U.S. 
Department 400 Seventh Street, S.W 
of Transportation Washington, D.C. 20590 
Pipeline and Hazardous 
Materials Safety Administration 
DEC 1 1 ' . 
Ms. Anna Black 
President 
Key Pipelines LTD 
355 Ashland Loop Road 
Ashland, Oregon 97520 
Re: CPF No. 5-2005-50 16 
Dear Ms. Black: 
Enclosed is the Final Order issued by the Acting Associate Administrator for Pipeline Safety 
in the above-referenced case. It makes findings of violation and assesses a civil penalty of 
$7,500. The Final Order also specifies actions to be taken to comply with the pipeline safety 
regulations and revision of certain operating and maintenance procedures/plans. The penalty 
payment terms are set forth in the Final Order. When the civil penalty is paid and the terms of 
the Compliance Order and Amendment of Procedures are completed, as determined by the 
Director, Western Region, this enforcement action will be closed. Your receipt of the Final 
Order constitutes service under 49 C.F.R. Ħħ 190.5. 
Sincerely, 
James Reynolds 
Pipeline Compliance Registry 
PHMSA-Office of Pipeline Safety 
Enclosure 
cc: 
Mr. Chris Hoidal, P.E., Director, Western Region, PHMSA 
CERTIFIED MAIL -RETURN RECEIPT REQUESTED 

DEPARTMENT OF TRANSPORTATION 
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION 
OFFICE OF PIPELINE SAFETY 
WASHINGTON, DC 20590 
In the Matter of 
1 
1 
Key Pipelines LTD, 
)
1 CPF NO. 5-2005-5016 
Respondent 
1 
1 
1 
FINAL ORDER 
Between November 22 and 23,2004, pursuant to 49 U.S.C. Ħħ 601 17, a representative of the 
Pipeline and Hazardous Materials Safety Administration's (PHMSA'S)' Office of Pipeline Safety 
conducted an on-site pipeline safety inspection of Respondent's Integrity Management Program 
(IMP) at your offices in Wheatland, Wyoming. As a result of the inspection, the Director, 
Western Region, PHMSA, issued to Respondent, by letter dated March 9,2005, a Notice of 
Probable Violation, Proposed Civil Penalty, Proposed Compliance Order, and Notice of 
Amendment (Notice). In accordance with 49 C.F.R. 5 190.207, the Notice proposed finding that 
Respondent committed violations of 49 C.F.R. Part 195, proposed assessing a civil penalty of 
$1 0,000 for the alleged violations, and proposed ordering Respondent to take certain measures to 
correct the alleged violations. The Notice also proposed, in accordance with 49 C.F.R. 
5 190.237, that Respondent amend its proceduresJplans. 
AAer requesting and receiving an extension of time to respond, Respondent responded to the 
Notice by letter dated May 1 1,2005 (Response). Respondent responded to many of the 
allegations but did not contest some of the Notice Items. Respondent did not request a hearing, 
and therefore has waived its right to one. 
FINDINGS OF VIOLATION 
Item l(a) in the Notice alleged Respondent violated 49 C.F.R. 5 195.452(b)(l) by failing to 
develop a written IMP by February 18,2003 as the regulation requires of an operator of a 
' Effective February 20,2005, the Pipeline and Hazardous Materials Safety Administration (PHMSA) succeeded 
Research and Special Programs Administration as the agency responsible for regulating safety in pipeline 
transportation and hazardous materials transportation. See, section 108 of the Norman Y. Mineta Research and 
Special Programs Improvement Act (Public Law 108-426, 118 Stat. 2423-2429 (November 30,2004)). See also, 70 
Fed. Reg. 8299 (February 18,2005) redelegating the pipeline safety authorities and functions to the PHMSA 
Administrator. 

Category 2 pipeline that could affect a high consequence area (HCA). During the IMP 
inspection, records indicated that the written IMP was initially completed in April 2004, which 
exceeds the mandated Category 2 pipeline deadline of February 18,2003 by approximately 
thirteen months. 
In its Response, Respondent contends that although its IMP was not formalized until April 2004, 
the plan was being implemented prior to its formalization. However, Respondent did not provide 
any evidence to support its claim that its IMP plan was developed prior to its formalization. 
