{"operation":"document","citation":"CPF 42021011NOPV","title":"HOLLY ENERGY PARTNERS - OPERATING, L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2021-11-02","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b), 195.573(a)(2).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021011nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021011nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021011nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42021011NOPV","body":"Notice of Probable Violation involving HOLLY ENERGY PARTNERS - OPERATING, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.432(b),  195.573(a)(2). The case was opened on 2021-11-02 and is reported as closed as of 2023-03-03. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42021011NOPV_Closure Letter_03032023_(20-172601).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Closure%20Letter_03032023_(20-172601).pdf\n\n42021011NOPV_Closure Letter_03032023_(20-172601)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Closure%20Letter_03032023_(20-172601)_text.pdf\n\n42021011NOPV_Final Order_02172022_(20-172601).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Final%20Order_02172022_(20-172601).pdf\n\n42021011NOPV_Final Order_02172022_(20-172601)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Final%20Order_02172022_(20-172601)_text.pdf\n\n42021011NOPV_Operator Response to Notice_12142021_(20-172601).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Operator%20Response%20to%20Notice_12142021_(20-172601).pdf\n\n42021011NOPV_PCO_11022021_(20-172601).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_PCO_11022021_(20-172601).pdf\n\n42021011NOPV_PCO_11022021_(20-172601)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_PCO_11022021_(20-172601)_text.pdf\n\n42021011NOPV_Final Order_02172022_(20-172601)_text.pdf\n\nFebruary 17, 2022\nVIA ELECTRONIC MAIL TO: richard.voliva@hollyfrontier.com\nMr. Richard Voliva\nPresident\nHolly Energy Partners, LP\n2828 North Harwood Street, Suite 1300\nDallas, Texas 75201\nRe: CPF No. 4-2021-011 NOPV\nDear Mr. Voliva:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and specifies actions that need to be taken by Holly Energy Partners, LP, to comply\nwith the pipeline safety regulations. When the terms of the compliance order have been\ncompleted, as determined by the Director, Southwest Region, this enforcement action will be\nclosed. Service of the Final Order by e-mail is effective upon the date of transmission as\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMs. Bridgette Taylor, Pipeline Regulatory Manager, Holly Energy Partners, LP,\nbridgette.taylor@hollyenergy.com\nMs. Lori Coupland, Director, Compliance & EHS, Holly Energy Partners, LP,\nlori.coupland@hollyenergy.com\nCONFIRMATION OF RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nHolly Energy Partners, LP, ) CPF No. 4-2021-011 NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 9, 2020, through July 2, 2021, pursuant to 49 U.S.C. § 60117, a representative of\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Holly\nEnergy Partners, LP (HEP or Respondent) in Utah, Texas, New Mexico, and Oklahoma. HEP\nprovides petroleum product and crude oil transportation and, through its subsidiaries and joint\nventures, owns and operates petroleum product and crude gathering pipelines, tankage and\nterminals in Texas, New Mexico, Washington, Idaho, Oklahoma, Utah, Nevada, Wyoming, and\nKansas as well as refinery processing units in Kansas and Utah.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated November 2, 2021, a Notice of Probable Violation and Proposed\nCompliance Order (Notice). The Notice proposed finding that Respondent committed four\nviolations of the pipeline safety regulations in 49 C.F.R. §§ 195.432(b) and 195.573(a)(2) and\nproposed certain measures to correct the alleged violations.\nHEP responded to the Notice by letter dated December 14, 2021 (Response). HEP contested one\nof the allegations of violation and offered additional information in response to the Notice.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) . . . .\n1 Holly Energy Partners, LP website, available at http://www hollyenergy.com/about-us/corporate-\nstructure/default.aspx (last accessed February 2, 2022).\n\n\n\nCPF No. 4-2021-011-NOPV\nPage 2\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3). The risk-based internal inspection procedures in\nAPI Std 653, section 6.4.3 cannot be used to determine the internal\ninspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks\naccording to API Std 653. Specifically, the Notice alleged that HEP failed to conduct routine in-\nservice inspections of the physical integrity of its in-service Tank #1201A and Tank #1201B at\nits Navajo Refinery in accordance with section 6.3.1 of API Std 653. API Std 653 Section 6.3.1\nRoutine In-Service Inspection requires, among other things, that “[e]vidence of leaks; shell\ndistortions; signs of settlement; corrosion; and condition of the foundation, paint coatings,\ninsulation systems, and appurtenances should be documented for follow-up action by an\nauthorized inspector.” During the inspection, the PHMSA inspector observed a cracked and\neroded asphalt base around the tank foundation for both Tank #1201A and Tank #1201B.