# NUSTAR PIPELINE OPERATING PARTNERSHIP L.P. — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420205005
- **title:** NUSTAR PIPELINE OPERATING PARTNERSHIP L.P. — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2020-02-04
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.452(j)(1).
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- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420205005
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420205005
**body:**

Notice of Probable Violation involving NUSTAR PIPELINE OPERATING PARTNERSHIP L.P.. PHMSA's enforcement data identifies the cited regulation as 195.452(j)(1). The case was opened on 2020-02-04 and is reported as closed as of 2020-09-11. Proposed civil penalty: $10,300. Assessed civil penalty: $10,300. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420205005_Final Order_09032020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205005/420205005_Final%20Order_09032020.pdf

420205005_Final Order_09032020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205005/420205005_Final%20Order_09032020_text.pdf

420205005_NOPV PCP PCO_02042020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205005/420205005_NOPV%20PCP%20PCO_02042020.pdf

420205005_NOPV PCP PCO_02042020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205005/420205005_NOPV%20PCP%20PCO_02042020_text.pdf

420205005_Operator Response to Notice_03272020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205005/420205005_Operator%20Response%20to%20Notice_03272020.pdf

420205005_Final Order_09032020_text.pdf

September 3, 2020
VIA ELECTRONIC MAIL TO: brad.barron@nustarengery.com
Mr. Brad Barron
President and Chief Executive Officer
NuStar Energy, LP
19003 IH-10 West
San Antonio, Texas 78257
Re: CPF No. 4-2020-5005
Dear Mr. Barron:
Enclosed please find the Final Order issued in the above-referenced case to NuStar Pipeline
Operating Partnership, LP, a subsidiary of NuStar Energy, LP. It makes one finding of violation
and assesses a civil penalty of $10,300. The penalty payment terms are set forth in the Final
Order. This enforcement action closes automatically upon receipt of payment. 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. Gary Koegeboehn, Vice President - Pipeline Operations, NuStar Energy, LP,
gary.koegeboehn@nustarenergy.com
Mr. Mike Dillinger, Senior Counsel, NuStar Energy, LP, mike.dillinger@nustarenergy.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
In the Matter of )
NuStar Pipeline Operating Partnership, LP, ) CPF No. 4-2020-5005
a subsidiary of NuStar Energy, LP )
Respondent. )
)
)
)
)
FINAL ORDER
From August 9 through December 17, 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 a records review of NuStar Pipeline Operating Partnership, LP, a subsidiary of
NuStar Energy, LP (NuStar or Respondent). NuStar operates the Hermann Pipeline, a four-inch
anhydrous ammonia pipeline located in Hermann, Missouri.1
As a result of the records review, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated February 4, 2020, 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 NuStar violated 49 C.F.R. § 195.452(j)(1) and proposed assessing a
civil penalty of $10,300 for the alleged violation. The Notice also proposed ordering Respondent
to take certain measures to correct the alleged violation.
After requesting an extension, NuStar responded to the Notice by letter dated March 27, 2020
(Response). The company contested the allegation, offered additional information in response to
the Notice, and requested that the Notice be converted to a Warning Letter and that the Proposed
Compliance Order be deemed complete. Respondent did not request a hearing and therefore has
waived its right to one.
FINDING OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)(1), which states:
1 Pipeline Safety Violation Report (Violation Report), at 1 (Feb. 4, 2020) (on file with PHMSA).



