{"operation":"document","citation":"CPF 520126008","title":"PAR HAWAII REFINING, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2012-04-17","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.214(a), 195.402(a), 195.402(c)(12), 195.452(k), 195.573(a)(2), 195.573(e), 195.577(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520126008.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520126008.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520126008","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520126008","body":"Notice of Probable Violation involving PAR HAWAII REFINING, LLC. PHMSA's enforcement data identifies the cited regulations as 195.214(a),  195.402(a),  195.402(c)(12),  195.452(k),  195.573(a)(2),  195.573(e),  195.577(a). The case was opened on 2012-04-17 and is reported as closed as of 2013-11-18. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520126008_closure letter_11182013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520126008/520126008_closure%20letter_11182013.pdf\n\n520126008_closure letter_11182013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520126008/520126008_closure%20letter_11182013_text.pdf\n\n520126008_Final Order_12312012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520126008/520126008_Final%20Order_12312012.pdf\n\n520126008_Final Order_12312012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520126008/520126008_Final%20Order_12312012_text.pdf\n\n520126008_NOPV PCO_04172012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520126008/520126008_NOPV%20PCO_04172012.pdf\n\n520126008_NOPV PCO_04172012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520126008/520126008_NOPV%20PCO_04172012_text.pdf\n\n520126008_Operator Response_06152012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520126008/520126008_Operator%20Response_06152012.pdf\n\n520126008_Final Order_12312012_text.pdf\n\nDECEMBER 31, 2012\nGregory J. Goff\nPresident and Chief Executive Officer\nTesoro Corporation\n19100 Ridgewood Parkway\nSan Antonio, TX 78259\nRe: CPF No. 5-2012-6008\nDear Mr. Goff:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws one\nallegation of violation, makes findings of violation, and specifies actions that need to be taken by\nyour subsidiary, Tesoro Hawaii Corporation, to comply with the pipeline safety regulations.\nWhen the terms of the Compliance Order have been completed, as determined by the Director,\nWestern Region, this enforcement action will be closed. Service of the Final Order by certified\nmail is deemed effective upon the date of mailing, or as otherwise provided under\n49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc:\nMr. Ralph Grimmer, Vice President, Logistics, Tesoro Refining & Marketing Company,\n19100 Ridgewood Parkway, San Antonio, TX 78259\nMr. Ryan K. Biggs, Director, Environmental, Health & Safety, Tesoro Corporation,\n19100 Ridgewood Parkway San Antonio, TX 78259\nMr. Chis Hoidal, Director, Western Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nTesoro Hawaii Corporation ) CPF No. 5-2012-6008\na subsidiary of Tesoro Corporation )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 30 to April 2, 2011, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Tesoro Hawaii\nCorporation (Tesoro or Respondent), a subsidiary of Tesoro Corporation in Honolulu, Hawaii.\nTesoro Corporation, through its subsidiaries, operates seven refineries, as well as various bulk\nterminals and approximately 900 miles of crude oil and petroleum product pipelines in the\nwestern United States.\n1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated April 17, 2012, a Notice of Probable Violation and Proposed\nCompliance Order (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In\naccordance with 49 C.F.R. § 190.207, the Notice proposed finding that Tesoro had violated\n49 C.F.R. §§ 195.214(a), 195.402(c)(12), 195.452(k), 195.573(a)(2), 195.573(e) and 195.577(a)\nand proposed ordering Respondent to take certain measures to correct the alleged violations.\nThe warning item required no further action, but warned the operator to correct the probable\nviolation or face possible enforcement action.\nTesoro responded to the Notice by letter dated May 15, 2012 (Response). Tesoro requested and\nwas granted an extension of time by OPS to respond by June 21, 2012. Tesoro submitted its\nsupplemental response by letter with attachments dated June 15, 2012 (Supplemental Response).\nThe company contested two of the six allegations of violation and the warning item, and\nprovided information concerning the corrective actions it had taken. Respondent did not request\na hearing and therefore has waived its right to one.\n1 http://www.tsocorp.com (last visited November 13, 2012)\n\n\n\n2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.214(a), which states:\n§ 195.214 Welding Procedures.\n(a) Welding must be performed by a qualified welder in accordance\nwith welding procedures qualified under Section 5 of [American\nPetroleum Institute (API)] API 1104 or Section IX of the ASME Boiler\nand Pressure Vessel Code (incorporated by reference, see § 195.3). The\nquality of the test welds used to qualify the welding procedure shall be\ndetermined by destructive testing.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.214(a) by failing to use a welding\nprocedure that was qualified under API Standard 1104. Specifically, the Notice alleged that\nTesoro failed to demonstrate that the company’s welding procedure (PLM-A2), used in the\ninstallation of a 65-inch sleeve repair, had been qualified using destructive testing, in accordance\nwith the requirements of API 1104.