\nPHMSA reviewed HEP’s Monthly Inspection reports dated May 26, June 28, and July 20, 2021,\nfor Tank #1201A and Tank #1201B, and none of the reports contained notes indicating cracked\nor eroded asphalt.\nRespondent did not contest this allegation of violation. Accordingly, based on a review of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of its in-service tanks in accordance with API Std 653.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) . . . .\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3). The risk-based internal inspection procedures in\nAPI Std 653, section 6.4.3 cannot be used to determine the internal\ninspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the\nphysical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks\naccording to API Std 653. Specifically, the Notice alleged that HEP failed to conduct external\ninspections of the physical integrity of its in-service Tank #1201B at its Navajo Refinery in\n\n\n\nCPF No. 4-2021-011-NOPV\nPage 3\naccordance with sections 6.3.2 and 6.9 of API Std 653. API Std 653 Section 6.3.2 External\nInspection requires visual external inspections at calculated intervals not to exceed five years.\nAPI Std 653 Section 6.9.2 Report Contents requires the inspection reports to include certain\ninformation.\nThe Notice alleged that HEP’s Storage Tank In-Service External Visual Inspection Report for\nTank #1201B (dated June 6, 2017) (Inspection Report) did not include information regarding the\nnext inspection date or the inspection interval, any recommendations, the name of the inspector,\nthe name of the company, the API Std 653 certification number, or the signature of the\nauthorized inspector responsible for the inspection as required by API Std 653 Section 6.9\nReports. Therefore, the Notice concluded that HEP failed to inspect the physical integrity of its\nin-service Tank #1201B at its Navajo Refinery in accordance with API Std 653.\nIn its Response, HEP contested the alleged violation.2 HEP provided its Inspection Report,\nindicating that the inspection for Tank #1201B was last completed June 6, 2017. HEP stated that\nthe inspection for Tank #1201B would not be due again until June 6, 2022. Accordingly, HEP\ncontended that the proposed violation of API Std 653 Section 6.3.2 External Inspection is\nincorrect. HEP did not contest, however, the inadequacy of its Inspection Report or that\ninformation was not included as required by section 6.9.2.3\nSection 195.432(b) states that “[e]ach operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according to API Std 653.”4\nAPI Std 653 Section 6.3.2 External Inspection prescribes an external in-service breakout tank\ninspection cycle of every five years by an authorized inspector. API Std 653 Section 6.9 Reports\nprescribes the specific information that must be included in each inspection report, including\namong other things, the dates of inspection; recommendations; and the authorized inspector’s\nname, company, API Std 653 certification number, and signature. In its Inspection Report, HEP\nfailed to include the next inspection date or the inspection interval, any recommendations, the\ninspector’s name, the company name, and the API Std 653 certification number, or an authorized\ninspector’s signature. The deficiency of the Inspection Report is uncontested. The external\ninspections of the physical integrity of Tank #1201B did not comply with API Std 653 because\nthe Inspection Report does not contain the required information, such as the signature of the\nauthorized inspector.\nAccordingly, after considering the evidence, I find Respondent violated 49 C.F.R. § 195.432(b)\nby failing to inspect the physical integrity of its in-service Tank #1201B at its Navajo Refinery in\naccordance with API Std 653.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n2 Response, at 2.\n3 Id.\n4 49 C.F.R. § 195.432(b).\n\n\n\nCPF No. 4-2021-011-NOPV\nPage 4\n(a) . . . .\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3). The risk-based internal inspection procedures in\nAPI Std 653, section 6.4.3 cannot be used to determine the internal\ninspection interval.