# HOLLY ENERGY PARTNERS - OPERATING, L.P. — Notice of Probable Violation

- **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:** Not available
- **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).
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- **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.

Official case documents:

420185005_Closure Letter_07082020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Closure%20Letter_07082020.pdf

420185005_Closure Letter_07082020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Closure%20Letter_07082020_text.pdf

420185005_Final Order_08082019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Final%20Order_08082019.pdf

420185005_Final Order_08082019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_Final%20Order_08082019_text.pdf

420185005_NOPV PCP PCO-06202018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_NOPV%20PCP%20PCO-06202018.pdf

420185005_NOPV PCP PCO_06202018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185005/420185005_NOPV%20PCP%20PCO_06202018_text.pdf

420185005_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

420185005_NOPV PCP PCO_06202018_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
June 20, 2018
Mark Cunningham
Senior Vice President, Engineering & Technical Services
Holly Energy Partners-Operating, L.P.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
CPF 4-2018-5005
Dear Mr. Cunningham:
From November 28, 2016 through May 19, 2017, representatives of the Pipeline and Hazardous
Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter
601 of 49 United States Code (U.S.C.) inspected your Holly Energy Partners-Operating, L.P.
(HEP) facilities in New Mexico, Oklahoma, and Texas.
As a result of the inspection, it is alleged that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected
and the probable violations are:
1. §195.403 Emergency Response Training.
(b) At the intervals not exceeding 15 months, but at least once each calendar year, each
operator shall:



(1) Review with personnel their performance in meeting the objectives of the emergency
response training program set forth in paragraph (a) of this section; and
(2) Make appropriate changes to the emergency response training program as necessary to
ensure that it is effective.
HEP failed to review with personnel their performance in meeting the objectives of the emergency
response training program and make appropriate changes to the emergency response training
program as necessary to ensure that it is effective.
During the inspection, PHMSA requested HEP to provide documentation for the review of
emergency personnel performance for calendar years 2014, 2015, and 2016. HEP could not
provide the requested documentation.
Further, HEP did not comply with its own O&M manual, which requires yearly evaluations of
emergency personnel performance pursuant to §195.403. The HEP O&M Procedure, Section 4.4
Emergency Response Training states:
4.4.1 “Yearly evaluations, not to exceed 15 months, are made to the training program to ensure
that personnel and supervisors maintain a thorough knowledge of any updates or revisions in
operations. Training records are maintained at the Artesia Operations office.”
4.4.3 “The company will, at intervals not exceeding 15 months, but at least once per year calendar
year, conduct a meeting to review personnel performance in the meeting the objectives of the
annual deployment drills, table top drills and the IBT training.”
2. § 195.446 Control Room Management.
(h) Training. Each operator must establish a controller training program and review the
training program content to identify potential improvements at least once each calendar
year, but at intervals not to exceed 15 months. An operator's program must provide for
training each controller to carry out the roles and responsibilities defined by the operator.
In addition, the training program must include the following elements:
(1) Responding to abnormal operating conditions likely to occur simultaneously or in
sequence;
HEP failed to provide controller training for responding to abnormal operating conditions likely
to occur simultaneous or in sequence for calendar years 2014, 2015, and 2016 in accordance with
their procedure 9.1 Rule Requirements and § 195.446.
HEP’s Control Room Management Plan States:
9.1 Rule Requirements
In accordance with the Rule, HEP must establish a training program that provides
each Controller with the knowledge to carry out the roles and responsibilities defined
2



