ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation

party submissionOfficial PDF520085002_operator response_05222008.pdf#

520085002_closure letter_06202011_text.pdf, page 1Official PDFVIA UPS : 1Z WR2 588 03 9135 5258 June 20, 2011 Mr. Mike Joynor Senior Vice President Oil Movements, Engineering and Pipeline Alyeska Pipeline Service Company 900 East Benson Blvd. P.O. Box 196660 Anchorage, AK 99519-6660 CPF 5-2008-5002 Dear Mr. Joynor: On March 21, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Alyeska Pipeline Service Company (Alyeska) a Final Order in the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. Based on our review of the documentation you provided and confirmation of payment of the civil penalty paid on April 4, 2011, it has been determined that you have complied with the terms of this Order. Accordingly, this case is now closed and no further action is contemplated with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, Dennis Hinnah Duty Director, Western Region Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Compliance Registry PHP-500 B. Flanders (#118831)#

520085002_nopv pcp pco_04012008_text.pdf, page 1Official PDFo U S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 12300 W Dakota Ave, Suite 110 Lakewood, CO 80228 NOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT RE UESTED April 1, 2008 Mr. Jim Johnson Pipeline Vice President Alyeska Pipeline Service Company 900 East Benson Blvd. P. O. Box 196606 Anchorage, AK 99519 CPF 5-2008-5002 Dear Mr. Johnson; On July 8 to 13, 2007, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected Alyeska Pipeline Service Company's (ASPC) pipeline segment between Pump Station 1 and Milepost 126 near Prudhoe Bay, Alaska. 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. 116 Valves. (e) Each valve other than a check valve must be equipped with a means for clearly indicating the position of the valve (open, closed, etc. ).#

520085002_nopv pcp pco_04012008_text.pdf, page 2During the inspection, MGV 10A was found without a valve position indicator. Evidence: Photograph of MGV 10A without valve position indicator. 2. $195. 401 General requirements. (b) Whenever an operator discovers any condition that could adversely affect the safe operation of its pipeline system, it shall correct it within a reasonable time. However, if the condition is of such a nature that it presents an immediate hazard to persons or property, the operator may not operate the affected part of the system until it has corrected the unsafe condition. A structural (non-pressure containment) sleeve was installed in 1990 at Mile Post (MP) 57. 785, due to internal corrosion. Alyeska is operating the pipeline with an indeterminate amount of remaining pipe wall thickness under this sleeve. Alyeska did not correct this condition within a reasonable time even though a commitment to cut out and replace was made for 2007, A 15-foot structural (non-pressure containment) sleeve was installed in 1990 at MP 57. 785 due to internal corrosion, Alyeska monitored the corrosion at this location with Ultrasonic Testing (UT) pigs to determine the depth of corrosion until 2001. At that time, Alyeska determined that wax was blocking the ability of the UT pig to accurately predict the corrosion depth. In 2004, a Magnetic flux pig was run and it also was unable to accurately assess the corrosion depth. Alyeska is operating the pipeline with an indeterminate amount of remaining pipe wall thickness under a sleeve design that cannot contain pressure. Alyeska did not correct this condition within a reasonable time, This issue was reported to Alyeska in January 2006 and APSC management committed to PHMSA they would cut out this sleeve in 2007. Alyeska has now postponed this work until 2008 or 2009. This is not correction of a condition within a reasonable time. Evidence; 1. ' Safety Related Condition Report 890028 Report listing internal corrosion as the cause, with maximum pit depth. 177. 2. Alyeska as built data base, listing 15 foot structural sleeve. (Not a pressure containing sleeve. A structural sleeve will not stop crude oil from leaking onto the ground, when the internal corrosion eats through the pipe wall). 3. Alyeska repair procedure for internal corrosion requires a pressure containing sleeve or replacement of pipe. 4. UT Pig data 1994-2001. (2001 pig having trouble with wax at Station 305116. 6). 5. 2003 BJ MFL Pig did not report any corrosion at sleeve, due to the additional metal thickness of the sleeve.#

520085002_nopv pcp pco_04012008_text.pdf, page 3$195. 406 Maximum operating pressure. (b) No operator may permit the pressure in a pipeline during surges or other variations from normal operations to exceed 110 percent of the operating pressure limit established under paragraph (a) of this section. Each operator must provide adequate controls and protective equipment to control the pressure within this limit. Alyeska's Sadlerochit meter piping at Pump Station 1 has a maximum operating pressure (MOP) of 275 psig (150 ANSI class, ) and BP's incoming piping to the meter has a MOP up to 740 psig (300 ANSI class). BP's surge report stated that BP's maximum discharge pressure has been limited by pressure shutdown switches at GC-1, FS-1 and FS-3, Alyeska must provide adequate controls and protective equipment to control the pressure within the maximum operating pressure. If BP switches are utilized, they must be maintained as DOT critical safety devices. Alyeska's "OM-1, Procedural Manual for Operations, Maintenance and Emergencies, " Section 7 does not indicate that Alyeska must test and maintain these pressure switches, Evidence: l. In Alyeska's response to request for specific information, it is stated that Alyeska meter runs WOA & EOA (Sadlerochit oil) has a MOP of 275 psig. 2. BP's surge analysis report, Executive Summary, states that the high pressure switches are DOT critical safety devices, 3. OM-1 section 2, surge pressure control, does not list high pressure switches at GC2, FS1, and FS3. $195. 428 Overpressure safety devices and overfill protection systems. (a) Except as provided in paragraph (b) of this section, each operator shall, at intervals not exceeding 15 months, but at least once each calendar year, or in the case of pipelines used to carry highly volatile liquids, at intervals not to exceed 7~/i months, but at least twice each calendar year, inspect and test each pressure limiting device, relief valve, pressure regulator, or other item of pressure control equipment to determine that it is functioning properly, is in good mechanical condition, and is adequate from the standpoint of capacity and reliability of operation for the service in which it is used. Alyeska's Kuparuk piping has a MOP of 1180 psig, while the Kuparuk pipeline system has a MOP of 1440 psig. Alyeska has installed a pressure transmitter (31-PT-013A) to protect the 1180 psig piping from overpressure. Alyeska's "OM-1, Procedural Manual for Operations, Maintenance and Emergencies, " Section 7 does not address this pressure transmitter or list it as required for testing. Alyeska presented records at Pump Station 1 of performing calibration of this pressure transmitter, indicating that transmitters were calibrated annually.#

