# HILCORP NORTH SLOPE, LLC — Corrective Action Order

- **operation:** document
- **citation:** CPF 520085044H
- **title:** HILCORP NORTH SLOPE, LLC — Corrective Action Order
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2008-06-20
- **effective on:** Not available
- **summary:** CLOSED corrective action order.
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520085044h.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-520085044h
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520085044H
**body:**

Corrective Action Order involving HILCORP NORTH SLOPE, LLC. The dataset does not identify a cited regulation for this case. The case was opened on 2008-06-20 and is reported as closed as of 2011-09-09. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520085044H_Notice of Proposed Corrective Action Order_06202008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520085044H/520085044H_Notice%20of%20Proposed%20Corrective%20Action%20Order_06202008.pdf

520085044H_Notice of Proposed Corrective Action Order_06202008.pdf

U.S. Department
of Transportation
Pipeline and
Hazardous Materials Safety
Administration
12300 W. Dakota Ave., Suite 110
Lakewood. CO 80228
VIA FEDERAL EXPRESS AND FACSIMILE
Mr. Kevin Hostler President and Chief Executive Officer Alyeska Pipeline Service Company 900 E. Benson Boulevard Anchorage, AK 995 19 Mr. Doug Suttles
President
BP Exploration (Alaska), Inc.
900 E. Benson Boulevard
Anchorage, AK 99501
Re: CPF No. 5-2008-5016H
Gentlemen:
Enclosed is a Notice of Proposed Corrective Action Order (Notice) issued in the above-
referenced case. The Notice proposes that Alyeska Pipeline Service Company and BP
Exploration (Alaska), Inc. take certain measures with respect to their respective portions of the
crude oil pipeline that connects Skid 50 to Pump Station 1 at Prudhoe Bay. Service is being
made by Federal Express and facsimile. Your receipt of this Notice constitutes service of that
document under 49 C.F.R. 5 190.5.
We look forward to a successful resolution of the potentially hazardous conditions posed by
this pipeline. Please direct any questions on this matter to me at (720) 963-3 160.
Thank you for your cooperation in this matter.
Sincerely, & Tu
Chris Hoidal
Director, Western Region
Enclosures: Notice of Proposed Corrective Action Order
49 C. F. R. $190.233



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WESTERN REGION
LAKEWOOD, CO 80228
In the Matter of
Alyeska Pipeline Service Company
and
BP Exploration (Alaska), Inc.,
Respondents.
CPF NO. 5-2008-501 6H
NOTICE OF PROPOSED CORRECTIVE ACTION ORDER
Background and Purpose
This Notice of Proposed Corrective Action Order ("Notice") is issued in reference to a hazardous
liquid pipeline operated in part by BP Exploration (Alaska), Inc. ("BPXA") and in part by The
Alyeska Pipeline Service Company ("Alyeska"), at the Prudhoe Bay Unit oil field in the North
Slope Borough, near Deadhorse, Alaska. This short but critical pipeline ("Affected Pipeline")
transports the combined output of crude oil-approximately 400,000 barrels per day-from the
Prudhoe Bay Unit Western Operating Area ("WOA") and the Prudhoe Bay Unit Eastern
Operating Area ("EOA") to the Trans Alaska Pipeline System ("TAPS"). The Affected Pipeline
begins at BPXA's Skid 50 facility and ends at Alyeska's Pump Station 1 of TAPS. The
upstream section is operated by BPXA and the downstream section is operated by Alyeska.
In March and August 2006, two crude oil pipelines located just upstream of Skid 50 and operated
by BPXA failed and caused spills of crude oil on the tundra of the North Slope of Alaska. The
March failure occurred on the WOA crude oil transit pipeline and resulted in a spill of an
estimated 212,252 gallons of oil. The August failures occurred on the EOA crude oil pipeline
and resulted in a spill of an estimated 966 gallons of oil. Both lines have similar operational and
internal characteristics to the Affected Pipeline.



