CHEVRON PIPE LINE CO — Notice of Probable Violation

party submissionOfficial PDF520105028_operator_response_to_notice_12022010.pdf#

520105028_Closure Letter_02232012_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED February 23, 2012 Mr. James Barnum VP, Pipeline Services and Standards Chevron Pipe Line Company 4800 Fournace Place Bellaire, TX 77401-2324 CPF 5-2010-5028 Dear Mr. Barnum: On February 17, 2011, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Chevron Pipe Line Company (CPL) a Final Order in the above- referenced case. This Order included a Compliance Order and closed the portion of the enforcement case associated with the Civil Penalty assessment. Based on our review of the documentation CPL provided, by letters dated February 15, 2012 and February 20, 2012, it has been determined that you have complied with the Compliance Order portion 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, Chris Hoidal Director, Western Region Pipeline and Hazardous Materials Safety Administration cc: Gary Saenz via e-mailed attachment PHP-60 Compliance Registry PHP-500 J. Stahoviak#

520105028_NOPV PCP PCO_11012010_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED November 1, 2010 Ms. Rebecca B. Roberts President Chevron Pipe Line Company 4800 Fournace Place Bellaire, TX 77401-2324 CPF 5-2010-5028 Dear Ms. Roberts: On June 12, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA) was notified of a release that occurred on a Chevron Pipe Line Company (Chevron) pipeline near Salt Lake City, Utah. The release began the previous night and resulted in approximately 800 barrels of crude oil being released into the ground and nearby Red Butte Creek where the oil flowed westwards into Liberty Park Pond. On June 12, 2010, pursuant to Chapter 601 of 49 United States Code, PHMSA initiated an investigation into the causes of that release. As a result of the investigation, 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. §195.402 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies….#

520105028_NOPV PCP PCO_11012010_text.pdf, page 2(c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part. Chevron had a procedure for patrolling its pipeline rights-of-way (ROWs), which is required by 49 C.F.R. §195.412, detailed in Procedure Number MIP-205 of its Operations and Maintenance Manual, Maintenance and Inspection Procedural Manual (MIP). Chevron did not implement the inspection procedures in MIP-205 for the conditions that were on the ROW in the vicinity of where the pipeline failure occurred. Chevron had chosen to use aerial patrols as the method for inspecting the surface conditions on or adjacent to the ROW for Crude Oil #2 Pipeline. The ROW had areas of excessive overgrowth and nearby manmade structures at the time of the OPS failure investigation. In addition, there was a pipeline marker buried in the bushes over Chevron’s crude line #1. According to MIP-205, inspections in such areas should have been done by land vehicle or on foot, and according to MIP-205 Section 5.4, the ROW overgrowth and the condition of the pipeline marker sign should have been noted during the inspections. Heavy vegetation, numerous structures, and narrow canyons in this pipeline segment indicate that aerial patrols could not be used to adequately assess the surface conditions on or adjacent to the pipeline right-of-way. Chevron had procedures for controlling corrosion of their pipeline systems detailed in their Core Liquids Pipeline Operations and Maintenance Manual in Section 10. Section 10.3.6 required grounding devices on underground pipelines in the vicinity of electrical isolation equipment locations to mitigate the risk of fault currents, lightning, and electrical arcing from negatively impacting the integrity of the pipeline. No such protective or mitigative measures were taken despite the location of an electrical substation above Crude Lines #1 and #2. 2. §195.575 Which facilities must I electrically isolate and what inspections, tests, and safeguards are required? (e) If a pipeline is in close proximity to electrical transmission tower footings, ground cables, or counterpoise, or in other areas where it is reasonable to foresee fault currents or an unusual risk of lightning, you must protect the pipeline against damage from fault currents or lightning and take protective measures at insulating devices. High-voltage electric transmission lines, an aboveground to belowground electric transfer station, and a security fence were located on the ROW at the point where Chevron’s Crude Oil #2 Pipeline failed on June 11, 2010. OPS’s accident investigation indicates that a discharge of electric current onto the pipeline was the probable cause of that failure. Chevron did not protect that portion of the Crude Oil #2 Pipeline against damage from fault currents that could be imparted from the nearby transfer station, including all structures tied into that station’s 2#