CPF No. 4-2020-5005
Page 2
§ 195.452 Pipeline integrity management in high consequence areas.
(a) ….
(j) What is a continual process of evaluation and assessment to
maintain a pipeline's integrity?
(1) General. After completing the baseline integrity assessment, an
operator must continue to assess the line pipe at specified intervals and
periodically evaluate the integrity of each pipeline segment that could affect
a high consequence area.
The Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)(1) by failing to continue to
assess its line pipe at specified intervals and periodically evaluate the integrity of each pipeline
segment that could affect a high consequence area. Specifically, the Notice alleged that NuStar
failed to assess the Hermann Pipeline within the required five-year interval, not to exceed 68
months.2 NuStar performed its last in-line inspection (ILI) assessment of the Hermann Pipeline
on November 19, 2013, and did not complete another one within the five-year assessment
interval, not to exceed 68 months (no later than July 19, 2019).
In its Response, NuStar noted that it had encountered technical and equipment availability issues
that led to the prolonged completion of a successful ILI assessment, which was eventually
completed in March 2020.3 Specifically, NuStar stated that in March 2017, the company began
preparations for an ILI assessment of the Hermann Pipeline, consisting of a series of three ILI
tools: (1) a gauge tool; (2) a deformation tool; and (3) a magnetic-flux leakage (MFL) tool.4
While the gauge and deformation tool runs were successful, the MFL tool was only able to
achieve 62 percent coverage due to technical issues associated with certain bends in the four-inch
pipeline. As a result, NuStar scheduled a second ILI assessment for the spring of 2019.
NuStar reported that during the second ILI assessment, the gauge tool ran successfully.5 The
launch of the deformation tool, however, was delayed due to equipment availability problems
and plant outages.6 The deformation tool finally launched on June 26, 2019.7 During the tool
run, the deformation tool became lodged in the pipeline approximately 2.8 miles downstream of
the launcher. After unsuccessful attempts to dislodge the tool, NuStar notified PHMSA of the
2 Pursuant to 49 C.F.R. § 195.452(j)(3), an operator must establish a five-year interval, not to exceed 68 months, for
continually assessing the line pipe’s integrity.
3 Response, at 2.
4 The company noted that MFL tools have historically experienced challenges associated with small diameter
pipelines because “… the size of the pipeline limits the ability of the tools to traverse the pipeline at an optimal
velocity which ensures sufficient inspection coverage and quality results.” Id.
5 The gauge tool ran on April 23, 2019. Id.
6 The deformation tool had to be sourced from Germany. Id.
7 Id.



CPF No. 4-2020-5005
Page 3
delays and incomplete tool runs on July 19, 2019.8
Pursuant to § 195.452(j)(4)(ii), if an operator requires a longer assessment period due to
unavailable technology, it must notify PHMSA 180 days before the end of the five-year interval,
justify the reason(s) why it cannot comply, demonstrate what action(s) it is taking to evaluate the
integrity of the line in the interim, and provide an estimate of when the assessment can be
completed. In this case, NuStar did not notify PHMSA 180 days in advance of the assessment
deadline that it needed additional time to complete the ILI runs due to unavailable technology.
Instead, the company did not notify PHMSA until the day of the regulatory deadline, July 19,
2019, to report that it would not meet the five-year assessment interval. NuStar did not complete
its ILI assessment on the Hermann Pipeline until March 2020.
This provision in § 195.452(j)(4)(ii) provides a “safe harbor” mechanism by which operators
who experience technical difficulties in meeting the five-year assessment interval can alert
PHMSA to any delays and make alternative provisions to ensure safety until those problems can
be resolved. NuStar, however, did not take advantage of this flexibility provided by the Code.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.452(j)(1) by failing to assess the Hermann Pipeline at specified intervals and periodically
evaluate the integrity of each pipeline segment that could affect a high consequence area.
This finding of violation will be considered a prior offense 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.9 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 $10,300 for the violation cited above.
Item 1: The Notice proposed a civil penalty of $10,300 for Respondent’s violation of 49 C.F.R.
8 The tool was ultimately cut out of the pipeline in November 2019. In December 2019, a root cause analysis by the
ILI tool vendor determined that there was a foreign metal object on the magnet segment that was located at the weld,
but ultimately was unable to identify the actual cause of the failure. Id.
9 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.



