHMSA requested HEP to provide documentation for the review of\nemergency personnel performance for calendar years 2014, 2015, and 2016. HEP could not\nprovide the requested documentation.\nFurther, HEP did not comply with its own O&M manual, which requires yearly evaluations of\nemergency personnel performance pursuant to §195.403. The HEP O&M Procedure, Section 4.4\nEmergency Response Training states:\n4.4.1 “Yearly evaluations, not to exceed 15 months, are made to the training program to ensure\nthat personnel and supervisors maintain a thorough knowledge of any updates or revisions in\noperations. Training records are maintained at the Artesia Operations office.”\n4.4.3 “The company will, at intervals not exceeding 15 months, but at least once per year calendar\nyear, conduct a meeting to review personnel performance in the meeting the objectives of the\nannual deployment drills, table top drills and the IBT training.”\n2. § 195.446 Control Room Management.\n(h) Training. Each operator must establish a controller training program and review the\ntraining program content to identify potential improvements at least once each calendar\nyear, but at intervals not to exceed 15 months. An operator's program must provide for\ntraining each controller to carry out the roles and responsibilities defined by the operator.\nIn addition, the training program must include the following elements:\n(1) Responding to abnormal operating conditions likely to occur simultaneously or in\nsequence;\nHEP failed to provide controller training for responding to abnormal operating conditions likely\nto occur simultaneous or in sequence for calendar years 2014, 2015, and 2016 in accordance with\ntheir procedure 9.1 Rule Requirements and § 195.446.\nHEP’s Control Room Management Plan States:\n9.1 Rule Requirements\nIn accordance with the Rule, HEP must establish a training program that provides\neach Controller with the knowledge to carry out the roles and responsibilities defined\n2\n\n\n\nby the Operator, to include the following:\n• Responding to abnormal operating conditions likely to occur simultaneously\nor in sequence;\n• Using a tabletop method for training Controllers to recognize AOC’s;\n• Communication responsibilities under the Operators emergency response\nprocedures;\n• Working knowledge of the pipeline system, especially during the development\nof AOC’s;\n• Providing the opportunity for Controller to review procedures for infrequently\nused operating setups in advance of their application;\n• Review of the program content for potential improvements at least once each\ncalendar year but not to exceed 15 months.\nHEP did not perform the required training. HEP could not provide any records regarding controller\ntraining except the list of OQ tasks for the controllers.\n3. §195.452 Pipeline integrity management in high consequence areas.\n(j) What is a continual process of evaluation and assessment to maintain a pipeline's integrity?\n(1) General. After completing the baseline integrity assessment, an operator must continue\nto assess the line pipe at specified intervals and periodically evaluate the integrity of each\npipeline segment that could affect a high consequence area.\n(2) Evaluation. An operator must conduct a periodic evaluation as frequently as needed to\nassure pipeline integrity. An operator must base the frequency of evaluation on risk factors\nspecific to its pipeline, including the factors specified in paragraph (e) of this section. The\nevaluation must consider the results of the baseline and periodic integrity assessments,\ninformation analysis (paragraph (g) of this section), and decisions about remediation, and\npreventive and mitigative actions (paragraphs (h) and (i) of this section).\nHEP failed to document the process for evaluating pipeline integrity to ensure all of the required\nrisk factors are accounted for and to ensure the effectiveness of the continual evaluation process\nas required by §195.452 (j)(2) and HEP’s Integrity Management Program Manual. HEP’s IMP\nManual states:\nSection 3.10.1-Post Integrity Assessment Evaluation:\nFollowing identification, evaluation and remediation of any conditions on covered pipeline\nsegments, Company will integrate actual pipe condition data and determine the need for additional\nP&M Measures. The Company will consider the entire pipeline system’s information when\ndetermining risks associated with pipeline operation in covered pipeline segments, such as results\nof previous:\n3\n\n\n\n• Reconstruction;\n• Integrity assessments;\n• Direct examinations;\n• Remediation actions;\n• ROW condition surveys;\n• Risk assessments; and,\n• P&M Measures”.