{"operation":"document","citation":"CPF 520045023","title":"CENEX PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2004-07-30","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(b)(3), 195.452(e)(1)(viii), 195.452(f)(1), 195.452(f)(4), 195.452(f)(5), 195.452(f)(7), 195.452(f)(8), 195.452(i)(1), 195.452(l)(1).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520045023.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520045023.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520045023","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520045023","body":"Notice of Probable Violation involving CENEX PIPELINE LLC. PHMSA's enforcement data identifies the cited regulations as 195,  195.452(b)(3),  195.452(e)(1)(viii),  195.452(f)(1),  195.452(f)(4),  195.452(f)(5),  195.452(f)(7),  195.452(f)(8),  195.452(i)(1),  195.452(l)(1). The case was opened on 2004-07-30 and is reported as closed as of 2007-02-27. Proposed civil penalty: $43,000. Assessed civil penalty: $43,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520045023_final order_03032006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045023/520045023_final%20order_03032006.pdf\n\n520045023_final order_03032006_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045023/520045023_final%20order_03032006_text.pdf\n\nCPF_ NO5-2004_5023.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045023/CPF_%20NO5-2004_5023.pdf\n\n520045023_final order_03032006_text.pdf\n\nU. S. Department\nof Transportation\nPipeline and\nHazardous Materials Safety\nAdministration 400 Seventh Street, S. W.\nWashington, D. C 20590\nINR - 3 pi, i';I)\n6-O6P01:41 RCVp\nMr. John Traeger\nManager, Pipelines and Terminals\nCenex Harvest States Cooperatives, Inc.\n803 Highway 212 South\nLaurel, MT 59044\nRE. CPF No. 5-2004-5023\nDear Mr. Traeger:\nEnclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the\nabove-referenced case. It makes findings of violation, assesses a civil penalty of $43, 000, makes\na finding of inadequate procedures and requires amendment of certain integrity management\nprogram procedures. The Final Order also specifies actions to be taken to comply with the\npipeline safety regulations and revision of certain integrity management program procedures.\nThe penalty payment terms are set forth in the Final Order. When the civil penalty is paid and\nthe terms of the compliance order and amendment of procedures are completed, as determined\nby the Director, Western Region, this enforcement action will be closed. Your receipt of the Final\nOrder constitutes service of that document under 49 C. F. R. $ 190. 5.\nSincerely,\nJames Reynolds\nPipeline Compliance Registry\nOffice of Pipehne Safety\nEnclosure\ncc: Chris Hoidal, Director, Western Region, OPS\nCERTIFIED MAIL - RETURN RECEIPT RE UESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D. C. 20590\nIn the Matter of\nCENEX HARVEST STATES\nCOOPERATIVES, INC.\nRespondent.\nCPF No. 5-2004-5023\nFINAL ORDER\nBetween July 28 and 31, 2003, pursuant to 49 U. S. C. $ 60117, representatives of the Office of\nPipeline Safety (OPS) Central and Western Regions, conducted an Integrity Management (IM)\ninspection of Respondent's pipeline system in Laurel, Montana As a result of the inspection, the\nDirector, Western Region, OPS, issued to Respondent, by letter dated July 30, 2004, a Notice of\nProbable Violation, Proposed Civil Penalty, Proposed Compliance Order, and Notice of Amendment\n(Notice)'. In accordance with 49 C. F. R. $ 190. 207, the Notice proposed finding that Respondent had\nviolated 49 C. F. R Part 195, proposed assessing a civil penalty of $43, 000 for the alleged violations\nand proposed that Respondent take certain measures to correct the alleged violations. The Notice\nalleged inadequacies in Respondent's integrity management program and proposed to require\namendment of Respondent's procedures to comply with the requirements of 49 C. F. R. $195. 452.\nRespondent requested a 60-day extension of time on August 18, 2004 to respond to the Notice. On\nAugust 27, 2004, Respondent was granted a 60-day extension to respond to the Notice. Respondent\nresponded to the Notice by letter dated, November 1, 2004 (Response). Respondent contested five\nof the alleged violations, offered information to explain the allegations, provided information\nconcerning the corrective actions it has taken, and requested additional time to complete the\nprovisions of the Proposed Compliance Order and Proposed Notice of Amendment. Respondent also\nrequested a hearing.\nThe hearing was held on February 22, 2005. After the hearing, Respondent submitted a\nsupplemental response dated March 15, 2005, in support of the position that its integrity\nmanagement plan and procedures meet the requirements of )$195. 452(f)(1) and 195. 452(f)(5).