{"operation":"document","citation":"PI-20-0004","title":"Buckeye Texas Processing, LLC — Pipeline Safety Interpretation","source_type":"guidance","agency":"Pipeline and Hazardous Materials Safety Administration","status":"guidance","official":true,"published_on":"2020-04-07","effective_on":null,"summary":"PI-20-0004 response to Buckeye Texas Processing, LLC concerning 195.1.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-20-0004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-20-0004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-20-0004","source_url":"https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/standards-rulemaking/pipeline/interpretations/73621/buckeye2-pi-20-0004-04-07-2020-part-195-1.pdf","body":"<<<PAGE 1>>>\n\nU.S. Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety Administration April, 7, 2020\n1200 New Jersey Avenue, SE\nWashington, DC 20590\nMr. Kevin Burke\nSr. Director and GM South Texas District\nBuckeye Texas Processing, LLC\n7209 Up River Road\nCorpus Christi, TX 77406\nDear Mr. Burke:\nThis letter is being provided in response to supplemental information received from you relating\nto an interpretation response letter issued by the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) to Buckeye Texas Processing, LLC (Buckeye) on September 10, 2019\n(September 10, 2019 Letter). This letter supersedes and replaces the prior interpretation;\ntherefore, the September 10, 2019 Letter is withdrawn.\nBackground\nBy letter dated July 27, 2018, Buckeye requested an interpretation of the exception in 49 CFR\n§ 195.1(b)(8) for transportation of hazardous liquid through refining facilities or storage or in-\nplant piping systems associated with such facilities. On September 10, 2019, after several\ncommunications with Buckeye, PHMSA responded to the company’s request for interpretation.\nIn October 2019, PHMSA met with Buckeye to discuss the September 10, 2019 Letter. At that\nmeeting, Buckeye presented supplemental information. In response to Buckeye’s presentation of\nnew information, PHMSA posed several follow-up questions, which Buckeye provided written\nresponses to on November 8, 2019. PHMSA reviewed the responses, held a teleconference with\nBuckeye on December 10, 2019, and sent follow-up questions to Buckeye on December 10,\n2019. On January 29, 2020, Buckeye submitted responses to PHMSA’s follow-up questions.\nOn February 13, 2020, Buckeye submitted a memorandum that clarified and categorized\nBuckeye’s reconsideration request as it relates to two issues: (1) the refining exception of 49\nCFR 195.1(b)(8) and its application at Buckeye’s refining facility; and (2) the application of 49\nCFR 195.1(b)(3)(ii) as it relates to the low stress pipelines (i.e. Modes A, B and C) serving the\nrefining facility. Buckeye and PHMSA met again in Washington, D.C. on February 18, 2020, to\ndiscuss the memorandum.\nAnalysis\nThe Federal pipeline safety regulations apply to pipeline facilities and the transportation of\nhazardous liquids or carbon dioxide associated with those facilities. However, 49 CFR\nThe Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR\nParts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts\npresented by the person requesting the clarification. Interpretations are not generally applicable, do not create legally-enforceable rights or\nobligations, and are provided to help the specific requestor understand how to comply with the regulations.\n\n<<<PAGE 2>>>\n\n2\n195.1(b)(8) excepts from the Part 195 regulations the “transportation of hazardous liquids or\ncarbon dioxide through onshore production (including flow lines), refining, or manufacturing\nfacilities or storage or in-plant piping systems associated with such facilities.” In this exception,\nin-plant piping system means “piping that is located on the grounds of a plant and used to\ntransfer hazardous liquid or carbon dioxide between plant facilities or between plant facilities\nand a pipeline or other mode of transportation, not including any device and associated piping\nthat are necessary to control pressure in the pipeline under § 195.406(b).” In addition, Part 195\nexcepts low-stress pipelines that serve refining facilities, if the pipeline is less than one mile long\nand does not cross an offshore area or waterway currently used for commercial navigation. See\n§ 195.1(b)(3)(ii).\nIn 1992, when PHMSA proposed the definition of in-plant piping, the agency explained that\npressure control devices necessary to control pressure of a regulated pipeline would mark the\nlimit of part 195 application inside a refining facility. If there is no pressure control device, such\nas on an un-regulated low-stress line, in-plant piping would extend to the plant boundary. See\nRegulatory Review: Hazardous Liquid and Carbon Dioxide Pipeline Safety Standards, 57 Fed.\nReg. 56305, Nov. 27, 1992.\nBuckeye owns and operates a crude oil refining facility located in Corpus Christi, Texas. The\nfacility is served by crude oil pipelines identified by Buckeye as Mode A, Mode B, Mode C,\nMode D, and Mode E. According to Buckeye, the refining facility includes storage and an in-\nplant piping system associated with the refining facility.