DELEK CRUDE LOGISTICS, LLC. — Notice of Probable Violation

party submissionOfficial PDF420195018_Operator Response to Notice_12132019.pdf#

420195018_NOPV PCP PCO_11042019_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED November 4, 2019 Ezra Uzi Yemin President and CEO Delek US Holdings, Inc. 7102 Commerce Way Brentwood, Tennessee 37027 CPF 4-2019-5018 Dear Mr. Yemin: From December 17, 2018 through June 21, 2019, a representative 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 subsidiary, Delek Crude Logistics, LLC,’s (Delek) - Healdton to Yantis, 8” hazardous liquid pipeline system near Dallas, 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:#

420195018_NOPV PCP PCO_11042019_text.pdf, page 21. § 195.61 National Pipeline Mapping System. (a) Each operator of a hazardous liquid pipeline facility must provide the following geospatial data to PHMSA for that facility: (1) Geospatial data, attributes, metadata and transmittal letter appropriate for use in the National Pipeline Mapping System. Acceptable formats and additional information is specified in the NPMS Operator Standards manual available at www.npms.phmsa.dot.gov or by contacting the PHMSA Geographic Information Systems Manager at (202) 366-4595. (2) The name of and address for the operator. (3) The name and contact information of a pipeline company employee, to be displayed on a public Web site, who will serve as a contact for questions from the general public about the operator’s NPMS data. (b) This information must be submitted each year, on or before June 15, representing assets as of December 31 of the previous year. If no changes have occurred since the previous year’s submission, the operator must refer to the information provided in the NPMS Operator Standards manual available at www.npms.phmsa.dot.gov or contact the PHMSA Geographic Information Systems Manager at (202) 366-4595. Delek failed to submit National Pipeline Mapping System data for its 143 mile Healdton to Yantis, 8” pipeline system to PHMSA on or before June 15, 2018, for calendar year 2017 as required by § 195.61(b). Delek did not submit the required information until June 13, 2019, one year beyond the submittal date for calendar year 2017. 2. § 195.64 National Registry of Pipeline and LNG Operators. (c) Changes. Each operator must notify PHMSA electronically through the National Registry of Pipeline and LNG Operators at http://opsweb.phmsa.dot.gov, of certain events. (2) An operator must notify PHMSA of any following event not later than 60 days after the event occurs: (iv) The acquisition or divestiture of 50 or more miles of pipeline or pipeline system subject to this part. Delek failed to notify PHMSA within 60 days of the acquisition of an existing pipeline facility as required by § 195.64(c)(2). Delek purchased the Healdton to Yantis, 8” pipeline from Plains Pipeline on September 15, 2017 (Notification D-20171114-17567). Delek was required under § 195.64(c)(2) to file a notice of acquising within 60 days. The 60-day filing by Delek should have occurred no later than November 14, 2017. As of the date of this letter, Delek has not filed the notification. 2#

420195018_NOPV PCP PCO_11042019_text.pdf, page 33. § 195.412 Inspection of rights-of-way and crossings under navigable waters. (a) Each operator shall, at intervals not exceeding 3 weeks, but at least 26 times each calendar year, inspect the surface conditions on or adjacent to each pipeline right-of- way. Methods of inspection include walking, driving, flying or other appropriate means of traversing the right-of-way. Delek failed to inspect the surface conditions on and adjacent to its pipeline right-of-way at intervals not exceeding 3 weeks, but at least 26 times each calendar year as required by § 195.412(a). During the PHMSA inspection, Delek provided only 19 records for calendar year 2018, 7 less than the required 26 minimum. Delek personnel were not able to provide the remaining records or provide information regarding the lack of the required record. There is therefore no evidence that Delek conducted the missing 7 inspections. 4. § 195.440 Public awareness. (a) Each pipeline operator must develop and implement a written continuing public education program that follows the guidance provided in the American Petroleum Institute’s (API) Recommended Practice (RP) 1162 (incorporated by reference, see §195.3). Delek’s written Public Awareness Program (PAP) failed to follow the guidance provided in the American Petroleum Institute’s (API) Recommended Practice (RP) 1162 in 6 areas as required by § 195.440(a). Delek’s PAP was inadequate because it failed to follow general program recommendations of API 1162 as required in Sections 2, 3, 6 and 8. 1. Delek failed to demonstrate adequate management support as required by API RP 1162. Section 2.5 in API RP 1162 requires that management “demonstrate its support [of PAP] through [1] company policy, [2] management participation, and [3] allocation of resources and funding.” 2. During the review of the Delek’s PAP contained within its Operations & Maintenance Manual (OM-ADM-195), it was noted that the procedure did not contain a company policy statement concerning public awareness or provide any indication that management had committed to assuring resources and funding would be allocated to ensure the successful implementation of the Delek PAP. Delek failed to identify the specific systems and assets that are to be included in the Delek PAP. 3#

