{"operation":"document","citation":"CPF 520075031","title":"TESORO LOGISTICS OPERATIONS LLC - MOUNTAIN REGION — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2007-08-13","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(h)(2), 195.452(h)(4).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075031.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075031.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520075031","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520075031","body":"Notice of Probable Violation involving TESORO LOGISTICS OPERATIONS LLC - MOUNTAIN REGION. PHMSA's enforcement data identifies the cited regulations as 195.452(h)(2),  195.452(h)(4). The case was opened on 2007-08-13 and is reported as closed as of 2010-01-22. Proposed civil penalty: $40,000. Assessed civil penalty: $30,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520075031_Final Order_12282009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_Final%20Order_12282009.pdf\n\n520075031_Final Order_12282009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_Final%20Order_12282009_text.pdf\n\n520075031_NOPV PCP_08132007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_NOPV%20PCP_08132007.pdf\n\n520075031_nopv pcp_08132007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_nopv%20pcp_08132007_text.pdf\n\n520075031_operator response to notice_10252007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_operator%20response%20to%20notice_10252007.pdf\n\n520075031_Final Order_12282009_text.pdf\n\nDEC 28 2009\nMr. John Moore\nVice President\nPipelines and Terminals\nTesoro Refining and Marketing Co.\n300 Concord Drive Plaza\nSan Antonio, TX 78216\nRe: CPF No. 5-2007-5031\nDear Mr. Moore:\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation\nand assesses a reduced civil penalty of $30,000. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon payment. Your receipt of the\nFinal Order constitutes service of that document under 49 C.F.R. § 190.5.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Chris Hoidal, Director, Western Region, PHMSA\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2464 5706]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n__________________________________________\nIn the Matter of )\nTesoro Refining and Marketing Company, ) CPF No. 5-2007-5031\n)\n)\n)\nRespondent. )\n__________________________________________)\nFINAL ORDER\nOn February 26 through March 2, 2007, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an inspection of the Integrity Management Program (IMP) of the Tesoro\nRefining and Marketing Company (Tesoro or Respondent), at its offices in Denver, Colorado.\nThe Tesoro IMP applied to numerous pipeline systems, including ones in Alaska and Hawaii.\nAs a result of the inspection, the Director, Western Region, PHMSA (Director), issued to\nRespondent, by letter dated August 13, 2007, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nRespondent committed certain violations of 49 C.F.R. § 195.452 and proposed assessing a civil\npenalty of $40,000 for the alleged violations.\nRespondent responded to the Notice by letter dated September 14, 2007, requesting an extension.\nPHMSA Western Region granted an extension and Respondent subsequently submitted\ncorrespondence dated October 25, 2007 (Response). On November 13, 2007, Respondent\nclarified that it was not contesting the allegations of violation, but indicated that its Response\nwas intended to offer information in support of a reduction or mitigation of the associated\npenalties. Respondent did not request a hearing, and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1A: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4), which states,\nin relevant part:\n\n\n\n2\n§ 195.452 Pipeline integrity management in high consequence\nareas.\n(a) . . .\n(h) What actions must an operator take to address integrity\nissues?\n(1) . . .\n(4) Special requirements for scheduling remediation- (i)\nImmediate repair conditions. An operator’s evaluation and remediation\nschedule must provide for immediate repair conditions…. An operator\nmust treat the following conditions as immediate repair conditions:\n(A) …\n(C) A dent located on the top of the pipeline (above the 4 and 8\no’clock positions) that has any indication of metal loss, cracking or stress\nriser.\nThe Notice alleged that Respondent violated § 195.452(h)(4) by failing to act immediately to\ninvestigate and repair an “immediate repair condition” under its IMP. Specifically, the Notice\nalleged that Tesoro failed to properly identify and repair an anomaly, known as Item 626, that\nhad been discovered on its 10-inch Hawaii products pipeline. The Notice alleged that\nRespondent incorrectly identified Item 626 as a bottom-side dent with metal loss, rather than a\ntop-side dent with metal loss. Bottom-side dents with metal loss must be investigated and\nrepaired within 60 days, as opposed to top-side dents, which are more serious and must be\ninvestigated and repaired immediately. In its Response, Tesoro admitted that it had not properly\ninvestigated and repaired the anomaly until more than a month after its discovery.\nAccordingly, I find that Respondent violated 49 C.F.R. § 195.452(h)(4) by failing to act\nimmediately to investigate and repair an immediate repair condition on its 10-inch Hawaii\nproducts pipeline.\nItem 2A: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(2), which states:\n§ 195.452 Pipeline integrity management in high consequence\nareas.