Accordingly, I find that Respondent violated 49 C.F.R. $ 195.452(b)(l) in the Notice. 
Item l(b) in the Notice alleged Respondent violated 49 C.F.R. 9 195.452(b)(2) by failing to 
identify pipeline segments that could affect an HCA by November 18,2002 as the regulation 
requires of an operator of a Category 2 pipeline. At the time of the IMP inspection, Respondent 
was unable to present any documentation showing that it had completed segment identification 
before the November 18,2002 due date for a Category 2 pipeline, exceeding the mandated 
deadline by approximately 17 months. 
In its Response, Respondent stated that when the plan was formalized in April 2004, it 
determined that it would not be necessary to distinguish segments on its single pipeline and 
integrity testing would be conducted for compliance on that one line. 
The rule requires that segments that could affect an HCA be identified as part of the IMP 
regardless of the size of the system or the extent of the integrity testing (assessment). These 
areas require a higher level of testing and remediation. 
Accordingly, I find that Respondent violated 49 C.F.R. $ 195.452(b)(2) in the Notice. 
Item 4 in the Notice Amendment alleged Respondent violated 49 C.F.R. $ 195.452(e) by failing 
to complete a risk analysis of its pipeline segments that could affect an HCA to determine 
baseline and continual integrity assessment schedules as the regulation requires of a pipeline 
operator. At the time of the IMP inspection, Respondent had not yet completed a risk analysis 
for this pipeline. 
In its Response, Respondent stated that it will do a comprehensive risk analysis in conjunction 
with the baseline assessment for its pipeline. 
A baseline assessment plan (BAP) is a required part of a complete IMP that should have been in 
place February 18,2003. A required part of a BAP under 195.452(c) is an evaluation of risk 
factors to establish an assessment schedule. Respondent did not provide supporting 
documentation that it has completed such an evaluation. 
Accordingly, I find that Respondent violated 49 C.F.R. $ 195.452(e) in the Notice. 
Item 5(b) in the Notice alleged Respondent violated 49 C.F.R. $ 195.452(f)(l)by failing to have 
a process in its IMP plan to identify segments that could affect HCAs. 

In its Response, Respondent stated that it had determined that pipeline segments were not 
necessary. 
49 C.F.R. Ħħ 195.452 does not allow an operator to decide whether or not pipeline segments need 
to be determined for its pipeline. Segments were required to have been delineated by November 
18,2002. 
Accordingly, I find that Respondent violated 49 C.F.R. 5 195.452(f)(l) in the Notice. 
Item 11 in the Notice alleged Respondent violated 49 C.F.R. 5 195.452(i)(2) by failing to 
evaluate the consequences associated with a pipeline release that could affect an HCA in 
determining preventive and mitigative future actions. It appeared that Respondent had 
incorrectly estimated the volume that could drain from its pipeline should a leak occur at the end 
of its pipeline in Guernsey, Wyoming. Respondent assumed that the pipeline would only drain 
from the first high point upstream from Guernsey, Wyoming, which is only about 2000 lineal 
feet of pipe. However, in reviewing the topography of this pipeline, it appears that where it 
crosses a divide approximately five miles from the Dwyer station, the pipeline generally drops 
about 550 vertical feet in eleven miles. Therefore, it appears that the drain down volume for this 
pipeline would exceed the volume contained in the 2000 lineal feet of pipe that is indicated in the 
IMP. 
Respondent did not contest this item and stated that a detailed analysis of the potential drainage 
volume from the "worst case" release will be incorporated into the IMP. 
Accordingly, I find that Respondent violated 49 C.F.R. 5 195.452(i)(2) in the Notice. 
These findings of violation will be considered prior offenses in any subsequent enforcement 
action taken against Respondent. 
ASSESSMENT OF PENALTY 
Under 49 U.S.C. 5 60122, Respondent is subject to a civil penalty not to exceed $100,000 per 
violation for each day of the violation up to a maximum of $1,000,000 for any related series of 
violations. 