520085002_nopv pcp pco_04012008_text.pdf, page 4Evidence: l. In Alyeska's response to request for specific information, it states that Alyeska's incoming Kuparuk pipe has a MOP 1180 psig, while Kuparuk's incoming pipeline has an MOP of 1415 psig. 2. Pressure transmitter calibration sheets for 2005, 2006. 3. OM-1 Section 7, does not list 31-PT-013A as a pressure-controlling device. $195. 573 What must I do to monitor external corrosion control? (a) Protected pipelines. You must do the following to determine whether cathodic protection required by this subpart complies with Sec. 195. 571: (1) Conduct tests on the protected pipeline at least once each calendar year, but with intervals not exceeding 15 months. However, if tests at those intervals are impractical for separately protected short sections of bare or ineffectively coated pipelines, testing may be done at least once every 3 calendar years, but with intervals not exceeding 39 months. (e) Corrective action. You must correct any identified deficiency in corrosion control as required by Sec. 195. 401(b). An area (MP 12. 2-13. 2) of the pipeline was found to have inadequate cathodic protection (CP). These low CP readings were confirmed by Close Interval Surveys conducted in 2003, 2004, 2005, and 2006. This low CP area was further confirmed by 2002-2006- coupon readings. This section of the pipeline did not meet criteria set forth in section 195. 571. This area of low CP levels was reported on a 2002 inspection (see PHMSA Final Order, CPF 5-2003-5002). Evidence; 1. 2003-2006 CIS, Below -850 mil volt. 2. 2001-, 2006 Coupon survey, Below -850 mil volt and -100 mv shift. 3. Final Order CPF 5-2003-5002, page 3, Item 6, First allegation. $195. 573 What must I do to monitor external corrosion control? (c) Rectifiers and other devices. You must electrically check for proper performance each device in the first column at the frequency stated in the second column.#

520085002_nopv pcp pco_04012008_text.pdf, page 5Device Rectifier. . Check fre uenc At least six times each calendar year, but with intervals not exceeding 2 Ii months Reverse current switch. Diode. Interference bond whose failure would 'eo ardize structural rotection Other interference bond . . . . . . . . . . . . , . . . . . . . . . . At least once each calendar year, but with intervals not exceeding 15 months. (e) Corrective action. You must correct any identified deficiency in corrosion control as required by Sec. 195. 401(b). A rectifier powered by wind (31 EE 125) was installed in October 2003 at MP 12, 5. Records indicated that the rectifier was only performing correctly on 11 occasions out of the 35 scheduled readings taken between October 2003 and July 2007. Evidence: 1. Rectifier readings 2003-2007, When operational, the output should be in the range of 5 volts and 1 amp. 2. Final Order CPF 5-2003-5002, page 3, Item 6, First allegation. $195. 438 Smoking or open flames. Each operator shall prohibit smoking and open flames in each pump station area and each breakout tank area where there is a possibility of the leakage of a flammable hazardous liquid or of the presence of flammable vapors. During the inspection, "No Smoking" signs were missing or faded at the following valve locations CKV 5, 8, 9, 10, 14, 16, 17, 18, 22, and MGV 5A andlOA. $195. 579 What must I do to mitigate internal corrosion? (c) Removing pipe. Whenever you remove pipe from a pipeline, you must inspect the internal surface of the pipe for evidence of corrosion. If you find internal corrosion requiring corrective action under Sec. 195. 585, you must investigate circumferentially and longitudinally beyond the removed pipe (by visual examination, indirect method, or both) to determine whether additional corrosion requiring remedial action exists in the vicinity of the removed pipe. Alyeska has removed piping associated with the Endicott meter run. Alyeska did not provide an inspection report for this pipe for internal corrosion,#

520085002_nopv pcp pco_04012008_text.pdf, page 6Pro osed Civil Penalt 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. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $112, 000. 00 as follows: Item Number PENALTY $56, 000 $56, 000 Warnin Items With respect to Items 7 and 8, 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 promptly correct this item. Be advised that failure to do so may result in Alyeska Pipeline Service Company being subject to additional enforcement action. Pro osed Com liance Order With respect to Items I, 2, 3, and 4 pursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Alyesk~ Pipeline Service Company. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Res onse to this Notice Enclosed as part of this Notice is a document entitled Response 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. 552(b), 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 Pipehne Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order.#

520085002_nopv pcp pco_04012008_text.pdf, page 7In your correspondence on this matter, please refer to CPF 5-200S-5002 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Chris oidal Director, Western Region Pipehne and Hazardous Materials Safety Administration cc: PHP-60 Compliance Registry PHP-500 B. Flanders (0118831) Enclosures' Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings#

