# CENEX PIPELINE LLC — Notice of Probable Violation

- **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:** Not available
- **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).
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**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.

Official case documents:

520045023_final order_03032006.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045023/520045023_final%20order_03032006.pdf

520045023_final order_03032006_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045023/520045023_final%20order_03032006_text.pdf

CPF_ NO5-2004_5023.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520045023/CPF_%20NO5-2004_5023.pdf

520045023_final order_03032006_text.pdf

U. S. Department
of Transportation
Pipeline and
Hazardous Materials Safety
Administration 400 Seventh Street, S. W.
Washington, D. C 20590
INR - 3 pi, i';I)
6-O6P01:41 RCVp
Mr. John Traeger
Manager, Pipelines and Terminals
Cenex Harvest States Cooperatives, Inc.
803 Highway 212 South
Laurel, MT 59044
RE. CPF No. 5-2004-5023
Dear Mr. Traeger:
Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the
above-referenced case. It makes findings of violation, assesses a civil penalty of $43, 000, makes
a finding of inadequate procedures and requires amendment of certain integrity management
program procedures. The Final Order also specifies actions to be taken to comply with the
pipeline safety regulations and revision of certain integrity management program procedures.
The penalty payment terms are set forth in the Final Order. When the civil penalty is paid and
the terms of the compliance order and amendment of procedures are completed, as determined
by the Director, Western Region, this enforcement action will be closed. Your receipt of the Final
Order constitutes service of that document under 49 C. F. R. $ 190. 5.
Sincerely,
James Reynolds
Pipeline Compliance Registry
Office of Pipehne Safety
Enclosure
cc: Chris Hoidal, Director, Western Region, OPS
CERTIFIED MAIL - RETURN RECEIPT RE UESTED



DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D. C. 20590
In the Matter of
CENEX HARVEST STATES
COOPERATIVES, INC.
Respondent.
CPF No. 5-2004-5023
FINAL ORDER
Between July 28 and 31, 2003, pursuant to 49 U. S. C. $ 60117, representatives of the Office of
Pipeline Safety (OPS) Central and Western Regions, conducted an Integrity Management (IM)
inspection of Respondent's pipeline system in Laurel, Montana As a result of the inspection, the
Director, Western Region, OPS, issued to Respondent, by letter dated July 30, 2004, a Notice of
Probable Violation, Proposed Civil Penalty, Proposed Compliance Order, and Notice of Amendment
(Notice)'. In accordance with 49 C. F. R. $ 190. 207, the Notice proposed finding that Respondent had
violated 49 C. F. R Part 195, proposed assessing a civil penalty of $43, 000 for the alleged violations
and proposed that Respondent take certain measures to correct the alleged violations. The Notice
alleged inadequacies in Respondent's integrity management program and proposed to require
amendment of Respondent's procedures to comply with the requirements of 49 C. F. R. $195. 452.
Respondent requested a 60-day extension of time on August 18, 2004 to respond to the Notice. On
August 27, 2004, Respondent was granted a 60-day extension to respond to the Notice. Respondent
responded to the Notice by letter dated, November 1, 2004 (Response). Respondent contested five
of the alleged violations, offered information to explain the allegations, provided information
concerning the corrective actions it has taken, and requested additional time to complete the
provisions of the Proposed Compliance Order and Proposed Notice of Amendment. Respondent also
requested a hearing.
The hearing was held on February 22, 2005. After the hearing, Respondent submitted a
supplemental response dated March 15, 2005, in support of the position that its integrity
management plan and procedures meet the requirements of )$195. 452(f)(1) and 195. 452(f)(5).
i This case, however, is ilo loilger before iRSPA for decision Fffeciive February 20, 2005, tiNe Pipehne and
Hazardous Matenals Safety Admimstration (PHMSA) was created to further the highest degree of safety in pipelme
transportation and hazardous materials transportation See, section 108 of the Norman Y Mineta Research and
Special Programs Improvement Act (Pubhc Law 108-426, 118 Stat 2423-2429 (November 30, 2004)) See also, 70
Fed Reg 8299 (February 18, 2005) redelegating the pipehne safety functions to the Adimmstrator, PHMSA