49 U.S.C. 8 60122 and 49 C.F.R. 8 190.225 require that, in determining the amount of the civil 
penalty, I consider the following criteria: nature, circumstances, and gravity of the violation, 
degree of Respondent's culpability, history of Respondent's prior offenses, Respondent's ability 
to pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on 
Respondent's ability to continue in business, and such other matters as justice may require. The 
Notice proposed a total civil penalty of $10,000 for the violations. 
Item l(a) of the Notice proposed a civil penalty of $5,000 for violation of 49 C.F.R. 
5 195.452(b)(l), as more fully described in the Notice and as discussed above, in that 
Respondent failed to develop a written IMP by February 18,2003 as the regulation requires of an 

operator of a Category 2 pipeline that could affect an HCA. In its Response, Respondent 
contends that although its IMP was not formalized until April 2004, the plan was being 
implemented prior to its formalization. However, Respondent did not provide any evidence to 
support its claim that its IMP plan was developed prior to its formalization. Accordingly, having 
reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of 
$5,000 for the violation. 
Item l(b) of the Notice proposed a civil penalty of $5,000 for violation of 49 C.F.R. 
8 195.452(b)(2), as more fully described in the Notice and as discussed above, in that 
Respondent failed to identify pipeline segments that could affect an HCA by November 18,2002 
as the regulation requires of an operator of a Category 2 pipeline. In its Response, Respondent 
stated that when the plan was formalized in April 2004, it determined that it would not be 
necessary to distinguish segments on its single pipeline and integrity testing would be conducted 
for compliance on that one line. The rule requires that segments that could affect an HCA be 
identified as part of the IMP regardless of the size of the system or the extent of the integrity 
testing (assessment). These areas require a higher level of testing and remediation. Accordingly, 
having reviewed the record and considered the assessment criteria under 49 U.S.C. $ 60122 and 
49 C.F.R. 8 190.225, I assess Respondent a civil penalty of $2,500 for the violation. 
Accordingly, having reviewed the record and considered the assessment criteria, I assess 
Respondent a total civil penalty of $7,500. Respondent has the ability to pay this penalty without 
adversely affecting its ability to continue in business. 
Payment of the civil penalty must be made within 20 days of service. Payment may be 
made by sending a certified check or money order (containing the CPF Number for this 
case) payable to "U.S. Department of Transportation" to the Federal Aviation 
Administration, Mike Monroney Aeronautical Center, Financial Operations Division 
(AMZ-300), P.O. Box 25082, Oklahoma City, OK 73 125. 
Federal regulations (49 C.F.R. 8 89.21(b)(3)) require this payment be made by wire 
transfer, through the Federal Reserve Communications System (Fedwire), to the account 
of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions 
concerning wire transfers should be directed to: Financial Operations Division (AMZ- 
300), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 
25082, Oklahoma City, OK 73 125; (405) 954-8893. 
Failure to pay the $7,500 civil penalty will result in accrual of interest at the current annual rate 
inaccordance with 31 U.S.C. $ 3717,31 C.F.R. 8 901.9 and49 C.F.R. $ 89.23. Pursuant to 
those same authorities, a late penalty charge of six percent (6%) per annum will be charged if 
payment is not made within 1 10 days of service. Furthermore, failure to pay the civil penalty 
may result in referral of the matter to the Attorney General for appropriate action in a United 
States District Court. 
COMPLIANCE ORDER 
The Notice proposed a Compliance Order with respect to Items 4,5b, and 1 1 in the Notice. 

Under 49 U.S.C. Ħħ 601 18(a), each person who engages in the transportation of hazardous liquids 
or who owns or operates a pipeline facility is required to comply with the applicable safety 
standards established under Chapter 601. Pursuant to the authority of 49 U.S.C. Ħħ 601 18(b) and 
49 C.F.R. 9 190.217, Respondent is ordered to take the following actions to ensure compliance 
with the pipeline safety regulations applicable to its operations. Respondent must- 
1. 
With respect to Item 4 of the Notice, complete a risk analysis of its pipeline and 
associated facilities. An evaluation of Respondent's risk analysis risk factors must be 
useda. 
To help explain Respondent's choice of its baseline assessment method, and 
b. 
In the establishment of its assessment schedule; 
2. 
