# TESORO LOGISTICS OPERATIONS LLC - MOUNTAIN REGION — Notice of Probable Violation

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

Official case documents:

520075031_Final Order_12282009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_Final%20Order_12282009.pdf

520075031_Final Order_12282009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_Final%20Order_12282009_text.pdf

520075031_NOPV PCP_08132007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_NOPV%20PCP_08132007.pdf

520075031_nopv pcp_08132007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_nopv%20pcp_08132007_text.pdf

520075031_operator response to notice_10252007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520075031/520075031_operator%20response%20to%20notice_10252007.pdf

520075031_Final Order_12282009_text.pdf

DEC 28 2009
Mr. John Moore
Vice President
Pipelines and Terminals
Tesoro Refining and Marketing Co.
300 Concord Drive Plaza
San Antonio, TX 78216
Re: CPF No. 5-2007-5031
Dear Mr. Moore:
Enclosed is the Final Order issued in the above-referenced case. It makes findings of violation
and assesses a reduced civil penalty of $30,000. The penalty payment terms are set forth in the
Final Order. This enforcement action closes automatically upon payment. Your receipt of the
Final Order constitutes service of that document under 49 C.F.R. § 190.5.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Chris Hoidal, Director, Western Region, PHMSA
CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2464 5706]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
__________________________________________
In the Matter of )
Tesoro Refining and Marketing Company, ) CPF No. 5-2007-5031
)
)
)
Respondent. )
__________________________________________)
FINAL ORDER
On February 26 through March 2, 2007, pursuant to 49 U.S.C. § 60117, a representative of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an inspection of the Integrity Management Program (IMP) of the Tesoro
Refining and Marketing Company (Tesoro or Respondent), at its offices in Denver, Colorado.
The Tesoro IMP applied to numerous pipeline systems, including ones in Alaska and Hawaii.
As a result of the inspection, the Director, Western Region, PHMSA (Director), issued to
Respondent, by letter dated August 13, 2007, a Notice of Probable Violation and Proposed Civil
Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that
Respondent committed certain violations of 49 C.F.R. § 195.452 and proposed assessing a civil
penalty of $40,000 for the alleged violations.
Respondent responded to the Notice by letter dated September 14, 2007, requesting an extension.
PHMSA Western Region granted an extension and Respondent subsequently submitted
correspondence dated October 25, 2007 (Response). On November 13, 2007, Respondent
clarified that it was not contesting the allegations of violation, but indicated that its Response
was intended to offer information in support of a reduction or mitigation of the associated
penalties. Respondent did not request a hearing, and therefore has waived its right to one.
FINDINGS OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
Item 1A: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4), which states,
in relevant part:



2
§ 195.452 Pipeline integrity management in high consequence
areas.
(a) . . .
(h) What actions must an operator take to address integrity
issues?
(1) . . .
(4) Special requirements for scheduling remediation- (i)
Immediate repair conditions. An operator’s evaluation and remediation
schedule must provide for immediate repair conditions…. An operator
must treat the following conditions as immediate repair conditions:
(A) …
(C) A dent located on the top of the pipeline (above the 4 and 8
o’clock positions) that has any indication of metal loss, cracking or stress
riser.
The Notice alleged that Respondent violated § 195.452(h)(4) by failing to act immediately to
investigate and repair an “immediate repair condition” under its IMP. Specifically, the Notice
alleged that Tesoro failed to properly identify and repair an anomaly, known as Item 626, that
had been discovered on its 10-inch Hawaii products pipeline. The Notice alleged that
Respondent incorrectly identified Item 626 as a bottom-side dent with metal loss, rather than a
top-side dent with metal loss. Bottom-side dents with metal loss must be investigated and
repaired within 60 days, as opposed to top-side dents, which are more serious and must be
investigated and repaired immediately. In its Response, Tesoro admitted that it had not properly
investigated and repaired the anomaly until more than a month after its discovery.
Accordingly, I find that Respondent violated 49 C.F.R. § 195.452(h)(4) by failing to act
immediately to investigate and repair an immediate repair condition on its 10-inch Hawaii
products pipeline.
Item 2A: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(2), which states:
§ 195.452 Pipeline integrity management in high consequence
areas.
(a) . . .
(h) What actions must an operator take to address integrity
issues? – (1) General requirements. An operator must take
prompt action to address all anomalous conditions the operator
discovers through the integrity assessment or information analysis.
. . .
(2) Discovery of condition. Discovery of a condition occurs when
an operator has adequate information about the condition to
determine that the condition presents a potential threat to the
integrity of the pipeline. An operator must promptly, but no later
than 180 days after an integrity assessment, obtain sufficient
information about a condition to make that determination unless
the operator can demonstrate that the 180-day period is
impracticable.



