{"operation":"document","citation":"CPF 520125008W","title":"CENEX PIPELINE LLC — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2012-04-20","effective_on":null,"summary":"CLOSED warning letter citing 195.204, 195.206, 195.214(a), 195.226(b), 195.402(a), 195.410(a)(1), 195.420(a), 195.420(c), 195.452(b)(5), 195.561(a), 195.571.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520125008w.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520125008w.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520125008w","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520125008W","body":"Warning Letter involving CENEX PIPELINE LLC. PHMSA's enforcement data identifies the cited regulations as 195.204,  195.206,  195.214(a),  195.226(b),  195.402(a),  195.410(a)(1),  195.420(a),  195.420(c),  195.452(b)(5),  195.561(a),  195.571. The case was opened on 2012-04-20 and is reported as closed as of 2012-04-20. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520125008W_warning letter_04202012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520125008W/520125008W_warning%20letter_04202012.pdf\n\n520125008W_warning letter_04202012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520125008W/520125008W_warning%20letter_04202012_text.pdf\n\n520125008W_warning letter_04202012_text.pdf\n\nWARNING LETTER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nApril 20, 2012\nMr. John Traeger\nPresident\nCenex Pipeline Company\n803 Highway 212 South\nP.O. Box 909\nLaurel, MT 59044-0909\nCPF 5-2012-5008W\nDear Mr. Traeger:\nBetween August 16 and October 29, 2010, representatives of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code,\ninspected Cenex Pipeline Company (Cenex) construction, operation and maintenance records in\nLaurel, Montana. The inspectors also conducted field inspections of various Cenex pipeline\nfacilities in Montana and North Dakota.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the\nprobable violations are:\n1. §195.204 Inspection – General\nInspection must be provided to ensure the installation of pipe or pipeline systems in\naccordance with the requirements of this subpart. No person may be used to\nperform inspections unless that person has been trained and is qualified in the phase\nof construction to be inspected.\n\n\n\nCenex failed to ensure that four (4) construction inspectors who inspected the 2010 Hysham to\nForsyth Pipe Replacement Project were trained and qualified in the phase of construction that\nthey inspected. Furthermore, construction records available at the time of inspection lacked\nsufficient detail to show whether the four inspectors were trained and qualified to perform\ninspections in all phases of construction. Interviews with Cenex personnel revealed that\ninspectors used to inspect the 2010 Replacement Project had not received any formal, specific\ntraining in the aspects of the construction that they inspected. Instead, Cenex relied on the use of\nretired Cenex personnel with prior construction experience and one (1) contract employee from\nan inspection service company. Cenex assumed these personnel would be qualified in the phase\nof construction to be inspected, but did not have the documentation that they actually were. An\noperator is required to ensure that any person may be used to perform pipeline construction\ninspections is trained and qualified in the phase of construction to be inspected.\n2. §195.206 Material inspection\nNo pipe or other component may be installed in a pipeline system unless it has been\nvisually inspected at the site of installation to ensure that it is not damaged in a\nmanner that could impair its strength or reduce its serviceability.\nCenex failed to verify that pipe and other components installed during the 2010 Hysham to\nForsyth Pipe Replacement Project had been visually inspected to ensure they had not been\ndamaged. Cenex did not have inspection guidance for their inspectors to ensure pipe or other\ncomponents were not damaged in a manner that could impair strength or reduce serviceability\nduring installation. They also did not have inspection records of pipe and fittings conditions prior\nto installation. As an alternative, Cenex relied on the use of retired Cenex personnel with\nconstruction experience and one (1) contract employee from an inspection service company, and\nCenex assumed these personnel would inspect pipe and fittings to ensure they had not been\ndamaged. An operator is required to visually inspect all pipe and other components during\ninstallation to ensure they are not damaged in a manner that could impair its strength or\nserviceability.\n3. §195.214 Welding procedures\n(a) Welding must be performed by a qualified welder in accordance with welding\nprocedures qualified under Section 5 of API 1104 or Section IX of the ASME Boiler\nand Pressure Vessel Code (ibr, see § 195.3) . The quality of the test welds used to\nqualify the welding procedure shall be determined by destructive testing.\nCenex failed to ensure that welding procedures used for the 2010 Hysham to Forsyth Pipe\nReplacement Project had been qualified to either the 19th or 20th edition of API 1104. The 2010\nHysham to Forsyth Pipe Replacement Project specification’s Section 6.0 General Welding\nProcedure did not specify which edition of API 1104 will be used for welding qualifications\nduring this project. An operator is required to ensure its welding procedures being used have\nbeen qualified either under the edition(s) of API 1104 or Section IX of the ASME Boiler and\nPressure Vessel Code which is incorporated by reference in Part 195.