\nPHMSA requested HEP to provide the records of the continual evaluation of their pipeline’s\nintegrity for calendar years 2014, 2015, and 2016. Upon review, PHMSA noted the content of the\nspreadsheet reflected the pipe segments, pipeline assessment methods, last and next inspection\ndates for ILI, identified anomalies and their prioritized repair schedule, etc. These items are only\na part of the requirements of the continual process of evaluation and assessment to maintain a\npipeline's integrity. HEP’s continual evaluation spreadsheet, however, did not include\nconsideration of other factors as required including the results of previous integrity assessment\nrisk results and/or risk ranking; review new data; identified integrity threats specific to that line\nsegment, and any new information which may suggest additional actions are warranted must be\nincluded in the continual evaluation process in order to measure the overall effectiveness of the\ncompany’s integrity management program.\n4. §195.573 What must I do to monitor external corrosion control:\n(a) Protected pipelines. You must do the following to determine whether cathodic protection\nrequired by this subpart complies with § 195.571:\n(2) Identify not more than 2 years after cathodic protection is installed, the circumstances\nin which a close-interval survey or comparable technology is practicable and necessary to\naccomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169 (incorporated by\nreference, see § 195.3).\nHEP failed to identify the circumstances in which a close interval survey (CIS) or comparable\ntechnology is necessary to evaluate the adequacy of cathodic protection at the pipe to soil interface\nwithin two years of the installation of their pipeline.\nHEP O&M Procedure, 195.573 (a) (2) CIS or other technology states:\nIf after cathodic protection is installed on a new or existing pipeline system, the Corrosion\nSupervisor will identify, within two years following installation, the circumstances in which a\nclose-interval survey or comparable technology is practicable and necessary.\nThe Corrosion Supervisor will consider the need for a close interval survey or other comparable\ntechnology by evaluating the following:\n• Baseline test point survey\n• Native Pipe to Soil potentials (if obtained)\n• Soil Conditions\n4\n\n\n\n• Foreign crossings, specifically those with cathodic protection\n• Close proximity Parallel pipelines and or High Voltage Power lines\nThe Corrosion Supervisor will submit findings to the Integrity Specialist for integration in the\nRisk Assessment, Integrity Analysis and Assessment Plans for each pipeline.\nHEP has approximately 195 miles of HCA out of 755 miles of pipeline. HEP did not follow its\nO&M Procedure mentioned above. The Corrosion Supervisor failed to provide Close Interval\nSurvey (CIS) data along with the evaluation reports/findings to the integrity specialist for\nintegration in the risk assessment, integrity analysis and assessment plans for each pipeline.\nHEP could not show it identified the circumstances in which a CIS or comparable technology is\npracticable and necessary to accomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169\nnot more than 2 years after cathodic protection was installed, as required by 195.573.\n5. §195.573 What must I do to monitor external corrosion control?\n(d) Breakout tanks. You must inspect each cathodic protection system used to control\ncorrosion on the bottom of an aboveground breakout tank to ensure that operation and\nmaintenance of the system are in accordance with API RP 651 (incorporated by reference,\nsee § 195.3). However, this inspection is not required if you note in the corrosion control\nprocedures established under §195.402(c)(3) why complying with all or certain operation\nand maintenance provisions of API RP 651 is not necessary for the safety of the tank.\nHEP did not inspect each cathodic protection system used to control corrosion on the bottom of its\naboveground breakout tanks to ensure that operation and maintenance of the systems are in\naccordance with API RP 651. HEP failed to consider IR drop during the annual tank to soil\npotential surveys as required by §195.573(d) for all of the breakout tanks within the terminal,. HEP\nrecords indicated that even though the “ON” readings satisfy the -850 mV criteria, they failed to\nestablish a valid interpretation of the voltage measurements without consideration of IR drop.\nPHMSA reviewed records for 2014, 2015, and 2016 and HEP could not provide documentation to\ndemonstrate the IR drop considerations of all the breakout tanks to ensure that operation and\nmaintenance of the system is in accordance with API Recommended Practice 651.\n6. §195.577 What must I do to alleviate interference currents\n(a) For pipelines exposed to stray currents, you must have a program to identify, test for,\nand minimize the detrimental effects of such currents.\n5\n\n\n\nHEP failed to identify, test and minimize the detrimental effects of the interference current in\nsufficient detail to demonstrate the adequacy of corrosion control measures or that corrosion\nrequiring control measures does not exist, as required by § 195.577.