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to complete an\ninternal inspection on three tanks at its El Paso PD Terminal and one tank at its Navajo Refinery\nin accordance with API Std 653. Specifically, the Notice alleged that HEP did not conduct initial\ninternal inspections for Tank #216 (in-service year 2002), Tank #217 (in-service year 2008), and\nTank #220 (in-service year 2009). The Notice alleged further that HEP used the 4th Edition of\nAPI Std 653, which is not incorporated by reference into the pipeline safety regulations,5 to\njustify its failure to conduct internal inspections. The Notice quoted API Std 653 Section 6.4.2.2\nInspection Intervals which states that the internal inspection interval may not exceed ten years.6\nThe Notice stated that at the time of inspection, more than ten years had passed since the in-\nservice date for all three tanks at the El Paso PD Terminal and no internal inspections were\nconducted, contrary to API Std 653 Section 6.4.2.2.\nThe Notice also alleged that HEP’s inspection report for Tank #1201B at its Navajo Refinery\n(dated May 28, 2009) lacked information as required by API Std 653 Section 6.9 Reports, such as\ncorrosion rates of the bottom of the tank, settlement survey measurements and analysis,\nrecommendations, drawings, photographs, non-destructive examination reports, and other\npertinent information that should be appended to the report.\nRespondent did not contest this allegation of violation. Accordingly, based on a review of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.432(b) by failing to complete an\ninternal inspection on three tanks at its El Paso PD Terminal and one tank at its Navajo Refinery\nin accordance with API Std 653.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(2) which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with §\n5 See 49 C.F.R. § 195.3(b)(19), which incorporates by reference API Standard 653, “Tank Inspection, Repair,\nAlteration, and Reconstruction,” 3rd edition, December 2001, (including addendum 1 (September 2003), addendum\n2 (November 2005), addendum 3 (February 2008), and errata (April 2008)).\n6 API Std 653, Section 6.4.2.2, Inspection Intervals\nWhen corrosion rates are not known and similar service experience is not available to estimate the bottom plate\nminimum thickness at the next inspection, the internal inspection interval shall not exceed 10 years.\n\n\n\nCPF No. 4-2021-011-NOPV\nPage 5\n195.571:\n(1) . . . .\n(2) Identify not more than 2 years after cathodic protection is installed,\nthe circumstances in which a close-interval survey or comparable\ntechnology is practicable and necessary to accomplish the objectives of\nparagraph 10.1.1.3 of NACE SP 0169 (incorporated by reference, see §\n195.3).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(2) by failing to identify, not\nmore than two years after cathodic protection was installed, the circumstances in which a close-\ninterval survey or comparable technology is practicable and necessary to accomplish the\nobjectives of paragraph 10.1.1.3 of NACE SP 0169. Specifically, the Notice alleged that HEP’s\nengineering analysis report dated June 14, 2019, entitled “Close Interval Survey Evaluation and\nDetermination Checklist” for Segment 1008 (MP 202 to MP 206, Magellan Station) and for\nSegment 1003 (Chevron to UNEV Pump Station) was insufficient to demonstrate compliance\nwith the objectives of paragraph 10.1.1.3 of NACE SP 0169.7 In addition, the Notice alleged\nthat during a field inspection from May 3 through May 6, 2021, the PHMSA inspector observed\nlow cathodic protection readings due to alternate current interference issues from nearby sources\non the pipeline from MP 202 to MP 206 at Magellan Station.\nRespondent did not contest this allegation of violation. Accordingly, based on a review of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.573(a)(2) by failing to identify, not\nmore than two years after cathodic protection was installed, the circumstances in which a close-\ninterval survey or comparable technology is practicable and necessary to accomplish the\nobjectives of paragraph 10.1.1.3 of NACE SP 0169.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, 3, and 4 in the Notice for\nviolations of 49 C.F.R. §§ 195.432(b) and 195.573(a)(2). Under 49 U.S.C. § 60118(a), each\nperson who engages in the transportation of hazardous liquids or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217,\nRespondent is ordered to take the following actions to ensure compliance with the pipeline safety\nregulations applicable to its operations:\nA. With respect to the violation of § 195.432(b) (Item 1), Respondent must:\n7 NACE SP 0169, ¶ 10.1.1.3\nWhen practicable and determined necessary by sound engineering practice, a detailed (close-interval) potential survey\nshould be conducted to: (a) assess the effectiveness of the CP system; (b) provide base line operating data; (c) locate\nareas of inadequate protection levels; (d) identify locations likely to be adversely affected by construction, stray\ncurrents, or other unusual environmental conditions; or (e) select areas to be monitored periodically.