CENEX PIPELINE LLC — Notice of Amendment

party submissionOfficial PDF520075014M_operator response to notice_11152007.pdf#

520075014M_Notice Letter_04042007.pdf, page 1Official PDF@ U.S. Deponment of Tronsporfollon Plp.tlno ond Hozorlout mqil.dab Sctfify Admlnbrrotlon 123{n W. Dakota Ave., Suite 110 Lakewood, CO g)228 NOTICE OF AMENDMENT CERTIFIEI} MAIL . RETURN RECEIPT REOTIESTED April4,2007 Mr. Dan Knepper VP Energy Operations CHS Inc. 803 Highway 212 South Laurel, MT 59044 SnNr ro CouplrRNcr Rsgsrny Hardcopy - Electronicailyy' # of Copiesl toatet/llto'l cPF 5-2007-5{114M Dear Mr. Knepper: On August 28 through 31,2006 a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected CHS Inc.'s procedures for integrity management in Laurel, Montana. On the basis of the inspection, PHMSA has identified the apparent inadequacies found within CHS's plans or procedures, as described below: 1. 5195.452 Pipeline integrity management in high consequence arees. $ rilhat are the elements of an integrity management program? An integrity management program begrns with the initial framework An operator must continually change the program to reflect operating experience, conclusions drawn from results of the integrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. An operator must include, at minimum, each of the following elements in its written integrity management program: (1) A process for identifying which pipeline segments could affect a high consequence area; (2) A baseline assessment plan meeting the requirements of paragraph (c) of this section; (3) An analysis that integrates all available information about the integrity#

520075014M_Notice Letter_04042007.pdf, page 2of the entire pipeline and the consequences of a failure (see paragraph (g of this section); (4) Criteria for remedial actions to address integrity issues raised by the assessment methods and information analysis (see paragraph (h) of this section); (5) A continual process of assessment and evaluation to maintain a pipeline's integrity (see paragraph (i) of this section); (6) Identilication of prwentive and mitigative measures to protect the high consequence area (see paragraph (i) ofthis section); (8) A prlocess for review of integrity assessment results and information analysis by a person qualilied to evaluate the results and information (see paragraph (hX2) of this section). o Item 1.A: $1es.4s2(D(r) CHS's Integrity Management Program (IMP) does not contain enough detail regarding the application of airborne toxicity buffers in determining which pipeline segments could affect HCAs. o ltem 1.8: Sl95 452(0(1) CHS's IMP does not contain the process used by CHS to analyze the overland flow of liquids released from potential pipeline failtres. This process must have sufficient detail to ensure repeatability including the assumptions used for spill volume, the buffer size and the effects of topography. o Item l.C: 9r95.452(fxl) CHS's IMP does not document the technical justification used for excluding tank volumes in their detennination of facilifies and adjacent piping that may impact HCAs. r Item l.D: gl95 452(fX2) CHS's Baseline Assessment Plan has no provisions for assessing an each pipeline segment's susceptibility to SCC. CHS stated thal they address SCC threats by performing magnetic particle testing for all excavations involving repairs to dents and gouge type anomalies. o Item l.E: 9195 452(fX3) CHS's IMP does not contain a risk analysis that specifically addresses facilities and their uique attributes. r Item l.F: 5195 452(fX4) CHS's IMP definition of "discovery" does not define a "discovery" process or provide requirements regarding how much time can be taken to review information and declare#

520075014M_Notice Letter_04042007.pdf, page 3"discovery" following receipt of vendor reports or other information that includes evidence of anomalies. o ltem 1.G: 5195 452(D(4) CHS's IMP does not speciS that "immediate" repair conditions must be repaired as soon .ui possible. o ltem l.If: Sl95 452(fX5) CHS's IMP defaults to five years for all reassessments without any justification. r ltem l.I: Sl95 452(D(5) CHS's IMP does not contain a process for 1) examining causes of incidents, leaks, and near- misses, 2) making recommendations for corrective actions, and 3) providing those lessons learned to appropriate company employees. o Item 1.J: 5195 452(fX6) CHS's IMP does not describe a process for performing a leak detection evaluation as required by $195.452(iX3). It is expected that such a leak detection process would include a documented basis for all operator reactions credited in the leak detection evaluation. o ltem l.K: 5195 452(fX6) CHS's IMP does not describe a process for evaluating the need for additional EFRDs including consideration of the factors required bV 195.a52(i)(a). o ltem l.L: Sl95 452(D(8) Appendix I of CHS's IMP specifies that anomalies selected for validafion are chosen from anomalies in the "Marcimum, Minimum, and Midrange" (two from each). However, there was no definition regarding what these ranges represent. o Item 1.M: gl95 452(fX8) CHS's IMP discusses how assessment results are integrated with pertinent pipeline risk- condition information to discover integrity issues that might not be evident from the assessment data done. However, the IMP does not provide details and specificity regarding how this analysis is to be performed. o Item l.N: gf95 452(fX8) CHS's IMP does not contain a requirernent to document that an effective corrosion control#

520075014M_Notice Letter_04042007.pdf, page 4progmm is in place and that corrosion control is being effectively applied to segments where hydro tests are performed as assessments. Resnonse to this Notice This Notice is provided pnrsuant to 49 U.S.C. $ 60108(a) and 49 C.F.R. $ 190.237. Enclosed as part of this Notice is a document entitled Respowe Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 5520), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. If, after opportunity for a hearing, your plans or procedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C.F.R. $ 190.237). If you are not contesting this Notice, we propose that you submit your amended procedures to my office within 30 days of receipt of this Notice. This period may be extended by written request for good cause. Once the inadequacies identified herein have been addressed in your amended procedures, this enforcement action will be closed. In correspondence conceming this matter, please referto CPF 5-2007-5014M and, for each document you submit, please provide a copy in electronic format whenever possible. rual Director, Western Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Optionsfor Pipeline Operators in Compliance Proceedings oc: PHP-60 Compliance Registry PHP-500 G. Davis (#Il7712)#