520085002_nopv pcp pco_04012008_text.pdf, page 8PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Alyeska Pipeline Service Company a Compliance Order incorporating the following remedial requirements to require that the Alyeska Pipeline Service Company complies with the pipeline safety regulations: 1. In regard to Item Number 1 of the Notice pertaining to the missing valve position indicator on MV 10A, Alyeska Pipeline Service Company shall install a valve position indicator on MV 10A, In regard to Item Number 2 of the Notice pertaining to the structural sleeve at MP 57. 785, Alyeska Pipeline Service Company shall remove and inspect the internal corrosion inside the pipe under the sleeve during the pump station ¹ 2 pipe replacement now scheduled for 2008. PHMSA shall be notified immediately if this sleeve is not removed in 2008. In regard to Item Number 3 of the Notice pertaining to the pressure shutdown switches at GC-I, FS-1 and FS-3, Alyeska shall maintain these pressure shutdown switches as DOT critical safety devices or shall install adequate pressure control equipment within its own facihties at Pump Station 1. Alyeska Pipeline Service Company shall revise "OM-1, Procedural Manual for Operations, Maintenance Atmospheric Corrosion and Emergencies", Section 7, to indicate that these pressure shutdown switches are DOT critical safety devices or to reflect any additional pressure control equipment Alyeska installs at its own facilities at Pump Station 1. Alyeska shall also arrange to have such pressure shutdown switches and any additional pressure control equipment tested annually and shall maintain and make available to PHMSA the records of such testing. In regard to Item Number 4 of the Notice pertaining to the pressure transmitter (31-PT-013A) on the Kuparuk pipeline incoming line to Alyeska. This pressure transmitter shall be maintained as DOT critical safety devices. Alyeska Pipeline Service Company shall revise "OM-1, Procedural Manual for Operations, Maintenance and Emergencies", Section 7, to indicate that these pressure shutdown switches are DOT critical safety devices. Alyeska shall also conduct annual tests of these pressure shutdown switches and shall maintain and make available to PHMSA the records of such testing. Alyeska Pipeline Service Company shall complete the above-listed requirements, and submit documentation of such completion within 180 days of receipt of the Final Order.#

520085002_nopv pcp pco_04012008_text.pdf, page 9Alyeska Pipeline Service Company shall maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Chris Hoidal, Director, Western, Pipeline and Hazardous Materials Safety Administration. Costs shall be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure.#

520085002_amended nopv pcp pco_10152008_text.pdf, page 1Official PDFU S. Department of Transpottahon Pipelline and Hazardous Matsrialls Safety Admirtistmtiiort 12300 W Dakota Ave, Suite 110 Lakewood, CO 80228 October 15, 2008 Mr Kevin Hostler President Alyeska Pipehne Service Company 900 East Benson Blvd P. O. Box 196660 Anchorage, AIZ 99519-6660 Bear Mr. Hostler On April 1, 2008, I issued a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Comphance Order to Alyeska regarding probable violations found during last year's inspection of the facihties between Pump Station 1 and Milepost 126 When the Proposed Order was written, two corrective items were inadvertently omitted I am resubmitting that letter in its entirety below along with the revisions in underhned itahcs Because we are amending this Proposed Order, Alyeska will have another 30 days to respond On July 8 to 13, 2007, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected Alyeska Pipehne Service Company's (ASPC) pipehne segment between Pump Station 1 and Milepost 126 near Prudhoe Bay, Alaska. As a result of the inspection, it appears that you have committed probable violations of the Pipehne Safety Regulations, Title 49, Code of Federal Regulations The items inspected and the probable violations are#

520085002_amended nopv pcp pco_10152008_text.pdf, page 2During the inspection, MGV 10A was found without a valve position nidicator Evidence: Photograph of MGV 10A without valve position indicator A structural (non-pressure containment) sleeve was installed kn 1990 at Mile Post (MP) 57. 785, due to mternal corrosion. Alyeska is operating the pipehne with an indeterminate amount of remaining pipe wall thickness under this sleeve. Alyeska did not correct this condition withm a reasonable time even though a commitment to cut out and replace was made for 2007. A 15-foot structural (non-pressure containment) sleeve was installed in 1990 at MP 57. 785 due to internal corrosion. Alyeska monitored the corrosion at this location with Ultrasonic Testing (UT) pigs to determine the depth of corrosion until 2001 At that time, Alyeska determmed that wax was blocking the abihty of the UT pig to accurately predict the corrosion depth In 2004, a Magnetic flux pig was run and it also was unable to accurately assess the corrosion depth Alyeska is operating the pipehne with an indetermmate amount of remaining pipe wall thickness under a sleeve design that cannot contaui pressure. Alyeska dhd not correct this condition within a reasonable time This issue was reported to Alyeska kn January 2006 and APSC management committed to PHMSA they would cut out this sleeve in 2007 Alyeska has now postponed this work until 2008 or 2009 This is not correction of a condition withm a reasonable time Evidence: 1 Safety Related Condition Repokt 890028 Report hsting internal corrosion as the cause, with maximum pit depth. 177 2 Alyeska as built data base, hsting 15 foot structural sleeve. (Not a pressure containing sleeve A structural sleeve will not stop crude oil from leaking onto the ground, when the internal corrosion eats through the pipe wall) 3 Alyeska repair procedure for internal corrosion requires a pressure containing sleeve or replacement of pipe 4. UT Pig data 1994-2001 (2001 pig having trouble with wax at Station 305116 6)#

