In deal, Olympic Pipe Line, 3 workers admit guilt in blast
A 1999 gasoline spill and explosion that killed three people near Bellingham will cost two pipeline companies $36 million -- the largest-ever penalty imposed in such an accident -- and could mean fines or prison time for three employees, according to a criminal plea deal announced yesterday.
A civil settlement to be finalized next week would also require Olympic Pipe Line Co. and Equilon Pipeline Co. to pay about $76 million more for an extensive inspection and damage-prevention program. Equilon was the majority owner of Olympic at the time of the accident and ran the company then.
The mother of Liam Wood, 18, who was fly-fishing on the river and who was overcome by gasoline fumes and drowned, said yesterday's agreement in the criminal case sends a "clear message to the industry that they need to make some really significant, positive changes."
"Nobody is going to make this situation better for me," Marlene Robinson said. "In my mind, these charges weren't about making me feel better, but about making sure this doesn't happen to someone else in the future."
The pipeline rupture June 11, 1999, sent 236,000 gallons of gasoline into Whatcom and Hannah creeks. Stephen Tsiorvas and Wade King were playing on the riverbank when the water turned into a fireball, leaving the 10-year-old boys fatally burned.
Yesterday, after hearing the series of pleas in U.S. District Court in Seattle, the boys' parents were torn about whether the three Olympic workers should face prison time.
"These three guys are really victims of an industry. It's the industry that needs to change," said Frank King, clutching his teary-eyed wife, Mary, who said that every day without her son is a nightmare.
"Revenge says we want them to go to jail," he said. "Logic says that isn't going to make any changes."
Stephen's mother, Katherine Dalen, wishes the men would be ordered to pay visits to other oil companies and warn, "Our mistakes caused three young men to die."
U.S. District Judge Barbara Rothstein will ultimately decide the punishment of the companies and the three workers at sentencing April 11. The criminal trial had been set for next month.
Now former Olympic manager Frank Hopf Jr., 55, of Texas and former Olympic supervisor Ronald Brentson, 52, of Kent would face up to six months behind bars under federal sentencing guidelines, although the maximum punishment is five years in prison and a $250,000 fine.
Both pleaded guilty for failing to "establish and conduct a continuing training program" under federal pipeline-safety regulations.
Kevin Dyvig pleaded guilty to a misdemeanor violation of the Clean Water Act. The 45-year-old Buckley man faces up to a year in prison and a $100,000 fine.
Equilon and Olympic both entered pleas to violating pipeline-safety regulations regarding the training of personnel, a felony, and one misdemeanor count of violating the Clean Water Act.
Olympic, through President Lawrence Peck, also pleaded guilty to "unlawfully discharging refuse matter" into a waterway without a permit.
Although Olympic pleaded guilty to the charges, Equilon pleaded no contest, which has the same effect as a guilty plea but cannot be introduced in civil proceedings. The companies face additional lawsuits, including an effort by Arco to seek compensation for lost revenue when the pipeline was temporarily shut down.
Equilon will pay a criminal fine of $15 million. About $5 million will go to Bellingham to fund a community project. Mayor Mark Asmundson speculated that the money will fund a park or outdoor recreation project, but said he will consult with the families of the victims first.
"My priority is to work with the families to make sure that whatever the community project is, it's something they believe is worthy and appropriate," he said.
Equilon must also pay a $10 million civil fine, to be split between the federal government and the state.
In a statement yesterday, company managers said they hope that "resolution of the criminal case will help continue the healing process for the families and communities that were so deeply affected by this tragedy."
For the pending civil settlement, Equilon -- now owned by Shell Oil Co. -- is expected to agree to spend more than $61 million toward inspection and damage-prevention measures for Shell's more than 2,100 miles of pipelines in the United States.
Olympic agreed to pay a criminal fine of $6 million and a civil penalty of $5 million. The civil settlement will require it to impose an estimated $15 million worth of safety measures on 400 miles of fuel lines in Washington and part of Oregon.
Peck said company officials "believe this is a fair and just settlement and that it brings us all closer to moving beyond this terrible tragedy."
Both companies would be on probation for five years.
U.S. Attorney John McKay of Seattle said the settlement marked the first time a pipeline company has been convicted under the Pipeline Safety Act, which was established in 1979. He said the explosion was "a profound event across the board."
"We know that nothing we say or do can repair the damage that was caused to these families," he said, while calling the agreement a significant step "toward making these companies safer."
Yesterday's plea agreements came eight months after Olympic, Equilon and others agreed to pay the families of Stephen Tsiorvas and Wade King $75 million. Woods' family reached a separate, undisclosed settlement.
Frank King now hopes more information will come out about what went wrong -- the defendants will have to describe their conduct in the coming months as part of their pleas.
He will continue his fight for more stringent pipeline-
safety laws and keep urging lawmakers to take action,
saying, "I'm not ready to ride off into the sunset yet."
The Olympic pipeline explosion triggered steep fines and criminal charges for the company and reform in the way all pipelines are monitored. Among the developments:
P-I reporter Tracy Johnson can be reached at 206-467- 5942 or firstname.lastname@example.org
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