{"operation":"document","citation":"CPF 520176022W","title":"HOLLY ENERGY PARTNERS - OPERATING, L.P. — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-06-21","effective_on":null,"summary":"CLOSED warning letter citing 195.404(b)(2), 195.452(g)(2), 195.452(h)(1)(i), 195.452(h)(2), 195.452(h)(4)(i), 195.452(i)(1), 195.452(i)(3), 195.452(j)(2), 195.452(j)(3), 195.452(k).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520176022w.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520176022w.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520176022w","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520176022W","body":"Warning Letter involving HOLLY ENERGY PARTNERS - OPERATING, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.404(b)(2),  195.452(g)(2),  195.452(h)(1)(i),  195.452(h)(2),  195.452(h)(4)(i),  195.452(i)(1),  195.452(i)(3),  195.452(j)(2),  195.452(j)(3),  195.452(k). The case was opened on 2017-06-21 and is reported as closed as of 2017-06-21. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520176022W_Warning Letter_06212017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176022W/520176022W_Warning%20Letter_06212017.pdf\n\n520176022W_Warning Letter_06212017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176022W/520176022W_Warning%20Letter_06212017_text.pdf\n\n520176022W_Warning Letter_06212017_text.pdf\n\nWARNING LETTER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 21, 2017\nMr. Mark Plake\nPresident\nHolly Energy Partners\n2828 N. Harwood, Suite 1300\nDallas, TX 75201\nCPF 5-2017-6022W\nDear Mr. Plake:\nOn October 3 through October 5, 2016, representatives of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States\nCode, inspected your Salt Lake Refinery System in North Salt Lake, Utah. I was one of those\nrepresentatives.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violations are:\n1. §195.452 Pipeline integrity management in high consequence areas.\n(g) What is an information analysis? In periodically evaluating the integrity of\neach pipeline segment (paragraph (j) of this section), an operator must analyze\nall available information about the integrity of the entire pipeline and the\nconsequences of a failure. This information includes:\n(2) Data gathered through the integrity assessment required under this section;\n\n\n\nAt this time, Holly continues to conduct the data/information analysis manually. Holly is\ncurrently migrating the data into the GIS/PODS. In the future, the data integration will be part\nof GIS/PODS. Meanwhile, Holly continues to collect the data from the anomaly digs, i.e.\nLong seam orientation. However, Holly had not performed a re-evaluation of the data to\nidentify any potential repair conditions, i.e. §195.452(h)(4)(iii)(H).\n2. §195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues?\n(2) Discovery of condition. Discovery of a condition occurs when an operator has\nadequate information about the condition to determine that the condition\npresents a potential threat to the integrity of the pipeline. An operator must\npromptly, but no later than 180 days after an integrity assessment, obtain\nsufficient information about a condition to make that determination, unless the\noperator can demonstrate that the 180-day period is impracticable.\nHolly did not declare the discovery for their 10-inch pipeline within 180 days after an\nintegrity assessment. It was noted that an integrity assessment for the 10-inch was assessed on\nDecember 18, 2012 and the date for discovery of condition for the 10-inch was declared on\nNovember 20, 2013.\n3. §195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues?\n(1) General Requirements. An operator must take prompt action to address all\nanomalous conditions the operator discovers through the integrity assessment or\ninformation analysis. In addressing all conditions, an operator must evaluate\nthose that could reduce a pipeline’s integrity. An operator must be able to\ndemonstrate that the remediation of the condition will ensure the conditions is\nunlikely to pose a threat to the long-term integrity of the pipeline An operator\nmust comply with 195.422 when making a repair.\n(i) Temporary pressure reduction. An operator must notify PHMSA, in\naccordance with paragraph (m) of this section, if the operator cannot meet the\nschedule for evaluation and remediation required under paragraph (h)(3) of this\nsection and cannot provide safety through a temporary reduction in operating\npressure.\nHolly failed to notify PHMSA for their 10-inch pipeline when the schedule could not be met\nfor evaluation and remediation and a temporary pressure reduction could not be reduced.\n4. §195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues?\n(4) Special requirements for scheduling remediation\n(i) Immediate repair conditions. An operator's evaluation and remediation\nschedule must provide for immediate repair conditions. To maintain safety, an\n2\n\n\n\noperator must temporarily reduce the operating pressure or shut down the\npipeline until the operator completes the repair of these conditions. An operator\nmust calculate the temporary reduction in operating pressure using the formulas\nreferenced in paragraph (h)(4)(i)(B) of this section. If no suitable remaining\nstrength calculation method can be identified, an operator must implement a\nminimum 20 percent or greater operating pressure reduction, based on actual\noperating pressure for two months prior to the date of inspection, until the\nanomaly is repaired.\nHolly did not remediate the four (4) anomalies promptly for their 10-inch pipeline. The\nrepairs for the four (4) immediate repair conditions were completed between August 23, 2013\nand August 29, 2013.\n5. §195.452 Pipeline integrity management in high consequence areas.\n(j) What is a continual process of evaluation and assessment to maintain a\npipeline’s integrity?\n(2) Evaluation. An operator must conduct a periodic evaluation as frequently as\nneeded to assure pipeline integrity. An operator must base the frequency of\nevaluation on risk factors specific to its pipeline, including the factors specified in\nparagraph (e) of this section. The evaluation must consider the results of the\nbaseline and periodic integrity assessments, information analysis (paragraph (g)\nof this section), and decisions about remediation, and preventive and mitigative\nactions (paragraphs (h) and (i) of this section).