\n(a) . . .\n(h) What actions must an operator take to address integrity\nissues? – (1) General requirements. An operator must take\nprompt action to address all anomalous conditions the operator\ndiscovers through the integrity assessment or information analysis.\n. . .\n(2) Discovery of condition. Discovery of a condition occurs when\nan operator has adequate information about the condition to\ndetermine that the condition presents a potential threat to the\nintegrity of the pipeline. An operator must promptly, but no later\nthan 180 days after an integrity assessment, obtain sufficient\ninformation about a condition to make that determination unless\nthe operator can demonstrate that the 180-day period is\nimpracticable.\n\n\n\n3\nThe Notice alleged that Respondent violated § 195.452(h)(2) and its own procedures by failing\nto identify the correct date that it “discovered” an anomalous condition on its pipeline, even\nthough the company had adequate information about the condition to determine that it presented\na potential threat to the integrity of the pipeline. Specifically, the Notice alleged that Tesoro\nshould have deemed “discovery” of the conditions to have taken place on the Refinery to Sand\nIsland and the Sand Island to Shell Terminal pipelines upon receipt of the in-line inspection (ILI)\nvendor’s final reports for such pipelines. It further alleged that Respondent’s IMP Procedure,\n“IM007 In-Line Inspection,” provided that discovery of a condition took place on the date the\ncompany received the ILI vendor’s final report. Instead, Tesoro allegedly declared that it had\ndiscovered the conditions 30 or more days after delivery of the vendor’s final reports.\nRegarding the Refinery to Sand Island pipeline, Respondent’s ILI Results and Repair\nVerification document indicates that the ILI vendor’s final report was received on October 24,\n2005. However, the document further indicates that the “discovery” of the condition did not\noccur until November 1, 2005, the date Respondent received a dig list. Regarding the Sand\nIsland to Shell Terminal pipeline, Respondent’s ILI Results and Repair Verification document\nindicates that the ILI vendor’s final report was received on September 7, 2004. However, the\ndocument indicated that the discovery of the anomalous condition did not occur until October 7,\n2004, the date Respondent received a dig list.\nTesoro did not contest these allegations of violation. Accordingly, I find that Respondent\nviolated § 195.452(h)(2) by failing to identify the correct date that it “discovered” anomalous\nconditions on its pipeline.\nItem 3A: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(1, 3 and 4),\nwhich state, in relevant part:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(h) What actions must an operator take to address integrity issues?\n(1) . . .\n(i) Temporary pressure reduction. An operator must notify PHMSA,\nin accordance with paragraph (m) of this section, if the operator cannot\nmeet the schedule for evaluation and remediation required under paragraph\n(h)(3) of this section and cannot provide safety through a temporary\nreduction in operating pressure. . . .\n(3) Schedule for evaluation and remediation. . . If an operator cannot\nmeet the schedule for any condition, the operator must explain the reasons\nwhy it cannot meet the schedule and how the changed schedule will not\njeopardize public safety or environmental protection.\n(4) Special requirements for scheduling remediation.-\n…\n(i) Immediate repair conditions. . . An operator must treat the following\nconditions as immediate repair conditions: …\n(ii) 60-day conditions. Except for conditions listed in paragraph\n(h)(4)(i) of this section, an operator must schedule evaluation and\nremediation of the following conditions within 60 days of discovery of\ncondition.\n\n\n\n4\n(A) A dent located on the top of the pipeline (above the 4 and 8 o’clock\npositions) with a depth greater than 3% of the pipeline diameter (greater\nthan 0.250 inches in depth of a pipeline diameter less than Nominal Pipe\nSize (NPS) 12).\n(B) A dent located on the bottom of the pipeline that has any indication\nof metal loss, cracking or a stress riser.\nThe Notice alleged that Respondent violated § 195.452(h)(4) by failing to schedule evaluation\nand remediation of pipeline anomalies that required repair within 60 days from the date of\ndiscovery. Specifically, the Notice alleged that Tesoro failed to complete Digs 26 and 28 on the\nTesoro Alaska Pipe Line (TAPL) within 60 days of discovery of the anomalous conditions. The\nViolation Report alleged that there were a total of three anomalies at Digs 26 and 28.\nRegarding Dig 26, Tesoro’s Response included information confirming that, at the time of the\ninspection, Tesoro had properly classified the anomaly at the dig location (Item 8775) as an\n“other condition,” rather than a “60-day condition,” as alleged. Upon review of the evidence, I\nagree and hereby withdraw that portion of the allegation relating to Dig 26.\nRegarding Dig 28, Respondent asserted that it had discovered two anomalies that resulted in the\ndig. In its Response, Tesoro admitted that it had erroneously classified one anomaly (Item 9507)\nas a 180-day repair condition, whereas it should have been classified as a 60-day condition.\nRespondent admits that this anomaly was repaired 89 days after discovery.\nIn its Response, Tesoro also submitted information showing that the other anomaly at the Dig 28\nlocation (Item 9508) was not a 60-day repair condition and had actually been repaired in 2004.