In response to the 2006 WOA and EOA failures, PHMSA issued a Corrective Action Order and
three subsequent Amendments to BPXA in 2006 and 2007 ("BPXA CAO.)"' The Pipeline and
Hazardous Materials Safety Administration ("PHMSA" or "the agency") and BPXA agree that
internal corrosion was a cause of the 2006 failures and that roughly sixteen (16) miles of WOA
and EOA pipeline have ultimately needed replacement in order to effectively address future
corrosion risks on those lines. This replacement work is currently underway and is scheduled for
completion by the end of 2008.
A purpose of this Notice is to address corrosion risks on the Affected Pipeline to prevent similar
failures. Specifically, PHMSA proposes that BPXA and Alyeska be required to undertake
measures similar to those imposed by PHMSA in the BPXA CAO to either assess and repair or
replace the Affected Pipeline. The Affected Pipeline has never been fully assessed and its
condition remains largely unknown.
PHMSA issues this Notice of Proposed Corrective Action Order, in accordance with 49 U.S.C.
5 601 12, to BPXA and Alyeska (collectively, "Respondents"), notifying them of the agency's
preliminary findings regarding the Affected Pipeline and proposing that Respondents take certain
corrective measures with respect to the Affected Pipeline that PHMSA deems necessary to
protect life, property, and the environment from potential hazards associated with the Affected
Pipeline.
Because Respondents each operate a portion of the Affected Pipeline, PHMSA encourages
Respondents to develop a joint and coordinated plan to accomplish the corrective measures
proposed in this Notice.
Preliminary Findings
Failures of Pipelines Similar to the Affected Pipeline
PHMSA began an investigation of the 2006 WOA pipeline failure immediately after
learning of the incident. On March 15, 2006, PHMSA issued a Corrective Action Order
finding that the continued operation of three hazardous liquid pipelines BPXA
operates-the WOA, EOA and Lisbume pipelines ("Subject Pipelinesn)-would be
hazardous to life, property, and the environment, if certain corrective measures were not
taken. The CAO set forth preliminary findings based on PHMSA's initial investigation
of the failure and required, among other actions, that BPXA perfom certain cleaning
pigging and smart pigging of the Subject Pipelines. PHMSA amended the CAO three
times based upon its ongoing investigation of the March failure and the subsequent
August 2006 failures and PHMSA's finding that the Subject Pipelines would continue to
be hazardous to life, property, and the environment without additional corrective
measures.
1 See In the Matter of BP Exploration (Alaska), Inc., Corrective Action Order, CPF No. 5-2006-5015H, (Pipeline
and Hazardous Materials Safety Admin. Mar. 15, 2006) as amended by Amendment No. 1 to Corrective Action
Order (July 20, 2006), Amendment No. 2 to Corrective Action Order (Aug. 10, 2006), and Amendment No. 3 to
Corrective Action Order (Apr. 27, 2007).



In .the course of investigating the WOA and EOA failures, PHMSA found that they
resulted, in part, from internal corrosion that had reduced the thickness of the pipeline
walls. PHMSA also found that certain common operating and internal characteristics
were relevant to the failures. These characteristics include, but are not limited to: a lack
of routine cleaning pigging; low crude oil flow velocities; the corrosivity of the materials
transported (including water and sediments); the tendency of sediments and water to drop
out of the low flow velocity crude oil stream onto the bottom inside surface of the
pipelines; the presence of accumulated water and sediments inside the pipelines;
operation in similar environmental conditions; and ineffective corrosion inhibitor and
pipeline assessment programs.
3. The Affected Pipeline shares the common operating and internal characteristics listed
above with the EOA and WOA pipelines. However, whereas the WOA and EOA
pipelines were cleaned and smart pigged (albeit very infrequently prior to the 2006
failures), the Affected Pipeline has never been cleaned or smart pigged.
4. It is well known that low crude oil flow velocities often cause the accumulation of water
and solids inside pipelines. BPXA has reported periodic upset conditions in which water
has been released into the WOA and EOA. It is likely that some of this water has entered
into and accumulated in the Affected Pipeline. BPXA has also reported that Gama Ray
scans of its portion of the Affected Pipeline indicate the presence of accumulated solids
in the line. Therefore, it is likely that solids have also accumulated in the Alyeska-
operated section of the Affected Pipeline.
5. The accumulation of water and solids in the bottom of the Affected Pipeline increases the
risk of internal corrosion and spills of oil, particularly when water and solids are not
removed by the use of cleaning pigs. As PHMSA noted in Amendment No. 3 to the
CAO, the accumulation of water and solids was a factor in the 2006 WOA and EOA
failures.
The Affected Pipeline
6. The Affected Pipeline is approximately 0.4 miles in length and located approximately 12
miles from Deadhorse, Alaska. The upstream section is a 34-inch line operated by BPXA
and known as "OT 501." OT 501 originates at Skid 50, runs beneath the Spine Road,
and ends at a welded pipe joint in the vicinity of an insulating flange approximately
1,600 feet downstream from Skid 50. The downstream section, a 36-inch line known as
the Greater Prudhoe Bay Connecting Pipeline ("GPB CP"), is operated by Alyeska, and
originates at the welded pipe joint. The GPB CP runs mostly underground, is partially
encased in concrete, and ends at Pump Station 1 approximately 660 feet downstream.
7. During the course of it's investigations of the 2006 pipeline failures and the Agency's
oversight of the BPXA CAO, PHMSA became concerned about the safety of the
Affected Pipeline because of its shared operating and internal characteristics to the failed