\nDuring the records review of annual cathodic protection surveys, PHMSA noted that the HEP\ndocuments the HVAC interference current readings along with the annual pipe to soil potential\nreadings. When asked about the threshold limit of interference for current readings that trigger\nfurther investigation, HEP did not know if the cathodic protection measurements encountered\ninterference currents or not. HEP simply answered that the AC readings are used for their records\nonly. This was confirmed during the PHMSA field inspection at ORLA pump station.\nPHMSA witnessed pipe soil potential measurements performed as 3.15Vdc. The technician’s\nresponse to the high CP reading was to point out the approximate 2 miles of overhead AC\ntransmission line along the pipeline ROW. In addition, Kinder Morgan and Enterprise also share\nthe same ROW which may also contribute to more interference activities. HEP did not provide\nevidence of any program or measure that mitigates the detrimental effects of the stray currents\ndetected.\n7. §195.583 What must I do to monitor atmospheric corrosion control?\n(b) During inspections you must give particular attention to pipe at soil-to-air interfaces,\nunder thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at\ndeck penetrations, and in spans over water.\n(c) If you find atmospheric corrosion during an inspection, you must provide protection\nagainst the corrosion as required by § 195.581.\nHEP failed to monitor and protect against the atmospheric corrosion of the station piping and the\nbreakout tank terminal. During the field inspection of the Wichita Falls Tank Terminal, PHMSA\nidentified severe atmospheric corrosion in the tank farm and pump station piping.\nIn the Wichita Falls Tank Terminal, PHMSA randomly conducted the visual inspection around the\ntanks. PHMSA identified severe atmospheric corrosion issues in the tank shell, tank bottom and\nthe dike areas. PHMSA observed pitted corrosion at lower part of the shell, paint peeled off, tank\nbottom/foundation completely covered by soil, vegetation round the tank bottom/foundation,\nchime completely/partially disappeared and/or corroded, irregular grading of the dike area.\nHEP did not identify atmospheric corrosion during inspections and did not protect against\natmospheric corrosion as required by § 195.583 and § 195.581.\n6\n\n\n\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$209,002 per violation per day the violation persists up to a maximum of $2,090,022 for a related\nseries of violations. For violations occurring prior to November 2, 2015, the maximum penalty\nmay not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000\nfor a related series of violations. The Compliance Officer has reviewed the circumstances and\nsupporting documentation involved in the above probable violation(s) and has recommended that\nyou be preliminarily assessed a civil penalty of $227,200 as follows:\nItem number PENALTY\n1 $67,000\n2 $67,000\n4 $55,200\n6 $38,000\nWarning Items\nWith respect to Items # 3 and # 5, we have reviewed the circumstances and supporting documents\ninvolved in this case and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to promptly correct these items. Failure to\ndo so may result in additional enforcement action.\nProposed Compliance Order\nWith respect to Item# 7 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials\nSafety Administration proposes to issue a Compliance Order to Holly Energy Partners-Operating,\nL.P. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this\nNotice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. All\nmaterial you submit in response to this enforcement action may be made publicly available. If you\nbelieve that any portion of your responsive material qualifies for confidential treatment under 5\nU.S.C. 552(b), along with the complete original document you must provide a second copy of the\ndocument with the portions you believe qualify for confidential treatment redacted and an\nexplanation of why you believe the redacted information qualifies for confidential treatment under\n5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, or request a\nhearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,\n7\n\n\n\nthis constitutes a waiver of your right to contest the allegations in this Notice and authorizes the\nAssociate Administrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order. If you are responding to this Notice, we propose that you\nsubmit your correspondence to my office within 30 days from receipt of this Notice. This period\nmay be extended by written request for good cause.\nIn your correspondence on this matter, please refer to CPF 4-2018-5005 and, for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n8\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Holly Energy Partners-Operating, L.P. a\nCompliance Order incorporating the following remedial requirements to ensure the compliance of\nHolly Energy Partners-Operating, L.P. with the pipeline safety regulations:\n1. In regard to Item Number # 7 of the Notice pertaining to HEP failing to monitor and protect the\npipeline from atmospheric corrosion at the Wichita Falls Tank Terminal, HEP must conduct\ninspections to comply with the code requirements of §195.583 in accordance with their procedures,\nand must provide protection against the corrosion as required by § 195.581 to include external\ncorrosion on tanks, tank bottoms/concrete foundations.