520105028_NOPV PCP PCO_11012010_text.pdf, page 3grounding grid, and did not take protective measures at insulating devices. This lack of protection resulted in a hole being created in the pipeline due to electrical arcing from the facility fence pole. 3. §195.452 Pipeline integrity management in high consequence areas. (i) What preventive and mitigative measures must an operator take to protect the high consequence area? (3) Leak detection. An operator must have a means to detect leaks on its pipeline system. An operator must evaluate the capability of its leak detection means and modify, as necessary, to protect the high consequence area. An operator's evaluation must, at least, consider, the following factors – length and size of the pipeline, type of product carried, the pipeline's proximity to the high consequence area, the swiftness of leak detection, location of nearest response personnel, leak history, and risk assessment results. Chevron did not have an adequate means to detect leaks on the Crude Oil #2 Pipeline at the time of the June 11, 2010, failure. OPS’s accident investigation indicates that over ten (10) hours elapsed between the time of the release and Chevron’s notification of the release by the local fire department at 7:42am on June 12th. Chevron controllers did not detect the leak and notification by the fire department was the first definitive knowledge Chevron had that a spill had occurred. The release occurred in a high-consequence area and led to the spill of approximately 800 barrels of crude oil into the Red Butte Creek and surrounding soils. OPS’s accident investigation further indicates that Chevron knew that the elevation profile and operational characteristics of the Crude Oil #2 pipeline rendered its chosen method of leak detection inadequate with respect to the swiftness of leak detection. Chevron’s August 13, 2010, response to PHMSA’s request for specific information about their leak detection capabilities on their Crude Line #2 states that they had performed a leak detection capability evaluation study in 2007. That report concluded that they needed enhancements to their leak detection capabilities on this line, but Chevron did not implement the recommended improvements until after the release. 4. §195.250 Clearance between pipe and underground structures. Any pipe installed underground must have at least 12 inches (305 millimeters) of clearance between the outside of the pipe and the extremity of any other underground structure, except that for drainage tile the minimum clearance may be 12 inches (305 millimeters) but not less than 2 inches (51 millimeters). However, where 12 inches (305 millimeters) of clearance is impracticable, the clearance may be reduced if adequate provisions are made for corrosion control. 3#

520105028_NOPV PCP PCO_11012010_text.pdf, page 4Chevron’s Crude Oil #2 pipeline had a fencepost installed within three (3) inches of it. The probable cause of the pipeline failure on June 11, 2010, was a high-voltage electrical current which went from the fencepost to the pipeline due to the proximity of the post to the pipeline. Chevron had installed a pipeline marker within a foot of the fence post. Proposed Civil Penalty 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 $423,600 as follows: Item number PENALTY 1 $45,400 2 $316,600 3 $61,600 Warning Items With respect to item 4, 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 similar occurrences on your Rangely to Salt Lake City pipeline. Be advised that failure to do so may result in Chevron being subject to additional enforcement action. Proposed Compliance Order With respect to items 1 through 3 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Chevron Pipe Line Company. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response 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 Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. 4#

520105028_NOPV PCP PCO_11012010_text.pdf, page 5In your correspondence on this matter, please refer to CPF 5-2010-5028 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Chris Hoidal Director, Western Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings cc: PHP-60 Compliance Registry PHP-500 P. Katchmar, J. Stahoviak (#130345) 5#