WOA and EOA pipelines, as described above, and because the Affected Pipeline had not
been cleaned or internally inspected.
8. As a result of these concerns, in the summer of 2006, PHMSA, by way of Item 34 of the
BPXA CAO, required BPXA to submit information detailing the results of assessments
and testing of the Affected Pipeline, then referred to by BPXA as OT 501, as well as
plans for future assessment and testing. On September 8, 2006, BPXA provided
responsive information. In its Response, BPXA provided information about OT 50 1 and
the results of external assessments that the company had conducted. BPXA indicated
that OT 501 transported oil from Skid 50 to Pump Station 1 but did not indicate that there
was another section of the Affected Pipeline that was operated by Alyeska.
9. In the summer of 2006, PHMSA, by way of Items 17 and 23 of the BPXA CAO, also
required BPXA to submit information on its plans for the repair or replacement of WOA
and EOA. In the fall of 2006, BPXA indicated that it would replace several segments of
the Prudhoe Bay Unit pipelines. In January 2007, BPXA provided details regarding the
nature and scope of the replacement project, including its plans to replace the entire
Affected Pipeline (including the section operated by Alyeska) by the end of 2008.
Specifically, BPXA indicated that the Affected Pipeline would be replaced with a new
pipeline of a uniform diameter, equipped with facilities to enable the line to be readily
assessed with smart pigs and cleaned with cleaning pigs. PHMSA reflected this
commitment in Item 35 of the BPXA CAO by requiring BPXA to report monthly on the
progress of pipeline replacement and to provide notice of any material changes to the
scope, design elements, or schedule of BPXA's plans for replacement.
10. Replacement of the Affected Pipeline with a new, piggable line would likely eliminate
many of the corrosion-related risks on the Affected Pipeline. In the alternative, full
inspection, repair, maintenance and work to make the existing Affected Pipeline
piggable, may eliminate such corrosion-related risks.
11. By letter dated January 29, 2008, BPXA reiterated its desire to replace the Affected
Pipeline to ExxonMobil Production Company ("Exxon"), one of the Working Interest
Owners ("Owners") of the Prudhoe Bay BPXA expressed its belief that "[tlhe
pipeline between Skid 50 and Pump Station 1 is one of the most important sections of
pipeline on the North Slope. The entire flow from the Prudhoe Bay Unit is transported
through this pipeline just before it enters the Trans Alaska Pipeline."
12. In the fall and winter of 2007, BPXA indicated to PHMSA that it was working to obtain
certain approvals for its plan to replace the Affected Pipeline.
13. On February 10, 2008, however, BPXA notified PHMSA by letter3 that it had suspended
plans to replace the Affected Pipeline. BPXA later explained that it was suspending its
replacement plans because it had not been able to obtain funding approval from all of the
2 The Owners consist of several oil companies who jointly own the Prudhoe Bay Unit facilities. BPXA operates the
facilities on behalf of the Owners pursuant to a written agreement.
3 Pursuant to Item 35 of the BPXA CAO.