520085002_amended nopv pcp pco_10152008_text.pdf, page 35 2003 BJ MFL Pig did not report any corrosion at sleeve, due to the additional metal thicloiess of the sleeve Alyeska's Sadlerochit meter pipmg at Pump Station 1 has a maximum operating pressure (MOP) of 275 psig (150 ANSI class, ) and BP's nicomnig piping to the meter has a MOP up to 740 psig (300 ANSI class). BP's surge report stated that BP's maximum discharge pressure has been hmited by pressure shutdown switches at GC-1, FS-1 and FS-3 Alyeska must provide adequate controls and protective equipment to control the pressure within the maximum operating pressure If BP switches are utihzed, they must be maintained as DOT critical safety devices. Alyeska's "OM-1, Procedural Manual for Operations, Manitenance and Emergencies, " Section 7 does not indicate that Alyeska must test and maintain these pressure switches 1. In Alyeska's response to request for specific information, it is stated that Alyesk@ meter runs WOA A EOA (Sadlerochit oil) has a MOP of 275 psig 2. BP's surge analysis report, Executive Summary, states that the high pressure switches are DOT critical safety devices. 3 OM-1 section 2, surge pressure control, does not hst high pressure switches at GC2, FS1, and FS3 (a) Except as provided in paragraph (b) of this section, each operator shaW, at intervals not exceeding 15 months, but at least once each calendar year, or in the case of pipehnes used to carry highly voiiatile hqmds, at intervals not to exceed 7/2 months, but at least twice each calendar year, inspect and test each pressure hmiting device, relief valve, pressure regulator, or other item of pressure control equipment to determine that it is functioning properly, is in good mechanical condition, and is adequate from the standpoint of capacity and reliability of operation for the service in which it is used. Alyeska's Kuparuk piping has a MOP of 1180 psig, while the Kuparuk pipehne system has a MOP of 1440 psig Alyeska has installed a pressure transmitter (31-PT-013A) to protect the 1180 psig pipnig from overpressure Alyeska's "OM-1, Procedural Manual for Operations, Maintenance and Emergencies, " Section 7 does not address this pressure transmitter or hst it as required for testing Alyeska presented records at Pump Station 1 of#

520085002_amended nopv pcp pco_10152008_text.pdf, page 4performing cahbration of this pressure transmitter, mdicating that transmitters were cahbrated annually 1. In Alyeska's response to request for specific information, it states that Alyeska's incoming Ikuparuk pipe has a MOP 1180 psig, while I&uparuk's mcommg pipehne has an MOP of 1415 psig 2 Pressure transmitter calibration sheets for 2005, 2006 3 OM-1 Section 7, does not list 31-PT-013A as a pressure-controlhng device An area (MP 12 2-13 2) of the pipehne was found to have madequate cathodic protection (CP) These low CP readmgs were confirmed by Close Interval Surveys conducted m 2003, 2004, 2005, and 2006 This low CP area was further confirmed by 2002-2006 coupon readings This section of the pipehne did not meet criteria set forth in section 195 571. This area of low CP levels was reported on a 2002 inspection (see PHMSA Final Order, CPF 5-2003-5002) 1 2003-2006 CIS, Below -850 mil volt. 2 2001-2006 Coupon survey, Below -850 rnil volt and -100 mv shift 3 Fmal Order CPF 5-2003-5002, page 3, Item 6, First allegation (c) Rectifiers aud othe~ devices. You must electricaily check for proper performance each device iu the first column at the frequency stated iu the second column.#

520085002_amended nopv pcp pco_10152008_text.pdf, page 5At least six times each calendar year, but vvith intervals not exceeding 2 I/~ months A rectifier powered by wmd (31 EE 125) was installed in October 2003 at MP 12 5 Records indicated that the rectifier was only performing correctly on 11 occasions out of the 35 scheduled readings taken between October 2003 and July 2007 1 Rectifier readings 2003-2007 When operational, the output should be in the range of 5 volts and 1 amp. 2 Final Order CPF 5-2003-5002, page 3, Item 6, First allegation During the inspection, "No Smoking" signs were missing or faded at the following valve locations CKV 5, 8, 9, 10, 14, 16, 17, 18, 22, and MGV 5A andlOA )195. 579 What must I do to mitigate internal corrosion' (c) Removing pipe. Whenever you remove pipe from a pipehne, you must inspect the internal surface of the pipe for evidence of corrosion. If you find internal corrosion requiring corrective action under Sec. 195. 585, you must investigate circumferentially and longitudinally beyond the removed pipe (by visual examination, indirect method, or both) to determine whether additional corrosion requiring remedial action exists in the vicinity of the removed pipe. Alyeska has removed piping associated with the Endicott meter run Alyeska did not provide an inspection report for this pipe for internal corrosion#

520085002_amended nopv pcp pco_10152008_text.pdf, page 6Pro osed Civil Penalt 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 The Comphance Officer has reviewed the circumstances and supporting documentation involved m the above probable violations and has recommended that you be prehminarily assessed a civil penalty of $112, 000. 00 as follows Item Number PENALTY $56, 000 $56, 000 Warmn Items With respect to Items 7 and 8, we have reviewed the circumstances and supporting documents involved m this case and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time We advise you to promptly correct this item. Be advised that failure to do so may result in Alyeska Pipeline Service Company being subject to additional enforcement action Pro osed Com hance Order With respect to Items 1, 2, 3, 4, 5 and 6 pursuant to 49 United States Code ( 60118, the Pipehne and Hazardous Materials Safety Admmistration proposes to issue a Comphance Order to Alaska Pipehne Service Company Please refer to the Proposed Conzpliance Order, which is enclosed and made a part of this Notice Res onse to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipehne Operators in Comp&ance ProceeCings 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 beheve that any portion of your responsive material quahfies for confidential treatment under 5 U. S C 552(b), along with the complete original document you must provide a second copy of the document with the portions you beheve quahfy for confidential treatment redacted and an explanation of why you beheve the redacted information quahfies 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 Pipehne Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order,#