520105028_NOPV PCP PCO_11012010_text.pdf, page 6PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Chevron Pipe Line Company (Chevron) a Compliance Order incorporating the following remedial requirements to ensure the compliance of Chevron with the pipeline safety regulations: 1. In regard to Item Number 1 of the Notice pertaining to pipeline patrolling, if Chevron continues to patrol their pipelines using an aerial method, they must sufficiently clear the right-of-way (ROW) on the Rangely, Colorado, to Salt Lake City, Utah, crude oil pipeline system so they can observe the surface conditions on or adjacent to the ROW as required by §195.412. Alternatively, in areas where vegetation or other ROW obstructions cannot be removed, other methods of patrolling, such as walking or driving, must be implemented to allow direct observation of the ROW conditions. 2. In regard to Item Number 2 of the Notice pertaining to electrical isolation and protection from fault currents per §195.575, Chevron must inspect the Rangely to Salt Lake City crude oil pipeline system for areas where damage to their pipeline facilities could occur from electrical power sources. Specifically, if the pipeline is found to be in close proximity to electrical transmission tower footings, ground cables, or counterpoise, or in other areas where it is reasonable to foresee fault currents or an unusual risk of lightning, Chevron must protect the pipeline system against damage from fault currents or lightning and take protective measures at insulating devices. 3. In regard to Item Number 3 of the Notice pertaining to Chevron’s leak detection methods utilized on the Rangely to Salt Lake City crude oil pipeline system and in accordance with §195.452 (i)(3), Chevron must reevaluate and modify its leak detection system on this pipeline to increase the swiftness and sensitivity of detection in order to minimize the impacts to high consequence areas. 4. Chevron shall complete the above items within 365 days of receipt of the Final Order. 5. Upon completion of all of the above requirements, Chevron must submit documentation on all actions taken by pipeline system including a summary report detailing the remedial actions taken to enhance public safety for each pipeline system. This report must be submitted to Chris Hoidal, Director, Western Region, Pipeline and Hazardous Materials Safety Administration, within 6 months of completing all required actions. 6#

520105028_NOPV PCP PCO_11012010_text.pdf, page 76. Chevron shall 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. 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. 7#

520105028_FinalOrder_02172011_text.pdf, page 1Official PDFFEB 17 2011 Ms. Rebecca B. Roberts President Chevron Pipe Line Company 4800 Fournace Place Bellaire, TX 77401-2324 Re: CPF No. 5-2010-5028 Dear Ms. Roberts: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $423,600, and specifies actions that need to be taken by Chevron Pipe Line Company to comply with the pipeline safety regulations. This is to acknowledge receipt of payment of the full penalty amount, by wire transfer, dated December 2, 2010. When the terms of the compliance order are 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 CERTIFIED MAIL - RETURN RECEIPT REQUESTED [7005 1160 0001 0041 3566]#

520105028_FinalOrder_02172011_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 ) ) Chevron Pipe Line Company, ) CPF No. 5-2010-5028 ) Respondent. ) ____________________________________) FINAL ORDER On June 12, 2010, 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 investigation of an incident involving the pipeline system operated by Chevron Pipe Line Company (Chevron or Respondent) in Salt Lake City, Utah. Chevron is the operator of a 182.5- mile hazardous liquid pipeline system that transports crude oil from a terminal in Rangely, Colorado, to a refinery in Salt Lake City, Utah (Salt Lake City Refinery). There are two 10-inch pipelines in that system: the Number 1 Line, an inactive line built in 1948, and the Number 2 Line, an active line built in 1952.1 The investigation arose out of a failure that occurred on the Number 2 Line on June 11, 2010, near Milepost (MP) 174.5, resulting in the release of 800 barrels of crude oil onto public property2 and into the Red Butte Creek. Chevron did not detect or respond to that failure for more than 10 hours. As a result of the investigation, the Director, Western Region, OPS (Director), issued to Respondent, by letter dated November 1, 2010, a Notice of Probable Violation and Proposed Civil Penalty and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Chevron had committed various violations of 49 C.F.R. Part 195, proposed ordering Chevron to take certain measures to correct the alleged violations, and proposed assessing a civil penalty of $423,600 for the alleged violations. 1 The Number 2 Line receives crude oil in Rangely from a hazardous liquid gathering line system and at three additional downstream injection points. It has an elevation profile that ranges from 4,234 feet at the Salt Lake City Refinery to 8,450 feet at Wolf Creek Pass and traverses several high consequence areas, particularly in the 50-mile segment that runs from Park City, Utah, to Salt Lake City. 2 MP 174.5 is located on property that is owned by the University of Utah. Several public buildings, including an arboretum, auditorium, and dormitories, are in the immediate area.#

