# HOLLY ENERGY PARTNERS - OPERATING, L.P. — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.432(b), 195.573(a)(2).
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- **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.

Official case documents:

42021011NOPV_Closure Letter_03032023_(20-172601).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Closure%20Letter_03032023_(20-172601).pdf

42021011NOPV_Closure Letter_03032023_(20-172601)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Closure%20Letter_03032023_(20-172601)_text.pdf

42021011NOPV_Final Order_02172022_(20-172601).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Final%20Order_02172022_(20-172601).pdf

42021011NOPV_Final Order_02172022_(20-172601)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_Final%20Order_02172022_(20-172601)_text.pdf

42021011NOPV_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

42021011NOPV_PCO_11022021_(20-172601).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_PCO_11022021_(20-172601).pdf

42021011NOPV_PCO_11022021_(20-172601)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021011NOPV/42021011NOPV_PCO_11022021_(20-172601)_text.pdf

42021011NOPV_Final Order_02172022_(20-172601)_text.pdf

February 17, 2022
VIA ELECTRONIC MAIL TO: richard.voliva@hollyfrontier.com
Mr. Richard Voliva
President
Holly Energy Partners, LP
2828 North Harwood Street, Suite 1300
Dallas, Texas 75201
Re: CPF No. 4-2021-011 NOPV
Dear Mr. Voliva:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation and specifies actions that need to be taken by Holly Energy Partners, LP, to comply
with the pipeline safety regulations. When the terms of the compliance order have been
completed, as determined by the Director, Southwest Region, this enforcement action will be
closed. Service of the Final Order by e-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
Ms. Bridgette Taylor, Pipeline Regulatory Manager, Holly Energy Partners, LP,
bridgette.taylor@hollyenergy.com
Ms. Lori Coupland, Director, Compliance & EHS, Holly Energy Partners, LP,
lori.coupland@hollyenergy.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 )
Holly Energy Partners, LP, ) CPF No. 4-2021-011 NOPV
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
From March 9, 2020, through July 2, 2021, 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 Holly
Energy Partners, LP (HEP or Respondent) in Utah, Texas, New Mexico, and Oklahoma. HEP
provides petroleum product and crude oil transportation and, through its subsidiaries and joint
ventures, owns and operates petroleum product and crude gathering pipelines, tankage and
terminals in Texas, New Mexico, Washington, Idaho, Oklahoma, Utah, Nevada, Wyoming, and
Kansas as well as refinery processing units in Kansas and Utah.1
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated November 2, 2021, a Notice of Probable Violation and Proposed
Compliance Order (Notice). The Notice proposed finding that Respondent committed four
violations of the pipeline safety regulations in 49 C.F.R. §§ 195.432(b) and 195.573(a)(2) and
proposed certain measures to correct the alleged violations.
HEP responded to the Notice by letter dated December 14, 2021 (Response). HEP contested one
of the allegations of violation and offered additional information in response to the Notice.
Respondent did not request a hearing and therefore has waived its right to one.
FINDINGS OF VIOLATION
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:
§ 195.432 Inspection of in-service breakout tanks.
(a) . . . .
1 Holly Energy Partners, LP website, available at http://www hollyenergy.com/about-us/corporate-
structure/default.aspx (last accessed February 2, 2022).



CPF No. 4-2021-011-NOPV
Page 2
(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.
The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the
physical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks
according to API Std 653. Specifically, the Notice alleged that HEP failed to conduct routine in-
service inspections of the physical integrity of its in-service Tank #1201A and Tank #1201B at
its Navajo Refinery in accordance with section 6.3.1 of API Std 653. API Std 653 Section 6.3.1
Routine In-Service Inspection requires, among other things, that “[e]vidence of leaks; shell
distortions; signs of settlement; corrosion; and condition of the foundation, paint coatings,
insulation systems, and appurtenances should be documented for follow-up action by an
authorized inspector.” During the inspection, the PHMSA inspector observed a cracked and
eroded asphalt base around the tank foundation for both Tank #1201A and Tank #1201B.
PHMSA reviewed HEP’s Monthly Inspection reports dated May 26, June 28, and July 20, 2021,
for Tank #1201A and Tank #1201B, and none of the reports contained notes indicating cracked
or eroded asphalt.
Respondent did not contest this allegation of violation. Accordingly, based on a review of the
evidence, I find that Respondent violated 49 C.F.R. § 195.432(b) by failing to inspect the
physical integrity of its in-service tanks in accordance with API Std 653.
Item 2: 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 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 inspect the
physical integrity of in-service atmospheric and low-pressure steel above-ground breakout tanks
according to API Std 653. Specifically, the Notice alleged that HEP failed to conduct external
inspections of the physical integrity of its in-service Tank #1201B at its Navajo Refinery in