Owners. Upon receiving this news, PHMSA requested4 and received5 additional
information from Respondents regarding the specifications and condition of their
respective sections of the Affected Pipeline.
14. By letter dated, March 28, 2008, BPXA provided PHMSA re-submitted assessment
information on several spot locations along OT 501 that it had complied in 2006 using
Non-Destructive Evaluation ("NDE") tools applied to the exterior of the pipeline. The
2006 information included assessment results indicating that OT 501 had two (2)
indications of internal corrosion with wall loss up to 40% and eight (8) indications of
internal corrosion with wall loss up to 20%. The 2006 information also revealed two (2)
indications of external corrosion with wall loss up to 40% and nineteen (19) indications
of external corrosion with wall loss up to 20%.
15. BPXA has recently informed PHMSA that the company has performed additional testing
,on the Affected Pipeline but has neither provided any data to PHMSA nor submitted
specific details on the assessment techniques or equipment used. Therefore, the actual
condition of the OT 501 section of the Affected Pipeline remains unknown.
16. By letter dated February 4, 2008 to Alyeska, BPXA indicated its intent to develop a joint
plan with Alyeska to fully assess the integrity of the Affected Pipeline.
17. By letter dated April 25, 2008, Alyeska indicated it had assessed the GPB CP section of
the Affected Pipeline with NDE tools applied to the exterior of the pipeline. The
assessments were conducted at two sites along the pipeline at above- and below-ground
locations. Alyeska indicated that it discovered external corrosion of up to 24% wall loss
and internal corrosion that it characterized as "light density corrosion pitting." Alyeska
reported that the external corrosion indications had been remediated.
18. Except for the two inspection sites, most of the GPB CP section of the Affected Pipeline
has not been assessed. Therefore the condition of the section as a whole remains
unknown.
19. In its April 25, 2008 letter, Alyeska indicated that, upon learning that BPXA had
suspended its plan to replace the entire Affected Pipeline, Alyeska had initiated an
engineering design process for replacement of its GPB CP section. The company
indicated that it may replace the GPB CP in 2009.
20. By letter dated April 3, 3008, Alyeska indicated that the GPB CP is constructed from 36-
inch nominal diameter, 0.375-inch wall thickness, Grade API-5L X60 (consisting of both
AT and CT line classes), dual submerged arc welded ("DSAW") pipe of unknown
manufacture or date with a thin film epoxy coating, and an AnodeFlex impressed current
cathodic protection system. Alyeska indicated that the date of construction of GPB CP is
PHMSA sent information requests to BPXA by letters dated Feb. 7 and Mar. 18, 2008, and to Alyeska by letters
dated Mar. 27 and Apr. 11,2008.
PHMSA received responses to its information requests from BPXA by letters dated Feb. 15 and Mar. 18, 2008, and
from Alyeska by letters dated Apr. 3,25 and June 2,2008.



unknown. The established maximum operating pressure of the GPB CP is 275 psi for the
AT line class pipe and 720 psi for the CT line class pipe, established by original design
criteria.
21. According to BPXA's September 8,2006 letter, as resent on March 28, 2008, the OT 501
was constructed in 1977 from uncoated 34-inch nominal diameter, 0.375-inch wall
thickness, Grade API-5L X52 DSAW pipe that the company believes was manufactured
by Sumitomo. According to BPXA, the established maximum operating pressure of OT
501 is 500 psi (de-rated from 720 psi in 1999). BPXA indicated its belief that the
maximum operating pressure was established by hydrostatic test.
22. Respondents indicate that they operate the Affected Pipeline at approximately 100 psi.
23. The Affected Pipeline traverses an ecological Unusually Sensitive Area ("USA") and is
in close proximity to a drinking water USA. The OT 501 section crosses under the Spine
Road, a heavily travelled access road for the Prudhoe Bay Unit. Area population
includes workers and others at Pump Station 1 and those travelling the Spine Road.
24. The Affected Pipeline operates at less than 20% of the specified maximum yield strength
("SMYS") and is therefore defined as a low-stress pipeline under 49 C.F.R. 9 195.2.
Federal hazardous liquid pipeline safety regulations (49 C.F.R. Part 195) currently do not
apply to the Affected Pipeline under the exemption in 49 C.F.R. 9 195.1 for onshore low-
stress pipelines located in rural areas, outside waterways currently used for commercial
navigation which do not transport highly volatile liquids. However, this exemption will
soon be narrowed as a result of recent changes to Part 1 9 5 . ~
Allegation of Hazardous Condition and Right to Hearing
Section 601 12 of Title 49, United States Code, provides for the issuance of a corrective action
order, after reasonable notice and the opportunity for a hearing, requiring corrective action,
which may include the suspended or restricted use of a pipeline facility, physical inspection,
testing, repair, replacement, or other action, as appropriate. The basis for making the
determination that a pipeline facility is or would be hazardous, requiring corrective action, is set
forth both in the above-referenced statute and 49 C.F.R. § 190.233, a copy of which is enclosed.
After evaluating the foregoing preliminary findings of fact, I find that the Affected Pipeline
operated by Respondents is a "pipeline facility," as defined in 49 U.S.C. § 60101 et seq.,
notwithstanding the current inapplicability of the pipeline safety regulations at 49 C.F.R. Part
195.' It is a "pipeline facility" because it is used in the transportation of hazardous liquid by
6 Effective July 3, 2008, the Affected Pipeline will become subject to 49 C.F.R. Part 195 pursuant to the adoption of
a final rule eliminating the exemption for certain low-stress pipelines. See Protecting Unusually Sensitive Areas
From Rural Onshore Hazardous Liquid Gathering Lines and Low-Stress Lines, 73 Fed. Reg. 3 1,634 (June 3,2008)
(to be codified at 49 C.F.R. Part 195). Tlie requirements of this Notice are in addition to and do not replace any
requirements that may apply to the Affected Pipeline as a result of the final rule.
7 See Id.