FINDINGS OF VIOLATION
Uncontested
Respondent did not contest the alleged violation of ($195. 452 in Items 1(b, d-e, h-j), 2, 3 (a-f), 4,
5(a-c), 6(a-b), and 7(b), 8, and 9(a-b) of the Notice. Accordingly, I find that Respondent violated
49 C F. R. Part 195, as more fully described m the Notice:
49 C. F. R. $195. 452(f)(1) — failure to perform segment identification on its 10"
BV211 to Glendive pipeline prior to placing it into service.
49 C F. R. $195. 452(f)(8) — failure to include any process description, or reference
any procedures for performing reviews of integrity assessment results; failure to
include a process for ensuring that personnel performing integrity assessment result
reviews are qualified to perform these reviews; failure to include a process for
validating and calibrating data received from third party in-line inspection (ILI)
vendors; failure to include a process for integration of other information with
assessment results in making repair decisions.
49 C. F. R. $195. 452(e)(1)(i-viii) — failure to adequately describe in sufficient detail
the performance of additional risk assessments aAer the BAP has been completed.
49 C F. R. (195. 452(f)(5) — failure to adequately describe in sufficient detail a
methodology for choosing integrity re-assessment methods.
49 C. F. R. $195. 452(f)(7) — failure to adequately describe in sufficient detail its
process for applying the performance metrics in its IMP to evaluate program
effectiveness, as it relates to identifying the type and frequency of audits to be
performed, developing a process for communicating goals and results of the IMP to
managers and others in the organization and developing a process for analyzing
actual events, e. g. ,
near misses as well as incorporating lessons learned.
49 C. F R. $195. 452(1)(1)(i)(ii) — failure to have a written integrity management
program, as Respondent-failed to meet the 3/31/02 deadline for the development of
two (2) of the processes required to be in the initial framework, and failure to have
sufficient documents to support the decisions and analyses, including any
modifications, justification, variances, deviations and determinations made, and
actions taken, to implement and evaluate each element of the integrity management
program in accordance with 49 C. F. R. ($195. 452(f)(6 -7) and (b)(4)(ii).



These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
Contested
Item la of the Notice alleged that Respondent violated 49 C. F. R. )195. 452 (f)(1) and (3) by not
identifying pipeline facilities that could affect High Consequence Areas in its Integrity Management
Plan (IMP). OPS noted that Respondent did not mention pipeline facilities other than line pipe.
In its Response and during the hearing, Respondent argued that it did not exclude pipeline facilities
from its segment identification analysis but did not address them specifically. Respondent explained
that it took a conservative approach that did not include the use of any specific leak volumes
Respondent further explained that it picked "conservative buffer distances, " i. e 20 mile overland
transport corridor and 50-mile water transport. Respondent posed that since no leak volumes were
calculated and that pipeline facihties other than mainline pipe, such as breakout tanks and pump
stations, were treated exactly like mainline pipe.
OPS countered that a determination on the conservative nature of the buffer zone distances presented
cannot be made without Respondent performing an analysis. OPS explained that Respondent must
conduct a quantitative analysis of the overland spread and water transport differences for the
differences in spill volumes between line pipe and other pipeline facilities which usually have
greater potential release volumes. In furtherance, OPS argued that Respondent must provide
justification for why they chose a 20 mile overland transport corridor and a 50-mile water transport
distance as opposed to any other distance. OPS maintained that each operator must consider every
aspect of their pipeline system and have documents to support the decisions and analyses, including
any modifications, justifications, variances, deviations, and determinations made, and actions taken,
to implement and evaluate each element of the integrity management program listed in 49 C. F. R.
)195. 452(f).
Respondent's revised IMP does not address pipeline facilities other than the line pipe. Respondent's
IMP does not provide a comprehensive risk assessment. Respondent provided a list of facilities
within a "could affect" pipeline segment after segment identification has been completed. The
information is insufficient. This is not what the rule intended nor does it allow for a comprehensive
risk assessment There is a lack of sufficient detail to explain the process, to support Respondent's
"conservative approach" or to justify the use of its approach. Accordingly, I find that Respondent
violated 49 C. F. R. )195. 452 (f)(1) and(3) by failing to adequately identify in its Integrity
Management Plan pipeline facilities that could affect High Consequence Areas.
Item 1c of the Notice alleged that Respondent violated 49 C F R. )195 452(f)(1), by not providing
sufficient detailed procedures in its IMP to identify all pipeline segments that "could affect" an HCA.
OPS posed that Respondent's revised process description covering segment identification lacks
adequate specificity to understand the process and to ensure that all pipeline segments that "could
affect" an HCA were identified and covered in Respondent's IMP program, in accordance with 49
C. F R $195. 452(1)(1)(ii)



