{"operation":"document","citation":"CPF 420185013","title":"CENTURION PIPELINE L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2018-07-23","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(l)(1)(ii), 195.505(a), 195.563(a), 195.563(d), 195.583(a), 195.61.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185013.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185013.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420185013","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420185013","body":"Notice of Probable Violation involving CENTURION PIPELINE L.P.. PHMSA's enforcement data identifies the cited regulations as 195.452(l)(1)(ii),  195.505(a),  195.563(a),  195.563(d),  195.583(a),  195.61. The case was opened on 2018-07-23 and is reported as closed as of 2020-09-09. Proposed civil penalty: $40,300. Assessed civil penalty: $40,300. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420185013_Closure Letter_09092020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185013/420185013_Closure%20Letter_09092020.pdf\n\n420185013_Closure Letter_09092020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185013/420185013_Closure%20Letter_09092020_text.pdf\n\n420185013_Final Order_08082019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185013/420185013_Final%20Order_08082019.pdf\n\n420185013_Final Order_08082019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185013/420185013_Final%20Order_08082019_text.pdf\n\n420185013_NOPV PCP PCO_07232018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185013/420185013_NOPV%20PCP%20PCO_07232018.pdf\n\n420185013_NOPV PCP PCO_07232018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185013/420185013_NOPV%20PCP%20PCO_07232018_text.pdf\n\n420185013_Operator Response to the Notice_09242018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420185013/420185013_Operator%20Response%20to%20the%20Notice_09242018.pdf\n\n420185013_Closure Letter_09092020_text.pdf\n\nELECTRONIC MAIL - RETURN RECEIPT REQUESTED\nSeptember 9, 2020\nMike Prince\nChief Executive Officer\nLotus Midstream, LLC\n2150 Town Square Place\nSuite 395\nSugarland, Texas 77479\nCPF 4-2018-5013\nDear Mr. Prince:\nOn August 8, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Centurion Pipeline LP (Lotus Midstream, LLC), a Final Order in the above-referenced case that\nincluded a civil penalty and Compliance Order. PHMSA has received the payment of penalty and\nhas reviewed the records submitted in response to the Order. The Southwest region has determined\nthe installation of Cathodic Protection on Tank 6689 and Tank 1878 satisfies the terms of the\nCompliance 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.\nSincerely,\nMary. L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n\n420185013_Final Order_08082019_text.pdf\n\nAugust 8, 2019\nMr. Mike Prince\nChief Executive Officer\nLotus Midstream, LLC\n2150 Town Square Place\nSuite 395\nSugar Land, Texas 77479\nRe: CPF No. 4-2018-5013\nDear Ms. Hollub:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nCenturion Pipeline, LP. It makes findings of violation, assesses a civil penalty of $40,300, and\nspecifies actions that need to be taken 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 L. McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Michael Morgan, GM Operations, Centurion Pipeline, LP\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n__________________________________________\nIn the Matter of )\nCenturion Pipeline, LP, ) CPF No. 4-2018-5013\na subsidiary of Lotus Midstream, LLC, )\n)\n)\n)\nRespondent. )\n__________________________________________)\nFINAL ORDER\nFrom May 1, 2017, through February 23, 2018, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of\nCenturion Pipeline, LP (Centurion or Respondent), in Houston and Midland, Texas. Centurion\noperates approximately 2,900 miles of pipeline extending from southeast New Mexico across the\nPermian Basin of west Texas to Cushing, Oklahoma.1 At the time of our pipeline safety\ninspection, Centurion was a wholly-owned subsidiary of Occidental Petroleum Corporation2 but\nis now a subsidiary of Lotus Midstream, LLC.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated July 23 , 2018, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to 49\nC.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nCenturion had committed three violations of 49 C.F.R. Part 195 and proposed assessing a civil\npenalty of $40,300 for one of the alleged violations. The Notice also proposed ordering\nRespondent to take certain measures to correct the alleged violations. The warning items\nrequired no further action but warned Centurion to correct the probable violations or face\npossible future enforcement action.\nAfter requesting and receiving an extension of time to respond, Centurion responded to the\nNotice by letter dated September 24, 2018 (Response). The company contested several of the\nallegations of violation, provided an explanation of its actions, and requested that the proposed\ncivil penalty be eliminated. The Southwest Region subsequently held an in-person meeting with\nCenturion on September 26, 2018, after which Respondent submitted a Supplemental Response\n1 Centurion Pipeline, LP website, available at http://www.centurionpipeline.com/about/about-centurion-\npipeline.aspx (last accessed March 7, 2019).