Friday, June 2, 2000, 11:17 a.m. Pacific

Federal regulators seek $3.05 million penalty against Olympic Pipe Line

by Brier Dudley Seattle Times staff reporter

Federal regulators announced this morning that they are seeking a record $3.05 million penalty against Olympic Pipe Line in response to its deadly rupture in Bellingham last June.

"Tragic events like this pipeline failure must never happen again," U.S. Transportation Secretary Rodney Slater said.

It's the largest penalty in the history of the agency's pipeline safety program.

"In cases like this, where a pipeline operator fails to take appropriate actions to ensure safety, we will penalize the company to the fullest extent possible to ensure full compliance with federal safety rules," said Kelley Coyner, the department administrator in charge of pipeline safety.

Here are the citations against Olympic and proposed fines:

Failing to conduct adequate damage prevention efforts, including failing to ensure that a representative was present during third-party excavation near its pipeline: $25,000.

Discovering an unsafe condition during inspections and continuing to operate the pipeline without correcting the problem: $500,000.

Failing to ensure that employees on duty at the time of the pipeline failure were trained according to federal regulations: $500,000.

Olympic's computer operated irregularly, then the company restarted the pipeline without ensuring it could be operated safely: $25,000.

Failing to modify its operations, maintenance and emergency plans when it added a new storage facility near Mount Vernon: $500,000.

Failing to adequately test relief valves at the new terminal: $500,000.

Failing to respond, investigate and correct a series of unintentional valve shutdowns prior to the rupture: $500,000.

Failing to maintain the required daily operating records of discharge at each pump station and of abnormal events: $500,000.

Olympic was notified this morning and had not yet reviewed "the basis" used to levy the fine, manager Carl Gast said in a prepared statement.

"Therefore any further comment would be premature at this point," he said.

"I would like to point out," Gast added, "that during the past several months, Olympic has worked very hard to comply with all of the safety directives issued by the Office of Pipeline Safety, and even now is engaged in a comprehensive internal inspections program of its entire 400-mile network."

Olympic, a subsidiary of some of the world's largest oil companies - Shell, Arco, Texaco and GATX Terminals - has the right to contest each penalty to reduce the amount of the proposed fines.

Last winer Olympic appealed a $120,000 fine issued by the state Department of Ecology for a subsequent spill at its Renton headquarters.

The appeal is still pending.

Sections of the pipeline remain shut down as the investigation into the June 10 explosion continues.

Olympic spilled over 200,000 gallons of gasoline into Whatcom Falls Park, where it was ignited by two 10-year-old boys who died of burns. An 18-year-old fisherman was overcome by fumes and drowned.

Members of Congress working on pipeline issues were pleased but said the fine doesn't lessen the need for stricter pipeline safety laws.

"I think OPS has really taken an important step in a very difficult case and has done the right thing," said Sen. Patty Murray, D-Washington.

U.S. Rep. Jay Inslee, D-Bainbridge Island, said Coyner still needs to order further testing of Olympic.

http://seattletimes.nwsource.com/news/local/html98/pipe_20000602.html

-- (1@2.3), June 02, 2000