{"operation":"document","citation":"CPF 42022040NOPV","title":"PERMIAN EXPRESS PARTNERS LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-10-11","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.412(a), 195.452(i)(1), 195.52(a)(3), 195.573(e), 195.583(a), 195.589(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022040nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022040nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022040nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42022040NOPV","body":"Notice of Probable Violation involving PERMIAN EXPRESS PARTNERS LLC. PHMSA's enforcement data identifies the cited regulations as 195.412(a),  195.452(i)(1),  195.52(a)(3),  195.573(e),  195.583(a),  195.589(c). The case was opened on 2022-10-11 and is reported as closed as of 2024-03-28. Proposed civil penalty: $22,800. Assessed civil penalty: $22,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42022040NOPV_Closure Letter (Revised)_03282024_(21-202527).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_Closure%20Letter%20(Revised)_03282024_(21-202527).pdf\n\n42022040NOPV_Closure Letter (Revised)_03282024_(21-202527)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_Closure%20Letter%20(Revised)_03282024_(21-202527)_text.pdf\n\n42022040NOPV_Closure Letter_03222024_(21-202527).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_Closure%20Letter_03222024_(21-202527).pdf\n\n42022040NOPV_Closure Letter_03222024_(21-202527)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_Closure%20Letter_03222024_(21-202527)_text.pdf\n\n42022040NOPV_Final Order_06302023_(21-202527).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_Final%20Order_06302023_(21-202527).pdf\n\n42022040NOPV_Final Order_06302023_(21-202527)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_Final%20Order_06302023_(21-202527)_text.pdf\n\n42022040NOPV_Operator Response to Notice_11182022_(21-202527).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_Operator%20Response%20to%20Notice_11182022_(21-202527).pdf\n\n42022040NOPV_PCO PCP_10112022_(21-202527).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_PCO%20PCP_10112022_(21-202527).pdf\n\n42022040NOPV_PCO PCP_10112022_(21-202527)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022040NOPV/42022040NOPV_PCO%20PCP_10112022_(21-202527)_text.pdf\n\n42022040NOPV_Closure Letter (Revised)_03282024_(21-202527)_text.pdf\n\nVIA ELECTRONIC MAIL TO: gregory.mcilwain@energytransfer.com\nMarch 28, 2024\nGregory McIlwain\nExecutive Vice President, Operations\nPermian Express Partners, LLC\n1300 Main Street\nHouston, Texas 77002\nCPF 4-2022-040-NOPV\nDear Mr. McIlwain:\nOn June 30, 2023, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Permian Express Partners a Final Order in the above-referenced case. This Order included a\nCompliance Order and Civil Penalty assessment and requirement to take corrective actions on\nyour pipeline. Based on our review of the documentation you provided and confirmation of\npayment of the civil penalty, it has been determined that you have complied with the terms of\nthis 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, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\ncc: Mr. Todd Nardozzi, Director, Regulatory Compliance, Energy Transfer, LP,\ntodd.nardozzi@energytransfer.com\n\n42022040NOPV_Closure Letter_03222024_(21-202527)_text.pdf\n\nVIA ELECTRONIC MAIL TO: gregory.mcilwain@energytransfer.com\nMarch 22, 2023\nGregory McIlwain\nExecutive Vice President, Operations\nPermian Express Partners, LLC\n1300 Main Street\nHouston, Texas 77002\nCPF 4-2022-040-NOPV\nDear Mr. McIlwain:\nOn June 30, 2023, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Permian Express Partners a Final Order in the above-referenced case. This Order included a\nCompliance Order and Civil Penalty assessment and requirement to take corrective actions on\nyour pipeline. Based on our review of the documentation you provided and confirmation of\npayment of the civil penalty, it has been determined that you have complied with the terms of\nthis 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, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\ncc: Mr. Todd Nardozzi, Director, Regulatory Compliance, Energy Transfer, LP,\ntodd.nardozzi@energytransfer.com\n\n42022040NOPV_Final Order_06302023_(21-202527)_text.pdf\n\nJune 30, 2023\nVIA ELECTRONIC MAIL TO: gregory.mcilwain@energytransfer.com\nGregory McIlwain\nExecutive Vice President, Operations\nPermian Express Partners, LLC\n1300 Main Street\nHouston, Texas 77002\nRe: CPF No. 4-2022-040-NOPV\nDear Mr. McIlwain:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, withdraws one alleged violation, assesses a civil penalty of $22,800, and specifies\nactions that need to be taken by Permian Express Partners, LLC, to comply with the pipeline\nsafety regulations. The penalty payment terms are set forth in the Final Order. When the civil\npenalty has been paid and the terms of the compliance order completed, as determined by the\nDirector, Southwest Region, this enforcement action will be closed. Service of the Final Order\nby e-mail is effective upon the date of transmission and acknowledgement of receipt as provided\nunder 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: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Todd Nardozzi, Director, Regulatory Compliance, Permian Express Partners, LLC,\ntodd.nardozzi@energytransfer.