\n2. HEP must complete the above item within 180 days following receipt of the Final Order and\nsubmit to PHMSA Southwest Region office.\n3. It is requested (not mandated) that Holly Energy Partners-Operating L.P. maintain\ndocumentation of the safety improvement costs associated with fulfilling this Compliance Order\nand submit the total to Mary McDaniel, Director, Southwest Region, Pipeline and Hazardous\nMaterials Safety Administration. It is requested that these costs be reported in two categories: 1)\ntotal cost associated with preparation/revision of plans, procedures, studies and analyses, and 2)\ntotal cost associated with replacements, additions and other changes to pipeline infrastructure.\n9\n\n420185005_NOPV PCP PCO-06202018.pdf\n\nof Transportation\nU.S. Department\nHouston, TX 77074\n8701 S. Gessner, Suite 630\nPipeline and\nHazardous Materials Safety\nAdministration\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 20, 2018\nMark Cunningham\nSenior Vice President, Engineering & Technical Services\nHolly Energy Partners-Operating, L.P.\n2828 N. Harwood, Suite 1300\nDallas, Texas 75201\nCPF 4-2018-5005\nDear Mr. Cunningham:\nFrom November 28, 2016 through May 19, 2017, representatives of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter\n601 of 49 United States Code (U.S.C.) inspected your Holly Energy Partners-Operating, L.P.\n(HEP) facilities in New Mexico, Oklahoma, and Texas.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n1. §195.403 Emergency Response Training.\n(b) At the intervals not exceeding 15 months, but at least once each calendar year, each\noperator shall:\n\n\n\n(1) Review with personnel their performance in meeting the objectives of the emergency\nresponse training program set forth in paragraph (a) of this section; and\n(2) Make appropriate changes to the emergency response training program as necessary to\nensure that it is effective.\nHEP failed to review with personnel their performance in meeting the objectives of the emergency\nresponse training program and make appropriate changes to the emergency response training\nprogram as necessary to ensure that it is effective.\nDuring the inspection, PHMSA requested HEP to provide documentation for the review of\nemergency personnel performance for calendar years 2014, 2015, and 2016. HEP could not\nprovide the requested documentation.\nFurther, HEP did not comply with its own O&M manual, which requires yearly evaluations of\nemergency personnel performance pursuant to §195.403. The HEP O&M Procedure, Section 4.4\nEmergency Response Training states:\n4.4.1 \"Yearly evaluations, not to exceed 15 months, are made to the training program to ensure\nthat personnel and supervisors maintain a thorough knowledge of any updates or revisions in\noperations. Training records are maintained at the Artesia Operations office.\"\n4.4.3 \"The company will, at intervals not exceeding 15 months, but at least once per year calendar\nyear, conduct a meeting to review personnel performance in the meeting the objectives of the\nannual deployment drills, table top drills and the IBT training.\"\n2. § 195.446 Control Room Management.\n(h) Training. Each operator must establish a controller training program and review the\ntraining program content to identify potential improvements at least once each calendar\nyear, but at intervals not to exceed 15 months. An operator's program must provide for\ntraining each controller to carry out the roles and responsibilities defined by the operator.\nIn addition, the training program must include the following elements:\n(1) Responding to abnormal operating conditions likely to occur simultaneously or in\nsequence;\nHEP failed to provide controller training for responding to abnormal operating conditions likely\nto occur simultaneous or in sequence for calendar years 2014, 2015, and 2016 in accordance with\ntheir procedure 9.1 Rule Requirements and § 195.446.\nHEP's Control Room Management Plan States:\n9.1 Rule Requirements\nIn accordance with the Rule, HEP must establish a training program that provides\neach Controller with the knowledge to carry out the roles and responsibilities defined\n2\n\n\n\nby the Operator, to include the following:\n• Responding to abnormal operating conditions likely to occur simultaneously\nor in sequence;\n• Using a tabletop method for training Controllers to recognize AOC's;\n• Communication responsibilities under the Operators emergency response\nprocedures;\n• Working knowledge of the pipeline system, especially during the development\nof AOC's;\n• Providing the opportunity for Controller to review procedures for infrequently\nused operating setups in advance of their application;\n• Review of the program content for potential improvements at least once each\ncalendar year but not to exceed 15 months.