CPF No. 4-2020-5005
Page 4
§ 195.452(j)(1) for a failure to assess the Hermann Pipeline at specified intervals and
periodically evaluate the integrity of each pipeline segment that could affect a high consequence
area. In its Response, NuStar presented additional information to explain why the company did
not conduct the ILI assessment within the five-year period. Specifically, NuStar explained that
equipment unavailability, plant outages, and unforeseen complications with the first MFL tool
caused the company to exceed the regulatory deadline. I will address each argument separately
below.
First, the regulatory deadline already provides operators an additional eight-month allowance to
complete their five-year assessments by permitting operators to extend beyond the 60-month
deadline to 68-months.10 This extension of time provides flexibility to allow for unforeseeable
events (e.g., permitting delays, weather, tool failures) that could affect the ability to successfully
complete an assessment on time.11 Additionally, while it is unfortunate, unavailable internal
inspection technology is not uncommon in the pipeline industry. Therefore, PHMSA has
promulgated regulations to address situations where operators face unavailable technology issues
that may delay integrity assessments. As discussed above, NuStar did not avail itself of this
opportunity to timely notify PHMSA of the delay.
Second, NuStar contended that unforeseen complications with the first MFL tool caused delays.
In its Response, the company noted that small-diameter pipelines, like the Hermann line, have
historically experienced challenges with MFL tools. Therefore, the company should have known
that its four-inch diameter line might experience potential complications with the MFL tool.
Even if NuStar believed the MFL tool would run successfully, it learned otherwise when the first
run resulted in only 62 percent coverage in 2017. The company even considered replacing bends
in the line, and initiated discussions with another tool vendor in 2018 after the first MFL tool
failed.12 Despite the complications of the first tool run, NuStar did not schedule a second tool
run until 2019. The deformation tool ran in June 2019, one month before the regulatory
deadline, and beyond the time allowance to notify PHMSA that it required a longer assessment
period. Therefore, I do not find either explanation warrants a reduction in the proposed penalty.
Further, the proposed penalty amount took into consideration NuStar’s good-faith efforts to
comply with the regulation and proposed a lower penalty that took such efforts into account.13
After the first unsuccessful MFL tool run, NuStar discussed replacing problematic bends in the
line, and initiated discussions with another tool vendor. When NuStar scheduled the second
assessment, the company reasonably did not anticipate any problems with the deformation tool,
since they ran it successfully in 2017.
10 See 49 C.F.R. § 195.452(j)(3).
11 PHMSA Hazardous Liquid Integrity Management FAQ 5.11 (last revised Dec. 19, 2007) available at
https://www.phmsa.dot.gov/pipeline/hazardous-liquid-integrity-management/hl-im-faqs (last accessed July 28,
2020).
12 Response, at 2.
13 See Violation Report, at 10 (determining that the company “had a reasonable justification for its
noncompliance”).



CPF No. 4-2020-5005
Page 5
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $10,300 for violation of 49 C.F.R. § 195.452(j)(1).
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 $10,300 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 WITHDRAWAL
The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49
C.F.R. § 195.452(j)(1). 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.
With regard to the violation of § 195.452(j)(1) (Item 1), Respondent argued the proposed
compliance terms should be deemed complete. Specifically, the Proposed Compliance Order
required NuStar to conduct an assessment of the Hermann Pipeline within 90 days of the
issuance of a final order.14 In its Response, NuStar reported that it completed the MFL tool run
by March 2020. The company also informed PHMSA that it had updated its procedures to
ensure timely notice to PHMSA of assessment delays and implementation of interim safety
measures to ensure the integrity of the pipeline should unforeseen circumstances arise with
respect to tool technology and equipment availability.15 The company also noted that it was
exploring alternative assessment methods and technologies for its four-inch-diameter Hermann
Pipeline.16
Despite not running these tools concurrently, or within the five-year assessment interval, NuStar
successfully ran a gauge tool (April 2019), a deformation tool (May 2017) and a MFL tool
(March 2020) on its Hermann Pipeline. The Region did not provide any explanation why the
14 Notice, at 4.
15 Response, at Exhibit 4, Draft Revisions to NuStar IM Variance Procedure.
16 Response, at 3.