pipeline in or affecting interstate commerce and is not used to move hazardous liquid through
gathering lines in a rural area; onshore production, refining, or manufacturing facilities; or
storage or in-plant piping systems associated with onshore production, refining, or
manufacturing facilities.
Additionally, considering the age of the pipe involved, the hazardous nature of the product
transported; the mostly unknown condition the pipeline; known indications of internal and
external corrosion; the corrosive effects of the materials transported (including sediments and
water); low crude oil flow velocities; the tendency of sediments and water to drop out of low
flow velocity crude oil; the known presence of accumulated sediments and the likely presence of
accumulated water; the fact that the pipeline has never been cleaned or internally inspected since
it was constructed roughly thirty (30) years ago; the fact that the pipeline does not currently have
the capability to be pigged; the design and operational similarities of the pipeline to nearby
BPXA pipelines that have failed, in part, due to corrosion; the location of the pipeline in an
ecological unusually sensitive area; the close proximity of the pipeline to workers and others at
Pump Station 1 and the heavily travelled Spine Road, an unusually sensitive drinking water area,
and other environmentally sensitive areas; it appears that the continued operation of the Affected
Pipeline without corrective measures would be hazardous to life, property, and the environment.
Accordingly, PHMSA issues this Notice of Proposed Corrective Action Order to notify
Respondents of the agency's intent to issue a corrective action order and to propose that
Respondents take measures specified herein to protect life, property, and the environment.
Response to this Notice
Either Respondent may request a hearing on this Notice, to be held as soon as practicable, by
notifying the Director, Western Region, PHMSA, 12300 West Dakota Avenue, Suite 110,
Lakewood, CO 80228 ("Director") in writing within ten (10) days of service of this notice.
Failure to submit such written notification waives the opportunity for a hearing and allows the
Associate Administrator for Pipeline Safety ("Associate Administrator") to proceed to determine
whether or not a corrective action order is required in accordance with 49 C.F.R. 5 190.233. If a
hearing is requested by either Respondent, it will be held in Lakewood, Colorado or Washington,
D.C., on a date that is mutually convenient for both of the Respondents and for PHMSA.
As soon as practicable after the conclusion of a hearing, or if no hearing is requested, the
Associate Administrator will determine whether or not a corrective action order is required. If he
decides that the pipeline facility is or would be hazardous to life, property, or the environment,
the Associate Administrator shall issue a corrective action order in accordance with 49 C.F.R. 5
190.233. If he does not decide that the pipeline facility is or would be hazardous to life,
property, or the environment, then he shall withdraw the allegation of the existence of a
hazardous condition contained in this Notice and promptly notify the Respondents in writing.



Proposed Corrective Action
Pursuant to 49 U.S.C. 8 601 12 and 49 C.F.R. 8 190.233, PHMSA proposes to issue to Alyeska
and BPXA a corrective action order incorporating the following remedial requirements with
respect to the Affected Pipeline. The order shall require that Respondents must -
I. Plan for Safe Transportation
1. 2. 3. Within thirty (30) days after the CAO is issued, determine to either fully assess, repair,
and conduct other work on the Affected Pipeline ("Option A"), or to replace the
Affected Pipeline ("Option B"), as detailed more fully below, and submit a written
notification to the Director indicating which Option has been selected. Perform the
requirements of the selected Option, as detailed more fully below.
Option A-Assessment, Repair and Other Work on Affected Pipeline
Full Assessment: Within sixty (60) days after the CAO is issued, develop and submit
for approval, in accordance with Item 2 of the Other Requirements and Terms listed
below ("Approval Procedure"), a written plan for assessment of the Affected Pipeline
for internal and external corrosion and any other anomalies that could affect the
integrity of the line. The plan shall provide for the completion of assessment of 100%
of the length and circumference of the Affected Pipeline within six (6) months after the
CAO is issued. The plan shall propose and describe the specific assessment tools that
Respondents seek to use. The proposed assessment tools shall be capable of detecting
internal and external corrosion features and other damage, and determining, at a
minimum, the percentage metal loss, areal extent, and geometry of any corrosion
features or other damage. The plan shall include provisions to ensure that such
assessment is performed, verified, and recorded in accordance with established industry
practices and shall provide for submission of assessment results to the Director within
ten (10) days of receipt of such assessment results by Respondents. Implement the plan
upon approval.
Initial Repairs: Document and repair all defects and other conditions on the Affected
Pipeline defined under 49 C.F.R. 8 195.452(h)(4)(i) through (iv), on a schedule that at a
minimum, comports with the deadlines set out in 49 C.F.R. €j 195.452(h)(4), and in a
manner consistent with ASME B-31.4, but make all repairs within twelve (12) months
after the CAO is issued. Make all repairs in compliance with 49 C.F.R. 3 195.422.
Extract, record and provide to the Director dimensional data of all anomalies found,
including data on distances from upstream and downstream girth welds, position,
minimum and maximum remaining wall thickness, and remedial actions taken. As
repairs are made, submit monthly reports to the Director documenting each repair made
with respect to each anomaly.
Make Line Piggable: Within sixty (60) days after the CAO is issued, develop and
submit for approval, in accordance with the Approval Procedure, a written plan for



