{"operation":"document","citation":"CPF 520155013","title":"CENEX PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2015-06-30","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.446(h).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520155013.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520155013.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520155013","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520155013","body":"Notice of Probable Violation involving CENEX PIPELINE LLC. PHMSA's enforcement data identifies the cited regulation as 195.446(h). The case was opened on 2015-06-30 and is reported as closed as of 2016-12-05. Proposed civil penalty: $43,200. Assessed civil penalty: $43,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520155013_Closure Letter_12052016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155013/520155013_Closure%20Letter_12052016.pdf\n\n520155013_Closure Letter_12052016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155013/520155013_Closure%20Letter_12052016_text.pdf\n\n520155013_Final Order_ 02042016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155013/520155013_Final%20Order_%2002042016.pdf\n\n520155013_Final Order_ 02042016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155013/520155013_Final%20Order_%2002042016_text.pdf\n\n520155013_NOPV PCP PCO_06302015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155013/520155013_NOPV%20PCP%20PCO_06302015.pdf\n\n520155013_NOPV PCP PCO_06302015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155013/520155013_NOPV%20PCP%20PCO_06302015_text.pdf\n\n520155013_Operator Response to Notice Letter_07202015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520155013/520155013_Operator%20Response%20to%20Notice%20Letter_07202015.pdf\n\n520155013_NOPV PCP PCO_06302015_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 30, 2015\nMr. John Traeger\nPresident\nCenex Pipeline LLC\n803 HWY 212 S\nP.O. Box 909\nLaurel, MT 59044\nCPF 5-2015-5013\nDear Mr. Traeger:\nBetween December 17, 2013 and June 26, 2014, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to\nChapter 601 of 49 United States Code, inspected Cenex Pipeline LLC’s (Cenex) Control\nRoom Management (CRM) Procedures in Laurel, Montana.\nAs a result of the inspection, it appears that you have committed a probable violation of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violation is:\n\n\n\n1. §195.446 Control room management.\n(h) Training. Each operator must establish a controller training program and\nreview the training program content to identify potential improvements at least\nonce each calendar year, but at intervals not to exceed 15 months. An operator's\nprogram must provide for training each controller to carry out the roles and\nresponsibilities defined by the operator. In addition, the training program must\ninclude the following elements:\n(1) Responding to abnormal operating conditions likely to occur simultaneously\nor in sequence;\n(2) Use of a computerized simulator or non-computerized (tabletop) method for\ntraining controllers to recognize abnormal operating conditions;\n(3) Training controllers on their responsibilities for communication under the\noperator's emergency response procedures;\n(4) Training that will provide a controller a working knowledge of the pipeline\nsystem, especially during the development of abnormal operating conditions; and\n(5) For pipeline operating setups that are periodically, but infrequently used,\nproviding an opportunity for controllers to review relevant procedures in\nadvance of their application.\nCenex failed to establish a controller training program in accordance with Section 195.446(h).\nSection 195.446(a) required the controller training program to be implemented by August 1,\n2012. Cenex’s controller training program did not clearly define controller roles and\nresponsibilities and did not include training for responding to abnormal operating conditions\nlikely to occur simultaneously or in sequence. The training program did not identify setups\nthat are periodically, but infrequently used, and did not indicate how the controllers were\ntrained on the procedures used for such setups.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a\nrelated series of violations. For violations occurring prior to January 4, 2012, the maximum\npenalty may not exceed $100,000 per violation per day, with a maximum penalty not to\nexceed $1,000,000 for a related series of violations. The Compliance Officer has reviewed\nthe circumstances and supporting documentation involved in the above probable violation(s)\nand has recommended that you be preliminarily assessed a civil penalty of $43,200.00 as\nfollows:\nItem number PENALTY\n1 $43,200.00\n2\n\n\n\nProposed Compliance Order\nWith respect to Item One (1) pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to Cenex\nPipeline LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a\npart of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the response\noptions. All material you submit in response to this enforcement action may be made publicly\navailable. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted\ninformation qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond\nwithin 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the\nallegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to\nfind facts as alleged in this Notice without further notice to you and to issue a Final Order.