520105028_FinalOrder_02172011_text.pdf, page 32 Chevron responded to the Notice by letter dated December 2, 2010 (Response). The company did not contest the allegations of violation but provided information concerning the corrective actions it had taken. Later that day, Respondent paid the full amount of the civil penalty by wire transfer as provided in 49 C.F.R. § 190.227. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION In its Response, Chevron did not contest the allegations in the Notice that it violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402, which states in relevant part: § 195.402 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies…. (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (1) …. (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part. The Notice alleged that Respondent violated 49 C.F.R. § 195.402 by failing to follow its manual of written procedures for conducting normal operations and maintenance activities. Specifically, the Notice alleged that Chevron failed to properly implement the provisions of its right-of-way inspection procedure, CPL-MIP 205 Pipeline Patrol, in the vicinity of MP 174.5. The Notice further alleged that Chevron failed to implement its procedures for controlling corrosion on its pipeline systems as detailed in its Core Liquids Pipeline Operations and Maintenance Manual in Section 10.3.6. Respondent did not contest these allegations. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.402 by failing to follow its manual of written procedures for conducting normal operations and maintenance activities. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.575(e), which states: § 195.575 Which facilities must I electrically isolate and what inspections, tests, and safeguards are required? (e) If a pipeline is in close proximity to electrical transmission tower footings, ground cables, or counterpoise, or in other areas where it is reasonable to foresee fault currents or an unusual risk of lightning, you must protect the pipeline against damage from fault currents or lightning and take protective measures at insulating devices.#

520105028_FinalOrder_02172011_text.pdf, page 43 The Notice alleged that Respondent violated 49 C.F.R. § 195.575(e) by failing to protect the pipeline against damage from fault currents or lightning and take protective measures at insulating devices. Specifically, the Notice alleged that several high-voltage electric transmission lines, an aboveground-to-belowground electric transfer station, and a security fence are located in the vicinity of MP 174.5, and that Chevron had not protected that portion of the Number 2 Line against damage from fault currents and had not taken protective measures at insulating devices. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.575(e) by failing to protect the pipeline against damage from fault currents or lightning and failing to take protective measures at insulating devices. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(3), which states: § 195.452 Pipeline integrity management in high consequence areas. (i) What preventive and mitigative measures must an operator take to protect the high consequence area? (3) Leak detection. An operator must have a means to detect leaks on its pipeline system. An operator must evaluate the capability of its leak detection means and modify, as necessary, to protect the high consequence area. An operator's evaluation must, at least, consider, the following factors – length and size of the pipeline, type of product carried, the pipeline's proximity to the high consequence area, the swiftness of leak detection, location of nearest response personnel, leak history, and risk assessment results. The Notice alleged that Respondent violated 49 C.F.R. § 195.452 by failing to have an adequate means for detecting leaks on its pipeline system. Specifically, the Notice alleged that Chevron did not detect the June 11, 2010 failure on the Number 2 Line for more than 10 hours, and that Respondent first became aware of the release when it received a phone call from the local fire department. The Notice further alleged that the failure occurred in a high-consequence area and resulted in the release of approximately 800 barrels of crude oil into the Red Butte Creek and surrounding soils. of the evidence, I find that Respondent violated 49 C.F.R. § 195.452 by failing to have an Respondent did not contest this allegation of violation.3 Accordingly, based upon a review of all adequate means for detecting leaks on its pipeline system. 3 OPS’s accident investigation report indicates that Chevron knew that the elevation profile and operational characteristics of the Number 2 Line rendered its leak detection inadequate. Indeed, in an August 13, 2010 response to a request for specific information, Chevron admitted that it had performed a leak detection capability evaluation study of the Number 2 Line in 2007, and that this report concluded that the leak detection capabilities on that line needed to be improved. However, Chevron did not implement that recommendation until after the June 11, 2010 failure.#