\n\n\n\n4. §195.226 Welding: Arc burns.\n(b) An arc burn may be repaired by completely removing the notch by grinding, if\nthe grinding does not reduce the remaining wall thickness to less than the minimum\nthickness required by the tolerances in the specification to which the pipe is\nmanufactured. If a notch is not repairable by grinding, a cylinder of the pipe\ncontaining the entire notch must be removed.\nCenex failed to ensure or verify that all arc burn notches had been adequately removed by\ngrinding on the 2010 Hysham to Forsyth Pipe Replacement Project. The Project specification’s\nSection 6.19 required arc burns to be removed but this procedure had no method for determining\nif the notch of an arc burn had been completely removed. The use of ammonium persulfate is\noften used to determine if arc burn notches have been completely removed by grinding. An\noperator must have a process for completely removing arc burn notches to include a method for\ndetermining that an arc burn notch has been completely removed. This process must be a part of\nthe pipeline specifications as required by 49 C.F.R Part §195.202.\n5. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies. This manual shall be\nreviewed at intervals not exceeding 15 months, but at least once each calendar year,\nand appropriate changes made as necessary to insure that the manual is effective.\nThis manual shall be prepared before initial operations of a pipeline system\ncommence, and appropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\n(e) Emergencies. The manual required by paragraph (a) of this section must\ninclude procedures for the following to provide safety when an emergency condition\noccurs;\n(9) Providing for a post accident review of employee activities to determine whether\nthe procedures were effective in each emergency and taking corrective action where\ndeficiencies are found.\nCenex failed to perform post accident reviews for three (3) releases which were reported on DOT\nForm 7000-1 since 2007. Interviews with Cenex personnel revealed that Cenex had never\nreviewed responses to these accidents to determine if emergency response procedures were\neffective. Cenex’s Emergency Response Procedures Section F Post-Accident Review and\nActions procedure explicitly stated to the contrary with a particular procedure, \"Any leak or\naccident which is reported on DOT Form 7000-1 shall have a post-accident review.\" An\noperator is required to complete a post accident review of employee activities to determine\nwhether the emergency response procedures were effective in each emergency and taking\ncorrective action where deficiencies are found as required by 49 C.F.R Part §195.402(e)(9).\n\n\n\n6. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies. This manual shall be\nreviewed at intervals not exceeding 15 months, but at least once each calendar year,\nand appropriate changes made as necessary to insure that the manual is effective.\nThis manual shall be prepared before initial operations of a pipeline system\ncommence, and appropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\nCenex failed to review its Minot Terminal Facility Emergency Response Plan at intervals not\nexceeding 15 months, but at least once each calendar year. During the review of records for the\nMinot Terminal Facility, the last review of Emergency Response Plan was performed in\nDecember 2007. No evidence of a review in 2008 or 2009 could be provided. An operator is\nrequired to review it written procedures for handling emergencies at intervals not exceeding 15\nmonths, but at least once each calendar year as required by 49 C.F.R Part §195.402(a).\n7. §195.402 Procedural manual for operations, maintenance, and emergencies\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies. This manual shall be\nreviewed at intervals not exceeding 15 months, but at least once each calendar year,\nand appropriate changes made as necessary to insure that the manual is effective.\nThis manual shall be prepared before initial operations of a pipeline system\ncommence, and appropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\n(c) Maintenance and normal operations. The manual required by paragraph (a) of\nthis section must include procedures for the following to provide safety during\nmaintenance and normal operations:\n(13) Periodically reviewing the work done by operator to determine the\neffectiveness of the procedures used in normal operation and maintenance and\ntaking corrective action where deficiencies are found.\nCenex failed to perform adequate periodic reviews of the work done by its employees to\ndetermine the effectiveness of the procedures used in normal operation and maintenance. During\nthe review of records, it appears that Cenex had not completed sufficient periodic reviews of\nwork done to ensure the effectiveness of procedures. Cenex’s review of procedures section\nstates, “The Maintenance Supervisor, Instrumentation and Electrical Supervisor, Manager of Oil\nMovements, and Manager, Pipelines and Terminals shall perform an annual review of the work\ndone on five normal operations, abnormal operations, and/or maintenance procedures to\ndetermine the applicability and use of the procedures in this manual.