Olympic Pipeline Co., along with three current and former pipeline employees, and ex-pipeline operator, Equilon Pipeline Co. LLC, pleaded guilty and no contest, respectively, in a Seattle federal courtroom Wednesday to criminal charges stemming from the fatal rupture and subsequent gasoline spill and explosion on the Olympic petroleum products line in Bellingham, WA, in mid-1999.

Appearing before U.S. District Judge Barbara Jacobs Rothstein, Olympic, through its President Larry Peck, admitted it “knowingly and willfully” violated minimum pipeline safety standards under the Hazardous Liquid Pipeline Safety Act; “negligently” caused the discharge of a harmful quantity of gasoline into a navigable waters; and unlawfully discharged refuse matter into a navigable water and tributary. Each count carries a maximum corporate penalty of either $500,000, or the “greater of twice the pecuniary gain or loss from the offense,” and a five-year period of corporate probation.

As part of the pipeline’s plea agreement with the U.S. Attorney’s Office in Seattle, Olympic agreed to pay a criminal fine of $6 million, a civil penalty of $5 million to resolve pending state and federal civil proceedings and to comply with an injunctive relief program, which will require it to conduct specific inspection and damage prevention measures on its 400-mile pipeline section in Washington State. It’s estimated the injunctive relief program will cost Olympic $15 million to carry out.

Equilon Pipeline, through a representative of Shell Pipeline Co. LP (successor-in-interest to Equilon), turned in a plea of no contest to charges that the company “knowingly and willfully” violated a regulation under the Hazardous Liquid Pipeline Safety Act; and “negligently” caused the discharge of a harmful quantity of gasoline into a navigable water. Equilon faces a maximum corporate fine of either $500,000, or the “greater of twice the pecuniary gain or loss from the offense,” and five years of corporate probation.

The no contest plea has the same effect as a guilty plea in a criminal case, although it is generally not admissible in subsequent civil litigation, according to federal prosecutors.

At the time of the rupture and explosion, Equilon Pipeline — a joint venture between Shell and Texaco — was a minority owner and operator of the Olympic pipeline, a company spokesman said. Since then, Shell has bought out Texaco’s interest, bringing its total ownership share to 37.5%, and Equilon Pipeline has been re-named Shell Pipeline. BP is the majority owner with 62%, which it acquired after the pipeline mishap, and is the current operator of Olympic.

In its agreement with federal prosecutors, Equilon agreed to pay a criminal fine of $15 million, a civil penalty of $10 million to settle state and federal civil proceedings, and to comply with a pipeline integrity/spill mitigation program to be entered in a pending federal civil proceeding. The mitigation plan is expected to cost Shell, as Equilon’s successor-in-interest, $61 million. Shell Pipeline also has agreed to carry out specific inspection and damage prevention measures on its 2,100-plus miles of petroleum products pipelines throughout the United States.

The combined criminal and civil penalties levied on the two companies, amounting to $36 million, are the biggest ever obtained in a pipeline rupture case, federal prosecutors said.

Frank Hopf Jr., a former Olympic manager, and Ronald Dean Brentson, Olympic’s supervisor of product movement, each pleaded guilty to the felony charge of “knowingly and willfully” violating a regulation under the Hazardous Liquid Pipeline Safety Act. They each face up to five years in prison and fines of $250,000. Kevin Scott Dyvig, Olympic’s control operator, pleaded to the misdemeanor charge of negligently discharging gasoline into navigable water, a violation of the Clean Air Act. He faces up to one year in prison and a $100,000 fine.

A federal grand jury in Seattle returned the indictments against Olympic, Equilon and the three pipeline employees in mid-September. They came more than three years after the Olympic line ruptured and released about 236,000 gallons of gasoline into nearby creeks, causing an explosion that resulted in the deaths of two boys and a young man.

The rupture and explosion were investigated by special agents with the Environmental Protection Agency and the Department of Transportation (DOT), and DOT’s Inspector General’s Office, which received assistance from the Federal Bureau of Investigation, Washington State’s Department of Ecology and the Bellingham Police Department.

The three deaths arising from the Olympic pipeline blast in 1999 and the 12 fatalities caused by the explosion on El Paso Natural Gas pipeline more than a year later in New Mexico prompted Congress to pass much tougher pipeline safety legislation in November.

When asked if El Paso and its officials could face the same fate as Olympic, a gas pipeline source said, “I don’t know the answer to that.” He noted that violations of the Clean Water Act and the Hazardous Liquid Pipeline Safety Law wouldn’t apply in El Paso’s case, but he speculated that violations of the Pipeline Safety Act may be relevant.

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