\nThe September 10, 2019, Letter was based on the agency’s evaluation of the information\nBuckeye had provided at that time, which did not include information about low-stress pipelines.\nSince that time, Buckeye has presented additional information to PHMSA, which has changed\nthe agency’s understanding of Buckeye’s refinery facility. Therefore, PHMSA provides the\nfollowing revised interpretation.\nWith regard to the Mode A, Mode B and Mode C pipelines, Buckeye has asserted they are low-\nstress pipelines that meet the § 195.1(b)(3)(ii) exception and thus not required to have § 195.406\npressure control devices. As noted above, if the pipelines were regulated, the point of\ndemarcation between these pipelines (i.e. Mode A, Mode B, and Mode C pipelines) and\nBuckeye’s in-plant piping system would be the pressure control device necessary to control\npressure, or the facility boundary if there is no pressure control device on plant grounds. (See 57\nFed. Reg. 56305). Buckeye has indicated the current point of demarcation is the nearest valves\ndownstream of the receivers for pipelines moving in crude oil (i.e. Mode A and Mode B), or\nupstream of the launchers for pipelines moving crude oil out (i.e. Mode B and Mode C).\nPHMSA believes these demarcation points are not inconsistent with § 195.1 for the Mode A,\nMode B, and Mode C pipelines if they are unregulated low-stress pipelines.\nWith regard to the Mode D pipeline, which Buckeye acknowledges is subject to the regulations\nin Part 195, Buckeye indicated that it is operated by a third-party, who delivers crude oil inbound\nto the refinery from the third party’s terminal. Buckeye also stated that the pipeline pressure is\nlimited using a pressure control device and associated surge relief piping. Specifically, the\npressure relief valve and surge relief piping that leads to the refinery’s Tanks TK-1004, TK-\nThe Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR\nParts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts\npresented by the person requesting the clarification. Interpretations are not generally applicable, do not create legally-enforceable rights or\nobligations, and are provided to help the specific requestor understand how to comply with the regulations.\n\n<<<PAGE 3>>>\n\n3\n1005, and TK-1006 results in those tanks being characterized as breakout tanks, which would be\nregulated under Part 195. Buckeye further stated that since the emergency shutdown valve\nprotects in-plant piping that could influence pressure on the Mode D pipeline, it determined the\ndemarcation point between the Mode D pipeline, which would be regulated under Part 195, and\nthe refinery’s in-plant piping system to be the outlet flange of the valve located immediately\ndownstream of the emergency shutdown valve. PHMSA believes Buckeye’s chosen\ndemarcation point is not inconsistent with § 195.1 for the Mode D pipeline. This includes the\npressure relief valve and piping leading to the breakout tanks, including the breakout tanks, as\nwell as the Mode D pipeline from the outlet flange downstream of the emergency shutdown\nvalve.\nFinally, with regard to the Mode E pipeline, which Buckeye acknowledges is subject to the\nregulations in Part 195, Buckeye indicated that a third-party operates the pipeline, transporting\ncrude oil outbound from the refinery to a third-party refining facility. Buckeye also indicated\nthat the pressure on the Mode E pipeline is limited by the combination of a pressure transmitter\nand a motor-operated valve located near the refinery’s boundary. Consequently, Buckeye has\ndetermined that the demarcation point between the Mode E pipeline, which would be regulated\nunder Part 195, and the refinery’s in-plant piping system is the inlet flange of the motor-operated\nvalve. PHMSA believes Buckeye’s chosen demarcation point is not inconsistent with § 195.1\nfor the Mode E pipeline. The point of demarcation for the Mode E pipeline would be valve\nupstream of the pressure transmitter and the motor-operated valve as annotated in the piping and\ninstrumentation diagram provided by Buckeye on November 8, 2019.\nPHMSA provides this written interpretation of the Federal pipeline safety regulations in response\nto a specific request of interpretation, and reflects the agency's application of the regulations to\nthe specific facts presented by the person requesting the clarification. If additional or differing\nfacts are presented, PHMSA’s interpretation may change.\nIf we can be of further assistance, please contact Tewabe Asebe at 202-366-5523.\nSincerely,\nJohn A. Gale\nDirector, Office of Standards\nand Rulemaking\nThe Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR\nParts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts\npresented by the person requesting the clarification. Interpretations are not generally applicable, do not create legally-enforceable rights or\nobligations, and are provided to help the specific requestor understand how to comply with the regulations.