\ni This case, however, is ilo loilger before iRSPA for decision Fffeciive February 20, 2005, tiNe Pipehne and\nHazardous Matenals Safety Admimstration (PHMSA) was created to further the highest degree of safety in pipelme\ntransportation and hazardous materials transportation See, section 108 of the Norman Y Mineta Research and\nSpecial Programs Improvement Act (Pubhc Law 108-426, 118 Stat 2423-2429 (November 30, 2004)) See also, 70\nFed Reg 8299 (February 18, 2005) redelegating the pipehne safety functions to the Adimmstrator, PHMSA\n\n\n\nFINDINGS OF VIOLATION\nUncontested\nRespondent did not contest the alleged violation of ($195. 452 in Items 1(b, d-e, h-j), 2, 3 (a-f), 4,\n5(a-c), 6(a-b), and 7(b), 8, and 9(a-b) of the Notice. Accordingly, I find that Respondent violated\n49 C F. R. Part 195, as more fully described m the Notice:\n49 C. F. R. $195. 452(f)(1) — failure to perform segment identification on its 10\"\nBV211 to Glendive pipeline prior to placing it into service.\n49 C F. R. $195. 452(f)(8) — failure to include any process description, or reference\nany procedures for performing reviews of integrity assessment results; failure to\ninclude a process for ensuring that personnel performing integrity assessment result\nreviews are qualified to perform these reviews; failure to include a process for\nvalidating and calibrating data received from third party in-line inspection (ILI)\nvendors; failure to include a process for integration of other information with\nassessment results in making repair decisions.\n49 C. F. R. $195. 452(e)(1)(i-viii) — failure to adequately describe in sufficient detail\nthe performance of additional risk assessments aAer the BAP has been completed.\n49 C F. R. (195. 452(f)(5) — failure to adequately describe in sufficient detail a\nmethodology for choosing integrity re-assessment methods.\n49 C. F. R. $195. 452(f)(7) — failure to adequately describe in sufficient detail its\nprocess for applying the performance metrics in its IMP to evaluate program\neffectiveness, as it relates to identifying the type and frequency of audits to be\nperformed, developing a process for communicating goals and results of the IMP to\nmanagers and others in the organization and developing a process for analyzing\nactual events, e. g. ,\nnear misses as well as incorporating lessons learned.\n49 C. F R. $195. 452(1)(1)(i)(ii) — failure to have a written integrity management\nprogram, as Respondent-failed to meet the 3/31/02 deadline for the development of\ntwo (2) of the processes required to be in the initial framework, and failure to have\nsufficient documents to support the decisions and analyses, including any\nmodifications, justification, variances, deviations and determinations made, and\nactions taken, to implement and evaluate each element of the integrity management\nprogram in accordance with 49 C. F. R. ($195. 452(f)(6 -7) and (b)(4)(ii).\n\n\n\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nContested\nItem la of the Notice alleged that Respondent violated 49 C. F. R. )195. 452 (f)(1) and (3) by not\nidentifying pipeline facilities that could affect High Consequence Areas in its Integrity Management\nPlan (IMP). OPS noted that Respondent did not mention pipeline facilities other than line pipe.\nIn its Response and during the hearing, Respondent argued that it did not exclude pipeline facilities\nfrom its segment identification analysis but did not address them specifically. Respondent explained\nthat it took a conservative approach that did not include the use of any specific leak volumes\nRespondent further explained that it picked \"conservative buffer distances, \" i. e 20 mile overland\ntransport corridor and 50-mile water transport. Respondent posed that since no leak volumes were\ncalculated and that pipeline facihties other than mainline pipe, such as breakout tanks and pump\nstations, were treated exactly like mainline pipe.\nOPS countered that a determination on the conservative nature of the buffer zone distances presented\ncannot be made without Respondent performing an analysis. OPS explained that Respondent must\nconduct a quantitative analysis of the overland spread and water transport differences for the\ndifferences in spill volumes between line pipe and other pipeline facilities which usually have\ngreater potential release volumes. In furtherance, OPS argued that Respondent must provide\njustification for why they chose a 20 mile overland transport corridor and a 50-mile water transport\ndistance as opposed to any other distance. OPS maintained that each operator must consider every\naspect of their pipeline system and have documents to support the decisions and analyses, including\nany modifications, justifications, variances, deviations, and determinations made, and actions taken,\nto implement and evaluate each element of the integrity management program listed in 49 C. F. R.\n)195. 452(f).