\nRespondent did not contest this allegation of violation.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.214(a) by using a welding procedure during the 65-inch sleeve repair that was\nnot qualified in accordance with API Standard 1104.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(c)(12), which states in\nrelevant part:\n§ 195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) ….\n(c) Maintenance and normal operations. The manual required by\nparagraph (a) of this section must include procedures for the following to\nprovide safety during maintenance and normal operations:\n(1) . . .\n(12) Establishing and maintaining liaison with fire, police, and other\nappropriate public officials to learn the responsibility and resources of\neach government organization that may respond to a hazardous liquid or\ncarbon dioxide pipeline emergency and acquaint the officials with the\noperator's ability in responding to a hazardous liquid or carbon dioxide\npipeline emergency and means of communication.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.402(c)(12) by failing to establish\nand maintain liaison with fire, police, and other appropriate public officials who may respond to\nan emergency on Tesoro’s pipeline.\n\n\n\n3\nRespondent did not contest the allegation of violation but described its subsequent liaison\nactivities and its intent to meet routinely with local emergency response officials.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.402(c)(12) by failing to establish and maintain liaison with fire, police, and\nother appropriate public officials to learn the responsibility and resources of each government\norganization that may respond to a hazardous liquid pipeline emergency.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(k), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(k) What methods to measure program effectiveness must be used?\nAn operator’s program must include methods to measure whether the\nprogram is effective in assessing and evaluating the integrity of each\npipeline segment and in protecting the high consequence areas. See\nAppendix C of this part for guidance on methods that can be used to\nevaluate a program’s effectiveness.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(k) by failing to include\nmethods in its Integrity Management Program (IMP) to measure whether the program was\neffective in assessing and evaluating the integrity of each pipeline segment and in protecting high\nconsequence areas (HCAs). Specifically, the Notice alleged that the company failed to perform a\ncausal factor analysis of two separate third-party strikes on their Honolulu pipeline in 2009.2\nThe Notice further alleged that Tesoro had not determined the root cause of the two third-party\nstrikes so that preventative actions could be taken to prevent a similar occurrence in the future.\nIn its Response, Respondent stated that it did not contest the allegation of violation but provided\nan explanation of the company’s response to both of the third-party strikes. The company\nexplained that it did not consider the third-party strikes to be “incidents” that required causal\nfactor analysis; therefore, incident investigations were not performed at that time. Respondent\nfurther explained that both third-party strikes resulted in minor coating abrasion that had been\nrepaired prior to the pipeline being reburied. Tesoro described the subsequent root cause\nanalysis conducted regarding the third-party strikes, which highlighted poor excavation practices\nby the third-party excavators. Respondent further explained that it had revised its IMP to ensure\nthird-party damage events, including abrasion damage events, are analyzed to ensure that all\npipeline risks caused by third-party damage are addressed.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.452(k) by failing to include in its IMP methods to measure whether the program\nwas effective in assessing and evaluating the integrity of each pipeline segment and in protecting\nHCAs.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(2), which states:\n2 Pipeline Safety Violation Report, (Violation Report) (April 17, 2012) at 39-40, and Exhibits A, B and D.\n\n\n\n4\n§ 195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with\n§ 195.571:\n(1) . . .\n(2) Identify not more than 2 years after cathodic protection is\ninstalled, the circumstances in which a close-interval survey or\ncomparable technology is practicable and necessary to accomplish the\nobjectives of paragraph 10.1.1.3 of NACE SP 0169 (incorporated by\nreference, see § 195.3).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(a)(2) by failing to identify the\ncircumstances in which a close-interval survey (CIS) is needed to accomplish the objectives of\nparagraph 10.1.1.3 of NACE SP 0169, which included assessing the effectiveness of the cathodic\nprotection (CP) system and identifying areas of inadequate protection. PHMSA asserted that\nTesoro’s operations and maintenance (O&M) manual procedure LO028, Corrosion Control\nrequired that “Every 5 years the pipeline or portion of the pipeline will be evaluated for the need\nof a CIS (beginning 7/2004)”.3 PHMSA’s inspection found Tesoro had no records to\ndemonstrate it had identified circumstances in which a CIS was practicable and necessary, in\naccordance with paragraph 10.1.1.3 of NACE SP 0169.