\nHEP did not perform the required training. HEP could not provide any records regarding controller\ntraining except the list of OQ tasks for the controllers.\n3. 8195.452 Pipeline integrity management in high consequence areas.\n(i) What is a continual process of evaluation and assessment to maintain a pipeline's integrity?\n(1) General. After completing the baseline integrity assessment, an operator must continue\nto assess the line pipe at specified intervals and periodically evaluate the integrity of each\npipeline segment that could affect a high consequence area.\n(2) Evaluation. An operator must conduct a periodic evaluation as frequently as needed to\nassure pipeline integrity. An operator must base the frequency of evaluation on risk factors\nspecific to its pipeline, including the factors specified in paragraph (e) of this section. The\nevaluation must consider the results of the baseline and periodic integrity assessments,\ninformation analysis (paragraph (g) of this section), and decisions about remediation, and\npreventive and mitigative actions (paragraphs (h) and (i) of this section).\nHEP failed to document the process for evaluating pipeline integrity to ensure all of the required\nrisk factors are accounted for and to ensure the effectiveness of the continual evaluation process\nas required by §195.452 (i)(2) and HEP's Integrity Management Program Manual. HEP's IMP\nManual states:\nSection 3.10.1-Post Integrity Assessment Evaluation:\nFollowing identification, evaluation and remediation of any conditions on covered pipeline\nsegments, Company will integrate actual pipe condition data and determine the need for additional\nP&M Measures. The Company will consider the entire pipeline system's information when\ndetermining risks associated with pipeline operation in covered pipeline segments, such as results\nof previous:\n3\n\n\n\n•\nReconstruction;\n•\nIntegrity assessments;\nDirect examinations;\nRemediation actions;\nROW condition surveys;\nRisk assessments; and,\nP&M Measures\".\nPHMSA requested HEP to provide the records of the continual evaluation of their pipeline's\nintegrity for calendar years 2014, 2015, and 2016. Upon review, PHMSA noted the content of the\nspreadsheet reflected the pipe segments, pipeline assessment methods, last and next inspection\ndates for ILI, identified anomalies and their prioritized repair schedule, etc. These items are only\na part of the requirements of the continual process of evaluation and assessment to maintain a\npipeline's integrity. HEP's continual evaluation spreadsheet, however, did not include\nconsideration of other factors as required including the results of previous integrity assessment\nrisk results and/or risk ranking; review new data; identified integrity threats specific to that line\nsegment, and any new information which may suggest additional actions are warranted must be\nincluded in the continual evaluation process in order to measure the overall effectiveness of the\ncompany's integrity management program.\n4. §195.573 What must I do to monitor external corrosion control:\n(a) Protected pipelines. You must do the following to determine whether cathodic protection\nrequired by this subpart complies with § 195.571:\n(2) Identify not more than 2 years after cathodic protection is installed, the circumstances\nin which a close-interval survey or comparable technology is practicable and necessary to\naccomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169 (incorporated by\nreference, see § 195.3).\nHEP failed to identify the circumstances in which a close interval survey (CIS) or comparable\ntechnology is necessary to evaluate the adequacy of cathodic protection at the pipe to soil interface\nwithin two years of the installation of their pipeline.\nHEP O&M Procedure, 195.573 (a) (2) CIS or other technology states:\nIf after cathodic protection is installed on a new or existing pipeline system, the Corrosion\nSupervisor will identify, within two years following installation, the circumstances in which a\nclose-interval survey or comparable technology is practicable and necessary.\nThe Corrosion Supervisor will consider the need for a close interval survey or other comparable\ntechnology by evaluating the following:\n• Baseline test point survey\n• Native Pipe to Soil potentials (if obtained)\n• Soil Conditions\n4\n\n\n\n• Foreign crossings, specifically those with cathodic protection\n• Close proximity Parallel pipelines and or High Voltage Power lines\nThe Corrosion Supervisor will submit findings to the Integrity Specialist for integration in the\nRisk Assessment, Integrity Analysis and Assessment Plans for each pipeline.