by the Operator, to include the following:
• Responding to abnormal operating conditions likely to occur simultaneously
or in sequence;
• Using a tabletop method for training Controllers to recognize AOC’s;
• Communication responsibilities under the Operators emergency response
procedures;
• Working knowledge of the pipeline system, especially during the development
of AOC’s;
• Providing the opportunity for Controller to review procedures for infrequently
used operating setups in advance of their application;
• Review of the program content for potential improvements at least once each
calendar year but not to exceed 15 months.
HEP did not perform the required training. HEP could not provide any records regarding controller
training except the list of OQ tasks for the controllers.
3. §195.452 Pipeline integrity management in high consequence areas.
(j) What is a continual process of evaluation and assessment to maintain a pipeline's integrity?
(1) General. After completing the baseline integrity assessment, an operator must continue
to assess the line pipe at specified intervals and periodically evaluate the integrity of each
pipeline segment that could affect a high consequence area.
(2) Evaluation. An operator must conduct a periodic evaluation as frequently as needed to
assure pipeline integrity. An operator must base the frequency of evaluation on risk factors
specific to its pipeline, including the factors specified in paragraph (e) of this section. The
evaluation must consider the results of the baseline and periodic integrity assessments,
information analysis (paragraph (g) of this section), and decisions about remediation, and
preventive and mitigative actions (paragraphs (h) and (i) of this section).
HEP failed to document the process for evaluating pipeline integrity to ensure all of the required
risk factors are accounted for and to ensure the effectiveness of the continual evaluation process
as required by §195.452 (j)(2) and HEP’s Integrity Management Program Manual. HEP’s IMP
Manual states:
Section 3.10.1-Post Integrity Assessment Evaluation:
Following identification, evaluation and remediation of any conditions on covered pipeline
segments, Company will integrate actual pipe condition data and determine the need for additional
P&M Measures. The Company will consider the entire pipeline system’s information when
determining risks associated with pipeline operation in covered pipeline segments, such as results
of previous:
3



• Reconstruction;
• Integrity assessments;
• Direct examinations;
• Remediation actions;
• ROW condition surveys;
• Risk assessments; and,
• P&M Measures”.
PHMSA requested HEP to provide the records of the continual evaluation of their pipeline’s
integrity for calendar years 2014, 2015, and 2016. Upon review, PHMSA noted the content of the
spreadsheet reflected the pipe segments, pipeline assessment methods, last and next inspection
dates for ILI, identified anomalies and their prioritized repair schedule, etc. These items are only
a part of the requirements of the continual process of evaluation and assessment to maintain a
pipeline's integrity. HEP’s continual evaluation spreadsheet, however, did not include
consideration of other factors as required including the results of previous integrity assessment
risk results and/or risk ranking; review new data; identified integrity threats specific to that line
segment, and any new information which may suggest additional actions are warranted must be
included in the continual evaluation process in order to measure the overall effectiveness of the
company’s integrity management program.
4. §195.573 What must I do to monitor external corrosion control:
(a) Protected pipelines. You must do the following to determine whether cathodic protection
required by this subpart complies with § 195.571:
(2) Identify not more than 2 years after cathodic protection is installed, the circumstances
in which a close-interval survey or comparable technology is practicable and necessary to
accomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169 (incorporated by
reference, see § 195.3).
HEP failed to identify the circumstances in which a close interval survey (CIS) or comparable
technology is necessary to evaluate the adequacy of cathodic protection at the pipe to soil interface
within two years of the installation of their pipeline.
HEP O&M Procedure, 195.573 (a) (2) CIS or other technology states:
If after cathodic protection is installed on a new or existing pipeline system, the Corrosion
Supervisor will identify, within two years following installation, the circumstances in which a
close-interval survey or comparable technology is practicable and necessary.
The Corrosion Supervisor will consider the need for a close interval survey or other comparable
technology by evaluating the following:
• Baseline test point survey
• Native Pipe to Soil potentials (if obtained)
• Soil Conditions
4