420195018_NOPV PCP PCO_11042019_text.pdf, page 43. 4. 5. 6. Section 2.7 in API RP 1162 requires identification of pipeline assets to be included within the program for overall program administration and development of a program that applies to each identified asset-specific program. During the PHMSA inspection, Delek personnel referenced Section 1.1.4-Pipelines Covered; Table 1-2: Delek Logistics Assets. However, upon review, the table was blank and did not identify any assets. According to the notification received from Plains Pipeline (D-20171114-17567), Delek acquired the Healdton to Yantis, 8” effective September 15, 2017 and those assets were not included in the PAP. Delek failed to identify the audience that should received the PAP’s messages and failed to define the communication coverage area (buffer) and include detail on how this coverage area for outreach and notification, delivery methods and delivery frequencies fit its particular pipeline, location and potential impact consequences in the Delek PAP. Section 3.0 in API RP 1162 requires a PAP to “identify the audience(s) that should receive the program’s messages.” Delek failed to include a procedure to ensure that a supplemental review is conducted as prescribed by API RP 1162 Section 6.1 in the Delek PAP. Section 6.1 in API RP 1162 states that “an operator should consider external factors along the pipeline system and determine if some additional level of public awareness communications is warranted, beyond the recommended baseline program.” During the review of the Delek PAP in its Operations & Maintenance Manual (OM-ADM-195), it was noted that there were no procedures that included criteria or relevant factors to consider for determining whether supplemental enhancements are necessary. Delek failed to include a procedure that measures the bottom-line results of the PAP by tracking third-party incidents and consequences including: (1) near misses, (2) excavation damages resulting in pipeline failures and (3) excavation damages that do not result in pipeline failures in the Delek PAP. Section 8.4.4 in API RP 1162 states that “One measure of the “bottom-line results” is the damage prevention effectiveness of an operator’s Public Awareness Program and the change in the number and consequences of third-party incidents.” During the review of the Delek PAP, it was noted that it did not include a procedure that specifies how Delek will track near misses, hits and failures, and will measure these results. Delek failed to include a procedure that specifies how self-assessments and effectiveness evaluations will be conducted in the Delek PAP. 4#

420195018_NOPV PCP PCO_11042019_text.pdf, page 5Section 8 in API RP 1162 states that “The overall written plan for the Public Awareness Program should include a section describing the operator’s evaluation program that includes the baseline elements.” During the review of the Delek PAP, it was noted that it did not include a procedure that specifies how program implementation and effectiveness will be periodically evaluated. 5. § 195.583 What must I do to monitor atmospheric corrosion control? (a) You must inspect each pipeline or portion of pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion, as follows: If the pipeline is located: Then the frequency of inspection is: Onshore At least once every 3 calendar years, but with intervals not exceeding 39 months. Offshore At least once each calendar year, but with intervals not exceeding 15 months. Delek failed to conduct an inspection of each pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion at least once every 3 calendar years, but with intervals not exceeding 39 months. Delek acquired the Healdton to Yantis, 8” pipeline system in September 2017. During the PHMSA inspection, records of atmospheric corrosion inspections were requested, however, Delek representatives stated that no atmospheric corrosion inspections had been conducted and could find no records to show the previous operator had conducted the inspection. The Delek Hazardous Liquids Operations & Maintenance Manual (OM-ADM-195); Section 14- Atmospheric Corrosion; 14.5.4.2 notes the requirement for the inspection as “Onshore pipelines exposed to the atmosphere are inspected every 3 years at intervals not exceeding 39 months for signs of corrosion as described in Delek Logistics Corrosion Control Manual. Delek Logistics personnel must record atmospheric corrosion inspections on Appendix 14.2, Atmospheric Corrosion Inspection Report.” There is therefore no evidence that Delek inspected the pipeline for evidence of atmospheric corrision. Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $218,467 per violation per day the violation persists, up to a maximum of $2,186,465 for a related series of violations. For violation occurring on or after November 27, 2018 and before July 31, 2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum 5#

420195018_NOPV PCP PCO_11042019_text.pdf, page 6penalty not to exceed $2,132,679. 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 for the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $19,000 as follows: Item number PENALTY Item Number 2 $19,000 Warning Items With respect to Items 1 and 3, 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 item(s). Failure to do so may result in additional enforcement action. Proposed Compliance Order With respect to items 2, 4, and 5 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Delek Crude Logistics, LLC. 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, 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. 6#