\n\n<<<PAGE 4>>>\n\nBUCKEYE TEXAS PROCESSING LLC\n7209 Up River Road\nCorpus Christi, TX 77406\nNOV ~ e !01 9\nNovember 8, 2019\nOffice of Pipeline Safety (PHP-30)\nPHMSA\nU.S. Department of Transportation\n1200 New Jersey Avenue SE\nWashington, DC 20590-0001\nAttn: Mr. Tewabe Asebe, Standards and Rulemaking (PHP-30)\nRe: Request for Written Regulatory Interpretation; Response to Inquiry\nDear Mr. Asebe:\nBuckeye Texas Processing LLC (BTP) appreciates the opportunity to meet with you, Mr. Fred,\nMr. Gale and Mr. Nanney on October 21, 2019. This letter responds to the information request\nposed by Mr. Steve Nanney during that meeting.\nDuring our meeting, Mr. Nanney inquired specifically of the manner in which the pipelines\noperating in Modes D and E tie-in to the crude oil in-plant piping system at the BTP refining facility,\nand requested a drawing depicting same.\nThe enclosed drawing, entitled \"Buckeye Texas Processing Crude Oil In-Plant Piping System,\" is\na piping and instrumentation diagram (P&ID) which is intended to respond to Mr. Nanney's\nrequest. Please note that BTP has used the same color-coding as was applied in BTP's June 6,\n2019, response to PHMSA inquiry. We noted during the meeting that Mr. Nanney requested a\nsimplified drawing, and we have endeavored to simplify the enclosed drawing as much as\npossible without obscuring relevant details.\nIn regards to the attached P&IDs, Buckeye would like to mention the additional information:\n• The Inventory Control Meter Skid is not used for leak detection on any of the crude oil\npipelines.\nAs you may recall, toward the end of our meeting, Mr. Fred inquired whether any aspect of the\nSeptember 10, 2019, interpretation (Pl-18-0017), other than the refining exception, deserved\nattention. BTP responded, yes, that the findings related to the low-stress pipelines (Modes A, B,\nand C) deserved a second look. In that regard, BTP would direct PHMSA's attention to the\ndescription of those pipelines found in BTP's June 6, 2019, response to PHMSA inquiry, at pages\n1-2, in the paragraph beginning \"Before turning to the April 29 discussion, .... \" BTP would add\nthat none of the low-stress pipelines operating in Modes A, B, and C crosses an offshore area,\n\n<<<PAGE 5>>>\n\nMr. Tewabe Asebe\nOffice of Pipeline Safety (PHP-30)\nBuckeye Texas Processing, LLC\nRequest for Written Regulatory Interpretation\nNovember 8, 2019\nPage2\nnor do they cross any waterway currently used for commercial navigation (re: 49 C.F.R. §\n195.1 (b )(3)(ii)).\nOur request for interpretation seeks confirmation that BTP has appropriately delineated between\nthe crude oil pipeline system and the pipelines which move crude oil off the refining facility\ngrounds.\nFinally, BTP wishes to offer to you and to Messrs. Gale and Fred any follow-up information that\nmight be helpful to your efforts in this regard. You may contact me with any such request.\nThank you for your time and for your attention to this matter.\nSincerely,\nKevin Burke\nSr. Director & GM South Texas District\nEnclosure\ncc: John Gale, Director, Standards and Rulemaking\nSteve Nanney, PHMSA/OPS\nMeredith Wilson\nClaudia Pankowski\nPatrick Monaghan\nVanessa Garcia-Silguero\nVince Murchison\n\n<<<PAGE 6>>>\n\nBUCKEYE TEXAS PROCESSING LLC\n7209 Up River Road\nCorpus Christi, TX 77406\nJanuary 29, 2020\nOffice of Pipeline Safety {PHP-30)\nPHMSA\nU.S. Department of Transportation\n1200 New Jersey Avenue SE\nWashington, DC 20590-0001\nAttn: Mr. Tewabe Asebe, Standards and Rulemaking (PHP-30)\nRe: Request for Written Regulatory Interpretation\nInterpretation Response Pl-18-0017\nResponse to Inquiry\nDear Mr. Asebe:\nThis letter responds to your email dated December 8, 2019, which presented follow-up questions\nfrom our teleconference on December 3, 2019, same related to the request for written regulatory\ninterpretation submitted by Buckeye Texas Processing (BTP), dated July 27, 2018. Reference\nis made to BTP's request, the corrected Exhibit C submitted July 31, 2018, and BTP's prior\nresponses to information requests dated December 3, 2018, March 22, 2019, June 6, 2019, and\nNovember 8, 2019, as well as our teleconference discussion of April 29, 2019.\nSet out below is each of your questions which is followed by BTP's response; for reference, we\nhave attached a copy of the P&ID that was submitted November 8, 2019.\n• Why does Buckeye believe the line that is marked yellow (in the latest map) and runs from\nMode A (Viking) to Mode C or to Mode B is in-plant piping. Interconnecting piping from\npipeline to pipeline?\nThe piping represented by the yellow line, which extends from Mode A to Mode C or Mode B, also\nserves the purpose of moving crude oil to tanks for storage prior to refining. Tanks 1001-1003\nare the dedicated refining charge tanks, and crude oil is moved to and among Tanks 1001-1003\nfor ultimate movement to the refining units; therefore, since the subject piping is associated with\nrefining, it is designated as in-plant piping pursuant to 49 C.F.R. §195.1{b){8).