CPF No. 4-2020-5005
Page 6
Compliance Order should remain in place given the fact that the operator has completed its
reassessment (despite doing so beyond the five-year interval). Therefore, the Compliance Order
is withdrawn. It is important to note, however, that running internal inspection tools years apart
is not recommended. Given the capabilities of current technology, an operator who elects to use
internal inspection assessment methods should run a metal loss tool and a deformation device in
a similar time frame to maximize the value of data integration.17 Further, running the tools in
close proximity allows the operator to readily identify potentially serious anomalies such as
dents with metal loss. Therefore, I strongly recommend that NuStar amend its written
procedures to require that its deformation tool and metal loss tool be run as concurrently as
possible during the five-year assessment interval.
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.
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.
September 3, 2020
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
17 See § 195.452(g) (requiring operators to analyze all available information about the integrity of the entire pipeline
and the consequences of a failure, including data gathered during integrity assessments).

420205005_NOPV PCP PCO_02042020_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
February 4, 2020
Brad Barron
President and Chief Executive Officer
NuStar Energy L.P.
19003 IH-10 Frontage Road
San Antonio, Texas 78257
CPF 4-2020-5005
Dear Mr. Barron:
From August 9, 2019 through December 17, 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.) reviewed an Integrity Management (IM) notification
submitted on July 19, 2019, by NuStar Pipeline Operating Partnership L.P. (NuStar).
As a result of the review, it is alleged that you have committed a probable violation of the Pipeline
Safety Regulations, Title 49, Code of Federal Regulations (CFR). The item inspected and the
probable violation is:



1. § 195.452 Pipeline integrity management in high consequence areas.
(j) What is a continual process of evaluation and assessment to maintain a pipeline's
integrity?
(1) General. After completing the baseline integrity assessment, an operator must
continue to assess the line pipe at specified intervals and periodically evaluate the
integrity of each pipeline segment that could affect a high consequence area.
NuStar failed to continue to assess the line pipe at specified intervals and periodically evaluate the
integrity of each pipeline segment that could affect a high consequence area after completing the
baseline integrity assessment. NuStar is required to continue to assess its pipelines and
periodically evaluate the integrity of its lines at intervals no longer than 5 years (68 months), as
specified in § 195.452(j)(3). NuStar failed to assess its 4-inch Hermann anhydrous ammonia
pipeline located in Hermann, Missouri within the required 5-year (not to exceed 68 months)
interval.
On August 23, 2019, PHMSA confirmed that the last successful completed assessment (MFL) was
performed on November 19, 2013, which would require NuStar to complete its next assessment
no later than November 18, 2018. NuStar has not completed the required assessment.
Proposed Civil Penalty
Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed
$218,647 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
penalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015, and
before November 27, 2018, the maximum penalty may not exceed $209,002 per violation per day,
with a maximum penalty not to exceed $2,090,022. 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 $10,300 as
follows:
Item number PENALTY
1 $10,300
2



Proposed Compliance Order
With respect to item number 1 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous
Materials Safety Administration proposes to issue a Compliance Order to NuStar. 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
Enforcement 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 4-2020-5005 and, for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Mary L. McDaniel, P.E.
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
cc: Gary Koegeboehn, Vice President Operations, NuStar Pipeline Operating Partnership, L.P.,
19003 IH-10 West, San Antonio, Texas 78257
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Enforcement Proceedings
3



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to NuStar Pipeline Operating Partnership L.P (NuStar)
a Compliance Order incorporating the following remedial requirements to ensure the compliance
of NuStar with the pipeline safety regulations:
1. 2. In regard to Item Number 1 of the Notice pertaining to NuStar’s failure to conduct
a continual assessment of its 4-inch Hermann anhydrous ammonia pipeline located
in Hermann Missouri, NuStar must conduct an assessment of the 4-inch line within
90-days of the issuance of a Final Order. NuStar must submit evidence of the
completion of the assessment to PHMSA for verification
It is requested (not mandated) that NuStar maintain documentation of the safety
improvement costs associated with fulfilling this Compliance Order and submit the
total to Mary McDaniel, Director, Southwest Region, Pipeline and Hazardous
Materials Safety Administration. It is requested that these costs be reported in two
categories: 1) total cost associated with preparation/revision of plans, procedures,
studies and analyses, and 2) total cost associated with replacements, additions and
other changes to pipeline infrastructure.
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