420195018_NOPV PCP PCO_11042019_text.pdf, page 7In your correspondence on this matter, please refer to CPF 4-2019-5018 and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Mary L. McDaniel, P.E. Director, Southwest Pipeline and Hazardous Materials Safety Administration cc: Michael Odigie, Vice President of Integrity, Delek Crude Logistics, LLC, 12700 Park Central Drive, Suite 1500, Dallas, Texas 75251 Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 7#

420195018_NOPV PCP PCO_11042019_text.pdf, page 8PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Delek Crude Logistics, LLC, (Delek) a Compliance Order incorporating the following remedial requirements to ensure the compliance of Delek with the pipeline safety regulations: 1. 2. 5. 6. In regard to Item Number 2 of the Notice pertaining to Delek’s failure to notify PHMSA of the acquisition of the Healdton to Yantis, 8” pipeline system, Delek must file this notification in accordance with § 195.64. In regard to Item Number 4 of the Notice pertaining to Delek’s failure to follow general Public Awareness Program (PAP) recommendations of API 1162 as required in Sections 2, 3, 6 and 8, Delek must: a. Provide adequate management support through its policy, participation and allocation of resources as required by § 195.440(a). b. Provide an update to Section 1.1.4 Pipelines Covered: Table 1-2 to include all pipeline assets covered under the PAP. c. Define the communication coverage area (buffer) for outreach and notification, delivery methods and delivery frequencies that are to be covered by the written Delek PAP. Delek must identify audience that receives PAP messages in coverage area for outreach and notification in accordance with §195.440(c). d. Include a procedure for a supplemental review in the written Delek PAP, Delek must consider external factors along the pipeline system and determine if additional levels of public awareness communications are warrented beyond the recommended baseline program in accordance with § 195.440(c). e. Include a procedure that measures the bottom-line results of the program by tracking third-party incidents and consequences including: (1) near misses, (2) excavation damages resulting in pipeline failures and (3) excavation damages that do not result in pipeline failures in the written Delek PAP, Delek must provide bottom line result measures in accordance with § 195.440(c). f. Include a procedure that specifies how self-assessments and effectiveness evaluations will be conducted in the written Delek PAP, Delek must specify how program implementation and effectiveness will be evaluated in accordance with § 195.440(i). In regard to Item Number 5 of the Notice pertaining to Delek’s failure to conduct atmospheric corrosion control inspections of exposed pipeline, Delek must conduct atmospheric corrosion inspections of exposed pipeline and pipeline facilities as required by § 195.583(a). Delek must complete Item Number 2 within 30 days, and Item Numbers 4 and 5 within 60 days following the receipt of Final Order. 8#

420195018_NOPV PCP PCO_11042019_text.pdf, page 97. It is requested (not mandated) that Delek maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Mary L. McDaniel, 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. 9#

420195018_Closure Letter_08182020_text.pdf, page 1Official PDFELECTRONIC MAIL - RETURN RECEIPT REQUESTED August 18, 2020 Ezra Uzi Yemin President and CEO Delek US Holdings, Inc. 7102 Commerce Way Brentwood, Tennessee 37027 CPF 4-2019-5018 Dear Mr. Yemin, On May 28, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Delek Logistics Partners, LP (Delek) a Final Order in the above-referenced case to include a Compliance Order and civil penalty. Based on our review of the documentation provided on July 29, 2020 and confirmation of payment of the civil penalty paid on June 16, 2020, it has been determined that you have complied with the terms of this order. Accordingly, this case is now closed and no further action is required with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, Mary L. McDaniel, P.E. Director, Southwest Region Pipeline and Hazardous Materials Safety Administration#

420195018_Final Order_05282020_text.pdf, page 1Official PDFMay 28, 2020 VIA ELECTRONIC MAIL TO: ezra.yemin@delekus.com Mr. Ezra Uzi Yemin Chairman, President, and Chief Executive Officer Delek US Holdings, Inc. 7102 Commerce Way Brentwood, Tennessee 37027 Re: CPF No. 4-2019-5018 Dear Mr. Yemin: Enclosed please find the Final Order issued in the above-referenced case to your subsidiary, Delek Crude Logistics, LLC. It makes three findings of violation, assesses a civil penalty of $19,000, and specifies actions that need to be taken 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 electronic mail is effective upon the date of transmission, 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. Michael Odigie, Vice President, Asset Integrity, Delek Logistics Partners, LP, michael.odigie@deleklogistics.com CONFIRMATION OF RECEIPT REQUESTED#