\nRespondent's revised IMP does not address pipeline facilities other than the line pipe. Respondent's\nIMP does not provide a comprehensive risk assessment. Respondent provided a list of facilities\nwithin a \"could affect\" pipeline segment after segment identification has been completed. The\ninformation is insufficient. This is not what the rule intended nor does it allow for a comprehensive\nrisk assessment There is a lack of sufficient detail to explain the process, to support Respondent's\n\"conservative approach\" or to justify the use of its approach. Accordingly, I find that Respondent\nviolated 49 C. F. R. )195. 452 (f)(1) and(3) by failing to adequately identify in its Integrity\nManagement Plan pipeline facilities that could affect High Consequence Areas.\nItem 1c of the Notice alleged that Respondent violated 49 C F R. )195 452(f)(1), by not providing\nsufficient detailed procedures in its IMP to identify all pipeline segments that \"could affect\" an HCA.\nOPS posed that Respondent's revised process description covering segment identification lacks\nadequate specificity to understand the process and to ensure that all pipeline segments that \"could\naffect\" an HCA were identified and covered in Respondent's IMP program, in accordance with 49\nC. F R $195. 452(1)(1)(ii)\n\n\n\nDuring the hearing and in its Responses, Respondent argued that its segment identification\nprocedures are adequate and effective because of the conservative nature of their buffer zone.\nRespondent advised that based upon the hearing, it understands that OPS would like to see additional\ndetails included m the procedures to ensure that it contains adequate specificity and is repeatable\nTo that end, Respondent advised that it modified Sections 2. 3, 2. 4, and 2. 5 of its IMP to achieve\nthose results. Respondent submitted the modified sections into the record.\nA review and comparison of Respondent's original procedures and the modified version revealed\nthat Respondent did not actually modify its procedures but made grammatical changes. Respondent\nmoved origmal language between section numbers, summarized original wording and changed the\ntense of words from future to present. For example, the original Section 2. 3 entitled \"Identifying\npotential HCAs that could be affected\" is now labeled Section 2. 4 and a new Section 2. 3 entitled,\n\"Geographic Information System (GIS)\" has been inserted. This section is one sentence long and\nmerely states, \"CHS utilized GIS data that is available on the NPMS website in conjunction with\nDeLorme TopoUSA, mapping software and Microsoft Access to analyze and manage the HCA and\nRisk data. \" This language is a summary of the last paragraph in Respondent's original IM Section\n2. 4\nThe new Section 2. 4 entitled, \"Identifying potential HCAs that could be affected\" and its subsections\nare nearly identical to the CHS IM original Section 2. 3 and its subsections. Again, the differences\nnoted are the changes of tense from future to present or past, e. g. ,\nThe original document discussed\npositions that normally would complete a task — the new language states more definitively, \"This\nprocess was completed by the DOT Compliance Coordinator, the Manager, EH&S and Manager,\nPipelines and Terminals. \" Also, while the original subsection 2 3. 3 asks the new question, \"Does\nthe HCA intersect the pipeline?\" There are a few other minor modifications to the procedures which\ndo not change the substance of the information presented from the original documents reviewed.\nIt is not necessary to enumerate all of the minor word changes.\nRespondent has not changed its segment identification process to provide sufficient detailed\nprocedures in its IMP to identify all pipeline segments that \"could affect\" an HCA. Respondent's\nrevised process description covering segment identification failed to provide adequate specificity\nto understand the process and to ensure that all pipeline segments that \"could affect\" an HCA were\n=- identified and covered in Respondent's IMP program, in accordance with 49 C. F R.\n$195. 452(1)(1)(ii). Accordingly, I find that Respondent violated 49 C. F R. $195. 452 (f)(1).\nItem 1f of the Notice alleged that Respondent violated 49 C. F. R $195 452(f)(1), by not including\nin its IMP the justification for the twenty (20) mile overland buffer zone or the fifty (50) mile water\ntransport distance. For example, there was no discussion on what constitutes a \"body of water\" for\nthe purpose of transportation.\nDuring the hearing and in its Response, Respondent explained that it chose the 20 mile overland\ntransport corridor and the 50-mile water transport corridor because they were conservative distances\n\n\n\nused to ensure that no potentially impacted HCA's were excluded from its pipeline segment\nidentification analysis. Respondent acknowledged that during an OPS IMP mspection m July 2003,\nit was notified by OPS thatjustification to support this conservative approach was necessary and that\njustification must be included in the IMP. Respondent advised that it responded with the initiation\nof an engmeering study by a consultant to evaluate the conservative nature of its buffer approach\nto the segment identification process.