4. 5. 6. 7. 8. making the Affected Pipeline piggable, such that cleaning and smart pigs may be used
on the Affected Pipeline on a routine basis. The plan shall provide for the installation
and operational status of pig launcher(s) and receiver(s) on the Affected Pipeline within
twelve (12) months after the CAO is issued. Implement the plan upon approval.
Cleaning Pigging: Within sixty (60) days after the CAO is issued, develop and submit
for approval, in accordance with the Approval Procedure, a written plan for running
cleaning pigs on the Affected Pipeline at regular intervals not to exceed three (3)
months. Implement such plan upon approval, after making the Affected Pipeline
piggable as required by Item 3 above.
Internal Assessment: Within sixty (60) days after the CAO is issued, develop and
submit for approval, in accordance with the Approval Procedure, a written plan for
internal assessment of the Affected Pipeline, using calibrated smart pigs, within three
(3) months after making the Affected Pipeline piggable as required by Item 3, and
subsequently at regular intervals not to exceed three (3) years. As part of the plan,
record the differences between inline inspection data and actual "as found" data for all
anomalies and integrate such data in future analyses, mapping corrosion growth, and
confirming data gathered by inline inspection tools. Implement the plan upon approval.
Future Repair: Document and repair all defects and other conditions, discovered from
the regular inline inspection required by Item 5, defined under 49 C.F.R. 5
195.452(h)(4)(i) through (iv) on a schedule that at a minimum, comports with the
deadlines set out in 49 C.F.R. 5 195.452(h)(4) and in a manner consistent with ASME
B-3 1.4.
Patrols: Perform daily patrols of the Affected Pipeline with survey equipment capable
of detecting hydrocarbons until the repair requirements of Item 2 are completed.
Fluid Testing: Within thirty (30) days after the CAO is issued, conduct all necessary
tests to determine the corrosivity of the fluid exiting the Affected Pipeline, record the
results of such tests, and make operational and any other necessary changes to mitigate
fluid corrosivity and make effective the corrosion inhibitor mix at mitigating the
corrosion growth. Changes may include, but not be limited to, increasing or changing
corrosion inhibitor concentrations or types. Within thirty (30) days of conducting the
fluid tests, submit to the Director the testing results and a report describing any changes
made as a result of the required tests. Notify the Director of any subsequent operational
or other changes made to mitigate fluid corrosivity and verify the effectiveness of the
corrosion inhibitor mix at mitigating corrosion growth.



2. 3. 4. 6. Option B-Replacement of the Affected Pipeline
Replacement Plan: Within sixty (60) days after the CAO is issued, develop and
submit for approval, in accordance with the Approval Procedure, a written plan for
replacement of the Affected Pipeline. The plan shall include milestones for the
completion of critical construction elements and for the beginning of operations. The
plan shall provide for replacement of the Affected Pipeline, within twelve (12) months
after the CAO is issued, with an operational pipeline that includes functional
launcher(s) and receiver(s) ("Replacement Pipeline") such that the pipeline can be
routinely cleaned with cleaning pigs and internally inspected with smart pigs. Provide
monthly updates of the progress of replacement. Implement the plan upon approval.
Cleaning Pigging: Within sixty (60) days after the CAO is issued, develop and submit
for approval, in accordance the Approval Procedure, a written plan for running cleaning
pigs on the Replacement Pipeline at regular intervals, not to exceed three (3) months.
Implement the plan upon approval.
Continuing Internal Assessment: Within sixty (60) days after the CAO is issued,
develop and submit for approval, in accordance with the Approval Procedure, a written
plan for the use of calibrated smart pigs to conduct internal inspections of the
Replacement Pipeline beginning within one (1) year of commencing operation of the
Replacement Pipeline, and continuing at regular intervals of not more than three (3)
years. Implement the plan upon approval.
Patrols: Perform daily patrols of the Affected Pipeline with survey equipment capable
of detecting hydrocarbons until the repair requirements of Item 1 are completed.
Fluid Testing: Within thirty (30) days after the CAO is issued, conduct all necessary
tests to determine the corrosivity of the fluid exiting the Affected Pipeline, record the
results of such tests, and make operational and any other necessary changes to mitigate
fluid corrosivity and make effective the corrosion inhibitor mix at mitigating the
corrosion growth. Changes may include, but not be limited to, increasing or changing
corrosion inhibitor concentrations or types. Within thirty (30) days of conducting the
fluid tests, submit to the Director the testing results and a report describing any changes
made as a result of the required tests. Notify the Director of any subsequent operational
or other changes made to mitigate fluid corrosivity and verify the effectiveness of the
corrosion inhibitor mix at mitigating corrosion growth.
De-Oiling: Within three (3) months of the shut-down of the Affected Pipeline in
preparation for replacement activities, complete de-oiling and render safe the Affected
Pipeline in accordance with the provisions for abandonment set forth in 49 C.F.R. 5
195.402(~)(10), and remove any remaining hydrocarbons, sludge, and other solids from
the pipelines. After the shut-down of the Affected Pipeline in preparation for
replacement activities, submit monthly written status reports describing the progress in
complying with this Item.



