# ROSE ROCK MIDSTREAM OPERATING, LLC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420205010
- **title:** ROSE ROCK MIDSTREAM OPERATING, LLC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** current
- **official:** true
- **published on:** 2020-05-26
- **effective on:** Not available
- **summary:** OPEN notice of probable violation citing 195.406(a), 195.420(b), 195.432(b), 195.452(f)(8).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-420205010.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420205010.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420205010
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420205010
**body:**

Notice of Probable Violation involving ROSE ROCK MIDSTREAM OPERATING, LLC. PHMSA's enforcement data identifies the cited regulations as 195.406(a),  195.420(b),  195.432(b),  195.452(f)(8). The case was opened on 2020-05-26 and is reported as open. Proposed civil penalty: $84,200. Assessed civil penalty: $67,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420205010_Final Order_11062020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205010/420205010_Final%20Order_11062020.pdf

420205010_Final Order_11062020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205010/420205010_Final%20Order_11062020_text.pdf

420205010_NOPV PCP PCO_05262020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205010/420205010_NOPV%20PCP%20PCO_05262020.pdf

420205010_NOPV PCP PCO_05262020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205010/420205010_NOPV%20PCP%20PCO_05262020_text.pdf

420205010_Operator Response to Notice _07102020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420205010/420205010_Operator%20Response%20to%20Notice%20_07102020.pdf

420205010_NOPV PCP PCO_05262020_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
ELECTRONIC MAIL - RETURN RECEIPT REQUESTED
May 26, 2020
Greg McIlwain
Senior Vice President, Operations
Rose Rock Midstream, L.P.
1300 Main Street
Houston, Texas 77002
CPF 4-2020-5010
Dear Mr. McIlwain:
On July 23, 2018 through July 19, 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 Rose Rock Midstream L.P. (Rose Rock) Pipeline
system in the Oklahoma and Kansas operating areas. At the time of the inspection these assets
were operated by Rose Rock Midstream L.P. (Operator ID 31476), a subsidiary of SemGroup
Corporation. Energy Transfer LP merged with SemGroup Corporation in December 2019 and
acquired its assets, including Rose Rock. As a result of the inspection, it is alleged that you have
committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal
Regulations (CFR). The items inspected and the probable violations are:
1. §195.406 Maximum operating pressure.
(a) Except for surge pressures and other variations from normal operations,
no operator may operate a pipeline at a pressure that exceeds any of the following:
(1) The internal design pressure of the pipe determined in accordance
with §195.106. However, for steel pipe in pipelines being converted under §195.5,
if one or more factors of the design formula (§195.106) are unknown, one of the
following pressures is to be used as design pressure:
(i) Eighty percent of the first test pressure that produces yield under section
N5.0 of Appendix N of ASME/ANSI B31.8 (incorporated by
reference, see §195.3), reduced by the appropriate factors in §§195.106(a)
and (e); or



(ii) If the pipe is 12¾ inch (324mm) or less outside diameter and is not tested
to yield under this paragraph, 200 psi (1379 kPa)
(2) The design pressure of any other component of the pipeline.
(3) Eighty percent of the test pressure for any part of the pipeline which has been
pressure tested under Subpart E of this part.
(4) Eighty percent of the factory test pressure or of the prototype test pressure
for any individually installed component which is excepted from testing
under §195.305.
(5) For pipelines under §195.302(b)(1) and (b)(2)(i), that have not been pressure
tested under Subpart E of this part, 80 percent of the test pressure or highest
operating pressure to which the pipeline was subjected for 4 or more continuous
hours that can be demonstrated by recording charts or logs made at the time the
test or operations were conducted.
Rose Rock failed to establish a maximum operating pressure (MOP) for its Riverside to Hanston
and Hanston to Hudson pipeline segments in accordance with 49 CFR § 195.406. The pipeline
has been operating without an established MOP.
Rose Rock failed to maintain records of pressure tests or operational pressures for two of twelve
pipeline segments and were unable to locate records for the Riverside to Hanston and Hanston to
Hudson segments of line at the time of the PHMSA inspection to demonstrate the two segments
were testing in accordance with Subpart E to establish an MOP.
2. §195.420 Valve Maintenance.
(b) Each operator shall, at intervals not exceeding 71∕2 months, but at least
twice each calendar year, inspect each mainline valve to determine that it is
functioning properly.
Rose Rock failed to inspect each mainline valve to determine that it is functioning properly at
intervals not exceeding 7½ months, but at least twice each calendar year. Rose Rock was unable
to provide documentation to validate the inspection of several valves in their system for calendar
year 2018.
Six (6) valves in the Kansas area had no documentation to verify they were inspected in the 2nd
half of 2018. The valves had been inspected prior to and after, as their inspection scheduled
designated with no maintenance issues.