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____________________________________\n)\nIn the Matter of )\n)\nPermian Express Partners, LLC, ) CPF No. 4-2022-040-NOPV\na subsidiary of Energy Transfer, LP, )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 1, 2021, through November 16, 2021, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), inspected Permian Express Partners, LLC’s (Permian Express or\nRespondent) Patoka Pipeline system in Illinois, Missouri, Arkansas, and Texas. The Permian\nExpress pipelines consist of approximately 1,700 miles of crude oil pipeline extending from\nproducing areas in the Permian Basin of Texas through Louisiana, Arkansas, Missouri, and\nIllinois.1 Permian Express is a subsidiary of Energy Transfer, LP.2\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated October 11, 2022, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Permian Express committed three violations of 49 C.F.R. Part 195,\nproposed assessing a civil penalty of $22,800 for the alleged violations, and proposed ordering\nRespondent to take certain measures to correct the alleged violations. The Notice also included\nan additional three warning items pursuant to 49 C.F.R. § 190.205, which warned the operator to\ncorrect the probable violations or face possible future enforcement action.\nPermian Express requested an extension of time to respond to the Notice on November 9, 2022.\nPHMSA granted this request. Respondent responded to the Notice by letter dated November 18,\n2022 (Response). Permian Express contested several of the allegations, offered additional\ninformation in response to the Notice, and requested that PHMSA find that it satisfied the\nproposed compliance order associated with one of the alleged violations. Respondent did not\nrequest a hearing and therefore has waived its right to one.\n1 Crude Oil, ENERGY TRANSFER, https://energytransfer.com/crude-oil/ (last accessed June 27, 2023).\n2 Id.\n\n\n\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a)….\n(i) What preventative and mitigative measures must an operator take to\nprotect the high consequence area?\n(1) General requirements. An operator must take measures to prevent\nand mitigate the consequences of a pipeline failure that could affect a high\nconsequence area. These measures include conducting a risk analysis of the\npipeline segment to identify additional actions to enhance public safety or\nenvironmental protection. Such actions may include, but are not limited to,\nimplementing damage prevention best practices, better monitoring of\ncathodic protection where corrosion is a concern, establishing shorter\ninspection intervals, installing EFRDs on the pipeline segment, modifying\nthe systems that monitor pressure and detect leaks, providing additional\ntraining to personnel on response procedures, conducting drills with local\nemergency responders and adopting other management controls.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1) by failing to conduct a\nrisk analysis for its pipeline facilities located in Beaumont and Nederland, Texas, in accordance\nwith § 195.452(i)(1) and its written procedures. Specifically, Respondent’s written pipeline\nintegrity management plan section 4.6, Facility Threat/Risk Analysis and Preventative and\nMitigative Measures, requires a facility risk analysis (HAZOP) and mitigative study to be\nperformed for the facilities in Beaumont and Nederland, Texas.\nIn its Response, Respondent did not contest the allegation of violation and provided additional\ninformation regarding its corrective actions. Accordingly, after considering all of the evidence, I\nfind that Permian Express violated 49 C.F.R. § 195.452(i)(1) by failing to conduct a risk analysis\nfor its pipeline facilities located in Beaumont and Nederland, Texas, in accordance with\n§ 195.452(i)(1) and its written procedures.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e), which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a)….\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the deficiency\ninvolves a pipeline in an integrity management program under § 195.452,\nyou must correct the deficiency as required by § 195.452(h).