CPF No. 4-2021-011-NOPV
Page 3
accordance with sections 6.3.2 and 6.9 of API Std 653. API Std 653 Section 6.3.2 External
Inspection requires visual external inspections at calculated intervals not to exceed five years.
API Std 653 Section 6.9.2 Report Contents requires the inspection reports to include certain
information.
The Notice alleged that HEP’s Storage Tank In-Service External Visual Inspection Report for
Tank #1201B (dated June 6, 2017) (Inspection Report) did not include information regarding the
next inspection date or the inspection interval, any recommendations, the name of the inspector,
the name of the company, the API Std 653 certification number, or the signature of the
authorized inspector responsible for the inspection as required by API Std 653 Section 6.9
Reports. Therefore, the Notice concluded that HEP failed to inspect the physical integrity of its
in-service Tank #1201B at its Navajo Refinery in accordance with API Std 653.
In its Response, HEP contested the alleged violation.2 HEP provided its Inspection Report,
indicating that the inspection for Tank #1201B was last completed June 6, 2017. HEP stated that
the inspection for Tank #1201B would not be due again until June 6, 2022. Accordingly, HEP
contended that the proposed violation of API Std 653 Section 6.3.2 External Inspection is
incorrect. HEP did not contest, however, the inadequacy of its Inspection Report or that
information was not included as required by section 6.9.2.3
Section 195.432(b) states that “[e]ach operator must inspect the physical integrity of in-service
atmospheric and low-pressure steel above-ground breakout tanks according to API Std 653.”4
API Std 653 Section 6.3.2 External Inspection prescribes an external in-service breakout tank
inspection cycle of every five years by an authorized inspector. API Std 653 Section 6.9 Reports
prescribes the specific information that must be included in each inspection report, including
among other things, the dates of inspection; recommendations; and the authorized inspector’s
name, company, API Std 653 certification number, and signature. In its Inspection Report, HEP
failed to include the next inspection date or the inspection interval, any recommendations, the
inspector’s name, the company name, and the API Std 653 certification number, or an authorized
inspector’s signature. The deficiency of the Inspection Report is uncontested. The external
inspections of the physical integrity of Tank #1201B did not comply with API Std 653 because
the Inspection Report does not contain the required information, such as the signature of the
authorized inspector.
Accordingly, after considering the evidence, I find Respondent violated 49 C.F.R. § 195.432(b)
by failing to inspect the physical integrity of its in-service Tank #1201B at its Navajo Refinery in
accordance with API Std 653.
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.
2 Response, at 2.
3 Id.
4 49 C.F.R. § 195.432(b).