3
The Notice alleged that Respondent violated § 195.452(h)(2) and its own procedures by failing
to identify the correct date that it “discovered” an anomalous condition on its pipeline, even
though the company had adequate information about the condition to determine that it presented
a potential threat to the integrity of the pipeline. Specifically, the Notice alleged that Tesoro
should have deemed “discovery” of the conditions to have taken place on the Refinery to Sand
Island and the Sand Island to Shell Terminal pipelines upon receipt of the in-line inspection (ILI)
vendor’s final reports for such pipelines. It further alleged that Respondent’s IMP Procedure,
“IM007 In-Line Inspection,” provided that discovery of a condition took place on the date the
company received the ILI vendor’s final report. Instead, Tesoro allegedly declared that it had
discovered the conditions 30 or more days after delivery of the vendor’s final reports.
Regarding the Refinery to Sand Island pipeline, Respondent’s ILI Results and Repair
Verification document indicates that the ILI vendor’s final report was received on October 24,
2005. However, the document further indicates that the “discovery” of the condition did not
occur until November 1, 2005, the date Respondent received a dig list. Regarding the Sand
Island to Shell Terminal pipeline, Respondent’s ILI Results and Repair Verification document
indicates that the ILI vendor’s final report was received on September 7, 2004. However, the
document indicated that the discovery of the anomalous condition did not occur until October 7,
2004, the date Respondent received a dig list.
Tesoro did not contest these allegations of violation. Accordingly, I find that Respondent
violated § 195.452(h)(2) by failing to identify the correct date that it “discovered” anomalous
conditions on its pipeline.
Item 3A: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(1, 3 and 4),
which state, in relevant part:
§ 195.452 Pipeline integrity management in high consequence areas.
(a) . . .
(h) What actions must an operator take to address integrity issues?
(1) . . .
(i) Temporary pressure reduction. An operator must notify PHMSA,
in accordance with paragraph (m) of this section, if the operator cannot
meet the schedule for evaluation and remediation required under paragraph
(h)(3) of this section and cannot provide safety through a temporary
reduction in operating pressure. . . .
(3) Schedule for evaluation and remediation. . . If an operator cannot
meet the schedule for any condition, the operator must explain the reasons
why it cannot meet the schedule and how the changed schedule will not
jeopardize public safety or environmental protection.
(4) Special requirements for scheduling remediation.-
…
(i) Immediate repair conditions. . . An operator must treat the following
conditions as immediate repair conditions: …
(ii) 60-day conditions. Except for conditions listed in paragraph
(h)(4)(i) of this section, an operator must schedule evaluation and
remediation of the following conditions within 60 days of discovery of
condition.



4
(A) A dent located on the top of the pipeline (above the 4 and 8 o’clock
positions) with a depth greater than 3% of the pipeline diameter (greater
than 0.250 inches in depth of a pipeline diameter less than Nominal Pipe
Size (NPS) 12).
(B) A dent located on the bottom of the pipeline that has any indication
of metal loss, cracking or a stress riser.
The Notice alleged that Respondent violated § 195.452(h)(4) by failing to schedule evaluation
and remediation of pipeline anomalies that required repair within 60 days from the date of
discovery. Specifically, the Notice alleged that Tesoro failed to complete Digs 26 and 28 on the
Tesoro Alaska Pipe Line (TAPL) within 60 days of discovery of the anomalous conditions. The
Violation Report alleged that there were a total of three anomalies at Digs 26 and 28.
Regarding Dig 26, Tesoro’s Response included information confirming that, at the time of the
inspection, Tesoro had properly classified the anomaly at the dig location (Item 8775) as an
“other condition,” rather than a “60-day condition,” as alleged. Upon review of the evidence, I
agree and hereby withdraw that portion of the allegation relating to Dig 26.
Regarding Dig 28, Respondent asserted that it had discovered two anomalies that resulted in the
dig. In its Response, Tesoro admitted that it had erroneously classified one anomaly (Item 9507)
as a 180-day repair condition, whereas it should have been classified as a 60-day condition.
Respondent admits that this anomaly was repaired 89 days after discovery.
In its Response, Tesoro also submitted information showing that the other anomaly at the Dig 28
location (Item 9508) was not a 60-day repair condition and had actually been repaired in 2004.
Upon review of the evidence, I agree and hereby withdraw that portion of the allegation relating
to the Item 9508 anomaly at Dig 28.
Finally, the Notice alleged that Tesoro neither made a pressure reduction nor notified PHMSA,
as required by 49 C.F.R. § 195.452(h)(1)(i) if it were unable to meet the schedule for evaluation
and remediation. Respondent did not contest this allegation of violation.
Accordingly, after considering all the evidence, I find that Respondent violated 49 C.F.R. §
195.452(h)(4) by failing to schedule evaluation and remediation of the Item 9507 pipeline
anomaly at Dig 28 within 60 days from the date of discovery. I also find that Respondent
violated 49 C.F.R. § 195.452(h)(1) and (h)(3) by failing to provide notice or justification to
PHMSA for failing to meet a schedule for evaluation and remediation. Finally, based upon
information Respondent provided regarding the other two anomalies, Item 9508 at Dig 28 and
Item 8775 at Dig 26, I hereby withdraw the portions of the allegation related to such anomalies.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.



