CHEVRON PRODUCTS COMPANY — Warning Letter

520075038W_warning_letter_10192007.pdf, page 1Official PDF5. Departme Transportati 12300 W. Dakota Ave., Suite 1 akewood, CO 802: WARNING LETTER CERTIFIED MAIL - RETURN RECEIPT REQUESTED October 19, 2007 Mr. Gene Ketcham Chevron Texaco Products Company HES Specialist, NA Logistics 5924 NW Front Avenue Portland, OR 97210 CPF 5-2007-5038W Dear Mr. Ketcham: Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected On March 12, 2007, a representative of the Pipeline and Hazardous Materials Safety your Portland Breakout Tanks in Portland, Oregon. Pipe resus to the gicion, tap ar that you have omited probable vidation of the and the probable violations are: 1. §195.581 Atmospheric Corrosion (2) You rote an and rear cap pieliac or por an or petin that is#

520075038W_warning_letter_10192007.pdf, page 2(c) Except portions of pipelines in offshore splash zones or soil-to-air interfaces, you need not protect against atmospheric corrosion any pipeline the environment of the pipeline that corrosion will - for which you demonstrate by test, investigation, or experience appropriate to (2) Not affect the safe operation of the pipeline before the next scheduled (1) Only be a light surface oxide; or inspection. involving substantial atmospheric corrosion, lack of dielectric interface between Visual examination of tank farm facilities revealed unsatisfactory conditions station piping and support structures, and above-ground paint failure and pitting these conditions have existed for many years. within many areas of horizontal piping. Visual evidence further suggests that 2. $195.432 Breakout tanks. (b) Each operator shall inspect the physical integrity of in-service section 4 of API Standard 653. However, if structural conditions prevent atmospheric and low-pressure steel aboveground breakout tanks according to plan included in the operations and maintenance manual under access to the tank bottom, the bottom integrity may be assessed according to a §195.402(c)(3). Field reviews showed advanced exterior paint failure, pitting, and atmospheric corrosion on most storage tanks and horizontal piping. maintain its facilities free of visible paint failure, pitting, and atmospheric An operator has the responsibility under the Code of Federal Regulations to of future paint failure, pitting, and corrosion mitigation efforts. corrosion, and to keep a maintenance schedule that projects an estimated timetable $100,000 for each violation for each day the violation persists up to a maximum of Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed supporting documents involved in this case, and have decided not to conduct additional $1,000,000 for any related series of violations. We have reviewed the circumstances and correct the items) identified in this letter. Failure to do so will result in ChevronTexaco enforcement action or penalty assessment proceedings at this time. We advise you to Products Company being subject to additional enforcement action. refer to CPF 5-2007-5038W. Be advised that all material you submit in response to this No reply to this letter is required. If you choose to reply, in your correspondence please portion of your responsive material qualifies for confidential treatment under 5 U.S.C. enforcement action is subject to being made publicly available. If you believe that any 552(b), along with the complete original document you must provide a second copy of the 2#

520075038W_warning_letter_10192007.pdf, page 3explanation of why you believe the redacted information qualifies for confidential document with the portions you believe qualify for confidential treatment redacted and an treatment under 5 U.S.C. 552(b). Sincerely, Chris Hoidal Director, Western Regior Pipeline and Hazardous Materials Safety Administratior CC: PHP-60 Compliance Registry PHP-500 J. Kenerson (#118892) 3#

520075038W_warning letter_10192007_text.pdf, page 1Official PDFWARNING LETTER CERTIFIED MAIL - RETURN RECEIPT REQUESTED October 19, 2007 Mr. Gene Ketcham HES Specialist, NA Logistics ChevronTexaco Products Company 5924 NW Front Avenue Portland, OR 97210 CPF 5-2007-5038W Dear Mr. Ketcham: On March 12, 2007, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected your Portland Breakout Tanks in Portland, Oregon. As a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are: 1. §195.581 Atmospheric Corrosion (a) Your must clean and coat each pipeline or portion of pipeline that is exposed to the atmosphere, except pipelines under paragraph (c) of this section.#

520075038W_warning letter_10192007_text.pdf, page 2(c) Except portions of pipelines in offshore splash zones or soil-to-air interfaces, you need not protect against atmospheric corrosion any pipeline for which you demonstrate by test, investigation, or experience appropriate to the environment of the pipeline that corrosion will – (1) Only be a light surface oxide; or (2) Not affect the safe operation of the pipeline before the next scheduled inspection. Visual examination of tank farm facilities revealed unsatisfactory conditions involving substantial atmospheric corrosion, lack of dielectric interface between station piping and support structures, and above-ground paint failure and pitting within many areas of horizontal piping. Visual evidence further suggests that these conditions have existed for many years. 2. §195.432 Breakout tanks. (b) Each operator shall inspect the physical integrity of in-service atmospheric and low-pressure steel aboveground breakout tanks according to section 4 of API Standard 653. However, if structural conditions prevent access to the tank bottom, the bottom integrity may be assessed according to a plan included in the operations and maintenance manual under §195.402(c)(3). Field reviews showed advanced exterior paint failure, pitting, and atmospheric corrosion on most storage tanks and horizontal piping. An operator has the responsibility under the Code of Federal Regulations to maintain its facilities free of visible paint failure, pitting, and atmospheric corrosion, and to keep a maintenance schedule that projects an estimated timetable of future paint failure, pitting, and corrosion mitigation efforts. Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. We have reviewed the circumstances and supporting documents involved in this case, and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to correct the item(s) identified in this letter. Failure to do so will result in ChevronTexaco Products Company being subject to additional enforcement action. No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 5-2007-5038W. 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. 552(b), along with the complete original document you must provide a second copy of the 2#

520075038W_warning letter_10192007_text.pdf, page 3document 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). Sincerely, Chris Hoidal Director, Western Region Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Compliance Registry PHP-500 J. Kenerson (#118892) 3#