\nAlthough Respondent submitted documentation of the engineering calculations concermng release\nvolumes, there are no result summaries or assumptions for the calculations made. While the report\nreflects what the consultant did, it failed to include the process or conclusions. Without a sufficient\ndetailed explanation of the process used, the assumptions made and the conclusions drawn, a\ndetermination on the adequacy of the analysis cannot be made. Accordingly, I find that Respondent\nviolated 49 C. F. R. $195. 452 (f)(1).\nItem 1g of the Notice alleged that Respondent violated 49 C. F. R. $195. 452(f)(1), by not providmg\nJustification for the exclusion of pipeline segments that directly intersect HCAs.\nDuring the hearing and in its Response, Respondent contended that it did include in its IMP the\nrationale for each case that a pipeline segment, which intersects an HCA, was determined to be\nunable to affect that HCA. Respondent further contended that the specific information was\ncontained in Appendix A of the IMP. In response to the discussion on this topic at the hearing,\nRespondent advised that Section 2. 4. 4 was modified to clarify its procedures for handling HCA's\nthat are intersected by its pipeline.\nFurther review of the modifications submitted by Respondent revealed no substantive changes to its\nIMP, as there was no justification for determining that pipeline segments that directly intersect a\nHCA cannot affect that HCA. Respondent failed to provide technical justification for excluding\npipeline segments that directly intersect HCAs, in accordance with 49 C F. R. $195 452 (b)(6)(ii).\nAccordingly, I find that Respondent violated 49 C. F. R $195. 452 (f)(1)\nItem 7a of the Notice alleged that Respondent violated 49 C. F. R. $195. 452(f)(5), by not providing\na sufficiently detailed description for continual process of evaluation and assessment in its IMP.\nRespondent did not document the methods and information required for integration for determining\nre-assessment intervals, as required by $195. 452(e). Respondent's IMP program states that 5-year\nre-assessment intervals will be used However, the justification for using this re-assessment was not\nprovided in accordance with $195 452(j).\nDuring the hearing and in its Response, Respondent took the position that IMP regulations\nrequire that the information from the baseline assessments be used in developing the re-\nassessment intervals and as a result it had not set the reassessment intervals for \"coiild af fe t»\npipeline segments at the time of the OPS inspection. Respondent contended that at the time of\nthe July 2003 inspection, no basehne assessments had been completed and it did not set a 5-year\nre-assessment interval. Respondent argued that reassessment intervals would not be set until\n\n\n\nafter the completion of baseline assessments, and that when the reassessment interval was\ndetermined, it would not exceed 5 years.\nAfter further review of Section 7 of Respondent's IMP, Respondent is correct in its position that it\ndid not set a 5-year re-assessment interval. Nevertheless, Respondent also failed to provide the\nprocess or procedures for determming reassessment intervals as required by $195 452(e). General\nstatements concemmg appropriate assessment methods for each \"could affect\" pipeline segment\nwithout mcluding process steps and the timing for making this determination is insufficient. The\nmodifications submitted by Respondent failed to include sufficient technical justification for\ndetermining reassessment intervals Accordingly, I find that Respondent violated 49 C. F. R.\n$195. 452(f)(5) by failing to provide a sufficiently detailed description for continual process of\nevaluation and assessment in its IMP, as required by $195. 452(e)\nASSESSMENT OF PENALTY\nUnder 49 U. S. C. $ 60122, Respondent is subject to a civil penalty not to exceed $100, 000 per\nviolation for each day of the violation up to a maximum of $1, 000, 000 for any related series of\nviolations. The Notice proposed a $43, 000 civil penalty for violations of 49 C. F. R. Part 195.\n49 U. S. C. $ 60122 and 49 C. F. R. $ 190 225 require that, in determining the amount of the civil\npenalty, I consider the following criteria: nature, circumstances, and gravity of the violation, degree\nof Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the\npenalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's\nability to continue in business, and such other matters as justice may require\nItem j. a of the Notice proposed a civil penalty of $5, 000 for violation of 49 C. F. R. )195. 