3. §195.432 Inspection of in-service breakout tanks.
(b) Each operator must inspect the physical integrity of in-service atmospheric and
low-pressure steel above-ground breakout tanks according to API Std 653 (except
section 6.4.3, Alternative Internal Inspection Interval) (incorporated by
reference, see §195.3). However, if structural conditions prevent access to the tank
bottom, its integrity may be assessed according to a plan included in the operations
and maintenance manual under §195.402(c)(3). The risk-based internal inspection
procedures in API Std 653, section 6.4.3 cannot be used to determine the internal
inspection interval.
Rose Rock failed to complete an external in-service breakout tank (BOT) inspection on two tanks
in accordance with API 653 Section 6.3 Inspections from the Outside of the Tank. API 653 Section
6.3 requires external in-service BOT inspections every 5 years.
PHMSA’s review of the certified API 653 inspection documents provided by Rose Rock at the
time of the inspection found that at the Kansas Tank Farm two BOTs exceeded the 5-year
requirement by 24 (Tank 1008) to 49 days (Tank 0301). At the Cushing Tank Farm, thirteen BOTs
exceeded the 5-year requirement by 17 (Tank 3505) to 179 days (Tank 2534).
4. §195.432 Inspection of in-service breakout tanks.
(b) Each operator must inspect the physical integrity of in-service atmospheric and
low-pressure steel above-ground breakout tanks according to API Std 653 (except
section 6.4.3, Alternative Internal Inspection Interval) (incorporated by
reference, see §195.3). However, if structural conditions prevent access to the tank
bottom, its integrity may be assessed according to a plan included in the operations
and maintenance manual under §195.402(c)(3). The risk-based internal inspection
procedures in API Std 653, section 6.4.3 cannot be used to determine the internal
inspection interval.
Rose Rock failed to complete an initial internal out-of-service BOT inspection on three tanks in
accordance with API 653 Section 6.4 Internal Inspection. API 653 Section 6.4 requires initial
internal out-of-service inspections within the first 10 years of operation.
At the time of the PHMSA inspection, Tanks #2524 (in-service 3/1/2009), #2525 (in-service
1/31/2009), #3504 (in-service 2/24/2009), and #3505 (in-service 6/24/2009) were still in-service.
For each of the tanks had not been taken out of service to perform the initial internal out-of-service
inspections within the first ten years of operation as required.
Rose Rock provided information following the inspection to demonstrate the Tanks were
inspected or removed from service for inspection following our inspection.



5. §195.452 Pipeline Integrity Management
(f) What are the elements of an integrity management program? An integrity
management program begins with the initial framework. An operator must
continually change the program to reflect operating experience, conclusions drawn
from results of the integrity assessments, and other maintenance and surveillance
data, and evaluation of consequences of a failure on the high consequence area. An
operator must include, at minimum, each of the following elements in its written
integrity management program: Rose Rock failed to comply with the requirements
of their IM plan.
(8) A process for review of integrity assessment results and information analysis by a
person qualified to evaluate the results and information (see paragraph (h)(2) of this
section).
Rose Rock failed to perform its review of integrity assessment results and information analysis by
a person qualified to evaluate the results and information in accordance with §195.452(f)(8). Rose
Rock’s written Integrity Management Plan Section 1.3 Responsible Person identifies the Pipeline
Integrity Specialist as the responsible party to perform Tasks to develop, analyze, and collaborate
with other departments to implement the Integrity Management Plan.
Rose Rock’s Pipeline Integrity Specialist, on several occasions during the inspection, was unable
to access the integrity management plan documentation, which limited his ability to evaluate the
results and information from integrity assessments. Rose Rock’s Integrity Management Plan,
Section 0.6 Roles and Responsibilities, the Pipeline Integrity Specialist is responsible for
overseeing and implementing all aspects of the IM plan to include direct access to all parts of the
IM plan. Without such information, an adequate review cannot be performed.
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. We have reviewed the circumstances and supporting
documentation involved for the above probable violation(s) and recommend that you be
preliminarily assessed a civil penalty of $84,200 as follows:
Item number
PENALTY
1
3
4
$40,400
$15,200
$28,600
Warning Items