420195018_Final Order_05282020_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 ) Delek Crude Logistics, LLC, ) CPF No. 4-2019-5018 a subsidiary of Delek US Holdings, Inc., ) ) ) ) Respondent. ) ____________________________________) FINAL ORDER From December 17, 2018, through June 21, 2019, pursuant to 49 U.S.C. § 60117, a representative 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 Delek Crude Logistics, LLC’s (DCL or Respondent) Healdton to Yantis eight-inch hazardous liquid pipeline system near Dallas, Texas. DCL is a wholly-owned subsidiary of Delek Logistics Partners, LP (DLP), which is, in turn, majority-owned by Delek US Holdings, Inc.1 DLP operates a system of crude-oil pipelines and refineries across the United States. As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated November 4, 2019, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice), which also included warnings pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that DCL had violated 49 C.F.R. §§ 195.64(c)(2)(iv), 195.440(a), and 195.583(a) and proposed assessing a civil penalty of $19,000 for one of the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. The warning items required no further action but warned the operator to correct the probable violations or face possible future enforcement action. DLP responded to the Notice on behalf of DCL by letter dated December 13, 2019 (Response). The company contested one of the allegations of violation, provided information concerning the corrective actions it had taken, offered additional information in response to the Notice, and requested that the proposed civil penalty be reduced. Respondent did not request a hearing and therefore has waived its right to one. 1 Delek Logistics Partners, LP website, available at https://www.deleklogistics.com/node/10576/html (last accessed May 20, 2020); Delek US Holdings, Inc. website, available at https://ir.delekus.com/node/16021/html (last accessed May 20, 2020).#

420195018_Final Order_05282020_text.pdf, page 3CPF No. 4-2019-5018 Page 2 FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows: Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.64(c)(2)(iv), which states: § 195.64 National Registry of Pipeline and LNG Operators. (a) . . . . (c) Changes. Each operator must notify PHMSA electronically through the National Registry of Pipeline and LNG Operators at http://opsweb.phmsa.dot.gov, of certain events. (1) . . . . (2) An operator must notify PHMSA of any following event not later than 60 days after the event occurs: (i) . . . . (iv) The acquisition or divestiture of 50 or more miles of pipeline or pipeline system subject to this part; or The Notice alleged that Respondent violated 49 C.F.R. § 195.64(c)(2)(iv) by failing to notify PHMSA within 60 days of the acquisition of an existing pipeline facility. Specifically, the Notice alleged that DCL purchased the Healdton to Yantis pipeline on September 15, 2017, and should have notified PHMSA of the acquisition no later than November 14, 2017. However, DCL did not file the required notification until December 13, 2019. In its Response, DLP did not contest the violation of § 195.64(c)(2)(iv), but requested a reduction in the proposed civil penalty, which is addressed in the “Assessment of Penalty” section below. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.64(c)(2)(iv) by failing to notify PHMSA within 60 days of the acquisition of an existing pipeline facility. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.440(a), which states: § 195.440 Public awareness. (a) Each pipeline operator must develop and implement a written continuing public education program that follows the guidance provided in the American Petroleum Institute's (API) Recommended Practice (RP) 1162 (incorporated by reference, see §195.3). The Notice alleged that Respondent violated 49 C.F.R. § 195.440(a) by failing to develop and implement a written continuing public education program that follows the guidance provided in API RP 1162. Specifically, the Notice alleged that DCL’s Public Awareness Plan (PAP) failed to follow the guidance in API RP 1162, sections 2, 3, 6, and 8, for six aspects of the public awareness program (PAP). DLP did not contest the allegation of violation. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.440(a) by failing to develop and implement a written continuing public education program#

420195018_Final Order_05282020_text.pdf, page 4CPF No. 4-2019-5018 Page 3 that follows the guidance provided in API RP 1162. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.583(a), which states: § 195.583 What must I do to monitor atmospheric corrosion control? (a) You must inspect each pipeline or portion of pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion, as follows: If the pipeline is located: Onshore Offshore Then the frequency of inspection is: At least once every 3 calendar years, but with intervals not exceeding 39 months. At least once each calendar year, but with intervals not exceeding 15 months. The Notice alleged that Respondent violated 49 C.F.R. § 195.583(a) by failing to inspect each onshore pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion at least once every 3 calendar years, but with intervals not exceeding 39 months. Specifically, the Notice alleged that DCL did not have any records demonstrating that the Healdton to Yantis pipeline system had been inspected for atmospheric corrosion, either since Respondent’s acquisition of the system in September 2017 or by the previous owner/operator. DLP did not contest this allegation of violation. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.583(a) by failing to inspect each onshore pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion at least once every 3 calendar years, but with intervals not exceeding 39 months. These findings of violation will be considered as prior offenses in any subsequent enforcement action taken against Respondent. 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.2 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 $19,000 for the violation cited above in Item 2. 2 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.#

