WESTERN REFINING LOGISTICS, LP — Notice of Probable Violation

party submissionOfficial PDF420185014_Operator Response to Notice and Request for Time Extension_08242018.pdf#

420185014_Final Order_07122019_text.pdf, page 1Official PDFJuly 12, 2019 Mr. Gary R. Heminger Chairman and Chief Executive Officer Marathon Petroleum Corporation 539 South Main Street Findlay, Ohio 45840 Re: CPF No. 4-2018-5014 Dear Mr. Heminger: Enclosed please find the Final Order issued in the above-referenced case to your subsidiary, Western Refining Pipeline, LLC (Western). It makes a finding of violation and assesses a civil penalty of $50,100. This is to acknowledge receipt of payment of the full penalty amount, by wire transfer, dated March 27, 2019. It also finds that Western has completed the actions specified in the Notice to comply with the pipeline safety regulations. Therefore, this case is now 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. Stoney Vining, Senior Counsel, Andeavor Logistics, LP, 19100 Ridgewood Parkway, San Antonio, Texas 78259 Mr. Aaron W. Martinez, Director, Compliance-Logistics, Andeavor Logistics, LP, 19100 Ridgewood Parkway, San Antonio, Texas 78259 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

420185014_Final Order_07122019_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 __________________________________________ In the Matter of ) Western Refining Pipeline, LLC, ) CPF No. 4-2018-5014 a subsidiary of Marathon Petroleum Corp., ) ) ) ) Respondent. ) __________________________________________) FINAL ORDER From March 7 through September 28, 2017, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Western Refining Pipeline, LLC (Western or Respondent) in Texas and New Mexico. Western was acquired by Tesoro Corporation on June 1, 2018, and the two companies combined to become Andeavor Logistics, LP (Andeavor),1 which is owned by Marathon Petroleum Corporation (Marathon).2 Western operates the Texas-New Mexico and Bisti Station-Gallup Pipeline systems. As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated July 20, 2018, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Western had violated 49 C.F.R. § 195.452(g) and proposed assessing a civil penalty of $50,100 for the alleged violation. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violation. Andeavor, on behalf of Western, responded to the Notice by letter dated August 24, 2018 (Response). The company did not contest the allegation of violation but provided an explanation of its actions, requested that the proposed civil penalty be reduced, and requested additional time to comply with the proposed compliance order. Respondent did not request a hearing and therefore has waived its right to one. Through a wire transfer dated March 27, 2019, Andeavor paid the proposed civil penalty of $50,100. In accordance with 49 C.F.R. § 190.208(a)(1), such payment authorizes the Associate 1 Western Refining Pipeline, LLC website, available at https://jobs.wnr.com/ (last accessed May 24, 2019). 2 Andeavor Logistics, LP website, available at http://www.andeavor.com/# (last accessed May 24, 2019).#

420185014_Final Order_07122019_text.pdf, page 3CPF No. 4-2018-5014 Page 2 Administrator to make a finding of violation and to issue this final order without further proceedings. FINDING OF VIOLATION In its Response, Andeavor did not contest the allegation in the Notice that it violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(g), which states: § 195.452 Pipeline integrity management in high consequence areas. (a) . . . . (g) What is an information analysis? In periodically evaluating the integrity of each pipeline segment (paragraph (j) of this section), an operator must analyze all available information about the integrity of the entire pipeline and the consequences of a failure. This information includes: (1) Information critical to determining the potential for, and preventing, damage due to excavation, including current and planned damage prevention activities, and development or planned development along the pipeline segment; (2) Data gathered through the integrity assessment required under this section; (3) Data gathered in conjunction with other inspections, tests, surveillance and patrols required by this Part, including, corrosion control monitoring and cathodic protection surveys; and (4) Information about how a failure would affect the high consequence area, such as location of the water intake. The Notice alleged that Respondent violated 49 C.F.R. § 195.452(g) by failing to demonstrate that the company had sufficiently evaluated the integrity of its pipeline system and the consequences of failure on high-consequence areas (HCAs). Specifically, the Notice alleged that Western failed to analyze all available information concerning the integrity of its entire pipeline and the consequences of a failure, including a failure to: integrate all relevant threats such as third-party damage; account for changes in physical characteristics or operating conditions of different pipeline segments; and provide a risk-comparison study showing how threats had been mitigated or eliminated after the company employed preventative and mitigative measures. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(g) by failing to analyze all available information about the integrity of the entire pipeline and the consequences of failure on HCAs. This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent.#