With respect to Item 5(b) of the Notice, Respondent must include a segment 
identification process in its IMP. Respondent's segment identification process musta. 
Include sources to be used for making HCA determinations such as National 
Pipeline Mapping System (NPMS), etc., 
b. 
Include guidance for the periodic reviews of HCA sources to ensure that 
segments reflect any HCA changes or additions, 
c. 
Ensure Respondent's each segment that either directly intersects an HCA or 
that affects an HCA is identified by beginning and ending points, and 
d. 
Include an overland spread analysis and water transport analysis. These 
analyses must be used to determine the beginning and ending points of the 
segments that could affect the Guernsey, Wyoming Other Populated Area 
HCA and possibly any HCAs downstream of Guernsey, 
e. 
Include an air dispersion analysis. Results from this analysis shall be used for 
determining if there are any additional segments that could affect HCAs, and 
f. 
Include an objective analysis of its Dwyer Pump Station facilities, including 
the breakout tank, to determine whether this facility will affect an HCA or not; 
3. 
With respect to Item 11 of the Notice, Respondent must conduct a rigorous drain 
down volume analysis for its pipeline at the North Platte River crossing and at 
Guernsey, Wyoming. Respondent must incorporate this rigorous drain down volume 
analysis for its pipeline into its IMP; 
4. 
Maintain documentation of the safety improvement costs associated with fulfilling 
this Compliance Order and submit the total to Director, Western Region, PHMSA. 
Costs shall be reported in two categories: I) total cost associated with 
preparation/revision of plans, procedures, studies and analyses, and 2) total cost 

associated with replacements, additions and other changes to pipeline inffastructure; 
and 
5. 
Within 60 days of receipt of the Final Order, submit documentation of procedures, 
costs and evidence of actions taken to the Director, Western Region, Pipeline and 
Hazardous Materials Safety Administration, 12300 West Dakota Avenue, Suite 1 10, 
Lakewood, Colorado 80228. Please refer to CPF No. 5-2005-5016 on any 
correspondence or communication in these matters. 
The Director, Western Region, may grant an extension of time to comply with any of the 
required items upon a written request timely submitted by Respondent demonstrating good cause 
for an extension. 
Failure to comply with this Order may result in the administrative assessment of civil penalties 
not to exceed $1 00,000 for each violation for each day the violation continues or in referral to the 
Attorney General for appropriate relief in a district court of the United States. 
AMENDMENT OF PROCEDURES 
Items 2(a-b), 3,5(a), 6, 7(a-c), 8,9(a-c), 10, 12(a-b), and 13 of the Notice alleged inadequacies in 
Respondent's procedures/plans and proposed to require amendment of Respondent's procedures 
to comply with the requirements of 49 C.F.R. 5 195.452. 
With respect to Notice Item 6, Respondent provided information, which Director, Western 
Region, PHMSA, reviewed, that its IMP states that the risk analysis team will be made up of 
qualified people. Accordingly, based on the results of this review and in light that Notice Item 6 
was generated fkom protocol 5.07, which is no longer a protocol question, I find no need exists to 
issue an Order Directing Amendment with respect to Item 6. 
Respondent did not contest the Items 9(a-c), 12 (a-b), and 13 in the Notice of Amendment. With 
respect to Notice Items 2(a-b), 3, 5(a)2, 7(a-c), 8, and 10, although Respondent provided 
information andlor explanation to the Director, Western Region, PHMSA, the 
information/explanation(s) provided does(do) not address all of the inadequacies described in the 
Notice. Accordingly, I find that Respondent's procedures as described in the Notice are 
inadequate to ensure safe operation of its pipeline system. Pursuant to 49 U.S.C. 5 60108(a) and 
49 C.F.R. 5190.237, Respondent is ordered to make the following revisions to its procedures: 
1. 
Amend its BAP to include an explanation of the processes used in determining its 
use of Subpart E pressure test as the baseline assessment method (Notice Item 2(a)); 
2. 
Amend its IMP to include an evaluation of risk factors for establishing an 
assessment schedule (Notice Item 2(b)); 
3. 