11. Other Requirements and Terms
1. Documentation of Costs: Maintain documentation of the costs associated with
implementation of the CAO and submit the total to the Director. Costs shall be
reported in two categories: 1) total cost associated with preparationlrevision of plans,
procedures, studies and other analyses, and 2) total cost associated with replacements,
additions and other changes to pipeline infrastructure.
2. Approval Procedure: With respect to each submission that under the CAO requires
the approval of the Director, the Director may: (a) approve, in whole or part, the
submission; (b) approve the submission on specified conditions; (c) modify the
submission to cure the deficiencies; (d) disapprove in whole or in part, the submission,
directing that Respondents modify the submission; or (e) any combination of the above.
In the event of approval, approval upon conditions, or modification by the Director,
Respondents shall proceed to take all action required by the submission as approved or
modified by the Director. In the event that the Director disapproves all or any portion
of the submission, Respondents shall correct all deficiencies within the time specified
by the Director, and resubmit it for approval. In the event that a resubmitted item is
disapproved in whole or in part, the Director may again require Respondents to correct
the deficiencies in accordance with the foregoing procedure, andlor the Director may
otherwise proceed to enforce the terms of an Order.
3. Respondents may appeal any decision of the Director to the Associate Administrator
for Pipeline Safety. Decisions of the Associate Administrator shall be final.
4. The Director may grant an extension of time for compliance with any of the terms of
the CAO upon a written request timely submitted demonstrating good cause for an
extension.
The actions proposed by this Notice of Proposed Corrective Action Order are in addition to and
do not waive any requirements that apply, or will apply, to either of Respondents7 pipeline
systems under 49 C.F.R. Parts 190 through 199, under any other order issued to either
Respondent under authority of 49 U.S.C. 5 60101 et seq., or under any other provision of Federal
or state law.
If a CAO is issued, failure to comply with such CAO may result in the assessment of
administrative civil penalties of not more than $100,000 per violation per day pursuant to 49
U.S.C. 5 60122 and 49 C.F.R. 5 190.223, or in referral to the Attorney General of the United
States for appropriate relief, including the imposition of civil judicial penalties, in a United States
District Court pursuant to 49 U.S.C. 5 60120.
After receiving and analyzing additional data in the course of this investigation, PHMSA may
identify other corrective measures that need to be taken. In that event, Respondents will be
notified of any additional measures required and amendment of the corrective action order will



be considered. To the extent consistent with safety, Respondents will be afforded notice and an
opportunity for a hearing prior to the imposition of any additional corrective measures.
[L 7b[!y7
06/20/08
Date Issued
Chris Hoidal
Director
Western Region, PHMSA