452(f)(1),\nas Respondent failed to identify pipeline facilities that could affect high consequence areas in its\nIntegrity Management Plan (IMP). Respondent did not mention pipeline facilities other than line\npipe. Respondent did not provide a comprehensive risk assessment. It is essential that an operator's\napproach clearly identifies the major threats to HCAs for a given pipeline segment or facility,\nidentifies how those threats rank in relation to each other, and how the segments and facilities\ncompare to each other based on the risk to HCAs. Respondent has not shown any circumstance that\nwould have prevented or justified it not including sufficient details about the processes and\nprocedures to support its \"conservative approach\" or to justify the use of its approach Respondent\nfailed to provide an analysis that integrates all available information about the integrity of the entire\npipehne and the consequences of a failure, as required by 49 C. F R $ 195 452(f)(3). Accordingly,\nhavmg reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $5, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).\nItem 1c of the Notice proposed a civil penalty of $1 000 for v~olation of 49 C. F. R. $195 452(f)(1),\nas Respondent failed to provide sufficient detailed procedures in its IMP to identify all pipeline\nsegments that \"could affect\" an HCA. A review and comparison of Respondent's original\nprocedures and the modified version revealed that Respondent did not actually modify its procedures\n\n\n\nbut made grammatical changes. Respondent's revised process description covering segment\nidentification lacked adequate specificity to make the process clear and to ensure that all pipeline\nsegments that \"could affect\" an HCA were identified and covered in Respondent's IMP program,\nin accordance with 49 C. F. R. $195. 452(1)(1)(ii). An operator's failure to identify pipelme facilities\nthat could affect high consequence areas along the pipelme will leave it ill-prepared to address the\nseverity and extent of the consequences that ensue following a failure. A release or failure under\nsuch circumstances increases the risk of harm to the public and the environment. Accordingly,\nhaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $1, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).\nItem 1f of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195. 452(f)(I),\nas Respondent failed to include in its IMP justification to support the use of its approach for a twenty\n(20) mile overland buffer zone and a fifty (50) mile water transport distance. For instance,\nRespondent failed to discuss what constitutes a \"body of water\" for the purpose of transportation.\nRespondent acknowledged that it was notified by OPS thatjustification to support this conservative\napproach was necessary and that justification must be included in the IMP. Nevertheless,\nRespondent failed to do so with a sufficiently detailed explanation of the process used, the\nassumptions made and the conclusions reached. Therefore, a determmation on the adequacy of the\nanalysis cannot be made. Accordingly, having reviewed the record and considered the assessment\ncriteria, I assess Respondent a civil penalty of $2, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).\nItem Ig of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195. 452(f)(I),\nas Respondent failed to provide justification for the exclusion of pipeline segments that directly\nintersect HCAs. Respondent contended that Appendix A of its IMP contained the specific\ninformation and rationale for each case that a pipeline segment, which intersects an HCA, was\ndetermined to be unable to affect that HCA. A subsequent review of the modifications submitted\nby Respondent revealed no substantive changes and failed to provide technical justification for\nexcluding pipeline segments that directly intersect HCAs, in accordance 49 C. F. R. $195 452\n(b)(6)(ii). Accordmgly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $2, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).\nItem li of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195 452(f)(1),\nas Respondent failed to perform segment identification on its 10\" BV211 to Glendive pipelme prior\nto placing it into service. Respondent treated this new line as if it could affect only the HCAs that\nwere identified for the line that it replaced. Respondent failed to have a process to ensure that all\nnew pipelines that could affect an HCA are identified and incorporated in its IMP, in accordance\nwith 49 C. F. R. $195. 452(b)(2). Respondent did not contest the violation or show any circumstance\nthat would have prevented or justified its failure to perform segment identification on its 10\" BV211\nto Glendive pipeline prior to placing it into service. Accordmgly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $2, 000, for violation of 49\nC. F. R. $195. 452(f)(1).