Amend its IMP to ensure that supporting justifications for revisions to its IMP are 
documented (Notice Item 3); 
Respondent did not provide any amended maps as evidence. 

4. 
Amend its IMP to show the drinking water HCA east of Guernsey, Wyoming that is 
shown on the NPMS (Notice Item 5(a)); 
5. 
Amend its IMP to either refer to, or provide guidance for, determining when 
anomalous conditions exist through information analysis of close interval surveys, 
potential third party strikes, etc. (Notice Item 7(a)); 
6 . 
Amend its IMP to provide guidance for corrective actions to be taken when 
anomalous conditions are discovered through information analysis (Notice Item 
7(b)); 
7. 
Amend its IMP to include the repair criteria listed in 49 C.F.R. 8 195.452(h)(4) 
(Notice Item 7(c)); 
8. 
Amend its IMP to include specific guidance to periodically review and recommend 
future assessment methods (Notice Item 8); 
9. 
Amend its IMP to include a process for identifying additional preventive and 
mitigative actions to protect HCAs in its IMP. Respondent's preventive and 
mitigative action identification process must include consideration of risk and must 
cover a broad spectrum of alternatives. Risk factors must play a role in determining 
additional preventive and mitigative actions. Respondent's preventive and 
mitigative action identification process must include preventive and mitigative 
actions taken to date (Notice Item 9(a)); 
10. 
Amend its IMP to include a process to evaluate Respondent's leak detection 
capabilities. The process must, at least, consider the following factors: length and 
size of the pipeline, type of product carried, the pipeline's proximity to an HCA, the 
swiftness of leak detection, location of nearest response personnel, leak history, and 
risk analysis results (Notice Item 9(b)); 
11. Amend its IMP to include a process to determine if emergency flow restriction 
devices could protect an HCA in the event of a hazardous liquid pipeline release. 
This determination must at least consider the following factors: the swiftness of leak 
detection and pipeline shutdown capabilities, the type of commodity carried, the rate 
of potential leakage, the volume that can be released, the pipeline profile, the 
potential for ignition, proximity to power sources, location of nearest response 
personnel, topography between the pipeline segment and the HCA, and benefits 
expected by reducing the spill size (Notice Item 9(c)); 
12. 
Amend its BAP to include qualifications, roles, and responsibilities of those who 
will be reviewing the results of its baseline assessment as well as any future 
assessments (Notice Item 10); 

13. 
Amend its IMP to state that if it is going to use an engineering justification to exceed 
an assessment interval, it must notify PHMSA 270 days before the end of the fiveyear 
(or less) interval of the justification for a longer interval, and additionally it will 
propose an alternative interval (Notice Item 12(a)); 
14. 
Amend its IMP to state that if it plans to have a longer assessment interval because 
of the unavailability of technology it must notify PHMSA 180 days before the end of 
the five-year (or less) interval that it may require a longer assessment interval, and in 
addition it will provide an estimate of when the assessment can be completed 
(Notice Item 12(b)); 
15. 
Amend its IMP to state that if technology other than pressure testing or in-line 
inspection is planned, notification to PHMSA is required at least 90 days before 
conducting the assessment (Notice Item 13); and 
16. 
Within 30 days following receipt of this Order, submit the amended procedures to 
the Director, Western Region, PHMSA. 
The Regional Director may grant an extension of time to comply with any of the required items 
upon a written request timely submitted by Respondent demonstrating good cause for an 
extension. 
Failure to comply with this Order Directing Amendment may result in the administrative 
assessment of civil penalties not to exceed $100,000 for each violation for each day the violation 
continues or in the referral the Attorney General for appropriate relief in a district court of the 
United States. 
Under 49 C.F.R. 5 190.2 15, Respondent has a right to submit a Petition for Reconsideration of 
this Final Order. The petition must be received within 20 days of Respondent's receipt of this 
Final Order and must contain a brief statement of the issue(s). The filing of the petition 
automatically stays the payment of any civil penalty assessed. All other terms of the Order, 
including any required corrective action and amendment of procedures, remain in full effect 
unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this 
Final Order are effective on receipt. 
DEC 1 1 " + 
Date Issued 
~ c t u 
Associate Administrator 
for Pipeline Safety