During the hearing and in its Responses, Respondent argued that its segment identification
procedures are adequate and effective because of the conservative nature of their buffer zone.
Respondent advised that based upon the hearing, it understands that OPS would like to see additional
details included m the procedures to ensure that it contains adequate specificity and is repeatable
To that end, Respondent advised that it modified Sections 2. 3, 2. 4, and 2. 5 of its IMP to achieve
those results. Respondent submitted the modified sections into the record.
A review and comparison of Respondent's original procedures and the modified version revealed
that Respondent did not actually modify its procedures but made grammatical changes. Respondent
moved origmal language between section numbers, summarized original wording and changed the
tense of words from future to present. For example, the original Section 2. 3 entitled "Identifying
potential HCAs that could be affected" is now labeled Section 2. 4 and a new Section 2. 3 entitled,
"Geographic Information System (GIS)" has been inserted. This section is one sentence long and
merely states, "CHS utilized GIS data that is available on the NPMS website in conjunction with
DeLorme TopoUSA, mapping software and Microsoft Access to analyze and manage the HCA and
Risk data. " This language is a summary of the last paragraph in Respondent's original IM Section
2. 4
The new Section 2. 4 entitled, "Identifying potential HCAs that could be affected" and its subsections
are nearly identical to the CHS IM original Section 2. 3 and its subsections. Again, the differences
noted are the changes of tense from future to present or past, e. g. ,
The original document discussed
positions that normally would complete a task — the new language states more definitively, "This
process was completed by the DOT Compliance Coordinator, the Manager, EH&S and Manager,
Pipelines and Terminals. " Also, while the original subsection 2 3. 3 asks the new question, "Does
the HCA intersect the pipeline?" There are a few other minor modifications to the procedures which
do not change the substance of the information presented from the original documents reviewed.
It is not necessary to enumerate all of the minor word changes.
Respondent has not changed its segment identification process to provide sufficient detailed
procedures in its IMP to identify all pipeline segments that "could affect" an HCA. Respondent's
revised process description covering segment identification failed to provide adequate specificity
to understand the process and to ensure that all pipeline segments that "could affect" an HCA were
=- identified and covered in Respondent's IMP program, in accordance with 49 C. F R.
$195. 452(1)(1)(ii). Accordingly, I find that Respondent violated 49 C. F R. $195. 452 (f)(1).
Item 1f of the Notice alleged that Respondent violated 49 C. F. R $195 452(f)(1), by not including
in its IMP the justification for the twenty (20) mile overland buffer zone or the fifty (50) mile water
transport distance. For example, there was no discussion on what constitutes a "body of water" for
the purpose of transportation.
During the hearing and in its Response, Respondent explained that it chose the 20 mile overland
transport corridor and the 50-mile water transport corridor because they were conservative distances