\nHEP has approximately 195 miles of HCA out of 755 miles of pipeline. HEP did not follow its\nO&M Procedure mentioned above. The Corrosion Supervisor failed to provide Close Interval\nSurvey (CIS) data along with the evaluation reports/findings to the integrity specialist for\nintegration in the risk assessment, integrity analysis and assessment plans for each pipeline.\nHEP could not show it identified the circumstances in which a CIS or comparable technology is\npracticable and necessary to accomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169\nnot more than 2 years after cathodic protection was installed, as required by 195.573.\n5. §195.573 What must I do to monitor external corrosion control?\n(d) Breakout tanks. You must inspect each cathodic protection system used to control\ncorrosion on the bottom of an aboveground breakout tank to ensure that operation and\nmaintenance of the system are in accordance with API RP 651 (incorporated by reference,\nsee § 195.3). However, this inspection is not required if you note in the corrosion control\nprocedures established under §195.402(c)(3) why complying with all or certain operation\nand maintenance provisions of API RP 651 is not necessary for the safety of the tank.\nHEP did not inspect each cathodic protection system used to control corrosion on the bottom of its\naboveground breakout tanks to ensure that operation and maintenance of the systems are in\naccordance with API RP 651. HEP failed to consider IR drop during the annual tank to soil\npotential surveys as required by §195.573(d) for all of the breakout tanks within the terminal,. HEP\nrecords indicated that even though the \"ON\" readings satisfy the -850 mV criteria, they failed to\nestablish a valid interpretation of the voltage measurements without consideration of IR drop.\nPHMSA reviewed records for 2014, 2015, and 2016 and HEP could not provide documentation to\ndemonstrate the IR drop considerations of all the breakout tanks to ensure that operation and\nmaintenance of the system is in accordance with API Recommended Practice 651.\n6. §195.577 What must I do to alleviate interference currents\n(a) For pipelines exposed to stray currents, you must have a program to identify, test for,\nand minimize the detrimental effects of such currents.\n\n\n\nHEP failed to identify, test and minimize the detrimental effects of the interference current in\nsufficient detail to demonstrate the adequacy of corrosion control measures or that corrosion\nrequiring control measures does not exist, as required by § 195.577.\nDuring the records review of annual cathodic protection surveys, PHMSA noted that the HEP\ndocuments the HVAC interference current readings along with the annual pipe to soil potential\nreadings. When asked about the threshold limit of interference for current readings that trigger\nfurther investigation, HEP did not know if the cathodic protection measurements encountered\ninterference currents or not. HEP simply answered that the AC readings are used for their records\nonly. This was confirmed during the PHMSA field inspection at ORLA pump station.\nPHMSA witnessed pipe soil potential measurements performed as 3.15Vdc. The technician's\nresponse to the high CP reading was to point out the approximate 2 miles of overhead AC\ntransmission line along the pipeline ROW. In addition, Kinder Morgan and Enterprise also share\nthe same ROW which may also contribute to more interference activities. HEP did not provide\nevidence of any program or measure that mitigates the detrimental effects of the stray currents\ndetected.\n7. §195.583 What must I do to monitor atmospheric corrosion control?\n(b) During inspections you must give particular attention to pipe at soil-to-air interfaces,\nunder thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at\ndeck penetrations, and in spans over water.\n(c) If you find atmospheric corrosion during an inspection, you must provide protection\nagainst the corrosion as required by § 195.581.\nHEP failed to monitor and protect against the atmospheric corrosion of the station piping and the\nbreakout tank terminal. During the field inspection of the Wichita Falls Tank Terminal, PHMSA\nidentified severe atmospheric corrosion in the tank farm and pump station piping.\nIn the Wichita Falls Tank Terminal, PHMSA randomly conducted the visual inspection around the\ntanks. PHMSA identified severe atmospheric corrosion issues in the tank shell, tank bottom and\nthe dike areas. PHMSA observed pitted corrosion at lower part of the shell, paint peeled off, tank\nbottom/foundation completely covered by soil, vegetation round the tank bottom/foundation,\nchime completely/partially disappeared and/or corroded, irregular grading of the dike area.\nHEP did not identify atmospheric corrosion during inspections and did not protect against\natmospheric corrosion as required by § 195.583 and § 195.581.