\nIn its Response, Tesoro stated that the company had evaluated the need for CIS and generated a\nreport to describe the company’s determination that it is not practical, safe, or necessary to\nperform a CIS survey. The company explained that, in lieu of a CIS, it had implemented an\nalternative CP evaluation method to accomplish the objectives of NACE SP0169-2007,\nparagraph 10.1.1.3. Tesoro also noted that it planned to conduct a feasibility study in the first\nquarter of 2013 to identify areas where a CIS may be performed.\nRespondent’s arguments, however, are unpersuasive. Performing an analysis and generating a\nreport in response to the Notice finding that a CIS was not necessary does not satisfy the\nrequirement. Respondent would have had to have performed and documented such analysis in a\ntechnically sound manner at the time the decision not to perform a CIS was made. At the time of\nthe inspection, Respondent did not have a documented analysis showing why it decided that such\na survey was not necessary (and no survey had been performed). I acknowledge that Tesoro has\ntaken action in the wake of the inspection to address the violation, including its plan to conduct a\nfeasibility study in the first quarter of 2013, however such actions do not demonstrate that\nRespondent was in compliance with 49 C.F.R. § 195.573(a)(2) at the time of the inspection.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.573(a)(2) by failing to identify the circumstances in which a CIS or comparable\ntechnology was practicable and necessary to accomplish the objectives of paragraph 10.1.1.3 of\nNACE SP 0169 within the required interval.\nItem 6: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e), which states:\n3 Violation Report at 41, and Exhibit C.\n\n\n\n5\n§ 195.573 What must I do to monitor external corrosion control?\n(a) . . . .\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the deficiency\ninvolves a pipeline in an integrity management program under § 195.452,\nyou must correct the deficiency as required by § 195.452(h).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) by failing to promptly\ncorrect CP deficiencies found in 2010, as required by § 195.401(b). Specifically, the Notice\nalleged that Tesoro did not demonstrate that corrective actions had either been planned or taken\nto correct approximately 12 recommendations regarding CP deficiencies identified in 2010, as a\nresult of CP field activities.\n4 PHMSA’s inspection revealed that Tesoro had no records to show\nwhether all of the recommendations had been addressed. PHMSA asserted that an operator is\nrequired to correct any identified deficiency in CP and to maintain a record of those corrective\nactions for at least five years as per § 195.589(c).\nIn its Response, Tesoro did not contest the allegation but provided information concerning the\ncorrective action that it had planned. Respondent explained that it had planned to complete the\nremaining 2010 CP Survey recommendations before the end of 2012.\nAccordingly, after considering the evidence, I find that Respondent violated 49 C.F.R. §\n195.573(e) by failing to promptly correct 12 deficiencies in corrosion control identified in 2010.\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.577, which states:\n§ 195.577 What must I do to alleviate interference currents\n(a) For pipelines exposed to stray currents, you must have a program\nto identify, test for, and minimize the detrimental effects of such currents.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.577(a) by failing to have a program\nto identify, test for, and minimize the detrimental effects of stray currents on its Honolulu\nPipeline System. Specifically, the Notice alleged that Tesoro failed to analyze whether stray\ncurrents were causing corrosion that had occurred where two foreign pipelines crossed over its\nHonolulu Pipeline System, and if so to take action to minimize the detrimental effects of these\ncurrents.\nIn its Response, Tesoro contended that there is no violation of 49 C.F.R. § 195.577(a), because it\nis premature to develop such a program until specifics of the rail system are provided by Kiewit,\nthe Hawaii Rail Transit design engineering firm.\n5 Tesoro also contended that the proposed\ntransit rail system is under construction and that preliminary information provided by Kiewit\nindicated that stray currents would not be an issue due to the design of the transit system.\nRespondent explained that the company attends regular task force meetings and receives\nprogress updates from Kiewit. Respondent also explained that, once the rail system designs are\n4 Violation Report at 42, and Exhibit D.\n5 Supplemental Response at 5.\n\n\n\n6\ncompleted, Tesoro will develop a program to identify, test for and minimize the effects of the\nnew rail system, as appropriate. The company stated that it would implement mitigation\nmeasures to address interference currents, as deemed necessary.\nI find that the Respondent was persuasive on this point. The allegation of violation is not ripe for\nconsideration and the record does not support PHMSA’s allegation that is associated with a\ntransit rail system that is under construction and proposed to lie parallel to the company’s\nHonolulu pipeline. I find that the allegation of violation is premature because it is contingent\nupon future events that may not occur as anticipated, or indeed may not occur at all. Therefore,\nwithdrawal of this Item is warranted. Based upon the foregoing, I hereby order that Item 7 of the\nNotice be withdrawn.