used to ensure that no potentially impacted HCA's were excluded from its pipeline segment
identification analysis. Respondent acknowledged that during an OPS IMP mspection m July 2003,
it was notified by OPS thatjustification to support this conservative approach was necessary and that
justification must be included in the IMP. Respondent advised that it responded with the initiation
of an engmeering study by a consultant to evaluate the conservative nature of its buffer approach
to the segment identification process.
Although Respondent submitted documentation of the engineering calculations concermng release
volumes, there are no result summaries or assumptions for the calculations made. While the report
reflects what the consultant did, it failed to include the process or conclusions. Without a sufficient
detailed explanation of the process used, the assumptions made and the conclusions drawn, a
determination on the adequacy of the analysis cannot be made. Accordingly, I find that Respondent
violated 49 C. F. R. $195. 452 (f)(1).
Item 1g of the Notice alleged that Respondent violated 49 C. F. R. $195. 452(f)(1), by not providmg
Justification for the exclusion of pipeline segments that directly intersect HCAs.
During the hearing and in its Response, Respondent contended that it did include in its IMP the
rationale for each case that a pipeline segment, which intersects an HCA, was determined to be
unable to affect that HCA. Respondent further contended that the specific information was
contained in Appendix A of the IMP. In response to the discussion on this topic at the hearing,
Respondent advised that Section 2. 4. 4 was modified to clarify its procedures for handling HCA's
that are intersected by its pipeline.
Further review of the modifications submitted by Respondent revealed no substantive changes to its
IMP, as there was no justification for determining that pipeline segments that directly intersect a
HCA cannot affect that HCA. Respondent failed to provide technical justification for excluding
pipeline segments that directly intersect HCAs, in accordance with 49 C F. R. $195 452 (b)(6)(ii).
Accordingly, I find that Respondent violated 49 C. F. R $195. 452 (f)(1)
Item 7a of the Notice alleged that Respondent violated 49 C. F. R. $195. 452(f)(5), by not providing
a sufficiently detailed description for continual process of evaluation and assessment in its IMP.
Respondent did not document the methods and information required for integration for determining
re-assessment intervals, as required by $195. 452(e). Respondent's IMP program states that 5-year
re-assessment intervals will be used However, the justification for using this re-assessment was not
provided in accordance with $195 452(j).
During the hearing and in its Response, Respondent took the position that IMP regulations
require that the information from the baseline assessments be used in developing the re-
assessment intervals and as a result it had not set the reassessment intervals for "coiild af fe t»
pipeline segments at the time of the OPS inspection. Respondent contended that at the time of
the July 2003 inspection, no basehne assessments had been completed and it did not set a 5-year
re-assessment interval. Respondent argued that reassessment intervals would not be set until



after the completion of baseline assessments, and that when the reassessment interval was
determined, it would not exceed 5 years.
After further review of Section 7 of Respondent's IMP, Respondent is correct in its position that it
did not set a 5-year re-assessment interval. Nevertheless, Respondent also failed to provide the
process or procedures for determming reassessment intervals as required by $195 452(e). General
statements concemmg appropriate assessment methods for each "could affect" pipeline segment
without mcluding process steps and the timing for making this determination is insufficient. The
modifications submitted by Respondent failed to include sufficient technical justification for
determining reassessment intervals Accordingly, I find that Respondent violated 49 C. F. R.
$195. 452(f)(5) by failing to provide a sufficiently detailed description for continual process of
evaluation and assessment in its IMP, as required by $195. 452(e)
ASSESSMENT OF PENALTY
Under 49 U. S. C. $ 60122, Respondent is subject to a civil penalty not to exceed $100, 000 per
violation for each day of the violation up to a maximum of $1, 000, 000 for any related series of
violations. The Notice proposed a $43, 000 civil penalty for violations of 49 C. F. R. Part 195.
49 U. S. C. $ 60122 and 49 C. F. R. $ 190 225 require that, in determining the amount of the civil
penalty, I consider the following criteria: nature, circumstances, and gravity of the violation, degree
of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability to pay the
penalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's
ability to continue in business, and such other matters as justice may require
Item j. a of the Notice proposed a civil penalty of $5, 000 for violation of 49 C. F. R. )195. 452(f)(1),
as Respondent failed to identify pipeline facilities that could affect high consequence areas in its
Integrity Management Plan (IMP). Respondent did not mention pipeline facilities other than line
pipe. Respondent did not provide a comprehensive risk assessment. It is essential that an operator's
approach clearly identifies the major threats to HCAs for a given pipeline segment or facility,
identifies how those threats rank in relation to each other, and how the segments and facilities
compare to each other based on the risk to HCAs. Respondent has not shown any circumstance that
would have prevented or justified it not including sufficient details about the processes and
procedures to support its "conservative approach" or to justify the use of its approach Respondent
failed to provide an analysis that integrates all available information about the integrity of the entire
pipehne and the consequences of a failure, as required by 49 C. F R $ 195 452(f)(3). Accordingly,
havmg reviewed the record and considered the assessment criteria, I assess Respondent a civil
penalty of $5, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).
Item 1c of the Notice proposed a civil penalty of $1 000 for v~olation of 49 C. F. R. $195 452(f)(1),
as Respondent failed to provide sufficient detailed procedures in its IMP to identify all pipeline
segments that "could affect" an HCA. A review and comparison of Respondent's original
procedures and the modified version revealed that Respondent did not actually modify its procedures