\n• INhere are pressure controls for Modes A, B, C, and D?\nBelow, BTP responds to your inquiry by reviewing system design, then each of the four modes is\naddressed in turn. BTP believes that a description of system design is essential to interpreting\nthe responses set out below.\n\n<<<PAGE 7>>>\n\nMr. Tewabe Asebe\nOffice of Pipeline Safety (PHP-30)\nBuckeye Texas Processing, LLC\nRequest for Written Regulatory Interpretation\nJanuary 29, 2020\nPage2\nIn sum, pressure control is not active, using protective equipment, in the manner contemplated\nby 49 C.F.R. §195.406(b) and the definition of in-plant piping (49 C.F.R. §195.2); rather, pressure\nis managed passively by system design.\nThe maximum pressure that the crude oil pipelines (line pipe located outside of the BTP and BTH\nfacilities) can withstand from a physical material perspective is higher than the maximum pressure\nthan the system can deliver. The operating pressures are limited by the maximum output that\ncan be produced by the pumps that are used to transfer along Modes A, B, C, and D. From an\nover-pressure protection standpoint, one must take into consideration that BTP and BTH are\nlimited by the in-plant piping design (ANSI 150), thus resulting in the low-stress designation to the\npipelines represented by Mode A, Mode B and Mode C which are excepted from Part 195\npursuant to 49 C.F.R. § 195.1 (b)(3)(ii).\nBelow, BTP reviews for each of the Modes the factors required to be excepted as a low-stress\npipeline pursuant to 49 C.F.R. § 195.1(b}(3)(ii}, along with the means by which the pipelines are\noperated to maintain pressure below 20% specified minimum yield strength (SMYS).\nMode A:\nThe Mode A pipelines are 0.45 miles in length (measured outside facility grounds), do not cross\nan offshore area or a commercially navigable waterway, and serve to move crude oil inbound to\na refining facility (BTP).\nPressure in the Mode A pipelines is maintained by way of pressure sensors and pump shutdown\nswitches located at the upstream origin pump station. Those switches are set to shut down the\npumps if pressure on the pipelines reaches 240 psig, which is approximately 12% of the SMYS.\nModeB:\nThe Mode B pipelines are approximately 0.69 miles in length (measured outside facility grounds);\nserve both a refining facility (BTP) and a vessel terminal facility (8TH); and do not cross an\noffshore area or a waterway currently used for commercial navigation.\nRecalling that Mode B pipelines are bidirectional, maintenance of pressure below 20% SMYS is\nachieved separately for inbound and outbound movements. Pressure for movements inbound\nfrom 8TH to BTP is maintained by the implementation of a pump permissive that is controlled by\na pressure transmitter located upstream of the pipeline near the BTH fence line. In the event that\nthe pressure reaches 150 psi, the pump permissive is removed and the 8TH pumps will shut\ndown. For these transfers, the pipelines are subject to pressures approximately 8% of the SMYS.\nPressure for movements outbound from BTP to 8TH is maintained by the implementation of\npressure transmitters located directly downstream of the pumps and pump shutdown s~itches.\n\n<<<PAGE 8>>>\n\nMr. Tewabe Asabe\nOffice of Pipeline Safety (PHP-30)\nBuckeye Texas Processing, LLC\nRequest for Written Regulatory Interpretation\nJanuary 29, 2020\nPage3\nThe pumps will shut down if pressure downstream of the pumps reaches 268 psi, which is\napproximately 14% of the SMYS.\nMode C:\nThe Mode C pipeline is approximately 0. 79-miles in length (measured outside of facility grounds};\nserves both a refining facility (BTP) and a vessel terminal facility (8TH); and does not cross an\noffshore area or a waterway currently used for commercial navigation.\nPressure in the Mode C pipeline is maintained by the implementation of pressure transmitters\nlocated directly downstream of the pumps and pump shutdown switches. The pumps will shut\ndown transfers if pressure downstream of the pumps reaches 268 psi, which is approximately\n17% of the SMYS.\nGiven the foregoing, that the Mode A, Mode B, and Mode C pipelines are excepted from regulation\nunder Part 195; and given that, as a result, no •device and associated piping that are necessary\nto control pressure• in the pipelines exists, long-standing precedent would place the end or the\nbeginning, as the case may be, of the crude oil in-plant piping system at the facility boundary.1\nBTP, however, concurs with Mr. Steve Nanney in concluding that launchers and receivers should\nbe part of the Mode A, Mode B, and Mode C pipelines. As such, BTP has established the\nbeginnings and endings of the crude oil in-plant piping system at the last- or first-occurring block\nvalves adjacent to piping which is connected to the launchers and receivers, as depicted in the\nNovember 8 drawing.\nMode D:\nThe pressure controls for the pipeline operating in Mode Dare located within BTP. Those controls\nare in the form of a pressure control relief valve. That pressure control valve is owned and\noperated by Energy Transfer and is depicted in the November 8 drawing.