• Foreign crossings, specifically those with cathodic protection
• Close proximity Parallel pipelines and or High Voltage Power lines
The Corrosion Supervisor will submit findings to the Integrity Specialist for integration in the
Risk Assessment, Integrity Analysis and Assessment Plans for each pipeline.
HEP has approximately 195 miles of HCA out of 755 miles of pipeline. HEP did not follow its
O&M Procedure mentioned above. The Corrosion Supervisor failed to provide Close Interval
Survey (CIS) data along with the evaluation reports/findings to the integrity specialist for
integration in the risk assessment, integrity analysis and assessment plans for each pipeline.
HEP could not show it identified the circumstances in which a CIS or comparable technology is
practicable and necessary to accomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169
not more than 2 years after cathodic protection was installed, as required by 195.573.
5. §195.573 What must I do to monitor external corrosion control?
(d) Breakout tanks. You must inspect each cathodic protection system used to control
corrosion on the bottom of an aboveground breakout tank to ensure that operation and
maintenance of the system are in accordance with API RP 651 (incorporated by reference,
see § 195.3). However, this inspection is not required if you note in the corrosion control
procedures established under §195.402(c)(3) why complying with all or certain operation
and maintenance provisions of API RP 651 is not necessary for the safety of the tank.
HEP did not inspect each cathodic protection system used to control corrosion on the bottom of its
aboveground breakout tanks to ensure that operation and maintenance of the systems are in
accordance with API RP 651. HEP failed to consider IR drop during the annual tank to soil
potential surveys as required by §195.573(d) for all of the breakout tanks within the terminal,. HEP
records indicated that even though the “ON” readings satisfy the -850 mV criteria, they failed to
establish a valid interpretation of the voltage measurements without consideration of IR drop.
PHMSA reviewed records for 2014, 2015, and 2016 and HEP could not provide documentation to
demonstrate the IR drop considerations of all the breakout tanks to ensure that operation and
maintenance of the system is in accordance with API Recommended Practice 651.
6. §195.577 What must I do to alleviate interference currents
(a) For pipelines exposed to stray currents, you must have a program to identify, test for,
and minimize the detrimental effects of such currents.
5



HEP failed to identify, test and minimize the detrimental effects of the interference current in
sufficient detail to demonstrate the adequacy of corrosion control measures or that corrosion
requiring control measures does not exist, as required by § 195.577.
During the records review of annual cathodic protection surveys, PHMSA noted that the HEP
documents the HVAC interference current readings along with the annual pipe to soil potential
readings. When asked about the threshold limit of interference for current readings that trigger
further investigation, HEP did not know if the cathodic protection measurements encountered
interference currents or not. HEP simply answered that the AC readings are used for their records
only. This was confirmed during the PHMSA field inspection at ORLA pump station.
PHMSA witnessed pipe soil potential measurements performed as 3.15Vdc. The technician’s
response to the high CP reading was to point out the approximate 2 miles of overhead AC
transmission line along the pipeline ROW. In addition, Kinder Morgan and Enterprise also share
the same ROW which may also contribute to more interference activities. HEP did not provide
evidence of any program or measure that mitigates the detrimental effects of the stray currents
detected.
7. §195.583 What must I do to monitor atmospheric corrosion control?
(b) During inspections you must give particular attention to pipe at soil-to-air interfaces,
under thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at
deck penetrations, and in spans over water.
(c) If you find atmospheric corrosion during an inspection, you must provide protection
against the corrosion as required by § 195.581.
HEP failed to monitor and protect against the atmospheric corrosion of the station piping and the
breakout tank terminal. During the field inspection of the Wichita Falls Tank Terminal, PHMSA
identified severe atmospheric corrosion in the tank farm and pump station piping.
In the Wichita Falls Tank Terminal, PHMSA randomly conducted the visual inspection around the
tanks. PHMSA identified severe atmospheric corrosion issues in the tank shell, tank bottom and
the dike areas. PHMSA observed pitted corrosion at lower part of the shell, paint peeled off, tank
bottom/foundation completely covered by soil, vegetation round the tank bottom/foundation,
chime completely/partially disappeared and/or corroded, irregular grading of the dike area.
HEP did not identify atmospheric corrosion during inspections and did not protect against
atmospheric corrosion as required by § 195.583 and § 195.581.
6



Proposed Civil Penalty
Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed
$209,002 per violation per day the violation persists up to a maximum of $2,090,022 for a related
series of violations. For violations occurring prior to November 2, 2015, the maximum penalty
may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000
for a related series of violations. The Compliance Officer has reviewed the circumstances and
supporting documentation involved in the above probable violation(s) and has recommended that
you be preliminarily assessed a civil penalty of $227,200 as follows:
Item number PENALTY
1 $67,000
2 $67,000
4 $55,200
6 $38,000
Warning Items
With respect to Items # 3 and # 5, we have reviewed the circumstances and supporting documents
involved in this case and have decided not to conduct additional enforcement action or penalty
assessment proceedings at this time. We advise you to promptly correct these items. Failure to
do so may result in additional enforcement action.
Proposed Compliance Order
With respect to Item# 7 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials
Safety Administration proposes to issue a Compliance Order to Holly Energy Partners-Operating,
L.P. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this
Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in
Compliance Proceedings. Please refer to this document and note the response options. All
material you submit in response to this enforcement action may be made publicly available. If you
believe that any portion of your responsive material qualifies for confidential treatment under 5
U.S.C. 552(b), along with the complete original document you must provide a second copy of the
document with the portions you believe qualify for confidential treatment redacted and an
explanation of why you believe the redacted information qualifies for confidential treatment under
5 U.S.C. 552(b).
Following the receipt of this Notice, you have 30 days to submit written comments, or request a
hearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,
7