\n\n\n\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$209,002 per violation per day the violation persists up to a maximum of $2,090,022 for a related\nseries of violations. For violations occurring prior to November 2, 2015, the maximum penalty\nmay not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000\nfor a related series of violations. The Compliance Officer has reviewed the circumstances and\nsupporting documentation involved in the above probable violation(s) and has recommended that\nyou be preliminarily assessed a civil penalty of $227,200 as follows:\nItem number\nPENALTY\n1\n$67,000\n2\n$67,000\n4\n$55,200\n6\n$38,000\nWarning Items\nWith respect to Items # 3 and # 5, we have reviewed the circumstances and supporting documents\ninvolved in this case and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to promptly correct these items. Failure to\ndo so may result in additional enforcement action.\nProposed Compliance Order\nWith respect to Item# 7 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials\nSafety Administration proposes to issue a Compliance Order to Holly Energy Partners-Operating,\nL.P. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this\nNotice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. All\nmaterial you submit in response to this enforcement action may be made publicly available. If you\nbelieve that any portion of your responsive material qualifies for confidential treatment under 5\nU.S.C. 552(b), along with the complete original document you must provide a second copy of the\ndocument with the portions you believe qualify for confidential treatment redacted and an\nexplanation of why you believe the redacted information qualifies for confidential treatment under\n5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, or request a\nhearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,\n7\n\n\n\nthis constitutes a waiver of your right to contest the allegations in this Notice and authorizes the\nAssociate Administrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order. If you are responding to this Notice, we propose that you\nsubmit your correspondence to my office within 30 days from receipt of this Notice. This period\nmay be extended by written request for good cause.\nIn your correspondence on this matter, please refer to CPF 4-2018-5005 and, for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nMary L. MeDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes\n• to issue\nto Holly Energy Partners-Operating, L.P. a\nCompliance Order incorporating the following remedial requirements to ensure the compliance of\nHolly Energy Partners-Operating, L.P. with the pipeline safety regulations:\n1. In regard to Item Number # 7 of the Notice pertaining to HEP failing to monitor and protect the\npipeline from atmospheric corrosion at the Wichita Falls Tank Terminal, HEP must conduct\ninspections to comply with the code requirements of §195.583 in accordance with their procedures,\nand must provide protection against the corrosion as required by § 195.581 to include external\ncorrosion on tanks, tank bottoms/concrete foundations.\n2. HEP must complete the above item within 180 days following receipt of the Final Order and\nsubmit to PHMSA Southwest Region office.\ndocumentation of the safety improvement costs associated with fulfilling this Compliance Order\n3. It is requested (not mandated) that Holly Energy Partners-Operating L.P. maintain\nMaterials Safety Administration. It is requested that these costs be reported in two categories: 1)\nand submit the total to Mary McDaniel, Director, Southwest Region, Pipeline and Hazardous\ntotal cost associated with preparation/revision of plans, procedures, studies and analyses, and 2)\n• total cost associated with replacements, additions and other changes to pipeline infrastructure.\n\n420185005_Final Order_08082019_text.pdf\n\nAugust 8, 2019\nMr. George J. Damiris\nChief Executive Officer\nHolly Energy Partners, LP\n2828 N. Harwood, Suite 1300\nDallas, Texas 75201\nRe: CPF No. 4-2018-5005\nDear Mr. Damiris:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws three of\nthe allegations of violation, makes other findings of violation, assesses a reduced civil penalty of\n$55,200, and specifies actions that need to be taken by Holly Energy Partners Operating, LP, a\nsubsidiary of Holly Energy Partners, LP, to comply with the pipeline safety regulations. The\npenalty payment terms are set forth in the Final Order. When the civil penalty has been paid and\nthe terms of the compliance order completed, as determined by the Director, Southwest Region,\nthis enforcement action will be closed. Service of the Final Order by certified mail is effective\nupon the date of mailing, as 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: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Mark Cunningham, P.E., Senior Vice President – Operations and Engineering, Holly\nEnergy Partners Operating, LP, Mark.Cunningham@hollyenergy.com\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_______________","truncated":true,"body_characters":62756}