\nItem 2 of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195 452(b)(3),\nRespondent did not contest the violation or show any circumstance that would have prevented or\n\n\n\njustified its failure to document in sufficient detail the process for revising the baseline assessment\nplan (BAP). Respondent's IMP did not include processes and procedures for the inclusion of new\nsegments that could affect an HCA in its BAP within one (1) year and for assessing the integrity of\nnew segments within five (5) years. A release or failure under such circumstances increases the nsk\nof harm to the public and the environment. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $2, 000, for violation of 49 C. F. R.\n$195 452(b)(3).\nItem 5c of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195. 452(e)(1)(i-\nvin) An operator's failure to sufficiently document its risk analysis process and analyze the potential\neffects of pipeline failures on high consequence areas at specific locations along the pipeline will\nleave it ill-prepared to address the severity and extent of the consequences that ensue following a\nfailure. Respondent did not contest the violation or show any circumstance that would have\nprevented or justified it not including sufficient details about the processes and procedures used to\nrisk rank its HCA segments and the segments hsted in Respondent's BAP. Accordingly, having\nreviewed the record and considered the assessment cnteria, I assess Respondent a civil penalty of\n$2, 000, for violation of 49 C. F. R. $195. 452(e)(1).\nItem 6a of the Notice proposed a civil penalty of $10, 000 for violation of 49 C. F. R. $195. 452(i)(1),\nas Respondent failed to provide sufficient detail on the methods to be used to evaluate preventive\nand mitigative measures. Respondent also failed to provide sufficient descriptions for its steps to\nchoose candidate measures, assess risks and how it determines whether to implement the candidate\nmeasures. Respondent did not contest the violation or show any circumstance that would have\nprevented or justified it not including sufficient details about its preventive and mitigative measures.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess Respondent\na civil penalty of $10, 000 for violation of 49 C. F. R. $195. 452(i)(1).\nItem 7a of the Notice proposed a civil penalty of $5, 000 for violation of 49 C. F. R. $195. 452(f)(5),\nas Respondent failed to provide the process or procedures for determining reassessment intervals as\nrequired by $195. 452(e). An evaluation of pipeline integrity is performed periodically to update the\noperator's understanding of pipe conditions and the location-specific integrity threats for segments\nthat can affect HCAs The results of this evaluation are use to establish the intervals for future\nintegrity assessments and the assessment methods to be used. Respondent argued that reassessment\n, intervals would not be set until after the completion of baseline assessments, and that when the re-\nassessment interval was determined, it would not exceed 5 years. The re-assessment intervals are\nbased on all risk factors associated with the pipeline. The operator must include, but is not limited\nto, the factors detailed in $195. 452(e) Respondent must have a continual process of evaluation and\nassessment. Respondent failed to provide a sufficiently detailed description for continual process\nof evaluation and assessment in its IMP, as required by $ 195. 452(e). Respondent failed to determine\nany re-assessment intervals at the time of the mspection Accordingly, having reviewed the record\nand considered the assessment cntena, I assess Respondent a civil penalty of $5, 000 for violation\nof 49 C. F R. $195. 452(f)(5).\n\n\n\n9\nItem 7b of the Notice proposed a civil penalty of $2,000 for violation of 49 C.F.R. §195.452(t)(5),\nas Respondent failed to describe a methodology for choosing integrity re-assessment methods in its\nIMP. The operator must assess the integrity of the line pipe by any of the methods detailed in\n§195.452(1)(5). Respondent did not contest the violation or show any circumstance that would have\nprevented or justified its failure to describe a methodology for assessing the integrity of the line pipe\nconsidered the assessment criteria, I assess Respondent a civil penalty of $2,000 for violation of 49\nC F.R. §195.452(f)(5).\nItem 9a of the Notice proposed a civil penalty of $10,000 for violation of 49 C.F.R.\n§195.452(1)(1)(i-ii), as Respondent failed to maintain for review, during an inspection, a written\nintegrity management program in accordance with 49 C.F.R. §195.452(b)(4)(i-ii). Respondent did\nnot contest the violation or show any circumstance that would have prevented or justified its failure\nto comply. Respondent's IMP failed to include two (2) of the processes required to be in the initial\nframework by March 31, 2002 and failed to indicate how decisions will be made to implement each\nelement of the IM program. Respondent failed to have in place an IM program that includes a\nframework that addresses each element of the IM program. Accordingly, having reviewed the record\nand considered the assessment criteria, I assess Respondent a civil penalty of $10,000 for violation\nof 49 C.F R. §195.452(1)(1)(i-ii).