420195018_Final Order_05282020_text.pdf, page 5CPF No. 4-2019-5018 Page 4 Item 2: The Notice proposed a civil penalty of $19,000 for Respondent’s violation of 49 C.F.R. § 195.64(c)(2)(iv), for failing to notify PHMSA within 60 days of the acquisition of an existing pipeline facility. Although DLP did not contest the violation, the company noted that it had filed with PHMSA other required annual reports and submissions pertaining to the pipeline facility since its September 2017 acquisition. While Respondent’s compliance with other requirements of the Pipeline Safety Regulations in 49 C.F.R. Parts 191 and 195 are commendable, such actions do not constitute grounds to reduce the civil penalty for the company’s noncompliance with this particular requirement. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $19,000 for violation of 49 C.F.R. § 195.64(c)(2)(iv). Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845. Failure to pay the $19,000 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 2, 4, and 5 in the Notice for violations of 49 C.F.R. §§ 195.64(c)(2)(iv), 195.440(a), and 195.583(a), respectively. 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 has indicated that Respondent has taken the following actions to address several of the cited violations: With regard to the violation of § 195.64(c)(2)(iv) (Item 2), Respondent filed a copy of the required acquisition notification with PHMSA on December 13, 2019. Accordingly, I find that compliance has been achieved with respect to this violation. Therefore, the compliance terms proposed in the Notice for Item 2 is not included in this Order. As for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations, within 60 days following receipt of this Order:#

420195018_Final Order_05282020_text.pdf, page 6CPF No. 4-2019-5018 Page 5 1. With respect to the violation of § 195.440(a) (Item 4), Respondent must follow the general recommendations of API RP 1162, sections 2, 3, 6, and 8, including updating its PAP to: a. Provide adequate management support through its policy, participation, and allocation of resources, as required by § 195.440(a); b. Provide an update to Section 1.1.4, Pipelines Covered: Table 1-2 of its PAP to include all pipeline assets covered under the PAP; c. Define the communication coverage area (buffer) for outreach and notification, delivery methods and delivery frequencies that are to be covered by the written PAP. DLP must identify the audience(s) that receives PAP messages in the coverage area for outreach and notification, in accordance with § 195.440(c); d. Include a procedure for a supplemental review in the written PAP, DLP must consider external factors along the pipeline system and determine if additional levels of public awareness communications are warranted beyond the recommended baseline program in accordance with § 195.440(c). e. Include a procedure in the written PAP that measures the bottom-line results of the program by tracking third-party incidents and their consequences, including: (1) “near misses,” (2) excavation damages resulting in pipeline failures, and (3) excavation damages that do not result in pipeline failures. DLP must provide bottom-line result measures, in accordance with § 195.440(c); and f. Include a procedure in the written PAP that specifies how self-assessments and effectiveness evaluations will be conducted. DLP must specify how program implementation and effectiveness will be evaluated, in accordance with § 195.440(i). 2. With respect to the violation of § 195.583(a) (Item 5), Respondent must conduct atmospheric corrosion inspections of exposed pipeline and pipeline facilities, as required by § 195.583(a). The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. It is requested (not mandated) that Respondent maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. 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#

420195018_Final Order_05282020_text.pdf, page 7CPF No. 4-2019-5018 Page 6 with replacements, additions and other changes to pipeline infrastructure. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. WARNING ITEMS With respect to Items 1 and 3, the Notice alleged probable violations of Part 195, but identified them as warning items pursuant to § 190.205. The warnings were for: 49 C.F.R. § 195.61 (Item 1) ─ Respondent’s alleged failure to submit National Pipeline Mapping System (NPMS) data for the Healdton to Yantis pipeline system for calendar year 2017; and 49 C.F.R. § 195.412(a) (Item 3) ─ Respondent’s alleged failure to inspect the surface conditions on and adjacent to its pipeline right-of-way at intervals not exceeding 3 weeks, but at least 26 times each calendar year. DLP presented information in its Response showing that it had taken certain actions to address Item 1. Under § 190.205, PHMSA does not adjudicate warning items to determine whether a probable violation occurred. If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be subject to future enforcement action. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of any civil penalty assessed. The other terms of the order, including corrective action, remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. May 28, 2020 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#