\n• Why does Buckeye believe the line that is marked yellow (in the latest map) and runs from\nMode D (ETC inbound 12\") to the tanks is not all DOT regulated?\nThe piping represented by the yellow line, which extends from Mode D to the tanks, also serves\nthe purpose of moving crude oil to tanks for storage prior to refining. Tanks 1001-1003 are the\ndedicated refining charge tanks, and crude oil is moved to and among Tanks 1001-1003 for\nultimate movement to the refining units; therefore, since the subject piping is associated with\nrefining, it is designated as in-plant piping pursuant to 49 C.F.R. §195.1 (b}(8}.\n1 In-plant piping system means piping that is located on the grounds of a plant and used to transfer huardous liquid\nor carbon dioxide between plant facilities or between plant facilities and a pipeline or other mode of transportation,\nnot including any device and associated piping that are necessary to control pressure in the pipeline under\n§ 195.406(b ).; \"If there is no such pressure control device on plant grounds, in-plant would extend to the boundary of\nplant grounds.\" Notice of Proposed Rulemaking. 57 Fed. Reg. 56304, 56305 9Nov. 27, 1992; \"The NPRM\nexplained that we would consider in-plant piping to extend to the plant boundary in the absence of a necessary\npressure control device on plant grounds.\" 59 Fed. Reg. 33388, 33389 (June 28, 1994).\n\n<<<PAGE 9>>>\n\nMr. Tewabe Asebe\nOffice of Pipeline Safety (PHP-30)\nBuckeye Texas Processing, LLC\nRequest for Written Regulatory Interpretation\nJanuary 29, 2020\nPage4\nBTP acknowledges that a fair amount of data and facility knowledge under1ies the information\npresented in this letter. As discussed on December 3, BTP suggests a follow-up, in-person\nmeeting to allow further discussion and to address any additional questions that would be helpful\nto PHMSA's interpretation.\nThank you for your time and attention to this matter.\nSincerely,\nKevin Burke\nSr. Director and GM South Texas District\nEnclosure\ncc: John Gale, Director, Standards and Rulemaking\nSteve Nanney, PHMSA/OPS\nBenjamin Fred\nMelanie Stevens\nVanessa Garcia-Silguero\nClaudia Pankowski\nVince Murchison\n\n<<<PAGE 10>>>\n\nMemo\nTo: Ben Fred\nMelanie Stevens\nFrom: Vince Murchison\nDate: February 13, 2020\nRe: Buckeye Texas Processing, LLC; Interpretation Response PI-18-0017; The PSA Refining\nException\nIntroduction\nThis memorandum follows-on to my recent offer to characterize Buckeye Texas Processing, LLC’s\n(“BTP’s”) refining facility under the refining exception to the federal pipeline safety regulations, 49 C.F.R.\nPart 195 (“Part 195”), which are promulgated pursuant to the Pipeline Safety Act, 49 U.S.C. § 60101, et\nseq (“PSA”). The refining exception is found in the PSA, 49 U.S.C. § 60101(a)(22)(B), and in Part 195,\n49 C.F.R. § 195.1(b)(8). This memorandum is limited to the movement of crude oil into, within, and out\nof the refining facility; i.e., it does not address the movement of refined petroleum products.\nTo place the discussion into context, BTP requested PHMSA’s interpretation of the physical locations\nwhich BTP had identified as the beginning or the end, as the case may be, of the refining facility crude\noil in-plant piping system. This memorandum reviews the scope of the Pipeline Safety Act and the\nintended scope of the exception for refining facilities – and storage and in-plant piping systems associated\nwith refining facilities – which necessarily brings into the discussion the promulgation of the defined term\n“in-plant piping system” (i.e., the determination of the physical extent of an in-plant piping system), as\nwell as the meaning of the clause “associated with.\n” Following that discussion is a section in which the\nrefining exception is applied to the BTP refining facility. Finally, at the request of Melanie Stevens, BTP\ndescribes certain central issues which it believes attend the PHMSA interpretation response of\nSeptember 10, 2019.\n1\nBackground\nBTP owns and operates a crude oil refining facility located in Corpus Christi, Texas. The refining facility\nis served by several crude oil pipelines, some of which are regulated under Part 195, but some of which\nare not. Crude oil is a hazardous liquid as defined by 49 C.F.R. 195.2. A total of seven crude oil pipelines\nserve the facility, and, given that certain of the pipelines are parallel and serve the same facilities, a total\nof five modes of operation exist. Those modes are designated Mode A, Mode B, Mode C, Mode D, and\nMode E.2\n1 PI-18-0017, Sep. 10, 2019.\n2 A description of the modes may be found in BTP’s request for interpretation of July 27, 2018, at 2.\n• Page 1\n\n<<<PAGE 11>>>\n\nTwo of the pipeline modes, Mode B and Mode C, serve a marine vessel terminal known as Buckeye\nTexas Hub (“BTH”).