9 190.231 (2) Subsequently damages a pipeline
facility and knows or has reason t o
know of the damage but fails to
promptly report the damage to the op-
erator and to the appropriate authori-
ties; or
(3) Subsequently damages a haz-
ardous liquid pipeline facility t h a t re-
sults in the release of more than 50 bar-
rels of product; shall, upon conviction,
be subject for each offense to a fine of
not more than $5,000, imprisonment for
a term not to exceed 5 years, or both.
( f ) No person shall be subject to
criminal penalties under paragraph (a)
of this section for violation of any reg-
ulation and the violation of any order
issued under 5 190.217, 5 190.219 or
5190.229 if both violations are based on
the same act.
[45 F R 20413, M a r . 27, 1980, a s a m e n d e d by
A m d t . 19&2, 54 F R 32344, A u g . 7, 1989; A m d t .
1 9 M , 56 F R 63770, Dec. 5, 1991; A m d t . 19W, 61
F R 18515, A p r . 26. 1996; 70 FR 11138, M a r . 8,
20051
6 190.231 Referral for prosecution.
If a n employee of the Pipeline and
Hazardous Materials Safety Adminis-
tration becomes aware of any actual or
possible activity subject t o criminal
penalties under 5190.229, the employee
reports it t o the Office of the Chief
Counsel, Pipeline and Hazardous Mate-
rials Safety Administration, U.S. De-
partment of Transportation, Wash-
ington, DC 20590. The Chief Counsel re-
fers the report to OPS for investiga-
tion. Upon completion of the investiga-
tion and if appropriate, the Chief Coun-
sel refers the report t o the Department
of Justice for criminal prosecution of
the offender.
[ A m d t . 1 9 W , 61 F R 18515, A p r . 26, 1996, a s
a m e n d e d a t 70 F R 11137, M a r . 8, 20051
6 190.233 Corrective action orders.
(a) Except as provided by paragraph
(b) of this section, if the Associate Ad-
ministrator, OPS finds, after reason-
able notice and opportunity for hearing
i n accord with paragraph (c) of this
section and 5190.211(a), a particular
pipeline facility t o be hazardous to life,
property, or the environment, the As-
sociate Administrator, OPS shall issue
a n order pursuant t o this section re-
49 CFR Ch. 1 (10-1-07 Edition)
quiring the owner or operator of the fa-
cility t o take corrective action. Cor-
rective action may include suspended
or restricted use of the facility, phys-
ical inspection, testing, repair, replace-
ment, or other appropriate action.
(b) The Associate Administrator,
OPS may waive the requirement for
notice and opportunity for hearing
under paragraph (a) of this section be-
fore issuing a n order pursuant t o this
section when the Associate Adminis-
trator, OPS determines t h a t the failure
to do so would result in the likelihood
of serious harm to life, property, or the
environment. However, the Associate
Administrator, OPS shall provide a n
opportunity for a hearing a s soon as is
practicable after the issuance of a com-
oliance order. The orovisions of oara-
graph (c)(2) of this section apply i o a n
owner or operator's decision to exercise
its opportunity for a hearing. The pur-
pose of such a post-order hearing is for
the Associate Administrator, OPS to
determine whether a compliance order
should remain in effect or be rescinded
or suspended in accord with paragraph
(g) of this section.
(c) Notice and hearing:
(1) Written notice t h a t OPS intends
to issue a n order under this section
shall be served upon the owner or oper-
ator of a n alleged hazardous facility in
accordance with 5190.5. The notice
shall allege the existence of a haz-
ardous facility and state the facts and
circumstances supporting the issuance
of a corrective action order. The notice
shall also provide the owner or oper-
ator with the opportunity for a hearing
and shall identify a time and location
where a hearing may be held.
(2) An owner or operator t h a t elects
t o exercise its opportunity for a hear-
ing under this section must notify the
Associate Administrator. OPS of t h a t
election in writing within 10 days of
service of the notice provided under
paragraph (c)(l) of this section, or
under paragraph (b) of this section
when applicable. The absence of such
written notification waives a n owner
or operator's opportunity for a hearing
and allows the Associate Adminis-
trator, OPS t o issue a corrective action
order i n accordance with paragraphs
(d) through (h) of this section.



Pipeline and Hazardous Materials Safety Administration, DOT (3) A hearing under this section shall
be presided over by an attorney from
the Office of Chief Counsel, Pipeline
and Hazardous Materials Safety Ad-
ministration, acting as Presiding Offi-
cial, and conducted without strict ad-
herence to formal rules of evidence.
The Presiding Official presents the al-
legations contained in the notice
issued under this section. The owner or
operator of the alleged hazardous facil-
ity may submit any relevant informa-
tion or materials, call witnesses. and
present arguments on the issue of
whether or not a corrective action
order should be issued.
(4) Within 48 hours after conclusion
of a hearing under this section, the
Presiding Official shall submit a rec-
ommendation to the Associate Admin-
istrator, OPS as to whether or not a
corrective action order is required.
Upon receipt of the recommendation,
the Associate Administrator. OPS shall
proceed in accordance with paragraphs
(d) through (h) of this section. If the
Associate Administrator, OPS finds the
facility is or would be hazardous to
life, property, or the environment, the
Associate Administrator, OPS shall
issue a corrective action order in ac-
cordance with this section. If the Asso-
c
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