\n2 Pipeline Safety Violation Report (Violation Report) (July 23, 2018) (on file with PHMSA), at 1.\n\n\n\nCPF No. 4-2018-5013\nPage 2\ndated December 6, 2018, that corrected certain information contained in the initial Response and\nmade additional arguments regarding the proposed compliance order. Respondent did not\nrequest a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.583(a), which states:\n§ 195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed\nto the atmosphere for evidence of atmospheric corrosion, as follows:\nIf the pipeline is located: Then the frequency of\ninspection is:\nOnshore ……….......................... At least once every 3 calendar\nyears, but with intervals not\nexceeding 39 months.\nOffshore …….............................. At least once each calendar year,\nbut with intervals not exceeding\n15 months.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.583(a) by failing to inspect each\nonshore pipeline or portion of pipeline that is exposed to the atmosphere for evidence of\natmospheric corrosion at least once every 3 calendar years, but at intervals not exceeding 39\nmonths. Specifically, the Notice alleged that Centurion failed, within the required timeframe, to\ninspect exposed portions of its pipeline between Bretch and El Reno, Oklahoma, for evidence of\natmospheric corrosion. Centurion inspected this pipeline segment for atmospheric corrosion on\nApril 1, 2013, but did not inspect it again until October 2017, exceeding the July 1, 2016\nmaximum interval date.\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. § 195.583(a) by failing to inspect each\nonshore pipeline or portion of pipeline that is exposed to the atmosphere for evidence of\natmospheric corrosion at least once every 3 calendar years, but at intervals not exceeding 39\nmonths.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(l)(1)(ii), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(l) What records must an operator keep to demonstrate compliance?\n(1) An operator must maintain, for the useful life of the pipeline, records\nthat demonstrate compliance with the requirements of this subpart. At a\n\n\n\nCPF No. 4-2018-5013\nPage 3\nminimum, an operator must maintain the following records for review\nduring an inspection:\n(i) . . .\n(ii) Documents to support the decisions and analyses, including any\nmodifications, justifications, deviations and determinations made,\nvariances, and actions taken, to implement and evaluate each element of the\nintegrity management program listed in paragraph (f) of this section.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(l)(1)(ii) by failing to maintain,\nfor the useful life of the pipeline, records demonstrating compliance with the requirements of\n§ 195.452(f) and (g), Compliance would include, at a minimum, the maintenance of documents\nsupporting the decisions and analyses, including any modifications, justifications, deviations and\ndeterminations made, variances, and actions taken, to implement and evaluate each element of an\noperator’s integrity management program, as listed in 49 C.F.R. § 195.452(f). Specifically, the\nNotice alleged that during the PHMSA inspection, Centurion was unable to produce records\ndocumenting that it had conducted the information analysis required by subparagraph (3) of\n§ 195.452(f)3 and paragraph (g) to support the company’s pipeline integrity-evaluation\ndecisions.4\nRespondent contested this allegation of violation, arguing that § 195.452(l)(1)(ii) requires an\noperator to maintain “documents to support the decisions and analyses” made as part of its\nintegrity-management program, but not records “documenting the information analysis” it had\nconducted under § 195.452(g). The company stated: “Although Centurion believes that its\nrecords satisfy both standards, Centurion believes that the plain regulatory language differs from\nthe NOPV’s characterization of the requirement. The regulatory language requires records of\nsupporting documentation, while the NOPV contemplates written documentation summarizing\nthe analysis.” The company pointed to the various records5 it had provided during the PHMSA\ninspection that supported its decisions and analyses made under § 195.452(g) and argued that\n3 Subparagraph (3) of § 195.452(f) states that operators must include “[a]n analysis that integrates all available\ninformation about the integrity of the entire pipeline and the consequences of a failure (see paragraph (g) of this\nsection)…”\n4 Paragraph 195.452(g) states:\n“(g) What is an information analysis? In periodically evaluating the integrity of each pipeline segment\n(paragraph (j) of this section), an operator must 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, damage due to excavation, including\ncurrent and planned damage prevention activities, and development or planned development along the pipeline\nsegment;\n(2) Data gathered through the integrity assessment required under this section;\n(3) Data gathered in conjunction with other inspections, tests, surveillance and patrols required by this Part,\nincluding, corrosion control monitoring and cathodic protection surveys; and\n(4) Information about how a failure would affect the high consequence area, such as location of the water\nintake.”