\nUpon review of the evidence, I agree and hereby withdraw that portion of the allegation relating\nto the Item 9508 anomaly at Dig 28.\nFinally, the Notice alleged that Tesoro neither made a pressure reduction nor notified PHMSA,\nas required by 49 C.F.R. § 195.452(h)(1)(i) if it were unable to meet the schedule for evaluation\nand remediation. Respondent did not contest this allegation of violation.\nAccordingly, after considering all the evidence, I find that Respondent violated 49 C.F.R. §\n195.452(h)(4) by failing to schedule evaluation and remediation of the Item 9507 pipeline\nanomaly at Dig 28 within 60 days from the date of discovery. I also find that Respondent\nviolated 49 C.F.R. § 195.452(h)(1) and (h)(3) by failing to provide notice or justification to\nPHMSA for failing to meet a schedule for evaluation and remediation. Finally, based upon\ninformation Respondent provided regarding the other two anomalies, Item 9508 at Dig 28 and\nItem 8775 at Dig 26, I hereby withdraw the portions of the allegation related to such anomalies.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\n\n\n\n5\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation up to a maximum of $1,000,000 for any\nrelated series of violations.\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: 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; the Respondent’s ability to pay the penalty and any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $40,000 for the violations.\nItem 1A proposed a civil penalty of $10,000 for violation of C.F.R. § 195.452 (h)(4) for\nRespondent’s failure to act immediately to investigate and repair an immediate repair condition\non its 10-inch Hawaii products pipeline. In its Response, Tesoro offered information in support\nof mitigation or elimination of the proposed penalty. Respondent indicated that its ILI tool\nvendor had incorrectly characterized an anomaly known as Item 626 as a 60-day condition,\nrather than an immediate repair condition. Respondent explained that it erroneously carried this\nerror over to its dig list. Information about the actions of Respondent’s ILI vendor are\nimmaterial to the assessment of a civil penalty for this violation. Respondent is responsible for\nthe correct characterization and repair of anomalies on its pipeline, whether it performs the work\nor contracts with outside vendors. The Hawaii products pipeline could affect HCAs, the\ngenerally sensitive ecology of Oahu and surrounding ocean, and the Honolulu high-population\narea. Accordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $10,000 for Item 1A.\nItem 2A proposed a civil penalty of $10,000 for violation of 49 C.F.R. § 195.452(f)(4), for\nRespondent’s failure to deem discovery of a condition to have taken place on the Refinery to\nSand Island and Sand Island to Shell Terminal pipelines upon receipt of the ILI vendor’s final\nreports for such pipelines. In its Response, Tesoro argued that it had correctly documented the\ndates of discovery for both pipelines. However, as discussed more fully above, Respondent’s\nIMP documentation indicates otherwise. Both pipelines could affect HCAs, the generally\nsensitive ecology of Oahu and surrounding ocean, and the Honolulu high-population area.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $10,000 for Notice Item 2A.\nItem 3A proposed a civil penalty of $20,000 for violation of 49 C.F.R. § 195.452(h)(4), for\nRespondent’s failure to complete Digs 26 and 28 on the TAPL within 60 days of discovery of a\ncondition, and for violation of 49 C.F.R. § 195.452(h)(3), for Respondent’s failure to provide\nnotice or justification to OPS for not meeting its schedule for evaluation and remediation. The\nTAPL could affect HCAs, the Anchorage high-population area, and the sensitive ecology of\nCook Inlet. As discussed above, Respondent provided information showing that the company\nproperly classified two (Items 8775 and 9508) of the three anomalies at Dig 26 and 28 locations.\n\n\n\n6\nAs a result, the portions of the allegation in Item 3A pertaining to the Items 8775 and 9508\nanomalies have been withdrawn. The withdrawal of these portions of Item 3A warrants a\nreduction in the civil penalty. However, Respondent has provided no information in support of\nany additional reduction of the civil penalty associated with the allegations regarding the Item\n9507 anomaly and the failure to provide notice to OPS.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a reduced civil penalty of $10,000\nIn summary, having reviewed the record and considered the assessment criteria for all of the\nabove Items, I assess Respondent a reduced total civil penalty of $30,000. Respondent has\nprovided no information that payment of this penalty would adversely affect its ability to\ncontinue in business.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be received within 20 days of Respondent’s receipt of this\nFinal Order and must contain a brief statement of the issue(s). The filing of the petition\nautomatically stays the payment of any civil penalty assessed. However, if Respondent submits\npayment for the civil penalty, the Final Order becomes the final administrative decision and the\nright to petition for reconsideration is waived. The terms and conditions of this Final Order are\neffective on receipt.\n________________________ ______________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":18158}