520085002_amended nopv pcp pco_10152008_text.pdf, page 7In your correspondence on this matter, please refer to CPF 5-2008-5002 and for each document you submit, please provide a copy in electronic format whenever possible Smcerely, Chris Hoidal Director, Western Region Pipehne and Hazardous Materials Safety Admmistration cc PHP-60 Comphance Registry PHP-500 8 Flanders {0118831) Enclosures Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings#

520085002_amended nopv pcp pco_10152008_text.pdf, page 8Pursuant to 49 United States Code ( 60118, the Pipeline and Hazardous Materials Safety Admmistration (PHMSA) proposes to issue to Alyeska Pipehne Service Company a Comphance Order incorporating the following remedial requirements to require that the Alyeska Pipelme Service Company comphes with the pipeline safety regulations In regard to Item Number 1 of the Notice pertaining to the missing valve position indicator on MV 10A Alyeska Pipehne Service Company shall mstall a valve position indicator on MV 10A In regard to Item Number 2 of the Notice pertainmg to the structural sleeve at MP 57. 785, Alyeska Pipeline Service Company shall remove and inspect the internal corrosion inside the pipe under the sleeve during the pump station ¹ 2 pipe replacement now scheduled for 2008 PHMSA shall be notified immediately if this sleeve is not removed m 2008 In regard to Item Number 3 of the Notice pertaining to the pressure shutdown switches at GC-1, FS-1 and FS-3. Alyeska shall maintain these pressure shutdown switches as DOT critical safety devices or shall install adequate pressure control equipment within its own facihties at Pump Station 1 Alyeska Pipelme Service Company shall revise "OM-1, Procedural Manual for Operations, Maintenance Atmospheric Corrosion and Emergencies", Section '1, to indicate that these pressure shutdown switches are DOT critical safety devices or to reflect any additional pressure control equipment Alyeska installs at its own facihties at Pump Station 1. Alyeska shall also arrange to have such pressure shutdown switches and any additional pressure control equipment tested annually and shall maintain and make available to PHMSA the records of such testing 4 In regard to Item Number 4 of the Notice peitaining to the pressure transmitter (31-PT-013A) on the Kuparuk pipehne mcommg line to Alyeska This pressure transmitter shall be maintained as DOT critical safety devices Alyeska Pipehne Service Company shall revise "OM-1, Procedural Manual for Operations, Maintenance and Emergencies", Section 7, to indicate that these pressure shutdown switches are DOT critical safety devices Alyeska shall also conduct annual tests of these pressure shutdown switches and shall maintam and make available to PHMSA the records of such testing. 5 In re ard to Item Number 5 o the Notice ertainin to the low cathodic rotection levels on the i eline between MP 12 2-13 2 This section o the i eline must be rovided cathodic rotection levels that meet criteria set orth in $195 571#

520085002_amended nopv pcp pco_10152008_text.pdf, page 96 In re ard to Item Number 6 o the Notice ertainin to the wind- owered recti ier 3I EE I25 located at MP I2 5 The recti ier at that location must be re aired so that it cathodzcall rotects the tar eted i eline se ment and that an o eratin de iciencies noted dunn t$ze bzmonthl recti ier readin s are rom tl re aired as ~ve mred b g~i95 401 b 7 Alyeska Pipehne Service Company shall complete the above-listed requirements, and submit documentation of such completion within 180 days of receipt of the Final Order 8 Alyeska Pipehne Service Company shall maintain documentation of the safety improvement costs associated with fulfilhng this Comphance Order and submit the total to Chris Hoidal, Director, Western, Pipehne and Hazardous Materials Safety Administration Costs shall be reported in two categories 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure#

520085002_Final Order_03212011_text.pdf, page 1Official PDFMAR 21 2011 Mr. Mike Joynor Senior Vice President Alyeska Pipeline Service Company 900 East Benson Blvd. P.O. Box 196660 Anchorage, AK 99519 Re: CPF No. 5-2008-5002 Dear Mr. Joynor: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $112,000, and withdraws one of the allegations of violation. It further specifies actions that need to be taken by Alyeska Pipeline Service Company to comply with the pipeline safety regulations. The penalty payment terms are set forth in the Final Order. When the civil penalty has been paid and the terms of the compliance order completed, as determined by the Director, Western Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Chris Hoidal, Director, Western Region, PHMSA Mr. Dennis Hinnah, Deputy Director, Western Region, PHMSA Ms. Sheila Doody Bishop, Esq., Counsel for Alyeska Pipeline Service Company CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2472 2858]#

