Fines total $18 million for pipeline explosion

By Rebecca Cook

Associated Press

OLYMPIA – State and federal agencies will fine Olympic Pipe Line and two other companies a total of $18 million for the June 1999 pipeline rupture that led to an explosion and the deaths of two 10-year-old boys and a young man in a Bellingham park, Department of Ecology Director Tom Fitzsimmons said today.

Olympic Pipe Line has agreed to pay $10 million in an agreement negotiated with the state and the federal Environmental Protection Agency.

The state also is charging the three companies involved in the spill with negligence, and fining them a total of $8 million.

The companies are Renton-based Olympic; Houston-based Equilon Pipeline Co., the majority owner of Olympic at the time of the blast; and IMCO General Construction of Bellingham, which performed excavation work over the pipeline in 1994 that scraped and gouged the line in several places, according to the Department of Ecology. IMCO has denied the allegations.

“The explosion was a tragedy that no amount of money can erase,” Gov. Gary Locke said in a news release. “I hope the fines for these companies provide an incentive to other businesses that deal with potentially dangerous substances to do all within their power to keep their employees and our communities safe.”

An Ecology Department investigation found that employees were poorly trained, did not properly monitor the pipeline and that management at Olympic and Equilon tolerated design problems at a nearby pumping station.

“The degree of negligence in failing to prevent the spill, along with the severe consequences, require the maximum daily penalty,” Fitzsimmons said.

The details are still being worked out in the $10 million settlement between the government and Olympic Pipeline and BP Pipelines North America, which took control of Olympic last year.

Olympic has estimated its costs from the rupture could top $70 million, including wrongful-death claims.

State and federal officials are still negotiating with Equilon, a Houston-based joint venture of Shell and Texaco whose 37.5 percent share of Olympic was a majority interest in June 1999. Those discussions could lead to a settlement or to the filing of civil actions against Equilon, The Seattle Times reported Tuesday.

Equilon has contended it was not operating the pipeline at the time of the rupture, merely lending six supervisory and administrative employees to Olympic under the partnership. Those employees included the president, three vice presidents and the head of environmental compliance.

“We hope to reach a satisfactory conclusion for everyone,” Equilon spokeswoman Barbara Kornylo said of the talks with state and federal officials.

It remains undecided how the $10 million BP has agreed to pay will be split between the state and federal governments. Olympic also was fined a record $3 million by the federal Office of Pipeline Safety in a separate penalty last year.

The focus of the state and federal investigations, and the lawsuits, has been whether Olympic failed to properly inspect anomalies in the 400-mile system that runs through Western Washington into Oregon. Investigators also have examined what Olympic knew about a faulty valve and whether employees in the company’s control room made proper decisions the day of the rupture.

The rupture June 10, 1999, spilled more than 200,000 gallons of gasoline into Bellingham’s Whatcom Creek. The spill fueled a fireball that fatally burned 10-year-olds Wade King and Stephen Tsiorvas. Liam Wood, an 18-year-old who was fishing, died after fumes overcame him.

BP took over Olympic last July after acquiring Arco, which had been a minority partner in Olympic. BP also bought the shares of another minority partner, which gave it 62.5 percent ownership.

BP has bolstered the inspection, testing and operation of the line and replaced Equilon officials who held management positions.

Equilon has said Olympic was a separate entity at the time of the rupture, solely responsible for the operation of the pipeline. The company has acknowledged its position “conflicts with statements on record” about the operation of the pipeline.

The issue of who operated the line could have major implications in the criminal investigation, which is being conducted by the U.S. attorney’s office in Seattle, and in the wrongful-death cases filed by the King and Tsiorvas families. A grand jury is expected to finish hearing evidence by late summer.

Olympic has filed suit against Equilon’s insurance companies.