\nThe refining facility has a crude oil in-plant piping system on plant grounds, all of which system is\nassociated with the refining facility, and which system moves crude oil between plant facilities (including\nstorage tanks and the refining units) and between plant facilities and the inbound and outbound crude oil\npipelines. The crude oil in-plant piping system was designed and constructed pursuant to ASME B31.3\n– Process Piping. Further, the in-plant piping system is operated and maintained pursuant to a safety\nmanagement system which conforms with the applicable regulations of OSHA and EPA.\nBTP submitted an interpretation request on July 27, 2018, seeking PHMSA’s interpretation of BTP’s\nconclusions regarding the points of demarcation, identified by BTP, between the pipelines and the\nrefining facility crude oil in-plant piping system. Subsequently, BTP responded to several agency\nrequests for additional information. PHMSA and BTP held a teleconference on April 29, 2019, to review\nthe refining facility layout and to respond to PHMSA inquires. PHMSA’s interpretation response was\nissued on September 10, 2019. The parties met in Washington on October 21, 2019 to discuss certain\nquestions relating to the interpretation response. BTP responded to a follow-up information request on\nJanuary 29, 2020.\nThe Refining Exception\nThe Pipeline Safety Act\nThe stated purpose of the PSA “is to provide adequate protection against risks to life and property posed\nby pipeline transportation and pipeline facilities by improving the regulatory and enforcement authority of\nthe Secretary of Transportation (“Secretary”).”3 To achieve this purpose, the PSA directs that the\nSecretary “prescribe minimum safety standards for pipeline transportation and for pipeline facilities.”4\nThe PSA definition of “pipeline transportation,” as relevant, includes “transporting hazardous liquid,\n” as\nset out below:5\nTransporting hazardous liquid –\n(A) means–\n(i) the movement of hazardous liquid by pipeline, or the storage of hazardous liquid\nincidental to the movement of hazardous liquid by pipeline, in or affecting\ninterstate or foreign commerce”6\n* * *\n(B) but does not include moving hazardous liquid through—\n* * *\n(ii) onshore production, refining, or manufacturing facilities; or\n(iii) storage or in-plant piping systems associated with onshore production, refining,\nor manufacturing facilities.”7\n3 49 U.S.C. § 60102(a)(1) (2017).\n4 49 U.S.C. § 60102(a)(2) (2017).\n5 49 U.S.C. § 60101(a)(19) (2017).\n6 49 U.S.C. § 60101(a)(22)(A)(i) (2017).\n7 49 U.S.C. § 60101(a)(22)(B)(ii)-(iii) (2017).\n Page 2\n\n<<<PAGE 12>>>\n\nSection 60101(a)(22)(B) reflects Congressional intent that neither (1) movement of hazardous liquid\nthrough refining facilities, nor (2) movement of hazardous liquid through (a) storage or (b) in-plant piping\nsystems, same associated with refining facilities, falls within the scope of the PSA.\nThe Legislative History\nThe legislative history of the PSA illustrates Congressional intent regarding the scope of the refining\nexception. The exception for refining facilities and associated storage and in-plant piping initially was\ncodified in the Hazardous Liquid Pipeline Safety Act of 1979 (“HLPSA”).8 During the development of S.\n411, the bill that eventually became the HLPSA, the Senate Committee on Commerce, Science, and\nTransportation (the “Committee”) narrowed the scope of the proposed legislation by amending previously\nproposed, broad language in S. 411, covering “all aspects of any pipeline transportation in or affecting\ninterstate commerce,” to add the exception for onshore production, refining, or manufacturing facilities\nand associated storage or in-plant piping systems.\n9 The Committee explained that “[o]n the basis of\ndiscussions with the Department of Transportation [(“DOT”)] and the affected industry, the Committee\nfound that such an exemption was appropriate because such lines present insufficient risk to life and\nproperty to require regulation.”10\nThe hearing record of the Committee provides further evidence of Congress’s purpose for excluding\nrefining facilities as a whole. In written answers to the Committee’s questions, DOT made it clear that,\nnot only did the safety of refineries present different challenges than the safety of pipelines, but that OSHA\nalready covered the safety of refining facilities.\n11 In a series of written questions and answers, the\nCommittee asked DOT,\n“[c]ould the proposed ‘[HLPSA] of 1979’ (Title II of S. 411) be used to regulate\nthe safety of refineries?”12 DOT responded:\nTitle II of S. 411 was not intended to extend to the safety regulation of refineries.\nLike the [Natural Gas Pipeline Safety Act], Title II covers the transportation of\nhazardous liquid and the treatment of hazardous liquid in the course of\ntransportation.