\nIn your correspondence on this matter, please refer to CPF 5-2015-5013 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\ncc: PHP-60 Compliance Registry\nPHP-500 M. Petronis (#142794 and #148705)\n3\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Cenex Pipeline LLC (Cenex) a Compliance\nOrder incorporating the following remedial requirements to ensure the compliance of Cenex\nwith the pipeline safety regulations:\n1. 2. 3. In regard to Item Number 1 of the Notice pertaining to the Controller Training\nProgram, Cenex must develop and implement a Controller Training Program that\nmeets each of the requirements of § 195.446(h).\nCenex must complete Compliance Item #1 within 60 days of receipt of the Final\nOrder.\nIt is requested (not mandated) that Cenex maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the\ntotal to Chris Hoidal, Director, Western, Pipeline and Hazardous Materials Safety\nAdministration. 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\nchanges to pipeline infrastructure.\n4\n\n520155013_Final Order_ 02042016_text.pdf\n\nFebruary 4, 2016\nMr. John Traeger\nPresident\nCenex Pipeline, LLC\n803 HWY 212 S\nP.O. Box 909\nLaurel, MT 59044\nRe: CPF No. 5-2015-5013\nDear Mr. Traeger:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation, assesses a civil penalty of $43,200, and specifies actions that need to be taken by\nCenex Pipeline, LLC to comply with the pipeline safety regulations. The penalty payment terms\nare set forth in the Final Order. When the civil penalty has been paid and the terms of the\ncompliance order completed, as determined by the Director, Western Region, this enforcement\naction will be closed. Service of the Final Order by certified mail is deemed effective upon the\ndate of mailing, or as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Director, Western Region, PHMSA OPS\nMr. Richard Petersen, V.P. Pipelines and Terminals, Cenex Pipeline, LLC\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)\nCenex Pipeline, LLC, ) CPF No. 5-2015-5013\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nBetween December 17, 2013, and June 26, 2014, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of\nCenex Pipeline, LLC (Cenex or Respondent) in Laurel, Montana. Cenex operates two hazardous\nliquid pipeline systems from its control center in Laurel, Montana. 1 The Cenex Products\nPipeline, which transports gasoline and diesel fuel, consists of approximately 671 miles of\npipeline with 24 breakout tanks.2 The Front Range Pipeline transports crude oil through\napproximately 295 miles of pipeline, including 10 breakout tanks.3\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated June 30, 2015, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Cenex had violated 49 C.F.R. § 195.446, and proposed assessing a\ncivil penalty of $43,200 for the alleged violation. The Notice also proposed ordering Respondent\nto take certain measures to correct the alleged violation.\nCenex responded to the Notice by letter dated July 20, 2015 (Response). The company did not\ncontest the allegations of violation but provided an explanation of its actions and requested that\nthe proposed civil penalty be reduced or eliminated. Respondent did not request a hearing and\ntherefore has waived its right to one.\n1 Pipeline Safety Violation Report (Violation Report), (June 30, 2015) (on file with PHMSA), at 1.\n2 Id.\n3 Id.\n\n\n\nCPF No. 5-2015-5013\nPage 2\nFINDING OF VIOLATION\nIn its Response, Cenex did not contest the allegation in the Notice that it violated 49 C.F.R. Part\n195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.446, which states in part:\n§ 195.446 Control room management.\n(a) . . . The training procedures required by paragraph (h) must be\nimplemented no later than August 1, 2012 . . .\n(h) Training. Each operator must establish a controller training program and\nreview the training program content to identify potential improvements at\nleast once each calendar year, but at intervals not to exceed 15 months. An\noperator’s program must provide for training each controller to carry out the\nroles and responsibilities defined by the operator. In addition, the training\nprogram must include the following elements:\n(1) Responding to abnormal operating conditions likely to occur\nsimultaneously or in sequence;\n(2) Use of a computerized simulator or non-computerized (tabletop) method\nfor training controllers to recognize abnormal operating conditions;\n(3) Training controllers on their responsibilities for communication under the\noperator’s emergency response procedures;\n(4) Training that will provide a controller a working knowledge of the pipeline\nsystem, especially during the development of abnormal operating conditions;\nand\n(5) For pipeline operating setups that are periodically, but infrequently used,\nproviding an opportunity for controllers to review relevant procedures in\nadvance of their application.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(h) by failing to establish a\ncontroller training program in accordance with Section 195.446(h). Specifically, the Notice\nalleged that Cenex’s controller training program did not clearly define controller roles and\nresponsibilities, and did not include training for responding to abnormal operating conditions\n(AOC) likely to occur simultaneously or in sequence. The training program did not identify\nsetups that are periodically - but infrequently - used, and did not indicate how the controllers\nwere trained on the procedures used for such setups.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.446(h) by failing to establish a\ncontroller training program in accordance with Section 195.446(h).\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\n\n\n\nCPF No. 5-2015-5013\nPage 3\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.4 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $43,200 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $43,200 for Respondent’s violation of 49 C.F.R.