With respect to items 2 and 5, we have reviewed the circumstances and supporting documents
involved in this case and have decided not to conduct additional enforcement action or penalty
assessment proceedings at this time. We advise you to promptly correct this item. Failure to do
so may result in additional enforcement action.
Proposed Compliance Order
With respect to items 1 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials
Safety Administration proposes to issue a Compliance Order to Rose Rock Midstream, L.P. Please
refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in
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 4-2020-5010 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 Enforcement Proceedings



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue Rose Rock Midstream, L.P. a Compliance Order
incorporating the following remedial requirements to ensure the compliance of Rose Rock with
the pipeline safety regulations:
1. 2. 3. In regards to Item 1 of the Notice pertaining to missing test records, Rose Rock
shall maintain a 20% pressure reduction for the segments identified below until
such time Rose Rock provides records to PHMSA that conform to the requirements
of §195.310 and demonstrate the two segments identified below have been pressure
tested in accordance with Subpart E of 49 CFR 195.
 Riverside to Hanston
 Hanston to Hudson
In regards to Item 1 Rose Rock must provide pressure test records to PHMSA,
Southwest Region Director no later than 180 days from Final Order.
It is requested (not mandated) that Rose Rock Midstream, L.P. maintain
documentation of the safety improvement costs associated with fulfilling this
Compliance Order and submit the total to Mary L. McDaniel, P.E., 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.

420205010_Final Order_11062020_text.pdf

November 6, 2020
VIA ELECTRONIC MAIL TO: gregory.mcilwain@energytransfer.com
Mr. Greg McIlwain
Senior Vice President, Operations
Rose Rock Midstream Operating, LLC
Energy Transfer, LP
1300 Main Street
Houston, Texas 77002
Re: CPF No. 4-2020-5010
Dear Mr. McIlwain:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a reduced civil penalty of $67,000, and specifies actions that need to be taken
by Rose Rock Midstream Operating, LLC, 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. Kelcy Warren, Chief Executive Officer, Energy Transfer, LP,
kelcy.warren@energytransfer.com
Mr. Todd Nardozzi, Director – Regulatory Compliance, Energy Transfer, LP,
todd.nardozzi@energytransfer.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 )
Rose Rock Midstream Operating, LLC, ) )
)
)
Respondent. )
____________________________________)
CPF No. 4-2020-5010
FINAL ORDER
From July 23, 2018, through July 19, 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 Rose Rock
Midstream Operating, LLC’s (Rose Rock or Respondent) crude oil pipeline systems in
Oklahoma and Kansas. At the time of the inspection, Rose Rock, a subsidiary of SemGroup
Corporation, operated the assets covered by this inspection. Energy Transfer, LP (Energy
Transfer), acquired SemGroup Corporation in December 2019.1
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated May 26, 2020, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice), which also included warning items pursuant
to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding
that Rose Rock had committed five violations of 49 C.F.R. Part 195 and proposed assessing a
civil penalty of $84,200 for 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 one of the probable violations or
face possible future enforcement action.
After receiving an extension of time to respond, Energy Transfer, on behalf of Rose Rock,
responded to the Notice by letter dated July 10, 2020 (Response). The company did not contest
the allegations of violation but provided an explanation of its actions and requested that the
proposed civil penalty be reduced. Respondent did not request a hearing and therefore has
waived its right to one.
1 Energy Transfer Press Release, Sept. 16, 2019, available at https://ir.energytransfer.com/news-releases/news-
release-details/energy-transfer-acquire-semgroup-5-billion-transaction (last accessed Oct. 16, 2020).