520085002_Final Order_03212011_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 __________________________________________ ) In the Matter of ) ) Alyeska Pipeline Service Company, ) CPF No. 5-2008-5002 ) Respondent. ) ) FINAL ORDER From July 8 to July 13, 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 on-site pipeline safety inspection of the facilities and records of Alyeska Pipeline Service Company (Alyeska or Respondent). Specifically, OPS inspected Alyeska’s facilities between Pump Station #1 and Mile Post (MP) 1 near Prudhoe Bay, Alaska. Alyeska is the operator of the Trans Alaska Pipeline System (TAPS), an 800-mile-long hazardous liquid pipeline system that transports crude oil from production facilities at Prudhoe Bay to a marine terminal in Valdez, Alaska.1 Approximately 200 miles of the TAPS is considered a High Consequence Area (HCA) on the North Slope of Alaska. As a result of the inspection, the Director, Western Region, OPS (Director), issued to Alyeska, by letter dated April 1, 2008, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order. Subsequently, on October 15, 2008, OPS amended its Notice to include two additional proposed corrective measures. Alyeska was granted an additional 30 days to respond to the Amended Notice.2 In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Respondent had committed various violations of 49 C.F.R. Part 195, that a civil penalty of $112,000 be assessed for the alleged violations, and that Respondent be required to take certain measures to correct the alleged violations. The Notice also proposed finding that Respondent had committed certain other probable violations of 49 C.F.R. Part 195, and warned Respondent to take appropriate corrective action to address them or be subject to future enforcement action. Alyeska responded to the Notice by letters dated April 22, 2008, May 22, 2008, and November 18, 2008 (collectively, Response). Respondent contested one of the alleged violations, provided 1 http://www.alyeska-pipe.com (last accessed on Feb. 14, 2010). 2 All references to “Notice” in this Final Order will refer to the Amended Notice issued on October 15, 2008.#

520085002_Final Order_03212011_text.pdf, page 32 an explanation of its actions regarding the other allegations, and requested that PHMSA withdraw certain items listed in the proposed compliance order. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION In its Response, Alyeska did not contest the following allegations in the Notice that it violated 49 C.F.R. Part 195: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.116(e), which states: § 195.116 Valves. following…. Each valve installed in a pipeline system must comply with the (e) Each valve other than a check valve must be equipped with a means for clearly indicating the position of the valve (open, closed, etc.). The Notice alleged that Alyeska violated 49 C.F.R. § 195.116(e) by failing to equip each valve with a means for clearly indicating the position of the valve. Specifically, the Notice alleged that during the inspection, MGV 10A, a manual gate valve, was found without a valve position indicator. OPS attached pictures to the Pipeline Safety Violation Report documenting the missing indicator. Alyeska did not contest this allegation of violation and stated that it had scheduled the installation of the valve position indicator. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.116(e) by failing to maintain a valve position indicator on MGV 10A. Item 2: The Notice alleged that Respondent violated 49 C.F.R. §195.401 (b), which states: § 195.401 General requirements. (a) …. (b) Whenever an operator discovers any condition that could adversely affect the safe operation of its pipeline system, it shall correct it within a reasonable time. However, if the condition is of such a nature that it presents an immediate hazard to persons or property, the operator may not operate the affected part of the system until it has corrected the unsafe condition. The Notice alleged that Alyeska violated 49 C.F.R. § 195.401(b) by failing to correct a condition that could adversely affect the safe operation of its pipeline system within a reasonable time. Specifically, the Notice alleged that due to internal corrosion Respondent installed a 15-foot non- pressure containment sleeve at MP 57.785 in 1989. The operator continued to operate the pipeline segment with the sleeve in place, even though an indeterminate amount of remaining pipe wall thickness existed under the sleeve. Such a condition could adversely affect the safe operation of TAPS because this type of structural sleeve will not stop crude oil from leaking onto the ground when internal corrosion has weakened the pipe wall. Alyeska was notified of this issue in January 2007 and scheduled work to repair it in 2007 and again in 2008. Respondent did#

520085002_Final Order_03212011_text.pdf, page 43 not correct this condition within a reasonable time. Alyeska did not contest this allegation of violation but requested that the OPS withdraw the proposed compliance order, as discussed below. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.401(b) by failing to correct a condition that could adversely affect the safe operation of its pipeline system within a reasonable time. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.428(a), which states: § 195.428 Overpressure safety devices and overfill protection systems. (a) Except as provided in paragraph (b) of this section, each operator shall, at intervals not exceeding 15 months, but at least once every calendar year, or in the case of pipelines used to carry highly volatile liquids, at intervals not to exceed 7½ months, but at least twice each calendar year, inspect and test each pressure limiting device, relief valve, pressure regulator, or other item of pressure control equipment to determine that it is functioning properly, is in good mechanical condition, and is adequate from the standpoint of capacity and reliability of operation for the service in which it is used. The Notice alleged that Alyeska violated 49 C.F.R. § 195.428(a) by failing to inspect each pressure limiting device, relief valve, pressure regulator or other pressure control equipment within the interval required by the regulation. Specifically, the Notice alleged that Respondent installed a pressure transmitter (31-PT-013A) to protect its Kuparuk pipeline system from overpressure, yet failed to reference it in the company’s procedure, “OM-1, Procedural Manual for Operations, Maintenance and Emergencies,” Section 7, or include it in a list of such equipment requiring annual testing. Alyeska did not contest this allegation of violation but requested that OPS withdraw the proposed compliance order since the company had added the pressure transmitter to its manual after the inspection. Such request is discussed more fully below. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.428(a) by failing to inspect a pressure transmitter on its Kuparuk pipeline system. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.573 (e), which states: § 195.573 What must I do to monitor external corrosion control? (a) Protected pipelines. You must do the following to determine whether cathodic protection required by this subpart complies with § 195.571:…. (e) Corrective action. You must correct any identified deficiency in corrosion control as required by § 195.401(b)…. The Notice alleged that Alyeska violated 49 C.F.R. § 195.573(e) by failing to correct certain corrosion control deficiencies in accordance with § 195.401(b), quoted above in Item 2.3 Specifically, the Notice alleged that since 2002 Alyeska had been aware of low cathodic 3 49 C.F.R. § 195.401(b) states that “whenever an operator discovers any condition that could adversely affect the safe operation of its pipeline system, it shall correct it within a reasonable time.”#