this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the
Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further
notice to you and to issue a Final Order. If you are responding to this Notice, we propose that you
submit your correspondence to my office within 30 days from receipt of this Notice. This period
may be extended by written request for good cause.
In your correspondence on this matter, please refer to CPF 4-2018-5005 and, for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Mary L. McDaniel, P.E.
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
8



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to Holly Energy Partners-Operating, L.P. a
Compliance Order incorporating the following remedial requirements to ensure the compliance of
Holly Energy Partners-Operating, L.P. with the pipeline safety regulations:
1. In regard to Item Number # 7 of the Notice pertaining to HEP failing to monitor and protect the
pipeline from atmospheric corrosion at the Wichita Falls Tank Terminal, HEP must conduct
inspections to comply with the code requirements of §195.583 in accordance with their procedures,
and must provide protection against the corrosion as required by § 195.581 to include external
corrosion on tanks, tank bottoms/concrete foundations.
2. HEP must complete the above item within 180 days following receipt of the Final Order and
submit to PHMSA Southwest Region office.
3. It is requested (not mandated) that Holly Energy Partners-Operating L.P. maintain
documentation of the safety improvement costs associated with fulfilling this Compliance Order
and submit the total to Mary McDaniel, Director, Southwest Region, Pipeline and Hazardous
Materials Safety Administration. It is requested that these costs be reported in two categories: 1)
total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2)
total cost associated with replacements, additions and other changes to pipeline infrastructure.
9

420185005_NOPV PCP PCO-06202018.pdf

of Transportation
U.S. Department
Houston, TX 77074
8701 S. Gessner, Suite 630
Pipeline and
Hazardous Materials Safety
Administration
NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
June 20, 2018
Mark Cunningham
Senior Vice President, Engineering & Technical Services
Holly Energy Partners-Operating, L.P.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
CPF 4-2018-5005
Dear Mr. Cunningham:
From November 28, 2016 through May 19, 2017, representatives of the Pipeline and Hazardous
Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter
601 of 49 United States Code (U.S.C.) inspected your Holly Energy Partners-Operating, L.P.
(HEP) facilities in New Mexico, Oklahoma, and Texas.
As a result of the inspection, it is alleged that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected
and the probable violations are:
1. §195.403 Emergency Response Training.
(b) At the intervals not exceeding 15 months, but at least once each calendar year, each
operator shall:



(1) Review with personnel their performance in meeting the objectives of the emergency
response training program set forth in paragraph (a) of this section; and
(2) Make appropriate changes to the emergency response training program as necessary to
ensure that it is effective.
HEP failed to review with personnel their performance in meeting the objectives of the emergency
response training program and make appropriate changes to the emergency response training
program as necessary to ensure that it is effective.
During the inspection, PHMSA requested HEP to provide documentation for the review of
emergency personnel performance for calendar years 2014, 2015, and 2016. HEP could not
provide the requested documentation.
Further, HEP did not comply with its own O&M manual, which requires yearly evaluations of
emergency personnel performance pursuant to §195.403. The HEP O&M Procedure, Section 4.4
Emergency Response Training states:
4.4.1 "Yearly evaluations, not to exceed 15 months, are made to the training program to ensure
that personnel and supervisors maintain a thorough knowledge of any updates or revisions in
operations. Training records are maintained at the Artesia Operations office."
4.4.3 "The company will, at intervals not exceeding 15 months, but at least once per year calendar
year, conduct a meeting to review personnel performance in the meeting the objectives of the
annual deployment drills, table top drills and the IBT training."
2. § 195.446 Control Room Management.
(h) Training. Each operator must establish a controller training program and review the
training program content to identify potential improvements at least once each calendar
year, but at intervals not to exceed 15 months. An operator's program must provide for
training each controller to carry out the roles and responsibilities defined by the operator.
In addition, the training program must include the following elements:
(1) Responding to abnormal operating conditions likely to occur simultaneously or in
sequence;
HEP failed to provide controller training for responding to abnormal operating conditions likely
to occur simultaneous or in sequence for calendar years 2014, 2015, and 2016 in accordance with
their procedure 9.1 Rule Requirements and § 195.446.
HEP's Control Room Management Plan States:
9.1 Rule Requirements
In accordance with the Rule, HEP must establish a training program that provides
each Controller with the knowledge to carry out the roles and responsibilities defined
2