\nThere was no formal documentation that the periodic evaluation had been performed.\n6. §195.452 Pipeline integrity management in high consequence areas.\n(j) What is a continual process of evaluation and assessment to maintain a\npipeline’s integrity?\n(3) Assessment intervals. An operator must establish five-year intervals, not to\nexceed 68 months, for continually assessing the line pipe’s integrity. An operator\nmust base the assessment intervals on the risk the line pipe poses to the high\nconsequence area to determine the priority for assessing the pipeline segments.\nAn operator must establish the assessment intervals based on the factors\nspecified in paragraph (e) of this section, the analysis of the results from the last\nintegrity assessment, and the information analysis required by paragraph (g) of\nthis section.\nIntegrity Assessment records indicated that Holly used 68 months to establish the re-\nassessment interval. In addition, Section 3.5.1 of the IMP Manual states, “An acceptable\nintegrity assessment method is 5 years (68 months). The IM Rule requires a nominal five-year\ninterval while recognizing that unexpected contingencies can arise.\" At the time of the\ninspection, it was noted that Holly did not encounter any unexpected events from their\n3\n\n\n\nintegrity assessment(s). Therefore, Holly did not comply with the Rule as required by\nSection 195.452(j)(3), i.e. 12-inch Woods Cross-Chevron (The second assessment was\nconducted on 3/24/2014 and the latest assessment was conducted on 8/31/2015) and 8-inch\nWoods Cross-Chevron (The second assessment was conducted on 6/29/2009 and the latest\nassessment was conducted on 2/26/2015).\n7. §195.452 Pipeline integrity management in high consequence areas.\n(i) What preventive and mitigative measures must an operator take to protect the\nhigh consequence area?\n(1) General requirements. An operator must take measures to prevent and\nmitigate the consequences of a pipeline failure that could affect a high\nconsequence area. These measures include conducting a risk analysis of the\npipeline segment to identify additional actions to enhance public safety or\nenvironmental protection. Such actions may include, but are not limited to,\nimplementing damage prevention best practices, better monitoring of cathodic\nprotection where corrosion is a concern, establishing shorter inspection intervals,\ninstalling EFRDs on the pipeline segment, modifying the systems that monitor\npressure and detect leaks, providing additional training to personnel on response\nprocedures, conducting drills with local emergency responders, and adopting\nother management controls.\nThere was no formal documentation to demonstrate that additional preventive and mitigative\nmeasures had been considered and implemented.\n8. §195.452 Pipeline integrity management in high consequence areas.\n(i) What preventive and mitigative measures must an operator take to protect the\nhigh consequence area?\n(3) Leak detection. An operator must evaluate the capability of its leak detection\nmeans and modify, as necessary, to protect the high consequence area. An\noperator’s evaluation must, at least, consider, the following factors – length and\nsize of the pipeline, the type of product carried, the pipeline’s proximity to the\nhigh consequence area, the swiftness of leak detection, location of nearest\nresponse personnel, leak history, and risk assessment results.\nThere was no formal documentation to demonstrate that leak detection for the 8-inch, 10-inch,\nand 12-inch pipelines had been evaluated or modified.\n9. §195.452 Pipeline integrity management in high consequence areas.\n(k) What methods to measure program effectiveness must be used? An operator’s\nprogram must include methods to measure whether the program is effective in\nassessing and evaluating the integrity of each pipeline segment and in protecting\nthe high consequence area. See Appendix C of this part for guidance on methods\nthat can be used to evaluate a program’s effectiveness.\n4\n\n\n\nThere was no formal documentation available to demonstrate that performance metrics were\nemployed in order to evaluate the effectiveness of the assessment and evaluation of the\nintegrity of each pipeline segment in order to protect the high consequence area.\n10. §195.404 Maps and records.\n(b) Each operator shall maintain for at least 3 years daily operating records that\nindicate-\n(2) Any emergency or abnormal operation to which the procedures under\n§195.402 apply.\nNo records were available to document the post-event review of an abnormal operation\ninvolving loss of communications for the control center.\nAs of April 27, 2017, under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a\ncivil penalty not to exceed $209,002 per violation per day the violation persists up to a\nmaximum of $2,090,022 for a related series of violations. We have reviewed the\ncircumstances and supporting documents involved in this case, and have decided not to\nconduct additional enforcement action or penalty assessment proceedings at this time. We\nadvise you to correct the item(s) identified in this letter. Failure to do so will result in Holly\nEnergy Partners being subject to additional enforcement action.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer\nto CPF 5-2017-6022W. Be advised that all material you submit in response to this\nenforcement action is subject to being made publicly available. If you believe that any\nportion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b),\nalong with the complete original document you must provide a second copy of the document\nwith the portions you believe qualify for confidential treatment redacted and an explanation of\nwhy you believe the redacted information qualifies for confidential treatment under 5 U.S.C.\n552(b).\nSincerely,\nHuy Nguyen\nActing Director, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 J. Stahoviak (#152652)\n5","truncated":false,"body_characters":12250}