520085002_Final Order_03212011_text.pdf, page 54 protection (CP) readings in the area of MPs 12.2-13.2, and that such readings indicated that the CP for this area did not meet the criteria set forth in § 195.571. Close Interval Surveys performed in 2003, 2004, 2005, and 2006 continued to reflect low readings in this area. Coupon readings collected between 2002 and 2006 also confirmed low CP in this area. These areas of had failed to correct these deficiencies. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 the timeframe set by § 195.401(b). low CP were first reported during an 2002 inspection.4 As of the date of the inspection, Alyeska C.F.R. § 195.573(e) by failing to correct certain identified corrosion control deficiencies within Item 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(c) and (e), which state: § 195.573 What must I do to monitor external corrosion control? (a) …. (c) Rectifiers and other devices. You must electrically check for proper performance each device in the first column at the frequency stated in the second column. Device Check frequency Rectifier……………………………… At least six times each calendar year, but with intervals not exceeding 2 ½ months. Reverse current switch. Diode. Interference bond whose failure would jeopardize structural protection. Other interference bond……………… At least once each calendar year, but with intervals not exceeding 15 months…. (e) Corrective action. You must correct any indentified deficiency in corrosion control as required by § 195.401(b)…. The Notice alleged that Alyeska violated 49 C.F.R. § 195.573(c) and (e) by failing to correct an identified deficiency in corrosion control of one its rectifiers. Specifically, the Notice alleged that a rectifier powered by wind was installed in October 2003 at MP 12.5, but that the rectifier only performed correctly on 11 out of 35 readings taken between October 2003 and July 2007. The Notice alleged that Alyeska failed to address this deficiency and Respondent did not contest the allegation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.573(c) and (e) by failing to correct an identified deficiency in corrosion control of one of its rectifier devices. 4 In the Matter of Alyeska Pipeline Service Company, Final Order, CPF No. 5-2003-5002, 2005 WL 5010121 (May 19, 2005) (cases are also available at www.phmsa.dot.gov/pipeline/enforcement).#

520085002_Final Order_03212011_text.pdf, page 65 These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. WITHDRAWAL OF ALLEGATION Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.406, which states, in relevant part: § 195.406 Maximum operating pressure. (a) Except for surge pressures and other variations from normal operations, no operator may operate a pipeline at a pressure that exceeds any of the following:…. (b) No operator may permit the pressure in a pipeline during surges or other variations from normal operations to exceed 110 percent of the operating pressure limit established under paragraph (a) of this section. Each operator must provide adequate controls and protective equipment to control the pressure within this limit. The Notice alleged that Alyeska violated 49 C.F.R. § 195.406(b) by failing to provide adequate controls and protective equipment to ensure that the pressure in the company’s meter piping at Pump Station 1 did not exceed 110 percent of the operating pressure limit established under paragraph (a) of this regulation. Specifically, the Notice alleged that the meter piping had a lower maximum operating pressure than the incoming piping. The incoming piping contained pressure shutdown switches at GC-1, FS-1 and FS-3. If these switches were used to control pressure, then they had to be maintained as DOT critical safety devices. However, Alyeska’s operating manual did not list the required testing of these high-pressure switches at those locations. In its Response, Alyeska argued that the connection piping was operated by Alyeska as a low- stress pipeline and thus was not regulated by PHMSA since it fell within the exception of pipelines from Part 195 requirements. A low-stress pipeline was defined in § 195.2 as a pipeline “operated in its entirety at a stress level of 20 percent or less of the specified minimum yield strength of the line pipe.” Respondent argued that the pipeline is normally operated at a level below 100 psi and never above 140 psi, which are both well below the 20 percent specified minimum yield strength (SMYS) levels of 250 psi and 333 psi for the pipeline in question. Aleyska also provided reasoning why the other requirements of § 195.1(b)(3)(i) were met. As a result, Respondent requested that PHMSA withdraw this allegation and the corresponding terms of the proposed compliance order. § 195.1(b)(3)(i).5 At the time of the inspection, this section exempted certain onshore low stress 5 At the time of the inspection, §195.1(b)(3)(i) was in effect. However, on June 3, 2008, PHMSA published a final rule amending 49 C.F.R. § 195.1, effective July 3, 2008. See Pipeline Safety: Protecting Unusually Sensitive Areas From Rural Onshore Hazardous Liquid Gathering Lines and Low-Stress Lines (2008), 73 Fed. Reg. 31644 (June 3, 2008). The current § 195.1 no longer includes the specific section cited herein.#