\n\n\n\nCPF No. 4-2021-011-NOPV\nPage 6\nB. C. D. i. Update its “Monthly Inspection” form to provide, at a minimum, detailed\ninformation as stated in API 653 Appendix C. API Std 653 Appendix C\nChecklist for Tank Inspection is available to be used as guidance to the\nowner/operator for developing an inspection assessment. As stated in API Std\n653 Section 6.3.1.3, routine in-service inspections (Monthly Inspections) must\ninclude a visual inspection of the tank’s exterior surfaces to inspect evidence\nof leaks; shell distortions; signs of settlement; corrosion; and the condition of\nthe foundation, paint coatings, insulation systems, and appurtenances;\nii. Conduct Monthly Inspections for Tank #1201A and Tank #1201B at its\nNavajo Refinery in accordance with API Std 653 Section 6.3.1 Routine In-\nService Inspection; and\niii. After conducting the Monthly Inspections, repair the deficiencies identified,\nincluding the cracked and eroded asphalt base around the foundation of Tank\n#1201A and Tank #1201B at its Navajo Refinery, which should direct runoff\nrain water away from the tank instead of under the tank.\nWith respect to the violation of § 195.432(b) (Item 2), Respondent must:\ni. Conduct an external inspection for Tank #1201B in accordance with API Std\n653 Section 6.3 Inspections from the Outside of the Tank and provide an\nExternal Inspection Report that will comply with API Std 653 Section 6.9\nReports. The report must include the tank’s next inspection date and/or\ninspection interval, any recommendations, the name of the inspector,\ncompany, API Std 653 certification number, and the signature of the\nauthorized inspector responsible for the inspection.\nWith respect to the violation of § 195.432(b) (Item 3), Respondent must:\ni. Conduct internal inspections by an authorized inspector for Tank #216, Tank\n#217, Tank #220, and Tank #1201B. The inspection reports must include\ndetailed information as required by API Std 653 Section 6.9 Reports, such as\ncorrosion rates of the bottom of the tank, settlement survey measurements and\nanalysis, recommendations per 6.9.3.1, drawings, photographs, NDE reports\nand other pertinent information that should be appended to the report.\nWith respect to the violation of § 195.573(a)(2) (Item 4), Respondent must:\ni. Demonstrate the circumstances in which a close-interval survey or\ncomparable technology is practicable and necessary to ensure compliance\nwith NACE SP 0169 paragraph 10.1.1.3 for segments 1008 (MP 202 to\nMagellan) and 1003 (Chevron to UNEV Pump Station) by completing the\nengineering analysis report, “Close Interval Survey Evaluation and\nDetermination Checklist,” and providing justification in each section of the\n\n\n\nCPF No. 4-2021-011-NOPV\nPage 7\nreport. If there is any deficiency found, HEP must conduct a close-interval\nsurvey or comparable technology and provide the report to PHMSA.\nE. HEP must submit all documentation demonstrating compliance with items A, B,\nC, and D to Mary L. McDaniel P.E., Director, Southwest Region, Pipeline and\nHazardous Materials Safety Administration, 8701 South Gessner, Suite 630\nHouston, Texas 77074 for review within 90 days of receipt of the Final Order.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nPHMSA requests that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (see 49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address. The written petition must be received no later than\n20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a\nstatement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The terms of\nthe order, including corrective action, remain in effect unless the Associate Administrator, upon\nrequest, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nFebruary 17, 2022\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n42021011NOPV_Closure Letter_03032023_(20-172601)_text.pdf\n\nVIA ELECTRONIC MAIL\nMarch 3, 2023\nMichael Jennings\nPresident, Holly Energy Partners\nHolly Energy Partners – Operating, L.P.\n2828 N. Harwood Street\nSuite 1300\nDallas Texas 75201\nCPF 4-2021-011-NOPV\nDear Mr. Jennings:\nFrom March 9, 2020, to September 25, 2020, a representative of the Office of Pipeline Safety\n(OPS), Southwest Region, pursuant to Chapter 601 of 49 United States Code, conducted a pipeline\nsafety inspection of Holly Energy Partners-Operating, L.P.’s (HEP) operations and maintenance\nprocedures for its facilities in Utah, Texas, New Mexico, and Oklahoma via video teleconference.\nAs a result of the inspection, HEP was issued a Final Order (Order) in the above-referenced case.\nThis Order included a Compliance Order.\nBased on PHMSA’s review of the documentation HEP provided, it has been determined that HEP\nhas complied with the terms of this Order.\nAccordingly, this case is now closed, and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nBryan Lethcoe\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration","truncated":false,"body_characters":23623}