{"operation":"document","citation":"CPF 520166013","title":"CHEVRON PRODUCTS COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-12-08","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.401(a), 195.583(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520166013.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520166013.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520166013","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520166013","body":"Notice of Probable Violation involving CHEVRON PRODUCTS COMPANY. PHMSA's enforcement data identifies the cited regulations as 195.401(a),  195.583(a). The case was opened on 2016-12-08 and is reported as closed as of 2017-10-30. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520166013_Closure Letter_10302017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_Closure%20Letter_10302017.pdf\n\n520166013_Closure Letter_10302017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_Closure%20Letter_10302017_text.pdf\n\n520166013_Final Order_06022017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_Final%20Order_06022017.pdf\n\n520166013_Final Order_06022017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_Final%20Order_06022017_text.pdf\n\n520166013_NOPV PCO_12082016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_NOPV%20PCO_12082016.pdf\n\n520166013_NOPV PCO_12082016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_NOPV%20PCO_12082016_text.pdf\n\n520166013_Operator Response to Notice (Chevron)_01102017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_Operator%20Response%20to%20Notice%20(Chevron)_01102017.pdf\n\n520166013_Operator_Response_to_Notice_(Island_Energy)_01042017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520166013/520166013_Operator_Response_to_Notice_(Island_Energy)_01042017.pdf\n\n520166013_Final Order_06022017_text.pdf\n\nJune 2, 2017\nMr. Jon Mauer\nPresident and CEO\nIsland Energy Services, LLC\n91-480 Malakole Street\nKapolei, HI 96707\nRe: CPF No. 5-2016-6013\nDear Mr. Mauer:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and specifies actions that need to be taken by Island Energy Services, LLC to comply\nwith the pipeline safety regulations. When the terms of the compliance order have been\ncompleted, as determined by the Director, Western Region, this enforcement action will be\nclosed. Service of the Final Order by certified mail is deemed effective as provided under 49\nC.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Director, Western Region, Office of Pipeline Safety, PHMSA\nMr. Mark Hepburn, Logistics Manager, Island Energy Services, LLC\nMr. John Watson, Chairman and CEO, Chevron Products Company, 6001 Bollinger\nCanyon Road, San Ramon, CA 94583\nMr. Fiaz Mohammed, Area Operations Manager, Southwest, Chevron Products\nCompany, 145 S State College Blvd., Suite 500, Brea, CA 92821\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)\nIsland Energy Services, LLC, ) CPF No. 5-2016-6013\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn March 8-10, 2016, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Chevron Products\nCompany’s (Chevron) Hilo Terminal in Hilo, Hawaii. Hilo Terminal is a multi-modal refined-\nproducts terminal that includes a breakout tank and approximately 700 feet of above-ground\nfacility piping and equipment.1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to Chevron,\nby letter dated December 8, 2016, a Notice of Probable Violation and Proposed Compliance\nOrder (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance\nwith 49 C.F.R. § 190.207, the Notice proposed finding that Chevron had violated 49 C.F.R.\n§ 195.401(a) and proposed ordering the company to take certain measures to correct the alleged\nviolation. The warning item required no further action, but warned the operator to correct the\nprobable violation or face possible enforcement action.\nEffective November 1, 2016, Island Energy Services, LLC (Island Energy or Respondent)\npurchased the Hilo Terminal facility from Chevron and responded to the Notice by letter dated\nJanuary 4, 2017 (Response).2 The company did not contest the allegation of violation.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDING OF VIOLATION\nIn its Response, Island Energy did not contest the allegation in the Notice that it violated\n1 Pipeline Safety Violation Report (Violation Report), (December 8, 2016) (on file with PHMSA), at 1.\n2 Chevron also responded to the Notice, by letter dated January 10, 2017, confirming that Island Energy had\npurchased the Hilo Terminal facilities and other assets as of November 1, 2016.\n\n\n\nCPF No. 5-2016-6013\nPage 2\n49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.401(a), which states:\n§ 195.401 General requirements.\n(a) No operator may operate or maintain its pipeline systems at a level\nof safety lower than that required by this subpart and the procedures it is\nrequired to establish under § 195.402(a) of this subpart.