by the Operator, to include the following:
• Responding to abnormal operating conditions likely to occur simultaneously
or in sequence;
• Using a tabletop method for training Controllers to recognize AOC's;
• Communication responsibilities under the Operators emergency response
procedures;
• Working knowledge of the pipeline system, especially during the development
of AOC's;
• Providing the opportunity for Controller to review procedures for infrequently
used operating setups in advance of their application;
• Review of the program content for potential improvements at least once each
calendar year but not to exceed 15 months.
HEP did not perform the required training. HEP could not provide any records regarding controller
training except the list of OQ tasks for the controllers.
3. 8195.452 Pipeline integrity management in high consequence areas.
(i) What is a continual process of evaluation and assessment to maintain a pipeline's integrity?
(1) General. After completing the baseline integrity assessment, an operator must continue
to assess the line pipe at specified intervals and periodically evaluate the integrity of each
pipeline segment that could affect a high consequence area.
(2) Evaluation. An operator must conduct a periodic evaluation as frequently as needed to
assure pipeline integrity. An operator must base the frequency of evaluation on risk factors
specific to its pipeline, including the factors specified in paragraph (e) of this section. The
evaluation must consider the results of the baseline and periodic integrity assessments,
information analysis (paragraph (g) of this section), and decisions about remediation, and
preventive and mitigative actions (paragraphs (h) and (i) of this section).
HEP failed to document the process for evaluating pipeline integrity to ensure all of the required
risk factors are accounted for and to ensure the effectiveness of the continual evaluation process
as required by §195.452 (i)(2) and HEP's Integrity Management Program Manual. HEP's IMP
Manual states:
Section 3.10.1-Post Integrity Assessment Evaluation:
Following identification, evaluation and remediation of any conditions on covered pipeline
segments, Company will integrate actual pipe condition data and determine the need for additional
P&M Measures. The Company will consider the entire pipeline system's information when
determining risks associated with pipeline operation in covered pipeline segments, such as results
of previous:
3



•
Reconstruction;
•
Integrity assessments;
Direct examinations;
Remediation actions;
ROW condition surveys;
Risk assessments; and,
P&M Measures".
PHMSA requested HEP to provide the records of the continual evaluation of their pipeline's
integrity for calendar years 2014, 2015, and 2016. Upon review, PHMSA noted the content of the
spreadsheet reflected the pipe segments, pipeline assessment methods, last and next inspection
dates for ILI, identified anomalies and their prioritized repair schedule, etc. These items are only
a part of the requirements of the continual process of evaluation and assessment to maintain a
pipeline's integrity. HEP's continual evaluation spreadsheet, however, did not include
consideration of other factors as required including the results of previous integrity assessment
risk results and/or risk ranking; review new data; identified integrity threats specific to that line
segment, and any new information which may suggest additional actions are warranted must be
included in the continual evaluation process in order to measure the overall effectiveness of the
company's integrity management program.
4. §195.573 What must I do to monitor external corrosion control:
(a) Protected pipelines. You must do the following to determine whether cathodic protection
required by this subpart complies with § 195.571:
(2) Identify not more than 2 years after cathodic protection is installed, the circumstances
in which a close-interval survey or comparable technology is practicable and necessary to
accomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169 (incorporated by
reference, see § 195.3).
HEP failed to identify the circumstances in which a close interval survey (CIS) or comparable
technology is necessary to evaluate the adequacy of cathodic protection at the pipe to soil interface
within two years of the installation of their pipeline.
HEP O&M Procedure, 195.573 (a) (2) CIS or other technology states:
If after cathodic protection is installed on a new or existing pipeline system, the Corrosion
Supervisor will identify, within two years following installation, the circumstances in which a
close-interval survey or comparable technology is practicable and necessary.
The Corrosion Supervisor will consider the need for a close interval survey or other comparable
technology by evaluating the following:
• Baseline test point survey
• Native Pipe to Soil potentials (if obtained)
• Soil Conditions
4