520085002_Final Order_03212011_text.pdf, page 76 I find Respondent’s argument persuasive. The meter piping is non-jurisdictional because the lines meet the exceptions listed in § 195.1(b)(3)(i). Therefore, based upon a review of all of the evidence, I find that Respondent did not violate 49 C.F.R. 195.406(b) and withdraw Item 3 and the related portion of the proposed compliance order. 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. In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must 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 $112,000 for the violations cited above. Item 5: The Notice proposed a civil penalty of $56,000 for Respondent’s violation of 49 C.F.R. § 195.573(e), for failing to correct the identified cathodic protection deficiencies at MP 12.2- 13.2. Alyeska did not contest the proposed civil penalty and did not offer any evidence in its Response as to why the penalty amount should be reduced or eliminated based on the assessment criteria of 49 C.F.R. § 190.225. Instead, Respondent described its 2007 efforts to remedy the problem. These actions occurred after the inspection and therefore cannot be considered as a “good faith” basis for decreasing a proposed civil penalty. Further, I find that after recognizing in 2002 that the CP readings in this area were low, Alyeska still failed to address the problem for nearly 4 years. The low CP levels had first been reported during a 2002 inspection and documented in a previous enforcement case, CPF No. 5-2003-5002. Failure to address inadequate cathodic protection for such a long period of time can result in a pipeline leak or rupture, thus threatening harm to life, property, and the environment. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $56,000 for violation of 49 C.F.R. § 195.573(e). Item 6: The Notice proposed a civil penalty of $56,000 for Respondent’s violation of 49 C.F.R. § 195.573(c) and (e), for failing to correct a corrosion control deficiency at the rectifier at MP 12.5. In its Response, Alyeska did not explicitly offer any evidence as to why the penalty amount should be reduced or eliminated based on the assessment criteria of 49 C.F.R. § 190.225. Instead, the company described its efforts in 2007 to install a new wind generator/rectifier to remedy the problem. These actions occurred after the inspection and therefore cannot be considered as a “good faith” basis for decreasing a proposed civil penalty. Further, after recognizing in 2002 that the rectifier was not operating correctly, Alyeska failed to address the problem for nearly 4 years. Alyeska’s records demonstrated that the rectifier device performed correctly on only 11 out of 35 readings taken between October 2003 and July 2007. A failure to correct inadequate CP for such a long period of time can result in a pipeline leak or rupture, thus#

520085002_Final Order_03212011_text.pdf, page 87 threatening harm to life, property, and the environment. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $56,000 for violation of 49 C.F.R. § 195.573(c). In summary, having reviewed the record and considered the assessment criteria for each of the items cited above, I assess Respondent a total civil penalty of $112,000. 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 269039, Oklahoma City, OK 73125. The Financial Operations Division’s telephone number is (405) 954-8893. Failure to pay the $112,000 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 will 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 district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1, 2, 3, 4, 5, and 6 in the Notice, for violations of 49 C.F.R. §§ 195.116(e), 195.401(b), 195.406(b), and 195.428(a), 195.573(e), and 195.573(c) and (e), respectively. As stated above, I have withdrawn the alleged violation listed in Item 3, and therefore the corresponding proposed compliance item is also withdrawn. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. The Director has indicated that Respondent has taken the following actions to address some of the cited violations: With respect to Item 2 in the Notice, Respondent has removed the sleeve and inspected the internal corrosion inside the pipe under the sleeve. With respect to Item 4, Respondent has updated its O&M manual and included the pressure transmitter 31-PT-013A as a DOT critical safety device. This action satisfies the requirements of the proposed compliance order. With respect to Items 5 and 6, Alyeska asserted that new corrosion control equipment was installed in 2007 and has been performing well since that time. The company provided convincing evidence that CP levels between Mile Posts 12.2 and 13.2 met the requirements of the pipeline safety regulations.#

520085002_Final Order_03212011_text.pdf, page 98 Accordingly, I find that compliance has been achieved with respect to these violations. Therefore, the compliance terms proposed in the Notice for Items 2, 4, 5, and 6 are not included in this Order. As for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 195.116(e) (Item 1), Alyeska Pipeline Service Company must install a valve position indicator on MV 10A. 2. Alyeska Pipeline Service Company must complete the above-listed requirements, and submit documentation of such completion within 180 days of receipt of the Final Order. 3. Alyeska Pipeline Service Company is requested to maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Chris Hoidal, Director, Western Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies, and analyses, and 2) total cost associated with replacements, additions, and other changes to pipeline infrastructure. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Failure to comply with this Order may result in administrative assessment of civil penalties not to exceed $100,000 for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. WARNING ITEMS With respect to Items 7 and 8, the Notice alleged probable violations of 49 C.F.R. §§ 195.438 and 195.579(c), respectively, but did not propose a civil penalty or compliance order for these items. Therefore, these are considered to be warning items. The warnings were for: 49 C.F.R. § 195.438 (Item 7) ─ Respondent’s alleged failure to exhibit or maintain “no smoking” signs in each pump station and breakout tank area where there was a possibility of the leakage of a flammable hazardous liquid or of the presence of flammable vapors. During the inspection, “no smoking” signs were inadequate at the following valve locations: CKV 5, 8, 9, 10, 14, 16, 17, 18, 22, and MGV 5A and 10A. 49 C.F.R. § 195.579(c) (Item 8) ─ Respondent’s alleged failure to provide an inspection report for internal corrosion upon removal of piping associated with the Endicott meter run.#

520085002_Final Order_03212011_text.pdf, page 109 Respondent presented information in its Response showing that it had taken certain actions to address the cited items. Having considered such information, I find, pursuant to 49 C.F.R. § 190.205, that probable violations of 49 C.F.R. § 195.438 (Item 7) and 49 C.F.R. § 195.579(c) (Item 8) have occurred and Respondent is hereby advised to correct such conditions. In the event that OPS finds a violation of any of these items in a subsequent inspection, Respondent may be subject to future enforcement action. 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 sent to: Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA will accept petitions received no later than 20 days after receipt of service of this Final Order by the Respondent, provided they contain a brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of any civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all other terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#