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Department of Ecology News Release - June 20, 2001
01-102
BELLINGHAM - Three companies share responsibility for causing the rupture and explosion of the Olympic pipeline in June 1999 near Bellingham, and they will share a $7.86 million penalty from the state for the environmental laws they broke.
Department of Ecology Director Tom Fitzsimmons visited the site of the spill today to announce the results of his agency's investigation and the penalty amount.
"On June 10, 1999, at least a quarter-million gallons of gasoline burst out of the Olympic pipeline in Bellingham and destroyed the peace of mind of an entire community," said Fitzsimmons. "Three young people died, three miles of creek were charred or contaminated, and three companies had a hand in it."
The companies are: Olympic Pipe Line Co. of Renton; Equilon Pipeline Company, LLC, based in Houston, Texas; and IMCO General Construction, Inc. of Bellingham.
Equilon was the pipeline operator, but Olympic also had significant responsibility for how the pipeline was run. IMCO performed excavation work over the pipeline in 1994, scraping and gouging the pipeline in several places. The rupture in 1999 occurred at one of the gouges.
Department of Ecology (Ecology) investigators found that the pipeline operators did not adequately monitor nor review the excavation work. In fact, in 1996 and 1997 the companies found anomalies in the pipe at or near where the pipeline eventually ruptured, but no repairs were made.
For six months before the rupture, Olympic's and Equilon's management tolerated design problems and repeated pressure fluctuations at a nearby pumping station. Also, the employees were poorly trained and could not respond appropriately when trouble inevitably occurred.
"The explosion was a tragedy that no amount of money can erase," said Gov. Gary Locke. "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."
The penalty calculations by Ecology are based on a combination of factors, including the size of the spill, the degree of harm on public health, the compliance history of the companies, the speed and thoroughness of the cleanup, the sensitivity of the environment that was damaged, the number of days water quality was impaired, and the degree of culpability.
Fitzsimmons pointed out that the rupture caused one of the largest petroleum spills in the history of the state. It seriously damaged Whatcom and Hanna creeks for three miles, as well as the soils and water underneath the area, and also caused three deaths.
"This was a spill of the highest severity," he said.
Based on information collected through the investigation, Ecology will charge the companies with negligence in causing the spill. A separate criminal investigation by federal agencies and other civil investigations could eventually result in more-serious charges.
Under the state's oil-spill prevention law, negligence carries a fine of up to $20,000 for each day that the spill poses risks to the environment.
"The degree of negligence in failing to prevent the spill, along with the severe consequences, require the maximum daily penalty," said Fitzsimmons.
To determine the total penalty amount, Ecology multiplied the maximum daily penalty ($20,000) by the number of days that water quality in Whatcom and Hanna creeks violated state standards - which was 393 days.
Fitzsimmons also announced today that Ecology and the federal Environmental Protection Agency (EPA) have already reached a tentative settlement with Olympic Pipe Line Co. The company has agreed to pay $10 million to satisfy its financial obligations to both agencies. How the money will be allocated is still being determined.
"We are seeking innovative settlements with all three companies that will funnel most of the state's share of the penalty directly into the Bellingham community for environmental and pipeline-safety projects," said Fitzsimmons. "We hope the settlement with Olympic will go forward quickly and will provide benefits to the community sooner than if we had to go through protracted negotiations."
Beginning June 5, Ecology entered into a 90-day negotiation period with all three companies in an effort to resolve their penalty liabilities without protracted litigation. At the end of 90 days, Ecology will impose penalties on any company that hasn't reached a settlement.
EPA is operating under federal laws and procedures and will announce the results of its investigation and settlement negotiations at a later date.
Media contact: Sheryl Hutchison, Communications Director, 360-407-7004
Joan Pelley, Public Information Manager, 360-738-6247
Copyright © Washington State Department of Ecology. See http://www.ecy.wa.gov/copyright.html.