CPF No. 4-2020-5010
Page 2
FINDINGS OF VIOLATION
In its Response, Rose Rock did not contest the allegations 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. § 195.406(a), which states:
§ 195.406 Maximum operating pressure.
(a) Except for surge pressures and other variations from normal
operations no operator may operate a pipeline at a pressure that exceeds any
of the following:
(1) The internal design pressure of the pipe determined in accordance
with §195.106. However, for steel pipe in pipelines being converted under
§195.5, if one or more factors of the design formula (§195.106) are
unknown, one of the following pressures is to be used as design pressure:
(i) Eighty percent of the first test pressure that produces yield under
section N5.0 of Appendix N of ASME/ANSI B31.8 (incorporated by
reference, see §195.3), reduced by the appropriate factors in §§195.106(a)
and (e); or
(ii) If the pipe is 12¾ inch (324 mm) or less outside diameter and is not
tested to yield under this paragraph, 200 p.s.i. (1379 kPa) gage.
(2) The design pressure of any other component of the pipeline.
(3) Eighty percent of the test pressure for any part of the pipeline which
has been pressure tested under subpart E of this part.
(4) Eighty percent of the factory test pressure or of the prototype test
pressure for any individually installed component which is excepted from
testing under §195.305.
(5) For pipelines under §195.302(b)(1) and (b)(2)(i), that have not been
pressure tested under subpart E of this part, 80 percent of the test pressure
or highest operating pressure to which the pipeline was subjected for 4 or
more continuous hours that can be demonstrated by recording charts or logs
made at the time the test or operations were conducted.
The Notice alleged that Respondent violated 49 C.F.R. § 195.406(a) by failing to establish a
maximum operating pressure (MOP) for its pipeline segments. Specifically, the Notice alleged
that Rose Rock failed to maintain records of pressure tests or operational pressures for the
Riverside to Hanston pipeline segment and the Hanston to Hudson pipeline segment. Therefore,
Rose Rock failed to demonstrate that MOP was properly established pursuant to 49 C.F.R.
§ 195.406(a).
Respondent did not contest this allegation of violation. Accordingly, based upon a review of the
evidence, I find that Respondent violated 49 C.F.R. § 195.406(a) by failing to establish the MOP
on two pipeline segments.



CPF No. 4-2020-5010
Page 3
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:
§ 195.432 Inspection of in-service breakout tanks.
(a) …
(b) Each operator must inspect the physical integrity of in-service
atmospheric and low-pressure steel above-ground breakout tanks according
to [American Petroleum Institute (API)] Std 653 (except section 6.4.3,
Alternative Internal Inspection Interval) (incorporated by reference, see
§195.3). However, if structural conditions prevent access to the tank
bottom, its integrity may be assessed according to a plan included in the
operations and maintenance manual under §195.402(c)(3). The risk-based
internal inspection procedures in API Std 653, section 6.4.3 cannot be used
to determine the internal inspection interval.
The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to complete an
external in-service breakout tank (BOT) inspection in accordance with API Std 653, Section 6.3,
Inspections from the Outside of the Tank, which requires external inspection of in-service BOTs
every five years. Specifically, the Notice alleged that Rose Rock exceeded the five-year
inspection requirement for two BOTs at the Kansas Tank Farm, and 13 BOTs at the Cushing
Tank Farm.
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. § 195.432(b) by failing to inspect in-
service BOTs in accordance with API Std 653.
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), as quoted above,
by failing to complete an initial internal out-of-service BOT inspection on three tanks in
accordance with API 653, Section 6.4, Internal Inspection, which requires an inspection within
the first 10 years of operation. Specifically, the Notice alleged that Rose Rock failed to take
Tanks #2524 (in-service 3/1/2009), #2525 (in-service 1/31/2009), and #3505 (in-service
6/24/2009) out of service to perform the initial internal out-of-service inspections within the first
10 years of operation.
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. § 195.432(b) by failing to complete an
initial internal out-of-service BOT inspection on three tanks within the first 10 years of
operation.
These findings of violation will be considered 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