520105028_FinalOrder_02172011_text.pdf, page 54 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 $423,600 for the violations cited above. Item 1: The Notice proposed a civil penalty of $45,400 for Respondent’s violation of 49 C.F.R. § 195.402, for failing to follow its manual of written procedures for conducting normal operations and maintenance activities. Chevron neither contested the allegation nor presented any evidence or argument justifying a reduction in the proposed penalty. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $45,400 for violation of 49 C.F.R. § 195.402. Item 2: The Notice proposed a civil penalty of $316,600 for Respondent’s violation of 49 C.F.R. § 195.575, for failing to protect its pipeline against damage from fault currents or lightning and failing to take protective measures at insulating devices. Chevron neither contested the allegation nor presented any evidence or argument justifying a reduction in the proposed penalty. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $316,600 for violation of 49 C.F.R. § 195.575. Item 3: The Notice proposed a civil penalty of $61,600 for Respondent’s violation of 49 C.F.R. § 195.452, for failing to have an adequate means to detect leaks on its pipeline system. Chevron neither contested the allegation nor presented any evidence or argument justifying a reduction in the proposed penalty. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $61,600 for violation of 49 C.F.R. § 195.452. Chevron paid the full civil penalty amount of $423,600 for these violations by wire transfer dated December 2, 2010. Accordingly, the case is hereby closed with prejudice to the Respondent under 49 C.F.R. § 190.209(a)(1). COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1, 2, and 3 in the Notice for violations of 49 C.F.R. §§ 195.402, 195.575, and 195.452, respectively. 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. 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:#

520105028_FinalOrder_02172011_text.pdf, page 65 1. With respect to the violation of § 195.402 (Item 1), Respondent must clear the ROW for the Rangely, Colorado, to Salt Lake City, Utah pipeline system to continue using aerial patrols to perform the inspections required under 49 C.F.R. § 195.412. In areas where vegetation or other obstructions cannot be removed, Respondent must use other methods of patrolling, such as walking or driving, to allow for direct observation of the ROW’s condition. 2. With respect to the violation of § 195.575 (Item 2), Respondent must inspect the Rangely, Colorado, to Salt Lake City, Utah pipeline system for areas where damage to those facilities could occur from electrical sources. Specifically, if the pipeline is found to be in close proximity to electrical transmission tower footings, ground cables, or counterpoise, or in other areas where it is reasonable to foresee fault currents or an unusual risk of lightning, Chevron must protect the pipeline system against damage from those forces and take protective measures at insulating devices. 3. With respect to the violation of § 195.452 (Item 3), Respondent must reevaluate and modify its leak detection system for the Rangely, Colorado, to Salt Lake City, Utah pipeline system to increase the swiftness and sensitivity of leak detection in order to minimize impacts to high consequence areas. 4. Chevron must complete Items 1, 2, and 3 within 365 days of receipt of this Final Order. 5. Upon completion of Items 1, 2, and 3, Chevron must submit documentation of all actions taken on the pipeline system, including a summary report detailing the remedial actions taken to improve public safety. This report must be submitted to Chris Hoidal, Director, Western Region, PHMSA, within 6 months of completing Items 1, 2, and 3. 6. It is requested that Chevron maintain documentation of the safety-improvement costs associated with fulfilling the terms of this Compliance Order and submit the total to Chris Hoidal, Director, Western Region, PHMSA. It is requested that costs 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 the 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.#

520105028_FinalOrder_02172011_text.pdf, page 76 WARNING ITEM With respect to Item 4, the Notice alleged a probable violation of Part 195 but did not propose a civil penalty or compliance order for this item. Therefore, this is considered to be a warning item. The warning was for: 49 C.F.R. § 195.250 (Item 4) ─ Respondent’s alleged failure to ensure that any pipe installed underground have at least 12 inches (305 millimeters) of clearance between the outside of the pipe and the extremity of any other underground structure. Chevron presented information in its Response showing that it had taken certain actions to address the cited item. Accordingly, having considered such information, I find, pursuant to 49 C.F.R. § 190.205, that a probable violation of 49 C.F.R. § 195.250 (Notice Item 4) has occurred and Respondent has corrected such conditions. If OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject to future enforcement action. The 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#