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) by failing to correct\nidentified corrosion control deficiencies. Specifically, the Notice alleged that Permian Express\n\n\n\nfailed to correct three identified corrosion control deficiencies within one calendar year, as\nrequired by its procedure;3 failed to correct deficiencies at 13 test stations in 2018, 2019, and\n2020 where it identified low pipe-to-soil readings for cathodic protection; and failed to remediate\ndepleted groundbeds and deficiencies that were needed to ensure the proper performance of\nrectifiers on its cathodic protection system within one calendar year in 2018, 2019, and 2020.\nIn its Response, Respondent did not contest the allegation of violation and provided additional\ninformation regarding its corrective actions.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.573(e) by failing to correct identified corrosion control deficiencies.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nWITHDRAWAL OF ITEM\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.589(c), which states:\n§ 195.589 What corrosion control information do I have to maintain?\n(a)….\n(c) You must maintain a record of each analysis, check, demonstration,\nexamination, inspection, investigation, review, survey, and test required by\nthis subpart in sufficient detail to demonstrate the adequacy of corrosion\ncontrol measures or that corrosion requiring control measures does not\nexist. You must retain these records for at least 5 years, except that records\nrelated to §§ 195.569, 195.573(a) and (b), and 195.579(b)(3) and (c) must\nbe retained for as long as the pipeline remains in service.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.589(c) by failing to maintain\ncorrosion control records in accordance with § 195.589(c) for Tank 348. Specifically, the Notice\nalleged that a record of an atmospheric corrosion inspection carried out on April 3, 2019, on\nTank 348 failed to indicate any items of concern or items requiring follow-up regarding\ncorrosion on the tank shell. The Notice further stated that an external inspection report carried\nout for the same tank from February 18, 2014, indicated that there was corrosion on the shell and\nroof areas.\nIn its Response, Permian Express argued that it complied with § 195.589(c) by maintaining\nrecords of the February 18, 2014 and April 3, 2019 inspections of Tank 348 and providing those\nrecords to PHMSA.4 Respondent noted that corrosion was reported in both inspection reports\n3 Section 4.0 of the Corrosion Control Remedial Action, HLD.40 (Effective Date 04/01/2018).\n4 Permian Express Partners, LLC, CPF No. 4-2022-040-NOPV Written Response to Notice of Probable Violation,\nProposed Civil Penalty and Proposed Compliance Order, dated November 18, 2022 (hereinafter “Response”) (on\nfile with PHMSA), at 12.\n\n\n\nand that “at no time was [the corrosion] determined to have deteriorated to the degree of being\nout of compliance with API 650 / 653 standards and requiring immediate remediation in order to\ncontinue service.”5\nAfter considering all of the evidence, I find that the allegation of violation should be withdrawn\nbecause the evidence fails to sufficiently establish that Respondent failed to maintain a record of\neach atmospheric corrosion inspection of Tank 348 to demonstrate the adequacy of corrosion\ncontrol measures. Although the Notice alleged that Respondent’s record from the 2019\natmospheric corrosion inspection failed to indicate any items of concern or items requiring\nfollow-up, the report in question did record several items of note. For example, the report noted\nthe external shell coating was weathered, that the condition should be monitored for continued\ndeterioration, and that consideration should be given to properly cleaning and re-coating. The\nreport recorded there was coating failure on the shell stiffener but that based on ultrasonic\nthickness readings this was noted for information only. The report noted corrosion located at the\nnine o'clock position of a nozzle that should be replaced the next time the tank has major repairs.\nThese and other conditions were documented with photographs.6\nBecause I find there is insufficient evidence to find a violation of § 195.589(c) for failure to\nmaintain a record of each atmospheric corrosion inspection of Tank 348, I hereby order that Item\n6 be withdrawn.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.7\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $22,800 for the violations cited above.\n5 Id., at 13.\n6 Item 6 did not allege a violation for failing to remediate atmospheric corrosion as may be required pursuant to\n§§ 195.401 or 195.583. This Final Order does not preclude potential future enforcement if the Director finds\nRespondent failed to remediate identified atmospheric corrosion. The allegation in Item 6 is limited to the alleged\nfailure to maintain records.\n7 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n\n\n\nItem 4: The Notice proposed a civil penalty of $22,800 for Respondent’s violation of 49 C.F.R.