but made grammatical changes. Respondent's revised process description covering segment
identification lacked adequate specificity to make the process clear and to ensure that all pipeline
segments that "could affect" an HCA were identified and covered in Respondent's IMP program,
in accordance with 49 C. F. R. $195. 452(1)(1)(ii). An operator's failure to identify pipelme facilities
that could affect high consequence areas along the pipelme will leave it ill-prepared to address the
severity and extent of the consequences that ensue following a failure. A release or failure under
such circumstances increases the risk of harm to the public and the environment. Accordingly,
having reviewed the record and considered the assessment criteria, I assess Respondent a civil
penalty of $1, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).
Item 1f of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195. 452(f)(I),
as Respondent failed to include in its IMP justification to support the use of its approach for a twenty
(20) mile overland buffer zone and a fifty (50) mile water transport distance. For instance,
Respondent failed to discuss what constitutes a "body of water" for the purpose of transportation.
Respondent acknowledged that it was notified by OPS thatjustification to support this conservative
approach was necessary and that justification must be included in the IMP. Nevertheless,
Respondent failed to do so with a sufficiently detailed explanation of the process used, the
assumptions made and the conclusions reached. Therefore, a determmation on the adequacy of the
analysis cannot be made. Accordingly, having reviewed the record and considered the assessment
criteria, I assess Respondent a civil penalty of $2, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).
Item Ig of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195. 452(f)(I),
as Respondent failed to provide justification for the exclusion of pipeline segments that directly
intersect HCAs. Respondent contended that Appendix A of its IMP contained the specific
information and rationale for each case that a pipeline segment, which intersects an HCA, was
determined to be unable to affect that HCA. A subsequent review of the modifications submitted
by Respondent revealed no substantive changes and failed to provide technical justification for
excluding pipeline segments that directly intersect HCAs, in accordance 49 C. F. R. $195 452
(b)(6)(ii). Accordmgly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $2, 000, for violation of 49 C. F. R. $ 195. 452(f)(1).
Item li of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195 452(f)(1),
as Respondent failed to perform segment identification on its 10" BV211 to Glendive pipelme prior
to placing it into service. Respondent treated this new line as if it could affect only the HCAs that
were identified for the line that it replaced. Respondent failed to have a process to ensure that all
new pipelines that could affect an HCA are identified and incorporated in its IMP, in accordance
with 49 C. F. R. $195. 452(b)(2). Respondent did not contest the violation or show any circumstance
that would have prevented or justified its failure to perform segment identification on its 10" BV211
to Glendive pipeline prior to placing it into service. Accordmgly, having reviewed the record and
considered the assessment criteria, I assess Respondent a civil penalty of $2, 000, for violation of 49
C. F. R. $195. 452(f)(1).
Item 2 of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195 452(b)(3),
Respondent did not contest the violation or show any circumstance that would have prevented or