CPF No. 4-2021-011-NOPV
Page 4
(a) . . . .
(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.
The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to complete an
internal inspection on three tanks at its El Paso PD Terminal and one tank at its Navajo Refinery
in accordance with API Std 653. Specifically, the Notice alleged that HEP did not conduct initial
internal inspections for Tank #216 (in-service year 2002), Tank #217 (in-service year 2008), and
Tank #220 (in-service year 2009). The Notice alleged further that HEP used the 4th Edition of
API Std 653, which is not incorporated by reference into the pipeline safety regulations,5 to
justify its failure to conduct internal inspections. The Notice quoted API Std 653 Section 6.4.2.2
Inspection Intervals which states that the internal inspection interval may not exceed ten years.6
The Notice stated that at the time of inspection, more than ten years had passed since the in-
service date for all three tanks at the El Paso PD Terminal and no internal inspections were
conducted, contrary to API Std 653 Section 6.4.2.2.
The Notice also alleged that HEP’s inspection report for Tank #1201B at its Navajo Refinery
(dated May 28, 2009) lacked information as required by API Std 653 Section 6.9 Reports, such as
corrosion rates of the bottom of the tank, settlement survey measurements and analysis,
recommendations, drawings, photographs, non-destructive examination reports, and other
pertinent information that should be appended to the report.
Respondent did not contest this allegation of violation. Accordingly, based on a review of the
evidence, I find that Respondent violated 49 C.F.R. § 195.432(b) by failing to complete an
internal inspection on three tanks at its El Paso PD Terminal and one tank at its Navajo Refinery
in accordance with API Std 653.
Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(2) which states:
§ 195.573 What must I do to monitor external corrosion control?
(a) Protected pipelines. You must do the following to determine
whether cathodic protection required by this subpart complies with §
5 See 49 C.F.R. § 195.3(b)(19), which incorporates by reference API Standard 653, “Tank Inspection, Repair,
Alteration, and Reconstruction,” 3rd edition, December 2001, (including addendum 1 (September 2003), addendum
2 (November 2005), addendum 3 (February 2008), and errata (April 2008)).
6 API Std 653, Section 6.4.2.2, Inspection Intervals
When corrosion rates are not known and similar service experience is not available to estimate the bottom plate
minimum thickness at the next inspection, the internal inspection interval shall not exceed 10 years.



CPF No. 4-2021-011-NOPV
Page 5
195.571:
(1) . . . .
(2) Identify not more than 2 years after cathodic protection is installed,
the circumstances in which a close-interval survey or comparable
technology is practicable and necessary to accomplish the objectives of
paragraph 10.1.1.3 of NACE SP 0169 (incorporated by reference, see §
195.3).
The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(2) by failing to identify, not
more than two years after cathodic protection was installed, the circumstances in which a close-
interval survey or comparable technology is practicable and necessary to accomplish the
objectives of paragraph 10.1.1.3 of NACE SP 0169. Specifically, the Notice alleged that HEP’s
engineering analysis report dated June 14, 2019, entitled “Close Interval Survey Evaluation and
Determination Checklist” for Segment 1008 (MP 202 to MP 206, Magellan Station) and for
Segment 1003 (Chevron to UNEV Pump Station) was insufficient to demonstrate compliance
with the objectives of paragraph 10.1.1.3 of NACE SP 0169.7 In addition, the Notice alleged
that during a field inspection from May 3 through May 6, 2021, the PHMSA inspector observed
low cathodic protection readings due to alternate current interference issues from nearby sources
on the pipeline from MP 202 to MP 206 at Magellan Station.
Respondent did not contest this allegation of violation. Accordingly, based on a review of the
evidence, I find that Respondent violated 49 C.F.R. § 195.573(a)(2) by failing to identify, not
more than two years after cathodic protection was installed, the circumstances in which a close-
interval survey or comparable technology is practicable and necessary to accomplish the
objectives of paragraph 10.1.1.3 of NACE SP 0169.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Items 1, 2, 3, and 4 in the Notice for
violations of 49 C.F.R. §§ 195.432(b) and 195.573(a)(2). 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:
A. With respect to the violation of § 195.432(b) (Item 1), Respondent must:
7 NACE SP 0169, ¶ 10.1.1.3
When practicable and determined necessary by sound engineering practice, a detailed (close-interval) potential survey
should be conducted to: (a) assess the effectiveness of the CP system; (b) provide base line operating data; (c) locate
areas of inadequate protection levels; (d) identify locations likely to be adversely affected by construction, stray
currents, or other unusual environmental conditions; or (e) select areas to be monitored periodically.