\n5 Centurion stated that it had provided to PHMSA the following records: “(1) In-line inspection (“ILI”) results; (2)\nThreat analysis documents; (3) Select tool process to inspect threats on pipeline; (4) Process to review ILI results;\n(5) Calculate corrosion growth rate; (6) Documents showing categorization of needed repairs; (7) Repair plan; and\n(8) Work journal for the project.”\n\n\n\nCPF No. 4-2018-5013\nPage 4\nthese documents satisfied the record-keeping requirement under § 195.452(l)(1)(ii).6\nI disagree. Subpart F of Part 195 requires all operators to develop and implement a\ncomprehensive integrity-management program that provides an extra measure of safety and\nenvironmental protection for “High Consequence Areas” (HCAs)7 and neighboring “could-\naffect” areas along the routes of their hazardous liquid pipelines. This program includes the\ngeneral record-keeping requirement in § 195.452(l), under which operators must keep records\nspecifically documenting how it made all “decisions and analyses, including any modifications,\njustifications, deviations and determinations made, variances, and actions taken, to implement\nand evaluate each element” of their integrity management program.\nOne of the most important elements of an integrity-management program is the “information\nanalysis” required under § 195.452(g), which involves an engineering analysis that periodically\nevaluates the integrity of each pipeline segment and analyzes “all available information about the\nintegrity of the entire pipeline and the consequences of a failure.” Such an analysis must include\nat least four sets of risk data, including the prevention of damage from excavation, ILI data,\ninformation gathered through other inspections, tests, surveillance, corrosion control and\ncorrosion-control surveys, and information related to the potential consequences of a pipeline\nfailure on the operator’s HCAs. This analysis then forms the basis for addressing anomalies on\nthe pipeline and developing preventive and mitigative measures to reduce the likelihood and\nconsequences of potential releases. In many ways, this “information analysis” lies at the heart of\nintegrity management because it not merely compiles various risk data, but actually analyzes and\nintegrates all available information to identify and address the unique risks affecting the integrity\nof each pipeline segment.\nIn this case, Respondent could not produce records showing that this sort of integrative\ninformation analysis had actually taken place. For example, Respondent had in-inline inspection\nresults, threat-analysis documents, corrosion-rate calculations, and other data, but there was no\nrecord explaining and summarizing how Centurion had actually taken this data to reach certain\nconclusions about risk and how the company had gone about implementing an effective\nintegrity-management strategy.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 195.452(l)(1)(ii) by failing to maintain, for the useful life of the pipeline, records that\ndemonstrate compliance with the requirements of § 195.452(f) and (g).\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.563, which states, in\nrelevant part:\n§ 195.563 Which pipelines must have cathodic protection?\n(a) Each buried or submerged pipeline that is constructed, relocated,\nreplaced, or otherwise changed after the applicable date in § 195.401(c)\nmust have cathodic protection. The cathodic protection must be in\n6 Response, at 1-2.\n7 See 49 C.F.R. § 194.450 for the definition of “High Consequence Area.”\n\n\n\nCPF No. 4-2018-5013\nPage 5\noperation no later than 1 year after the pipeline is constructed, relocated,\nreplaced, or otherwise changed, as applicable.\n(b) . . . .\n(d) Bare pipelines, breakout tank areas, and buried pumping station\npiping must have cathodic protection in places where regulations in effect\nbefore January 28, 2002 required cathodic protection as a result of electrical\ninspections. . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.563 by failing to have cathodic\nprotection (CP) on five of its breakout tanks. Specifically, the Notice alleged that Centurion\ninstalled vapor corrosion inhibitors (VCIs) with electric resistance (ER) probes for monitoring\nthe corrosion rate between the floors of five breakout tanks (Tank Nos. 6689, 7264, 7265, 6719,\nand 1878). The Notice alleged that while Centurion had CP on the old tank floors, the use of\nVCI with ER probes could not serve as a substitute for CP on the new tank floors.