420185014_Final Order_07122019_text.pdf, page 4CPF No. 4-2018-5014 Page 3 ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.3 In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation, including adverse impact on the environment; the degree of Respondent’s culpability; the history of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $50,100 for the violation cited above. Item 1: The Notice proposed a civil penalty of $50,100 for Respondent’s violation of 49 C.F.R. § 195.452(g), for failing to analyze all available information about the integrity of the entire pipeline and the consequences of failure on HCAs. Respondent initially requested a reduction in the amount of the civil penalty in its Response, arguing that Western did conduct an analysis under 49 C.F.R. § 195.452(g) and explaining that Andeavor did not have any prior relationship with Western prior to its recent acquisition of the company. Respondent offered no evidence that documented Western’s alleged information analysis was conducted prior to PHMSA’s inspection. Further, the fact that Andeavor acquired Western after PHMSA’s inspection does not absolve either entity from culpability for violations of the Pipeline Safety Regulations. Respondent subsequently paid the civil penalty in full, which serves to withdraw its request for penalty reduction pursuant to 49 C.F.R. § 190.208. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $50,100 for violation of 49 C.F.R. § 195.452(g), which amount was paid in full by wire transfer on March 27, 2019. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49 C.F.R. § 195.452(g). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. The Director indicates that Respondent has taken the following actions specified in the proposed compliance order: 1. With respect to the violation of § 195.452(g) (Item 1), Respondent has provided documentation sufficient to demonstrate that a comprehensive analysis of all information concerning the integrity of its pipeline system and the consequences of a 3 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223; Revisions to Civil Penalty Amounts, 83 Fed. Reg. 60732, 60744 (Nov. 27, 2018).#

420185014_Final Order_07122019_text.pdf, page 5CPF No. 4-2018-5014 Page 4 failure was thoroughly performed after PHMSA’s inspection. Accordingly, I find that compliance has been achieved with respect to this violation. Therefore, the compliance terms proposed in the Notice are not included in this Order. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. July 12, 2019 ___________________________________ _________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

420185014_NOPV PCP PCO_07202018_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED July 20, 2018 Don J. Sorensen Senior Vice President, Logistics Western Refining Pipeline, LLC 19100 Ridgewood Parkway San Antonio, Texas 78259 CPF 4-2018-5014 Dear Mr. Sorensen: From March 7, 2017 to September 28, 2017, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected Western Refining Pipelines, LLC (Western Refining) procedures for the Texas-New Mexico and Bisti Station-Gallup Pipeline Systems. As a result of the inspection, it is alleged that you have committed probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The item inspected and the probable violation is: §195.452 Pipeline integrity management in high consequence areas. (g) What is an information analysis? In periodically evaluating the integrity of each pipeline segment (paragraph (j) of this section), an operator must analyze all available information about the integrity of the entire pipeline and the consequences of a failure. This information includes: (1) Information critical to determining the potential for, and preventing, damage due to excavation, including current and planned damage prevention activities, and development#

420185014_NOPV PCP PCO_07202018_text.pdf, page 2or planned development along the pipeline segment; (2) Data gathered through the integrity assessment required under this section; (3) Data gathered in conjunction with other inspections, tests, surveillance and patrols required by this Part, including, corrosion control monitoring and cathodic protection surveys; and (4) Information about how a failure would affect the high consequence area, such as location of the water intake. Western Refining failed to demonstrate that a comprehensive analysis of all information concerning the integrity of their pipeline system and the consequence of a failure were thoroughly performed. During PHMSA’s 2017 inspection of the Integrity Management Plan at Western Refining’s Bloomfield, NM office, PHMSA requested that Western Refining provide any information or risk analysis of completed by Western Refining. Based on the information provided, PHMSA identified that Western Refining failed to analyze all available information concerning the integrity of the entire pipeline and the consequences of a failure:  Western refining failed to appropriately integrate all of the relevant threats such as third party damage, internal corrosion, external corrosion and flood damage.  Western Refining did not account for either changes in physical characteristics or operating conditions of different pipeline segments throughout their pipeline system.  Western Refining failed to provide a risk comparisons study showing how threats had been eliminated and/or reduced from higher to lower risk after preventive and mitigative measures had been employed. Therefore, Western Refining’s Integrity Management Plan failed to demonstrate an information analysis that considers all available information relative to the integrity of entire pipeline system to ensure compliance with §195.452(g). 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. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $50,100. 2#

420185014_NOPV PCP PCO_07202018_text.pdf, page 3Response 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, 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-4-2018-5014 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 3#

420185014_NOPV PCP PCO_07202018_text.pdf, page 4Proposed Compliance Order Pursuant to 49 United States Code §60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Western Refining Pipelines, LLC a Compliance Order incorporating the following remedial requirements to ensure the compliance of Western Refining Pipelines, LLC with the pipeline safety regulations: 1. In regard to Item Number 1 of the Notice pertaining to Western Refining’s failure to provide documentation sufficient to demonstrate that a comprehensive analysis of all information concerning the integrity of their pipeline system and the consequences of a failure were thoroughly performed, Western Refining shall develop, perform and implement an information analysis to ensure compliance with §195.452(g). 2. Provide PHMSA Southwest Region with documentation that verifies completion of Item Number 1 within 60 days following the receipt of Final Order. 3. It is requested (not mandated) that Western Refining Pipelines, LLC maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Regional Director, Southwest, 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. 4#