\nThe knowledge and expertise necessary to address safety problem[s] in refineries\nis dissimilar to that necessary for addressing safety problems in pipeline\ntransportation. It should be noted however, the OSHA has extensive occupational\nsafety related requirements for refineries which go a long way to assuring the safe\noperation of such refineries.13\nThe Part 195 Refining Exception\nThe version of Part 195 that was published following passage of the HLPSA mirrored the refining\nexception of the HLPSA, excepting from Part 195 “[t]ransportation of a hazardous liquid through onshore\nproduction, refining, or manufacturing facilities or storage or in-plant piping systems associated with such\nfacilities.”14\nThe current version of the refining exception reads virtually the same as the original, excepting from Part\n195 “[t]ransportation of hazardous liquid or carbon dioxide through onshore production (including flow\n8 Hazardous Liquid Pipeline Safety Act of 1979, Pub. L. No.96-129, § 203 (1979).\n9 S. Rep. 96-182, at 18 (1979).\n10 Id.\n11 Hearing on S. 411 Before the Senate Committee on Commerce, Science, and Transportation, 96th\nCong. (1979).\n12 Id. at 45, question 51.\n13 Id.\n14 Transportation of Liquids by Pipeline; Final Rule, 46 Fed. Reg. 38357, 38361 (July 27, 1981).\n Page 3\n\n<<<PAGE 13>>>\n\nlines), refining, or manufacturing facilities or storage or in-plant piping systems associated with such\nfacilities.”15\nThe key question in the present context is determining the physical extent of an in-plant piping system\nwhich is associated with a refining facility and thereby excepted from Part 195 regulation. The BTP\ninterpretation request is focused upon the refining facility crude oil in-plant piping system. BTP believes\nthat no questions surround which crude oil storage tanks at BTP are breakout tanks and thereby subject\nto Part 195.\nIn-Plant Piping Systems\nThe term “in-plant piping system” was defined in 1994 as “piping that is located on the grounds of a plant\nand used to transfer hazardous liquid or carbon dioxide between plant facilities or between plant facilities\nand a pipeline or other mode of transportation, not including any device and associated piping that are\nnecessary to control pressure in the pipeline under §195.406(b).”16 The purpose for defining “in-plant\npiping system” was for a similar purpose as BTP’s interpretation request, to clarify “the physical distinction\nbetween a regulated pipeline serving a plant and unregulated in-plant piping.”17 The term “in-plant piping\nsystem” has not been altered since it initially was promulgated.18\nNotably, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), combined with its\npredecessor agencies, for decades has been quite consistent in applying the regulatory concepts for\ndetermining the extent of a refining facility in-plant piping system.19 Prior to the promulgation of the\ndefinition of the term “in-plant piping system,” PHMSA established the points of demarcation between a\nregulated pipeline and an unregulated in-plant piping system in an interpretation provided to Conoco, Inc.\n(“Conoco”).\nThe Conoco interpretation stated that,\n[F]or transfers of hazardous liquid from a refinery to a regulated pipeline, in-plant piping\nends and the regulated pipeline begins\n[A]t the inlet of each pressure control device on refinery grounds that is necessary for\nthe operator to control pressure in the pipeline outside the refinery grounds [and that]\nA similar demarcation applies to the transfer of hazardous liquid from a regulated\npipeline to a refinery. The regulated pipeline ends and the in-plant piping begins at the\noutlet of each pressure control device on refinery grounds that is necessary for the\noperator to control pressure in the pipeline outside the refinery grounds [but that]\nIf the operator has adequate alternative means to control pressure in the pipeline\noutside the refinery grounds, then we consider the regulated pipeline to end at the\nboundary of the refinery grounds, which usually is marked by a fence.\n20\nThe exact same methodology that was applied in the Conoco interpretation was established as the basis\nfor determining the extent of an in-plant piping system in the Notice of Proposed Rulemaking (“NPRM”)\nby which the definition of “in-plant piping system” was promulgated. The NPRM provided that:\n15 49 C.F.R. § 195.1(b)(8).\n16 Regulatory Review: Hazardous Liquid and Carbon Dioxide Pipeline Safety Standards; Final Rule, 59\nFed. Reg. 33388, 33395 (June 28, 1994).\n17 Id. at 33388.\n18 49 C.F.R. § 195.2 (2018).\n19 PHMSA was preceded, in turn, by the Research and Special Programs Administration and the\nMaterials Transportation Bureau.\n20 Interpretation 195.406 5; Conoco, Inc., March 25, 1991.\n Page 4\n\n<<<PAGE 14>>>\n\n[T]he inlet of the pressure control device would demarcate in-plant piping if the pipeline\nis moving product away from plant grounds\n[T]he outlet of the pressure control device if the pipeline is supplying the plant [and,]\nIf there is no such pressure control device on plant grounds, in-plant [piping] would\nextend to the boundary of plant grounds.”21\nThat methodology was confirmed by the Final Rule by which the term “in-plant piping system” was\npromulgated.22\nPHMSA continued to apply the exact same methodology, in the wake of the promulgation of the term “in-\nplant piping system,” in a 1995 interpretation directed to Unifield Engineering (“Unifield”). The Unifield\ninterpretation stated the points of demarcation as follows:\nThe in-plant and terminal piping exemption under § 195.1(b)(6) [now 195.1(b)(8)] [is]\nsubject to the following … interpretations:\nIf there is no pressure control device on plant grounds that is required by § 195.406(b)\nfor safe operation of a jurisdictional pipeline serving the plant, in-plant piping extends to\nthe plant boundary (57 FR 56305 and 59 FR 33389).