\nAccordingly, having reviewed the record and considered the assessment criteria, I assess Respondent\na total civil penalty of $43,000 A determination has been made that Respondent has the ability to\npay this penalty without adversely affecting its ability to continue business.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R.\n§ 89.21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are\ncontained in the enclosure. Questions concerning wire transfers should be directed to. Financial\nOperations Division (AMZ-300), Federal Aviation Administration, Mike Monroney Aeronautical\nCenter, P.O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $43,000 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 same\nauthorities, a late penalty charge of six percent (6%) per annum wıll be charged if payment is not\nmade within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral\nof the matter to the Attorney General for appropriate action in a United States District Court.\nCOMPLIANCE ORDER\nThe Notice proposed a Compliance Order with regards to Item 1(1), 3(a-d), 8, and 9(b), violation\nof 49 C.F.R. § 195.452(f)(1), 195.452(f)(8), 195.452(f)(7) and 195 452(1)(1).\nUnder 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or\n\n\n\na. Clearly articulate the necessary steps to perform each program element\nand ensure repeatability;\nb. Describe the key input information sources;\nc. Define the process output products, their documentation (including the\njustification for decisions), and document retention requirements; and\nd. Specify organizational responsibilities for performing key process steps\nWith regard to Item 1(i), establish processes and procedures that comply with 49 C. F. R.\n$195. 452 in its entirety as it relates to Category 3 \"new\" pipelines.\na. Processes and procedures that comply with 49 C. F. R. $195. 452 in its\nentirety with regard to performing integrity assessment results reviews.\nb. Processes and procedures that comply with 49 C. F R. $195. 452 in its\nentirety with regard to only utilizing qualified individuals to perform the\nintegrity assessment results review.\nc. Processes and procedures for validating and calibrating data received from\nthird party in-line-inspection (ILI) vendors.\nd. Processes and procedures for the integration of other information with\nassessment results in making repair decisions.\n4. With regard to Item 8, establish processes and procedures that comply with 49 C. F. R.\n$195. 452 in its entirety with regard to evaluating Cenex's IM Program effectiveness,\nincluding sufficient details on the application of appropriate performance metrics.\nWithin 60 days of receipt of this Order, submit proof, records and notice of completed\nactions for Items 1-4 to Mr Chris Hoidal, Director, Office of Pipeline Safety, Western\nRegion, 12300 W. Dakota Avenue, Ste ¹110, Lakewood, CO 80228.\n\n\n\n6. Cenex Harvest States Cooperatives, Inc. must maintain documentation of the costs\nassociated with fulfilling this Compliance order and submit the total to the Director,\nOffice of Pipeline Safety, Western Region.\nThe Regional Director may extend the period for complying with the required items if the\nRespondent requests an extension and adequately justifies the reasons for the extension.\nAMENDMENT OF PROCEDURES\nItems 1b-g, 2, 3e-f, 4, Sa-b, and 6a of the Notice alleged inadequacies in Respondent's integrity\nmanagement program and proposed to require amendment of Respondent's procedures to comply\nwith the requirements of 49 C. F. R. $$ 195. 452(f)(1), 195. 452(b)(3), 195 452 (f)(8), 195. 452(f)(4),\n195 452(e)(1)(i-viii), and 195. 452(i)(1).\nRespondent requested addition time to implement the provisions the proposed Notice of\nAmendment. Although Respondent submitted amended procedures with its post-hearing submission\non March 16, 2005 to the Western Region, OPS, these procedures do not address all of the\ninadequacies described in the Notice. Accordingly, I find that Respondent's integrity management\nprocedures are inadequate to ensure safe operation of its pipeline system. Pursuant to 49 U. S. C.\n$ 60108(a) and 49 C. F. R. $ 190. 237, Respondent is ordered to make the following revisions to its\nintegrity management program and procedures. Respondent must:\nAmend your procedures to include which company personnel are to provide\nfeedback from field activities that could result in the identification of new or\nextended segments that could affect HCAs, include how the information is\nto be recorded and how it will be communicated to your IM team, in\naccordance with 49 C. F. R. $ 195. 452(d)(3).\nAmend your procedures to include appropriate details and specificity about\nthe process description in your integrity management plan document covering\nsegment identification. Ensure that all pipehne segments that \"could affect\"\nan HCA are identified.