justified its failure to document in sufficient detail the process for revising the baseline assessment
plan (BAP). Respondent's IMP did not include processes and procedures for the inclusion of new
segments that could affect an HCA in its BAP within one (1) year and for assessing the integrity of
new segments within five (5) years. A release or failure under such circumstances increases the nsk
of harm to the public and the environment. Accordingly, having reviewed the record and considered
the assessment criteria, I assess Respondent a civil penalty of $2, 000, for violation of 49 C. F. R.
$195 452(b)(3).
Item 5c of the Notice proposed a civil penalty of $2, 000 for violation of 49 C. F. R. $195. 452(e)(1)(i-
vin) An operator's failure to sufficiently document its risk analysis process and analyze the potential
effects of pipeline failures on high consequence areas at specific locations along the pipeline will
leave it ill-prepared to address the severity and extent of the consequences that ensue following a
failure. Respondent did not contest the violation or show any circumstance that would have
prevented or justified it not including sufficient details about the processes and procedures used to
risk rank its HCA segments and the segments hsted in Respondent's BAP. Accordingly, having
reviewed the record and considered the assessment cnteria, I assess Respondent a civil penalty of
$2, 000, for violation of 49 C. F. R. $195. 452(e)(1).
Item 6a of the Notice proposed a civil penalty of $10, 000 for violation of 49 C. F. R. $195. 452(i)(1),
as Respondent failed to provide sufficient detail on the methods to be used to evaluate preventive
and mitigative measures. Respondent also failed to provide sufficient descriptions for its steps to
choose candidate measures, assess risks and how it determines whether to implement the candidate
measures. Respondent did not contest the violation or show any circumstance that would have
prevented or justified it not including sufficient details about its preventive and mitigative measures.
Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent
a civil penalty of $10, 000 for violation of 49 C. F. R. $195. 452(i)(1).
Item 7a of the Notice proposed a civil penalty of $5, 000 for violation of 49 C. F. R. $195. 452(f)(5),
as Respondent failed to provide the process or procedures for determining reassessment intervals as
required by $195. 452(e). An evaluation of pipeline integrity is performed periodically to update the
operator's understanding of pipe conditions and the location-specific integrity threats for segments
that can affect HCAs The results of this evaluation are use to establish the intervals for future
integrity assessments and the assessment methods to be used. Respondent argued that reassessment
, intervals would not be set until after the completion of baseline assessments, and that when the re-
assessment interval was determined, it would not exceed 5 years. The re-assessment intervals are
based on all risk factors associated with the pipeline. The operator must include, but is not limited
to, the factors detailed in $195. 452(e) Respondent must have a continual process of evaluation and
assessment. Respondent failed to provide a sufficiently detailed description for continual process
of evaluation and assessment in its IMP, as required by $ 195. 452(e). Respondent failed to determine
any re-assessment intervals at the time of the mspection Accordingly, having reviewed the record
and considered the assessment cntena, I assess Respondent a civil penalty of $5, 000 for violation
of 49 C. F R. $195. 452(f)(5).



9
Item 7b of the Notice proposed a civil penalty of $2,000 for violation of 49 C.F.R. §195.452(t)(5),
as Respondent failed to describe a methodology for choosing integrity re-assessment methods in its
IMP. The operator must assess the integrity of the line pipe by any of the methods detailed in
§195.452(1)(5). Respondent did not contest the violation or show any circumstance that would have
prevented or justified its failure to describe a methodology for assessing the integrity of the line pipe
considered the assessment criteria, I assess Respondent a civil penalty of $2,000 for violation of 49
C F.R. §195.452(f)(5).
Item 9a of the Notice proposed a civil penalty of $10,000 for violation of 49 C.F.R.
§195.452(1)(1)(i-ii), as Respondent failed to maintain for review, during an inspection, a written
integrity management program in accordance with 49 C.F.R. §195.452(b)(4)(i-ii). Respondent did
not contest the violation or show any circumstance that would have prevented or justified its failure
to comply. Respondent's IMP failed to include two (2) of the processes required to be in the initial
framework by March 31, 2002 and failed to indicate how decisions will be made to implement each
element of the IM program. Respondent failed to have in place an IM program that includes a
framework that addresses each element of the IM program. Accordingly, having reviewed the record
and considered the assessment criteria, I assess Respondent a civil penalty of $10,000 for violation
of 49 C.F R. §195.452(1)(1)(i-ii).
Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent
a total civil penalty of $43,000 A determination has been made that Respondent has the ability to
pay this penalty without adversely affecting its ability to continue business.
Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R.
§ 89.21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve
Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are
contained in the enclosure. Questions concerning wire transfers should be directed to. Financial
Operations Division (AMZ-300), Federal Aviation Administration, Mike Monroney Aeronautical
Center, P.O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893.
Failure to pay the $43,000 civil penalty will result in accrual of interest at the current annual rate in
accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R § 89 23. Pursuant to those same
authorities, a late penalty charge of six percent (6%) per annum wıll be charged if payment is not
made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral
of the matter to the Attorney General for appropriate action in a United States District Court.
COMPLIANCE ORDER
The Notice proposed a Compliance Order with regards to Item 1(1), 3(a-d), 8, and 9(b), violation
of 49 C.F.R. § 195.452(f)(1), 195.452(f)(8), 195.452(f)(7) and 195 452(1)(1).
Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or