\nIf there is such a device on plant grounds, Part 195 applies to the device and to plant\npiping that connects the device to the jurisdictional pipeline (57 FR 56305 and 59 FR\n33389).23\nA subtlety attends all three of the authorities which defined – and today define – the methodology for\ndetermining the extent of an in-plant piping system by identifying the end points or the beginning points\nof the in-plant piping system. The subtlety is that those authorities speak to the “pressure control device,”\nthat which is necessary to control pressure in a regulated pipeline under 49 C.F.R. § 195.406(b), having\nan “inlet” or an “outlet.” Pressure control devices which have “inlets” and “outlets” typically are valves,\nspecifically pressure control valves, pressure relief valves and motor-operated valves, which universally\nwill have an inlet flange and an outlet flange; whether a given flange is the inlet flange or the outlet flange\ndepends merely upon the direction of flow.\nAgency intent appears rather clear – if a regulated pipeline entering or exiting a refining facility in fact has\na pressure control device, a valve with inlet and outlet flanges, and the valve is necessary to control\npressure in the pipeline, then that device would mark the end or the beginning, as the case may be, of\nthe refining facility in-plant piping system. If no such valve were present, however, the beginning and the\nend of a refining facility in-plant piping system would be at the facility boundary.\nAssociated With vs. Exclusive Use\nA degree of confusion might appear to surround the distinction between the concept of “associated with”\nand the concept of exclusive use. PHMSA has, however, recently issued relevant guidance in the context\nof the refining exception.\nIn the initial rendition of the refining exception, Congress provided that, to be excepted from the PSA,\nstorage and in-plant piping systems need only be associated with a refining facility.\n24 The initial Part 195\n21 Regulatory Review: Hazardous Liquid and Carbon Dioxide Pipeline Safety Standards; NPRM, 57\nFed. Reg. 56304, 56305 (Nov. 27, 1992).\n22 59 Fed. Reg. 33389 (“The NPRM explained that we would consider in-plant piping to extend to the\nplant boundary in the absence of a necessary pressure control device on plant grounds.”).\n23 Interpretation 195.1 75, at 1; Unifield Engineering, December 27, 1995.\n24 49 U.S.C. 60101(a)(22)(B)(iii) (2017) (emphasis supplied).\n Page 5\n\n<<<PAGE 15>>>\n\nversion of the refining exception provided likewise, as is the case today.25 If a term used in a regulation\nis not defined by that regulation, the term is to be construed according to its plain and ordinary meaning.26\nThe plain and ordinary meaning of “associated” may be derived from dictionary definitions. Merriam-\nWebster defines “associated” as “joined together often in a working relationship; related, connected, or\ncombined together.”27 MacMillan Dictionary defines “be associated with” as “to be connected with\nsomething in some way.”28 As such, one may derive that the clause “associated with” lends itself to the\nconcept of a connection, a relationship, a combination. And, while PHMSA has not clearly explained to\nthe regulated community the meaning of “associated with,” PHMSA has explained what “associated with”\ndoes not mean.\nIn a 2013 interpretation, PHMSA found that the distinction between the so-called “terminals exception”\nand the refining exception needed explanation. For context, the terminals exception excepts from\nregulation under Part 195 “[t]ransportation of hazardous liquid … [t]hrough facilities located on the\ngrounds of a materials transportation terminal if the facilities are used exclusively to transfer hazardous\nliquid or carbon dioxide between non-pipeline modes of transportation or between a non-pipeline mode\nand a pipeline.”29\nIn a statutory interpretation issued by the PHMSA Chief Counsel to ONEOK, the PHMSA Chief Counsel,\nin distinguishing the terminals exception from the refining exception, confirmed that “the Production,\nRefining or Manufacturing Facility Exemption does not have the exclusivity requirement of the Terminals\nExemption and that the former requires only that storage and in-plant piping be ‘associated with’ a\nproduction, refining, or manufacturing facility.”30 As the Chief Counsel clearly stated, “associated with”\ndoes not mean used “exclusively,” to the conclusion that storage and in-plant piping systems associated\nwith a refining facility need not be used exclusively for refining.\nThe Low-Stress Pipelines\nBy letter dated January 29, 2020, BTP responded to several PHMSA inquiries. Among the informatio","truncated":true,"body_characters":52800}