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.401(a) by operating and\nmaintaining its pipeline systems at a level of safety lower than that required by Subpart F of\n49 C.F.R. 195. Part 195 requires that an operator establish the maximum operating pressure\n(MOP) for each of its pipelines. The criteria required for determining MOP are found at\n49 C.F.R. § 195.406(a). Operators must consider the requirements of either §§ 195.406(a)(3) or\n(5). Section 195.406(a)(3) states that “. . . no operator may operate a pipeline at a pressure that\nexceeds . . . [e]ighty percent of the test pressure for any part of the pipeline which has been\npressure tested under subpart E of this part.” Section 195.406(a)(5) states that “[f]or pipelines …\nthat have not been pressure tested under subpart E of this part, 80 percent of the test pressure or\nhighest operating pressure to which the pipeline was subjected for 4 or more continuous hours\nthat can be demonstrated by recording charts or logs made at the time the test or operations were\nconducted.”\nSpecifically, the Notice alleged that Island Energy did not properly establish the MOP for the\n8-inch-diameter CUSA/HELCO pipeline within the Hilo Terminal. The CUSA/HELCO pipeline\nis an intrastate steel pipeline constructed in 1983. As such, the pipeline may be operated without\na Subpart E pressure test if its MOP is established under § 195.406(a)(5).3 In addition, Island\nEnergy’s MOP determination did not consider § 195.406(a)(3) requirements, i.e. 80 percent of a\nSubpart E pressure test. Although Island Energy’s MOP determination was required to consider\neither § 195.406(a)(5) or § 195.406(a)(3) requirements, neither was considered. Therefore,\nwithout a properly established MOP, the CUSA/HELCO pipeline was operating at a level of\nsafety lower than that required by Part 195, Subpart F.\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. § 195.401(a) by operating and\nmaintaining its pipeline systems at a level of safety lower than that required by Subpart F of\n49 C.F.R. 195.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\n3 49 C.F.R. § 195.302(b)(1) states, “[e]xcept for pipelines converted under § 195.5, the following pipelines may be\noperated without pressure testing under this subpart: . . . (iii) An intrastate pipeline constructed before October 21,\n1985. . . .”\n\n\n\nCPF No. 5-2016-6013\nPage 3\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 1 in the Notice for violation of\n49 C.F.R. § 195.401(a). 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 § 195.401(a) (Item 1), Respondent must establish\nthe maximum operating pressure of the CUSA/HELCO pipeline within the Hilo\nTerminal pursuant to §§ 195.406(a)(3) or (5) and submit the maximum operating\npressure determination to the Director, Western Region, OPS.\n2. Respondent must submit to the Director, Western Region, OPS, within 30 days\nfollowing receipt of the Final Order, a plan and schedule to comply with Item 1\nabove.\n3. Respondent must complete Compliance Order Item 1 within 180 days following\nreceipt of the Final Order.\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:\nIsland Energy should maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to Chris Hoidal,\nDirector, Western Region, Pipeline and Hazardous Materials Safety Administration.\nIt is requested that these costs be reported in two categories: 1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses; and 2) total cost\nassociated with replacements, additions and other changes to pipeline infrastructure.\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.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation 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:\n\n\n\nCPF No. 5-2016-6013\nPage 4\n49 C.F.R. § 195.583(a) (Item 2) ─ Respondent’s alleged failure to inspect each\nonshore pipeline or portion of pipeline that is exposed to the atmosphere for\nevidence of atmospheric corrosion at least once every 3 calendar years, but with\nintervals not exceeding 39 months.\nIsland Energy presented information in its Response showing that it plans to take certain actions\nto address the cited item. If OPS finds a violation of this provision in a subsequent inspection,\nRespondent may be subject to future enforcement action.\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. 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.\nJune 2, 2017\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n520166013_Closure Letter_10302017_text.pdf\n\nVIA FACSIMILE TO (808) 682-2324 AND FED EX\nOctober 30, 2017\nMr. Jon Mauer\nPresident and CEO\nIsland Energy Services, LLC\n91-480 Malakole Street\nKapolei, HI 96707\nCPF 5-2016-6013\nClosure Letter\nDear Mr. Mauer:\nOn June 2, 2017, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Island Energy Services, LLC 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,\nDustin B. Hubbard\nActing Director, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 T. Johnson (# 152136)\nMr. Mark Hepburn, Logistics Manager, Island Energy Services, LLC","truncated":false,"body_characters":12882}