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, 4, 5, 6 and 7 in the Notice\nfor violations of 49 C.F.R. §§ 195.214(a), 195.402(c)(12), 195.452(k), 195.573(a)(2), 195.573(e)\nand 195.577(a), respectively. Under 49 U.S.C. § 60118(a), each person who engages in the\ntransportation of hazardous liquids or who owns or operates a pipeline facility is required to\ncomply with the applicable safety standards established under chapter 601. Because I ordered\nthat the allegation in Item 7 be withdrawn, the compliance terms proposed for Item 7 are not\nincluded in this order. The Director has indicated that Respondent has taken the following\nactions to address some of the cited violations:\n1. With respect to the violation of § 195.214(a), (Item 1), Tesoro qualified the\nsleeve welding procedure that had been used on June 19, 2009, and all welds\ncompleted during the subject sleeve repair project repair have been qualified.\n2. With respect to the violation of § 195.402(c)(12) (Item 2), Respondent met with\nthe Honolulu LEPC (Local Emergency Planning Committee) on June 20, 2012,\nand shared information on Tesoro’s Emergency Response Plan, expectations for\npersonnel responding to emergencies at Tesoro assets, resources available and\nexpertise necessary for incident mitigation. Tesoro also submitted its participant\nsign-in sheet from the June 2012 meeting.\n3. With respect to the violation of § 195.452(k) (Item 4), Tesoro submitted a copy of\nits revised DOT IMP that required coating abrasion events to be appropriately\ninvestigated. The revision also required that abrasion events are analyzed to\ndetermine gaps in the damage prevention and line locate programs.\nAccordingly, I find that compliance has been achieved with respect to these violations.\nTherefore, the compliance terms proposed in the Notice for Items 1, 2, and 4 are not included in\n\n\n\n7\nthis Order.\nAs for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance\nwith the pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.573(a)(2) (Item 5), Respondent must\nperform a CIS of its Honolulu pipeline to (a) assess the effectiveness of the CP\nsystem; (b) provide base line operating data; (c) locate areas of inadequate protection\nlevels; (d) identify locations likely to be adversely affected by construction, stray\ncurrents, or other unusual environmental conditions; and (e) select areas to be\nmonitored periodically.\n2. With respect to the violation of § 195.573(e) (Item 6), Tesoro must address each\nof the recommendations within the Caufman Engineering 2010 CP report for the\ncompany’s Honolulu pipeline. Tesoro must document how they have addressed each\nof the recommendations.\n3. Regarding the requirements for Notice Items 5 and 6 above, within sixty (60) days\nof receipt of this Final Order, Respondent must complete the required actions and\nsubmit documentation of completion to the Director, Western Region, Office of\nPipeline Safety, Pipeline and Hazardous Materials Safety Administration. Please\nreference CPF# 5-2012-6008 in the title of the supporting documentation.\n4. It is requested (not mandated) that Tesoro Hawaii maintain documentation of the\nsafety improvement costs associated with fulfilling this Compliance Order and submit\nthe total the Director. It is requested that these costs be reported in two categories: 1)\ntotal cost associated with preparation/revision of plans, procedures, studies and\nanalyses, and 2) total cost associated with replacements, additions, and other changes\nto pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\nto exceed $100,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\n\n\n\n8\nWARNING ITEM\nWith respect to Item 3, the Notice alleged probable violations of Part 195 but did not propose a\ncivil penalty or compliance order for this item. Therefore, this is considered to be a warning\nitem. The warning was for:\n49 C.F.R. § 195.402(a) and (c)(13) (Item 3) ─ Respondent’s alleged failure to\ndemonstrate that it had periodically reviewed the work done by operator\npersonnel to determine the effectiveness of the procedures used in normal O&M\nand had taken corrective action where deficiencies were found. Specially, Tesoro\ncould not produce any records showing that it had conducted such periodic\nreviews or that corrections had been taken.\nTesoro presented information in its Response showing that it had taken certain actions to address\nthe Item 3. If OPS finds a violation of this provision, Respondent may be subject to future\nenforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of this Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. Unless the Associate Administrator, upon request, grants a\nstay, the terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n520126008_closure letter_11182013_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nNovember 18, 2013\nMr. Aaron W. Martinez\nManager, DOT Compliance and Risk\nTesoro Hawaii Corporation\n19100 Ridgewood Parkway\nSan Antonio, Texas 78259\nCPF 5-2012-6008\nDear Mr. Martinez:\nOn December 31, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Tesoro Hawaii Corporation a Final Order in the above-referenced case. This Order\nincluded a Compliance Order. Based on our review of the documentation you provided, it has\nbeen determined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 M. Petronis/H. Nguyen (#133324)","truncated":false,"body_characters":24429}