\nIn its Response, Centurion contested the allegation of violation only with respect to one of its\ntanks, No. 6719. The company argued that this particular tank was a single-bottom tank that\nalready had CP in place. Subsequently, during a September 26, 2018 in-person meeting with the\nRegion, Centurion demonstrated that Tank Nos. 7264 and 7265 were reconstructed as single-\nbottom tanks with CP already in place. Respondent did not contest the allegation of violation\nwith respect to Tank Nos. 6689 and 1878, but “[sought] to clarify the proposed compliance\norder” as discussed below.8\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated 49\nC.F.R. § 195.563 by failing to have CP on two breakout tanks (Tank Nos. 6689 and 1878), but\nwithdraw the allegation of violation with regard to the remaining three tanks (Tank Nos. 6719,\n7264, and 7265).\nThe above findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\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.9 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; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\n8 Response, at 2.\n9 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223; Revisions to Civil Penalty Amounts,\n83 Fed. Reg. 60732, 60744 (Nov. 27, 2018).\n\n\n\nCPF No. 4-2018-5013\nPage 6\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 $40,300 for the violation cited in Item 1 above.10\nItem 1: The Notice proposed a civil penalty of $40,300 for Respondent’s violation of 49 C.F.R.\n§ 195.583(a), for failing to inspect each onshore pipeline or portion of pipeline that is exposed to\nthe atmosphere for evidence of atmospheric corrosion at least once every 3 calendar years, but\nwith intervals not exceeding 39 months. In its Response, Centurion noted it had entered annual\natmospheric corrosion inspections into its Maximo electronic work-scheduling system that goes\nbeyond the regulatory requirement. In consideration of this corrective action, Centurion\nrequested full mitigation of the proposed penalty. I find that elimination of the penalty for this\nitem is not appropriate because Respondent failed to comply with the regulatory requirement as\nof the date of the PHMSA inspection and did not come into compliance until after PHMSA had\ndiscovered the violation. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $40,300 for violation of 49 C.F.R.\n§ 195.583(a).\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 $40,300 civil penalty will result in accrual of interest at the current annual rate\nin 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 3 and 4 in the Notice for\nviolations of 49 C.F.R. §§ 195.452(l)(1)(ii) and 195.563, respectively. Under 49 U.S.C.\n§ 60118(a), each person who engages in the transportation of hazardous liquids or who owns or\noperates a pipeline facility is required to comply with the applicable safety standards established\nunder chapter 601.\nWith regard to the violation of § 195.452(l)(1)(ii) (Item 3), the Director has indicated that\n10 Although the Notice inadvertently failed to specify that the proposed civil penalty applied to the alleged violation\nof § 195.583(a) (Item 1) and no other, the Violation Report shows that the penalty was applicable solely to Item 1.\n(Violation Report, at 6).\n\n\n\nCPF No. 4-2018-5013\nPage 7\nRespondent has taken action to satisfy the terms of the proposed compliance order. Therefore, it\nis unnecessary to include the terms of the proposed compliance order associated with this Item in\nthis Order.\nWith regard to the violation of § 195.563 (Item 4), Respondent argued that the compliance terms\nshould be withdrawn with respect to Tank Nos. 6719, 7264, and 7265 because they are single-\nbottom tanks with cathodic protection in place. For the reasons stated above, I withdraw the\ncompliance terms associated with these three tanks.\nAdditionally, Respondent argued that the remaining compliance terms should be modified to\nallow Centurion to take periodic CP readings directly around Tank Nos. 6689 and 1878 and not\nto apply CP directly to the bottom of the tanks. Respondent noted that although many of the CP\nreadings taken on the tanks are below the standard -0.850 volt criteria, they are at least 100 mv\nmore negative than the native reading, demonstrating the safety of the tanks. Respondent also\nstated that additional CP for these two tanks is unnecessary for the safety of the tanks because of\nthe presence of a vapor corrosion inhibitor (VCI) on the second bottom of the tanks and the deep\nwell anodes in the area of the tanks.\nHaving considered Respondent’s proposal, I find that it must be rejected. These two tanks have\ndouble bottoms, with the old bottom forming a shield that prevents CP from reaching the new\nbottom to protect against corrosion. CP measurements taken around the tanks, as proposed by\nRespondent, would measure the CP on the old tank bottoms. However, the new tank bottoms are\nnot protected using CP and the presence of the VCI system does not substitute for a sacrificial\nanode as it is unassociated with the CP system, which is absent on the new bottoms.