\nAmend your procedures to describe the process for how your pipelines were\nlocated with your software program in relation to HCAs, include how this\nwas accomplished to ensure repeatability\nAmend your procedures to provide sufficient details that clearly describe\n\"ground truthing\" as a method to verify that all pipeline segments that could\naffect an HCA have in fact been identified, include a description of how this\nprocess is to be implemented.\nAmend your procedures to include justification for your ten (10) mile\noverland buffer zone and fifty (50) mile water transport distance, mcluding\n\n\n\n12\na description of what constitutes a \"body of water\" for the purpose of\ntransportation.\nAmend your procedures to include technical justification for excluding\npipeline segments that directly intersect HCAs.\nAmend your procedures to include in sufficient detail the process for revising\nyour baseline assessment plan (BAP), including the processes and procedures\nfor the inclusion of new segments that could affect an HCA in your BAP\nwithin one (1) year and for assessing the integrity of new segments within\nfive (5) years.\nAmend your procedures to include a process for the development of hydrotest\nprocedures and acceptance criteria where you plan to utilize hydrotesting as\na method of integrity assessment.\nAmend your procedures to include a process description that limits a pressure\nreduction taken to ensure the integrity of a line segment until repairs can be\ncompleted to a maximum of 365 days\nAmend your procedures to describe in detail to ensure repeatability how the\nSubject-Matter-Expert (SME) risk analysis process was performed, including,\nbut not limited to, the use of appropriate inputs, considerations of the inputs\nas well as technical justifications of determinations made.\nAmend your procedures to expand your risk analysis process description and\nprovide additional process descriptions, including, but not limited to, a\ndefinition of the Probability and Consequences risk categories, a definition\nof the terms Susceptibility and Severity, qualitative description for the\nProbability and Consequence quantitative (1-10) rankings and consideration\nof the use of weighing factors for risk categories used.\nAmend your procedures to describe in sufficient detail the process for\nidentifying preventive and mitigative measures and the methods to be used\nto evaluate preventive and mitigative measures. The description should\ninclude steps for choosing a candidate measures, assessing risk, and deciding\non whether to implement the candidate measures Your procedures should\nalso include, but is not limited to, identification of the most significant\ndrivers of high risk; identification of the preventive and mitigative measures\nthat address the high risk drivers; measurement of the effectiveness of\npreventive and mitigative measures; determme which preventive and\nmitigative measures are implemented; and evaluate the effectiveness of\nmstalling additional leak detection and/or emergency flow restriction devices\n(valves).\n\n\n\n13\n13. Submit the amended procedures within 30 days following receipt of this\nOrder to Director, Office of Pipeline Safety Western Region, 12300 W.\nDakota Avenue, Suite 110, Lakewood, CO 80228.\nThe Regional Director may extend the period for complying with the required items if the\nRespondent requests an extension and adequately justifies the reasons for the extension.\nFailure to comply with this Amendment may result m the assessment of civil penalties of up to\n$100, 000 per violation per day, or in the referral of the case for judicial enforcement.\nWARNING ITEM\nThe Notice did not propose a civil penalty or corrective action for Items 1(h), 1(j) and 6(b) in the\nNotice; therefore, these are considered warning items. Respondent is warned that if it does not take\nappropriate action to correct these items, enforcement action will be taken if a subsequent inspection\nreveals a violation.\nFailure to comply with this Final Order may result in the assessment of civil penalties of up to\n$100, 000 per violation per day, or in the referral of the case for judicial enforcement.\nUnder 49 C. F. R. $ 190. 215, Respondent has a right to submit a Petition for Reconsideration of this\nFinal Order. The petition must be received within 20 days of Respondent's receipt of this Final\nOrder and must contain a brief statement of the issue(s). The filing of the petition automatically\nstays the payment of any civil penalty assessed. All other terms of the order, including any required\n\"corrective action and amendment of procedures, remain in full effect unless the Associate\nAdministrator, upon request, grants a stay. The terms and conditions of this Final Order are effective\non recei\ngg -l3 2006\nDate Issued\nStac rard\n~sso iat Administrator\nfor '\nine Safety","truncated":false,"body_characters":39678}