a. Clearly articulate the necessary steps to perform each program element
and ensure repeatability;
b. Describe the key input information sources;
c. Define the process output products, their documentation (including the
justification for decisions), and document retention requirements; and
d. Specify organizational responsibilities for performing key process steps
With regard to Item 1(i), establish processes and procedures that comply with 49 C. F. R.
$195. 452 in its entirety as it relates to Category 3 "new" pipelines.
a. Processes and procedures that comply with 49 C. F. R. $195. 452 in its
entirety with regard to performing integrity assessment results reviews.
b. Processes and procedures that comply with 49 C. F R. $195. 452 in its
entirety with regard to only utilizing qualified individuals to perform the
integrity assessment results review.
c. Processes and procedures for validating and calibrating data received from
third party in-line-inspection (ILI) vendors.
d. Processes and procedures for the integration of other information with
assessment results in making repair decisions.
4. With regard to Item 8, establish processes and procedures that comply with 49 C. F. R.
$195. 452 in its entirety with regard to evaluating Cenex's IM Program effectiveness,
including sufficient details on the application of appropriate performance metrics.
Within 60 days of receipt of this Order, submit proof, records and notice of completed
actions for Items 1-4 to Mr Chris Hoidal, Director, Office of Pipeline Safety, Western
Region, 12300 W. Dakota Avenue, Ste ¹110, Lakewood, CO 80228.



6. Cenex Harvest States Cooperatives, Inc. must maintain documentation of the costs
associated with fulfilling this Compliance order and submit the total to the Director,
Office of Pipeline Safety, Western Region.
The Regional Director may extend the period for complying with the required items if the
Respondent requests an extension and adequately justifies the reasons for the extension.
AMENDMENT OF PROCEDURES
Items 1b-g, 2, 3e-f, 4, Sa-b, and 6a of the Notice alleged inadequacies in Respondent's integrity
management program and proposed to require amendment of Respondent's procedures to comply
with the requirements of 49 C. F. R. $$ 195. 452(f)(1), 195. 452(b)(3), 195 452 (f)(8), 195. 452(f)(4),
195 452(e)(1)(i-viii), and 195. 452(i)(1).
Respondent requested addition time to implement the provisions the proposed Notice of
Amendment. Although Respondent submitted amended procedures with its post-hearing submission
on March 16, 2005 to the Western Region, OPS, these procedures do not address all of the
inadequacies described in the Notice. Accordingly, I find that Respondent's integrity management
procedures are inadequate to ensure safe operation of its pipeline system. Pursuant to 49 U. S. C.
$ 60108(a) and 49 C. F. R. $ 190. 237, Respondent is ordered to make the following revisions to its
integrity management program and procedures. Respondent must:
Amend your procedures to include which company personnel are to provide
feedback from field activities that could result in the identification of new or
extended segments that could affect HCAs, include how the information is
to be recorded and how it will be communicated to your IM team, in
accordance with 49 C. F. R. $ 195. 452(d)(3).
Amend your procedures to include appropriate details and specificity about
the process description in your integrity management plan document covering
segment identification. Ensure that all pipehne segments that "could affect"
an HCA are identified.
Amend your procedures to describe the process for how your pipelines were
located with your software program in relation to HCAs, include how this
was accomplished to ensure repeatability
Amend your procedures to provide sufficient details that clearly describe
"ground truthing" as a method to verify that all pipeline segments that could
affect an HCA have in fact been identified, include a description of how this
process is to be implemented.
Amend your procedures to include justification for your ten (10) mile
overland buffer zone and fifty (50) mile water transport distance, mcluding