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.563 (Item 4), Respondent must submit a\nplan to bring Tank Nos. 6689 and 1878 into compliance within 30 days of receipt of\nthe Final Order; and\n2. With respect to the violation of § 195.563 (Item 4), Respondent must submit to\nthe Director, Southwest Region, records demonstrating compliance with § 195.563 no\nlater than six months from the issuance of the Final Order.\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 (not mandated) that Centurion maintain documentation of the safety improvement\ncosts associated 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.\n\n\n\nCPF No. 4-2018-5013\nPage 8\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.\nWARNING ITEMS\nWith respect to Items 2 and 5, 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. § 195.61 (Item 2) ─ Respondent’s alleged failure to submit geospatial\ndata to PHMSA for the 2015 and 2016 calendar years, on or before June 15,\nrepresenting assets as of December 31, of the previous year; and\n49 C.F.R. § 195.505 (Item 5) ─ Respondent’s alleged failure to follow its own\nwritten operator-qualification program.\nCenturion presented information in its Response showing that it had taken certain actions to\naddress the cited items. If OPS finds a violation of any of these items in a subsequent inspection,\nRespondent may be subject 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 49\nC.F.R. § 190.5.\nAugust 8, 2019\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420185013_NOPV PCP PCO_07232018_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJuly 23, 2018\nMichael Morgan\nGM Operations\nCenturion Pipeline L.P.\n5 Greenway Plaza, Suite 110\nHouston, TX, 77046\nCPF 4-2018-5013\nDear Mr. Morgan:\nOn May 1, 2017 through February 23, 2018, a representative 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 procedures for operations and maintenance\nin Houston and Midland 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 violation(s) are:\n1. §195.583 – What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed to the\natmosphere for evidence of atmospheric corrosion, as follows:\n\n\n\nIf the pipeline is\nlocated:\nOnshore Offshore 2. 3. Then the frequency of inspection is:\nAt least once every 3 calendar years, but with intervals not\nexceeding 39 months\nAt least once each calendar year, but with intervals not exceeding\n15 months\nCenturion Pipeline failed to inspect the exposed portions of its pipeline between Bretch\nand El Reno, Oklahoma for evidence of atmospheric corrosion as required by 49 CFR\n§195.583. Atmospheric corrosion inspections are required at least once every 3 calendar\nyears not to exceed 39 months, and the last atmospheric corrosion inspection on the Bretch\nto El Reno portion of the pipeline was performed in April 1, 2013. Based on the last\ninspection date, the maximum interval for the next inspection would have been July 1,\n2016.\nThe atmospheric inspection was not performed until October 2017 following the PHMSA\ninspection of the pipeline system.\n§195.61 – National Pipeline Mapping system\n(a) Each operator of a hazardous liquid pipeline facility must provide the following\ngeospatial data to PHMSA for that facility.\n(b) This information must be submitted each year, on or before June 15, representing\nassets as of December 31, of the previous year. If no changes have occurred since\nthe previous year’s submission, the operator must refer to the information\nprovided in the NPMS Operator Standards manual available at\nwww.npms.phmsa.dot.gov or contact the PHMSA Geographic Information\nSystems Manager at (202)366-4595.\nCenturion failed to submit NPMS data on or before June 15th for both the 2015 and 2016\ncalendar year data submittals. Letters acknowledging receipt of the NPMS data submitted\nby Centurion’s personnel to PHMSA in 2016 and 2017 indicates that the submission dates\nwere June 21, 2016 for CY2015 and June 30, 2017 for CY2016.\n§195.452(l)(1)(ii) –What records must an operator keep to demonstrate compliance?\n(1) An operator must maintain, for the useful life of the pipeline, records that\ndemonstrate compliance with the requirements of this subpart. At a minimum, an\noperator must maintain the following records for review during an inspection:\n2\n\n\n\n4. (ii) Documents to support the decisions and analyses, including any modifications,\njustifications, deviations and determinations made, variances, and actions taken, to\nimplement and evaluate each element of the integrity management program\nlisted in paragraph (f) of this section.\nCenturion Pipeline failed to maintain records documenting the information analysis\nrequired by 49 CFR §195.452(g). While the data required under 195.452(g) for the\nanalysis was gathered and entered into the mapping system, there is no record to document\nan analysis carried out by the Subject Matter Expert (SME.)\nCenturion was unable to provide records for review during the inspection of the\ninformation analysis carried out to support the pipeline integrity evaluation decisions.