\" An operator is required to\nperiodically review the work done by operator to determine the effectiveness of the procedures\nused in normal operation and maintenance and the operator must take corrective action when\ndeficiencies are found, i.e. this includes employees or contractors.\n\n\n\n8. §195.402 Procedural manual for operations, maintenance, and emergencies\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies. This manual shall be\nreviewed at intervals not exceeding 15 months, but at least once each calendar year,\nand appropriate changes made as necessary to insure that the manual is effective.\nThis manual shall be prepared before initial operations of a pipeline system\ncommence, and appropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\n(d) Abnormal operation. The manual required by paragraph (a) of this section\nmust include procedures for the following to provide safety when operating design\nlimits have been exceeded;\n(5) Periodically reviewing the response of operator personnel to determine the\neffectiveness of the procedures controlling abnormal operation and taking\ncorrective action where deficiencies are found.\nCenex failed to review the response to an abnormal operation that occurred at the Glendive\nStation on December 21, 2008 to determine the effectiveness of the procedures. Cenex’s records\nof the abnormal operation event did not include the operator’s response to the abnormal\noperation. As a result, it is not feasible to review the response of operator personnel in\nresponding to the abnormal operation event at your Glendive station. An operator is required to\nperiodically review the response of operator personnel to determine the effectiveness of\nprocedures for controlling abnormal operations. An operator must document operator\npersonnel’s response to those abnormal operations and the records should be made available for\nreview.\n9. §195.410 Line markers.\n(a) Except as provided in paragraph (b) of this section, each operator shall place\nand maintain line markers over each buried pipeline in accordance with the\nfollowing:\n(1) Markers must be located at each public road crossing, at each railroad crossing,\nand in sufficient number along the remainder of each buried line so that its location\nis accurately known.\nCenex did not install and maintain pipeline markers in sufficient numbers along some of its\npipeline right-of-way in North Dakota. During a field inspection of the Cenex pipeline, PHMSA\npersonnel identified insufficient numbers of pipeline markers along the east side of Lake\nAshtabula. An operator is required to have sufficient pipeline markers along its right-of-way so\nthat its location is accurately identified.\n10. §195.420 Valve maintenance.\n(a) Each operator shall maintain each valve that is necessary for the safe operation\nof its pipeline systems in good working order at all times.\n\n\n\nCenex did not maintain two (2) valves necessary for the safe operation of its pipeline system.\nThe valves must be maintained in good working condition at all times. During the 2010 field\ninspection, PHMSA discovered that the upstream launcher valve at the Billings pump station had\na broken valve position indicator and that the M.P. 191 downstream launcher valve was seeping\na small amount of product. An operator is required to maintain each of its valves necessary for\nsafe operation of its pipeline system in good working condition at all times as required by 49\nC.F.R Part §195.420(a).\n11. §195.420 Valve maintenance\n(c) Each operator shall provide protection for each valve from unauthorized\noperation and from vandalism.\nCenex did not provide protection for three (3) valves from unauthorized operation and from\nvandalism. During field inspections in North Dakota, PHMSA identified two (2) small diameter\nside valves attached to the mainline block valve at M.P. 250 (West Fargo) had blind flanges and\nthey had no locks to prevent the side valves themselves from being opened. During field\ninspections in Montana, it was found that the Glendive Tank 7’s relief line valve was not locked\nto protect from unauthorized operation and from vandalism. In addition, it is critical that this\nvalve should be remained open at all times to relieve pipeline surges safely. An operator must\nprovide protection for each valve from unauthorized operation and from vandalism as required\nby 49 C.F.R Part §195.420(c).\n12. §195.452 Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline integrity?\nEach operator of a pipeline covered by this section must:\n(5) Implement and follow the program.\nCenex did not implement and follow the CHS integrity management program used to comply\nwith Federal pipeline safety integrity management rules. Cenex's compilation of verification and\nrepair digs show that only three (3) anomalies were chosen to validate the accuracy of 2008 in-\nline inspection (ILI) tool assessment between Glendive, MT and Minot, ND. Meanwhile, the\nCHS Integrity Management Plan Appendix I Section 7.1.1 - Verification and Remediation\nProcedure states, \"CHS shall select six (6) anomalies to field verify. Two each shall be selected\nfrom the Maximum, Minimum, and Mid Range. \" In addition, Cenex selected three (3)\nvalidation anomalies within seven (7) feet of each other. Therefore, Cenex failed to validate the\ntool accuracy for the entire pipeline segment and for the range of potential anomalies. An\noperator is required to implement and follow its written integrity management program in high\nconsequence areas.