5
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative 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.
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: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that
the penalty may have on its ability to continue doing business; and the good faith of Respondent
in attempting to comply with the pipeline safety regulations. In addition, I may consider the
economic benefit gained from the violation without any reduction because of subsequent
damages, and such other matters as justice may require. The Notice proposed a total civil
penalty of $40,000 for the violations.
Item 1A proposed a civil penalty of $10,000 for violation of C.F.R. § 195.452 (h)(4) for
Respondent’s failure to act immediately to investigate and repair an immediate repair condition
on its 10-inch Hawaii products pipeline. In its Response, Tesoro offered information in support
of mitigation or elimination of the proposed penalty. Respondent indicated that its ILI tool
vendor had incorrectly characterized an anomaly known as Item 626 as a 60-day condition,
rather than an immediate repair condition. Respondent explained that it erroneously carried this
error over to its dig list. Information about the actions of Respondent’s ILI vendor are
immaterial to the assessment of a civil penalty for this violation. Respondent is responsible for
the correct characterization and repair of anomalies on its pipeline, whether it performs the work
or contracts with outside vendors. The Hawaii products pipeline could affect HCAs, the
generally sensitive ecology of Oahu and surrounding ocean, and the Honolulu high-population
area. Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $10,000 for Item 1A.
Item 2A proposed a civil penalty of $10,000 for violation of 49 C.F.R. § 195.452(f)(4), for
Respondent’s failure to deem discovery of a condition to have taken place on the Refinery to
Sand Island and Sand Island to Shell Terminal pipelines upon receipt of the ILI vendor’s final
reports for such pipelines. In its Response, Tesoro argued that it had correctly documented the
dates of discovery for both pipelines. However, as discussed more fully above, Respondent’s
IMP documentation indicates otherwise. Both pipelines could affect HCAs, the generally
sensitive ecology of Oahu and surrounding ocean, and the Honolulu high-population area.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $10,000 for Notice Item 2A.
Item 3A proposed a civil penalty of $20,000 for violation of 49 C.F.R. § 195.452(h)(4), for
Respondent’s failure to complete Digs 26 and 28 on the TAPL within 60 days of discovery of a
condition, and for violation of 49 C.F.R. § 195.452(h)(3), for Respondent’s failure to provide
notice or justification to OPS for not meeting its schedule for evaluation and remediation. The
TAPL could affect HCAs, the Anchorage high-population area, and the sensitive ecology of
Cook Inlet. As discussed above, Respondent provided information showing that the company
properly classified two (Items 8775 and 9508) of the three anomalies at Dig 26 and 28 locations.



6
As a result, the portions of the allegation in Item 3A pertaining to the Items 8775 and 9508
anomalies have been withdrawn. The withdrawal of these portions of Item 3A warrants a
reduction in the civil penalty. However, Respondent has provided no information in support of
any additional reduction of the civil penalty associated with the allegations regarding the Item
9507 anomaly and the failure to provide notice to OPS.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a reduced civil penalty of $10,000
In summary, having reviewed the record and considered the assessment criteria for all of the
above Items, I assess Respondent a reduced total civil penalty of $30,000. Respondent has
provided no information that payment of this penalty would adversely affect its ability to
continue in 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-341), Federal Aviation Administration, Mike
Monroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893.
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. However, if Respondent submits
payment for the civil penalty, the Final Order becomes the final administrative decision and the
right to petition for reconsideration is waived. The terms and conditions of this Final Order are
effective on receipt.
________________________ ______________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety
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