• Foreign crossings, specifically those with cathodic protection
• Close proximity Parallel pipelines and or High Voltage Power lines
The Corrosion Supervisor will submit findings to the Integrity Specialist for integration in the
Risk Assessment, Integrity Analysis and Assessment Plans for each pipeline.
HEP has approximately 195 miles of HCA out of 755 miles of pipeline. HEP did not follow its
O&M Procedure mentioned above. The Corrosion Supervisor failed to provide Close Interval
Survey (CIS) data along with the evaluation reports/findings to the integrity specialist for
integration in the risk assessment, integrity analysis and assessment plans for each pipeline.
HEP could not show it identified the circumstances in which a CIS or comparable technology is
practicable and necessary to accomplish the objectives of paragraph 10.1.1.3 of NACE SP 0169
not more than 2 years after cathodic protection was installed, as required by 195.573.
5. §195.573 What must I do to monitor external corrosion control?
(d) Breakout tanks. You must inspect each cathodic protection system used to control
corrosion on the bottom of an aboveground breakout tank to ensure that operation and
maintenance of the system are in accordance with API RP 651 (incorporated by reference,
see § 195.3). However, this inspection is not required if you note in the corrosion control
procedures established under §195.402(c)(3) why complying with all or certain operation
and maintenance provisions of API RP 651 is not necessary for the safety of the tank.
HEP did not inspect each cathodic protection system used to control corrosion on the bottom of its
aboveground breakout tanks to ensure that operation and maintenance of the systems are in
accordance with API RP 651. HEP failed to consider IR drop during the annual tank to soil
potential surveys as required by §195.573(d) for all of the breakout tanks within the terminal,. HEP
records indicated that even though the "ON" readings satisfy the -850 mV criteria, they failed to
establish a valid interpretation of the voltage measurements without consideration of IR drop.
PHMSA reviewed records for 2014, 2015, and 2016 and HEP could not provide documentation to
demonstrate the IR drop considerations of all the breakout tanks to ensure that operation and
maintenance of the system is in accordance with API Recommended Practice 651.
6. §195.577 What must I do to alleviate interference currents
(a) For pipelines exposed to stray currents, you must have a program to identify, test for,
and minimize the detrimental effects of such currents.



HEP failed to identify, test and minimize the detrimental effects of the interference current in
sufficient detail to demonstrate the adequacy of corrosion control measures or that corrosion
requiring control measures does not exist, as required by § 195.577.
During the records review of annual cathodic protection surveys, PHMSA noted that the HEP
documents the HVAC interference current readings along with the annual pipe to soil potential
readings. When asked about the threshold limit of interference for current readings that trigger
further investigation, HEP did not know if the cathodic protection measurements encountered
interference currents or not. HEP simply answered that the AC readings are used for their records
only. This was confirmed during the PHMSA field inspection at ORLA pump station.
PHMSA witnessed pipe soil potential measurements performed as 3.15Vdc. The technician's
response to the high CP reading was to point out the approximate 2 miles of overhead AC
transmission line along the pipeline ROW. In addition, Kinder Morgan and Enterprise also share
the same ROW which may also contribute to more interference activities. HEP did not provide
evidence of any program or measure that mitigates the detrimental effects of the stray currents
detected.
7. §195.583 What must I do to monitor atmospheric corrosion control?
(b) During inspections you must give particular attention to pipe at soil-to-air interfaces,
under thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at
deck penetrations, and in spans over water.
(c) If you find atmospheric corrosion during an inspection, you must provide protection
against the corrosion as required by § 195.581.
HEP failed to monitor and protect against the atmospheric corrosion of the station piping and the
breakout tank terminal. During the field inspection of the Wichita Falls Tank Terminal, PHMSA
identified severe atmospheric corrosion in the tank farm and pump station piping.
In the Wichita Falls Tank Terminal, PHMSA randomly conducted the visual inspection around the
tanks. PHMSA identified severe atmospheric corrosion issues in the tank shell, tank bottom and
the dike areas. PHMSA observed pitted corrosion at lower part of the shell, paint peeled off, tank
bottom/foundation completely covered by soil, vegetation round the tank bottom/foundation,
chime completely/partially disappeared and/or corroded, irregular grading of the dike area.
HEP did not identify atmospheric corrosion during inspections and did not protect against
atmospheric corrosion as required by § 195.583 and § 195.581.