\n13. §195.452 Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline integrity?\nEach operator of a pipeline covered by this section must:\n(5) Implement and follow the program.\n\n\n\nCenex did not implement and follow the CHS integrity management program which Cenex uses\nto comply with Federal pipeline safety integrity management rules. CHS Integrity Management\nPlan Article 7.9 described a process for performing evaluations/analyses that integrate all\navailable integrity information about a pipeline as required by 49 C.F.R Part 195.452(f) (3).\nCenex had no records to indicate that they had performed an evaluation/analysis of all available\npipeline integrity information, i.e. the integration of the results from the 2008 ILI assessment\nwith all other available information about the integrity of your pipeline such as annual CP\nsurveys, close-interval surveys, one-call tickets, and patrol reports. An operator is required to\nimplement and follow its written integrity management program in high consequence areas.\n14. §195.561 When must I inspect pipe coating used for external corrosion control?\n(a) You must inspect all external pipe coating required by Sec. 195.557 just prior to\nlowering the pipe into the ditch or submerging the pipe.\n(b) You must repair any coating damage discovered.\nCenex failed to inspect all pipe coating just prior to lowering the pipe into the ditch during the\n2010 Hysham to Forsyth Pipeline Replacement project. Cenex’s construction records indicated\nthere had been minimal inspection of line pipe coating and of the coating at the weld areas for\nthe 2010 Hysham to Forsyth Pipeline Replacement project. As a result, Cenex’s construction\ninspection records cannot be verified that the pipe and weld area coating were inspected prior to\nlowering the pipe into the ditch. An operator is required to inspect all external pipe coating just\nprior to lowering the pipe into the ditch and any coating damage found must be repaired.\n15. §195.571 What criteria must I use to determine the adequacy of cathodic\nprotection? Cathodic protection required by this Subpart must comply with one or\nmore of the applicable criteria and other considerations for cathodic protection\ncontained in paragraphs 6.2 and 6.3 of NACE SP 0169 (incorporated by reference,\nsee § 195.3).\nCenex did not comply with paragraphs 6.2 and 6.3 of NACE SP 0169 for determining the\nadequacy of their cathodic protection (CP) in 2009. During the 2009 CP surveys, Cenex found\napproximately 70 test stations had polarized potentials more negative than negative1200 mV.\nNACE SP 0169 paragraph 6.2.2.3.3 states,\n“The use of excessive polarized potentials on\nexternally coated pipelines should be avoided to minimize cathodic disbondment of the coating.”\nCP polarized potentials more negative than negative1200 mV may also indicate that stray current\nis interfering with a pipeline’s CP system as specified in NACE SP0169 paragraph 6.3.4.\nFurthermore, there is another possibility that all rectifiers supplying protective current to the\npipeline at the test station location have not been interrupted which means that the potentials\nbeing read are not polarized potentials. Specifically, the locations of the polarized potentials that\nwere more negative than -1200 mV are Johnson Lane in Billings to M.P. 60, M.P. 90 to M.P.\n111, M.P. 175 to M.P. 180, Minot to Fargo segment’s M.P. 138 to M.P. 140, and Minot to Fargo\nsegment’s M.P.154 to M.P.166. An operator must comply with applicable criteria and other\nconsiderations within NACE SP 0169 paragraphs 6.2 and 6.3 to determine the adequacy of\ncathodic protection.\n\n\n\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000\nfor each violation for each day the violation persists up to a maximum of $1,000,000 for any\nrelated series of violations. We have reviewed the circumstances and supporting documents\ninvolved in this case, and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to correct the item identified in this letter.\nFailure to do so will result in Cenex Pipeline Company being subject to additional enforcement\naction.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer to\nCPF 5-2012-5008W. Be advised that all material you submit in response to this enforcement\naction is subject to being made publicly available. If you believe that any portion of your\nresponsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the\ncomplete original document you must provide a second copy of the document with the portions\nyou believe qualify for confidential treatment redacted and an explanation of why you believe\nthe redacted information qualifies for confidential treatment under 5 U.S.C. 552(b).\nSincerely,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 G. Davis (#129363, 129364, 129365)","truncated":false,"body_characters":22011}