12
a description of what constitutes a "body of water" for the purpose of
transportation.
Amend your procedures to include technical justification for excluding
pipeline segments that directly intersect HCAs.
Amend your procedures to include in sufficient detail the process for revising
your baseline assessment plan (BAP), including the processes and procedures
for the inclusion of new segments that could affect an HCA in your BAP
within one (1) year and for assessing the integrity of new segments within
five (5) years.
Amend your procedures to include a process for the development of hydrotest
procedures and acceptance criteria where you plan to utilize hydrotesting as
a method of integrity assessment.
Amend your procedures to include a process description that limits a pressure
reduction taken to ensure the integrity of a line segment until repairs can be
completed to a maximum of 365 days
Amend your procedures to describe in detail to ensure repeatability how the
Subject-Matter-Expert (SME) risk analysis process was performed, including,
but not limited to, the use of appropriate inputs, considerations of the inputs
as well as technical justifications of determinations made.
Amend your procedures to expand your risk analysis process description and
provide additional process descriptions, including, but not limited to, a
definition of the Probability and Consequences risk categories, a definition
of the terms Susceptibility and Severity, qualitative description for the
Probability and Consequence quantitative (1-10) rankings and consideration
of the use of weighing factors for risk categories used.
Amend your procedures to describe in sufficient detail the process for
identifying preventive and mitigative measures and the methods to be used
to evaluate preventive and mitigative measures. The description should
include steps for choosing a candidate measures, assessing risk, and deciding
on whether to implement the candidate measures Your procedures should
also include, but is not limited to, identification of the most significant
drivers of high risk; identification of the preventive and mitigative measures
that address the high risk drivers; measurement of the effectiveness of
preventive and mitigative measures; determme which preventive and
mitigative measures are implemented; and evaluate the effectiveness of
mstalling additional leak detection and/or emergency flow restriction devices
(valves).



13
13. Submit the amended procedures within 30 days following receipt of this
Order to Director, Office of Pipeline Safety Western Region, 12300 W.
Dakota Avenue, Suite 110, Lakewood, CO 80228.
The Regional Director may extend the period for complying with the required items if the
Respondent requests an extension and adequately justifies the reasons for the extension.
Failure to comply with this Amendment may result m the assessment of civil penalties of up to
$100, 000 per violation per day, or in the referral of the case for judicial enforcement.
WARNING ITEM
The Notice did not propose a civil penalty or corrective action for Items 1(h), 1(j) and 6(b) in the
Notice; therefore, these are considered warning items. Respondent is warned that if it does not take
appropriate action to correct these items, enforcement action will be taken if a subsequent inspection
reveals a violation.
Failure to comply with this Final Order may result in the assessment of civil penalties of up to
$100, 000 per violation per day, or in the referral of the case for judicial enforcement.
Under 49 C. F. R. $ 190. 215, Respondent has a right to submit a Petition for Reconsideration of this
Final Order. The petition must be received within 20 days of Respondent's receipt of this Final
Order and must contain a brief statement of the issue(s). The filing of the petition automatically
stays the payment of any civil penalty assessed. All other terms of the order, including any required
"corrective action and amendment of procedures, remain in full effect unless the Associate
Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective
on recei
gg -l3 2006
Date Issued
Stac rard
~sso iat Administrator
for '
ine Safety
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