\n§ 195.446(h), for failing to establish a controller training program in accordance with Section\n195.446(h). Respondent submitted a response letter which stated that Respondent has been\nworking with a vendor since late 2011 to develop a Supervisory Control and Data Acquisition\nsimulator that will be used to train pipeline controllers on operating procedures and AOC\nresponse; and the simulator will be used to evaluate controller performance. Respondent further\nstated that it has invested over $590,000 in development of the simulator and has scheduled a\nSimulator Site Acceptance Test. Because it began improving the Controller Training Program\nbefore the PHMSA inspection, and because it has invested significant resources in development\nof the simulator, Respondent argues the proposed civil penalty should be mitigated or eliminated.\nWith respect to the nature, circumstances, and gravity of this violation, the failure to establish a\ncontroller training program in accordance with Section 195.446(h) is a serious violation that\ncould threaten the proper operation of the pipeline. The pipeline contains high consequence area\nsegments, and the lack of a controller training program established in accordance with Section\n195.446(h) could seriously affect pipeline safety and integrity.\nI acknowledge Respondent’s attempt to develop a SCADA simulator in order to meet the\ntraining requirements. However, during the several years of Respondent’s inability to procure\nthe simulator, Respondent relied on standard Operator Qualification modules that did not fully\nmeet the control room management training requirements of Section 195.446(h). Respondent\nwas fully aware of the training program requirements, but failed to institute an adequate\ncontroller training program. Based on the gravity of the violation and Respondent’s culpability, I\ndo not see any basis for reducing or eliminating the penalty. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $43,200 for\nviolation of 49 C.F.R. § 195.446(h).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $43,200.\n4 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.\n1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per\nviolation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.\n\n\n\nCPF No. 5-2015-5013\nPage 4\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $43,200 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 1 in the Notice for violation of\n49 C.F.R. § 195.446(h). 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. Pursuant to the\nauthority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the\nfollowing actions to ensure compliance with the pipeline safety regulations applicable to its\noperations:\n1. With respect to the violation of § 195.446(h) (Item 1), Respondent must:\nA. Develop and implement a Controller Training Program that meets each of\nthe requirements of § 195.446(h) within 60 days of receipt of the Final\nOrder.\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.\nIn addition, pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217,\nRespondent is requested (not mandated) to take the following action:\nCenex should maintain documentation of the safety improvement costs associated\nwith fulfilling this Compliance Order and submit the total to Director, Western\nRegion, Pipeline and Hazardous Materials Safety Administration, Office of Pipeline\nSafety. It is requested that these costs be reported in two categories: 1) total cost\nassociated with preparation/revision of plans, procedures, studies and analyses; and 2)\ntotal cost associated with replacements, additions and other changes to pipeline\ninfrastructure.\n\n\n\nCPF No. 5-2015-5013\nPage 5\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000 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.\nUnder 49 C.F.R. § 190.243, 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. § 190.243. The filing of a petition automatically stays the payment of\nany civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all\nother 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\n520155013_Closure Letter_12052016_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nDecember 5, 2016\nMr. Richard S. Petersen\nPresident\nCenex Pipeline, LLC\nPO Box 909\nLaurel, MT 59044\nCPF 5-2015-5013\nCase Closure\nDear Mr. Petersen:\nBetween December 2013 and June 2014, a representative of the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49\nUnited States Code inspected your Control Room Management Procedures in Laurel, Montana. As a\nresult of the inspection, Cenex Pipeline was issued a Final Order and Compliance Order on February\n4, 2016, which identified deficiencies in your Control Room Management Controller Training\nProgram and required that an adequate Controller Training Program be developed and implemented to\nmeet each of the requirements of 49 CFR 195.446(h).\nWe reviewed information provided in your letters dated April 7, 2016 and June 20, 2016, and\nconsidered information shared with PHMSA staff in meetings with you and your representatives on\nSeptember 28, November 8 and November 28, 2016. As a result of the review of the new Controller\nTraining Program, it appears that the deficiencies outlined in the Final Order have been corrected. This\nletter is to inform you no further action is necessary and this case is now closed. Thank you for your\ncooperation.\nSincerely,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 M. Petronis","truncated":false,"body_characters":22626}