CPF No. 4-2021-011-NOPV
Page 6
B. C. D. i. Update its “Monthly Inspection” form to provide, at a minimum, detailed
information as stated in API 653 Appendix C. API Std 653 Appendix C
Checklist for Tank Inspection is available to be used as guidance to the
owner/operator for developing an inspection assessment. As stated in API Std
653 Section 6.3.1.3, routine in-service inspections (Monthly Inspections) must
include a visual inspection of the tank’s exterior surfaces to inspect evidence
of leaks; shell distortions; signs of settlement; corrosion; and the condition of
the foundation, paint coatings, insulation systems, and appurtenances;
ii. Conduct Monthly Inspections for Tank #1201A and Tank #1201B at its
Navajo Refinery in accordance with API Std 653 Section 6.3.1 Routine In-
Service Inspection; and
iii. After conducting the Monthly Inspections, repair the deficiencies identified,
including the cracked and eroded asphalt base around the foundation of Tank
#1201A and Tank #1201B at its Navajo Refinery, which should direct runoff
rain water away from the tank instead of under the tank.
With respect to the violation of § 195.432(b) (Item 2), Respondent must:
i. Conduct an external inspection for Tank #1201B in accordance with API Std
653 Section 6.3 Inspections from the Outside of the Tank and provide an
External Inspection Report that will comply with API Std 653 Section 6.9
Reports. The report must include the tank’s next inspection date and/or
inspection interval, any recommendations, the name of the inspector,
company, API Std 653 certification number, and the signature of the
authorized inspector responsible for the inspection.
With respect to the violation of § 195.432(b) (Item 3), Respondent must:
i. Conduct internal inspections by an authorized inspector for Tank #216, Tank
#217, Tank #220, and Tank #1201B. The inspection reports must include
detailed information as required by API Std 653 Section 6.9 Reports, such as
corrosion rates of the bottom of the tank, settlement survey measurements and
analysis, recommendations per 6.9.3.1, drawings, photographs, NDE reports
and other pertinent information that should be appended to the report.
With respect to the violation of § 195.573(a)(2) (Item 4), Respondent must:
i. Demonstrate the circumstances in which a close-interval survey or
comparable technology is practicable and necessary to ensure compliance
with NACE SP 0169 paragraph 10.1.1.3 for segments 1008 (MP 202 to
Magellan) and 1003 (Chevron to UNEV Pump Station) by completing the
engineering analysis report, “Close Interval Survey Evaluation and
Determination Checklist,” and providing justification in each section of the



CPF No. 4-2021-011-NOPV
Page 7
report. If there is any deficiency found, HEP must conduct a close-interval
survey or comparable technology and provide the report to PHMSA.
E. HEP must submit all documentation demonstrating compliance with items A, B,
C, and D to Mary L. McDaniel P.E., Director, Southwest Region, Pipeline and
Hazardous Materials Safety Administration, 8701 South Gessner, Suite 630
Houston, Texas 77074 for review within 90 days of 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.
PHMSA requests 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 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 (see 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. The written petition must be received no later than
20 days after receipt of the 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 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.
February 17, 2022
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

42021011NOPV_Closure Letter_03032023_(20-172601)_text.pdf

VIA ELECTRONIC MAIL
March 3, 2023
Michael Jennings
President, Holly Energy Partners
Holly Energy Partners – Operating, L.P.
2828 N. Harwood Street
Suite 1300
Dallas Texas 75201
CPF 4-2021-011-NOPV
Dear Mr. Jennings:
From March 9, 2020, to September 25, 2020, a representative of the Office of Pipeline Safety
(OPS), Southwest Region, pursuant to Chapter 601 of 49 United States Code, conducted a pipeline
safety inspection of Holly Energy Partners-Operating, L.P.’s (HEP) operations and maintenance
procedures for its facilities in Utah, Texas, New Mexico, and Oklahoma via video teleconference.
As a result of the inspection, HEP was issued a Final Order (Order) in the above-referenced case.
This Order included a Compliance Order.
Based on PHMSA’s review of the documentation HEP provided, it has been determined that HEP
has complied with the terms of this Order.
Accordingly, this case is now closed, and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
Bryan Lethcoe
Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
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