\n§ 195.573(e), for failing to correct identified corrosion control deficiencies. Respondent neither\ncontested the allegation nor presented any evidence or argument justifying a reduction in or\nelimination of the proposed penalty. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $22,800 for violation of 49 C.F.R.\n§ 195.573(e).\nPayment of the civil penalty must be made within 20 days after receipt of this Final Order.\nFederal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer\nthrough the Federal Reserve Communications System (Fedwire), to the account of the U.S.\nTreasury. Detailed instructions are contained in the enclosure. Questions concerning wire\ntransfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,\nOklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the civil penalty will result in accrual of interest at the current annual rate in\naccordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those\nsame authorities, a late penalty charge of six percent (6%) per annum will be charged if payment\nis not made within 110 days of service. Furthermore, failure to pay the civil penalty may result\nin referral of the matter to the Attorney General for appropriate action in a district court of the\nUnited States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 3, 4, and 6 in the Notice for\nviolations of 49 C.F.R. §§ 195.452(i)(1), 195.573(e), and 195.589(c), respectively. Under 49\nU.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\nestablished under chapter 601. As discussed above, Item 6 has been withdrawn. Therefore, the\ncompliance terms proposed in the Notice for Item 6 are not included in this Order. The Director\nhas indicated that Respondent has taken the following actions to address Item 3:\nPermian Express has completed HAZOP assessments of the pipeline facilities located\nin Beaumont and Nederland, Texas, in accordance with § 195.452(i)(1) and its\nwritten procedures.\nAccordingly, I find that compliance has been achieved with respect to this violation. Therefore,\nthe compliance terms proposed in the Notice for Item 3 are not included in this Order.\nRespondent did not contest the proposed compliance terms for Item 4. Pursuant to the authority\nof 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following\nactions to ensure compliance with the pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.573(e) (Item 4), Respondent must submit a plan\nto have the cathodic protection remediated at the 13 identified locations within 90 days of\n\n\n\nreceipt of the Final Order. Permian Express must also submit a plan to remediate any\nidentified corrosion control deficiencies from the calendar year 2021 annual pipe-to-soil\nsurvey remediated within 90 days of receipt of the Final Order. Respondent must also\nsubmit a remediation plan for all rectifier systems where there has not been current output\nfollowing the calendar years 2020 and 2021 inspections completed within 90 days of\nreceipt of the Final Order. Permian Express shall provide records showing completion of\nremedial activities and inspections within the submitted remedial action plans for this\nItem within 60 days of the completion of the inspections and remediations carried out\nfollowing 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 administrative assessment of civil penalties not\nto 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.\nWARNING ITEMS\nWith respect to Items 1, 2, and 5, the Notice alleged probable violations of Part 195, but\nidentified them as warning items pursuant to § 190.205. The warnings were for:\n49 C.F.R. § 195.52(a) (Item 1) ─ Respondent’s alleged failure to provide\nnotification within one hour after confirmed discovery of an accident where the\nestimated property damage exceeded $50,000;\n49 C.F.R. § 195.412(a) (Item 2) ─ Respondent’s alleged failure to conduct right-\nof way (ROW) inspections capable of observing the surface conditions on or\nadjacent to each pipeline; and\n49 C.F.R. § 195.583(a) (Item 5) ─ Respondent’s alleged failure to inspect its\npipeline exposed to the atmosphere for evidence of atmospheric corrosion in\naccordance with § 195.583(a).\nPermian Express requested withdrawal of Item 1, because it believes it complied with the\nreporting requirements of § 195.52(a). Under § 190.205, PHMSA does not adjudicate warning\nitems to determine whether a probable violation occurred. Respondent provided additional\n\n\n\ninformation regarding its actions to address Items 2 and 5. If OPS finds a violation of these\nprovisions in a subsequent inspection, Permian Express may be subject to future\nenforcement action.\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 filing of a\npetition automatically stays the payment of any civil penalty assessed. The other terms of the\norder, 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.\nJune 30, 2023\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":23839}