\n§195.563 – Which pipelines must have cathodic protection?\n(a) Each buried or submerged pipeline that is constructed, relocated, replaced, or\notherwise changed after the applicable date in §195.401(c) must have cathodic\nprotection. The cathodic protection must be in operation no later than 1 year after\nthe pipeline is constructed, relocated, replaced, or otherwise changed, as\napplicable.\n(d) Bare pipelines, breakout tank areas, and buried pumping station piping must\nhave cathodic protection in places where regulations in effect before January 28,\n2002 required cathodic protection as a result of electrical inspections.\nCenturion Pipeline failed to provide cathodic protection to protect 5 breakout tanks in\naccordance with §195.563 where new tank bottoms were installed. The tanks include:\nTank # 6689 Slaughter Station\nTanks #7264 and 7265 Artesia Station\nTank #6719 Wasson Station\nTank #1878 Seminole Station.\nCenturion installed vapor corrosion inhibitors (VCI) with electric resistance (ER) probes\nfor monitoring the corrosion rates between the tank floors. The use of VCI with ER probes\nfor corrosion control and monitoring is a not considered cathodic protection as required by\n§195.563(d) and 195.565(section 7.2.4.3 of ANSI/API RP 651).\n§195.563 and §195.565 require cathodic protection and its installation and does not permit\nthe use of VCI as a substitute for cathodic proection. In each of these tanks, Centurion has\ncathodic protection on the old tank floor but does not have cathodic protection on the new\ntank floors.\n3\n\n\n\n5. §195.505 – Qualification Program\nEach operator shall have and follow a written qualification program. The program\nshall include provisions:\n(a) Identify covered tasks\nCenturion Pipeline, L.P failed to follow section 2.2 of their written operator qualification\nplan that prescribes the four-part test components as described in §195.501. Centurion\nfailed to determine if personnel performing tasks needed to be evaluated and if the task\nshould have been classified as a covered task. Conditions 1,2,3 and 4 in section 2.2 of the\nOQ plan required that any construction type activities to be carried out on a facility used\nin the transportation of hazardous liquids needs to be classified as a covered task and the\nindividuals carrying out this task need to be evaluated prior to performing the task.\nCenturion did not identify the installation, inspection and maintenance of the Vapor\nCorrosion Inhibitor systems on 5 of it’s regulated breakout tanks prior to the installation\nand monitoring of the VCI systems on the breakout tanks.\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 $40,300.\nWarning Items\nWith respect to items 2 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 this item. Failure to do\nso may result in additional enforcement action.\nProposed Compliance Order\nWith respect to items 3 and 4 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials\nSafety Administration proposes to issue a Compliance Order to Centurion Pipeline L.P. Please\nrefer to the Proposed Compliance Order, which is enclosed and made a part of this Notice.\n4\n\n\n\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,\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 4-2018-5013 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\n5\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 Centurion Pipeline, L.P a Compliance Order\nincorporating the following remedial requirements to ensure the compliance of Centurion Pipeline,\nL.P with the pipeline safety regulations:\n1. 2. 3. 4. In regard to Item Number 3 of the Notice pertaining to maintenance of records for\neach analysis carried out during the information analysis activity as required under\nthe regulation cited, Centurion Pipeline, L.P shall ensure that records of all analysis\ncarried out as part of the information analysis under the integrity management\nprogram are maintained and made available for review during the next scheduled\nPHMSA inspection.\nIn regard to item number 4 of the notice pertaining to providing cathodic protection\nto the new floors of the breakout tanks for corrosion control. Centurion Pipeline,\nL.P shall submit a plan to bring the affected tanks into compliance within 30 days\nfrom the receipt of the final order.\nRecords showing compliance with Item 4 shall be submitted to PHMSA no later\nthan 6 months from the issuance of the Final Order in this case.\nIt is requested (not mandated) that Centurion Pipeline, L.P. maintain documentation\nof the safety improvement costs associated with fulfilling this Compliance Order\nand submit the total to Mary McDaniel, Director, Southwest Region, Pipeline and\nHazardous Materials Safety Administration. It is requested that these costs be\nreported in two categories: 1) total cost associated with preparation/revision of\nplans, procedures, studies and analyses, and 2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n6","truncated":false,"body_characters":38252}