CPF No. 4-2020-5010
Page 4
$200,000 per violation for each day of 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 $84,200 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $40,400 for Respondent’s violation of 49 C.F.R.
§ 195.406(a), for failing to establish the MOP for two pipeline segments. Rose Rock neither
contested the allegation nor presented any evidence or argument justifying a reduction in the
proposed penalty. In this case, Respondent failed to comply with a requirement that was clearly
applicable and did not present a reasonable justification for its noncompliance. Accordingly,
having reviewed the record and considered the assessment criteria, I assess Respondent a civil
penalty of $40,400 for violation of 49 C.F.R. § 195.406(a).
Item 3: The Notice proposed a civil penalty of $15,200 for Respondent’s violation of 49 C.F.R.
§ 195.432(b), for failing to complete an external in-service BOT inspection on two tanks within
the five-year requirement. Rose Rock neither contested the allegation nor presented any
evidence or argument justifying a reduction in the proposed penalty. Respondent failed to
comply with an applicable requirement, but offered a reasonable justification for its non-
compliance and was therefore granted a “Good Faith” credit in the Notice. Accordingly, having
reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of
$15,200 for violation of 49 C.F.R. § 195.432.
Item 4: The Notice proposed a civil penalty of $28,600 for Respondent’s violation of 49 C.F.R.
§ 195.432(b), for failing to complete an initial out-of-service BOT inspections on three tanks
within the first 10 years of operation, as required. Respondent did not contest the allegation of
violation, but requested a reduction in the proposed penalty amount based on reconsideration of
the “Good Faith” penalty assessment criterion found in Part E8 of the Violation Report for this
item.3 Respondent failed to comply with an applicable requirement, but offered a reasonable
justification for its non-compliance. Specifically, Rose Rock stated it reasonably believed it had
to perform the 10-year initial out-of-service BOT internal inspections within the calendar year of
the 10th year of service, not on or prior to the calendar date 10 years after placing the BOT in
service.4 Rose Rock further noted that PHMSA had provided a “Good Faith” credit for an
identical justification for non-compliance concerning Item 3. In her Region Recommendation,
2 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.
3 Pipeline Safety Violation Report (Violation Report), (May 26, 2020) (on file with PHMSA).
4 Each of the BOTs that Rose Rock failed to inspect by the regulatory deadline were scheduled to be removed from
service within calendar year 2019 prior to PHMSA’s inspection. Response, at 3.



CPF No. 4-2020-5010
Page 5
the Director agreed that a “Good Faith” credit should also be applied to Item 4.5 Because
Respondent had already taken concrete action toward inspecting the BOT prior to PHMSA’s
inspection, I approve the Director’s decision. Accordingly, having reviewed the record and
considered the assessment criteria, I assess Respondent a reduced civil penalty of $11,400 for
violation of 49 C.F.R. § 195.432(b).
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $67,000.
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 $67,000 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 Item 1 in the Notice for the violation of
49 C.F.R. § 195.406(a). 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. 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:
1. With respect to the violation of § 195.406(a) (Item 1), Respondent must maintain
a 20 percent pressure reduction for the segments identified below until such time
Rose Rock provides records to PHMSA that conform to the requirements of
§ 195.310 and demonstrate that the two segments identified below have been
pressure tested in accordance with Subpart E of 49 CFR 195.
 Riverside to Hanston
 Hanston to Hudson
5 Region Recommendation, at 4.



CPF No. 4-2020-5010
Page 6
Respondent must provide pressure test records to the Director no later than 180
days from receipt of the Final Order.
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 Mary
L. McDaniel, P.E., 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.
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 2 and 5, 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. § 195.420(b) (Item 2) ─ Respondent’s alleged failure to inspect, at
intervals not exceeding 7 ½ months but at least twice each calendar year, each
mainline valve to determine that it is functioning properly; and
49 C.F.R. § 195.452(f)(8) (Item 5) ─ Respondent’s alleged failure to perform its
review of integrity assessment results and information analysis by a person
qualified to evaluate the results and information, as required.
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.



CPF No. 4-2020-5010
Page 7
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
November 6, 2020
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
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