Proposed Civil Penalty
Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed
$209,002 per violation per day the violation persists up to a maximum of $2,090,022 for a related
series of violations. For violations occurring prior to November 2, 2015, the maximum penalty
may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000
for a related series of violations. The Compliance Officer has reviewed the circumstances and
supporting documentation involved in the above probable violation(s) and has recommended that
you be preliminarily assessed a civil penalty of $227,200 as follows:
Item number
PENALTY
1
$67,000
2
$67,000
4
$55,200
6
$38,000
Warning Items
With respect to Items # 3 and # 5, we have reviewed the circumstances and supporting documents
involved in this case and have decided not to conduct additional enforcement action or penalty
assessment proceedings at this time. We advise you to promptly correct these items. Failure to
do so may result in additional enforcement action.
Proposed Compliance Order
With respect to Item# 7 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials
Safety Administration proposes to issue a Compliance Order to Holly Energy Partners-Operating,
L.P. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this
Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in
Compliance Proceedings. Please refer to this document and note the response options. All
material you submit in response to this enforcement action may be made publicly available. If you
believe that any portion of your responsive material qualifies for confidential treatment under 5
U.S.C. 552(b), along with the complete original document you must provide a second copy of the
document with the portions you believe qualify for confidential treatment redacted and an
explanation of why you believe the redacted information qualifies for confidential treatment under
5 U.S.C. 552(b).
Following the receipt of this Notice, you have 30 days to submit written comments, or request a
hearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,
7



this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the
Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further
notice to you and to issue a Final Order. If you are responding to this Notice, we propose that you
submit your correspondence to my office within 30 days from receipt of this Notice. This period
may be extended by written request for good cause.
In your correspondence on this matter, please refer to CPF 4-2018-5005 and, for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Mary L. MeDaniel, P.E.
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes
• to issue
to Holly Energy Partners-Operating, L.P. a
Compliance Order incorporating the following remedial requirements to ensure the compliance of
Holly Energy Partners-Operating, L.P. with the pipeline safety regulations:
1. In regard to Item Number # 7 of the Notice pertaining to HEP failing to monitor and protect the
pipeline from atmospheric corrosion at the Wichita Falls Tank Terminal, HEP must conduct
inspections to comply with the code requirements of §195.583 in accordance with their procedures,
and must provide protection against the corrosion as required by § 195.581 to include external
corrosion on tanks, tank bottoms/concrete foundations.
2. HEP must complete the above item within 180 days following receipt of the Final Order and
submit to PHMSA Southwest Region office.
documentation of the safety improvement costs associated with fulfilling this Compliance Order
3. It is requested (not mandated) that Holly Energy Partners-Operating L.P. maintain
Materials Safety Administration. It is requested that these costs be reported in two categories: 1)
and submit the total to Mary McDaniel, Director, Southwest Region, Pipeline and Hazardous
total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2)
• total cost associated with replacements, additions and other changes to pipeline infrastructure.

420185005_Final Order_08082019_text.pdf

August 8, 2019
Mr. George J. Damiris
Chief Executive Officer
Holly Energy Partners, LP
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Re: CPF No. 4-2018-5005
Dear Mr. Damiris:
Enclosed please find the Final Order issued in the above-referenced case. It withdraws three of
the allegations of violation, makes other findings of violation, assesses a reduced civil penalty of
$55,200, and specifies actions that need to be taken by Holly Energy Partners Operating, LP, a
subsidiary of Holly Energy Partners, LP, to comply with the pipeline safety regulations. The
penalty payment terms are set forth in the Final Order. When the civil penalty has been paid and
the terms of the compliance order completed, as determined by the Director, Southwest Region,
this enforcement action will be closed. Service of the Final Order by certified mail is effective
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. Mark Cunningham, P.E., Senior Vice President – Operations and Engineering, Holly
Energy Partners Operating, LP, Mark.Cunningham@hollyenergy.com
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
_______________
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