US files Shell suit

The US Department of Justice and the Environmental Protection Agency (EPA) have announced that the United States has filed a civil suit against Shell Pipeline Company and the Olympic Pipeline Company in connection with a June 1999 gasoline pipeline rupture near Bellingham, WA.

The complaint alleges that the rupture was caused by gross negligence in the operation and maintenance of the pipeline. The rupture resulted in the discharge of over 230,000 gallons of gasoline into Whatcom and Hanna Creeks and caused the deaths of three young people, as well as severe property and environmental damage.

'The gasoline spill in Washington state was a horrible, but preventable, tragedy that caused the death of three young people and endangered an entire city. We've filed this suit to ensure that measures are taken to help prevent such an incident from ever happening again,' said Tom Sansonetti, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division.

'We will do everything in our power to hold companies accountable for maintaining their operations in a safe and environmentally sound manner and will seek severe penalties against those whose operation practices endanger the public,' said Sylvia Lowrance, EPA's Principal Deputy Assistant Administrator for Enforcement and Compliance Assurance.

The lawsuit alleges gross negligence on the part of Shell and Olympic and seeks civil fines of up to approximately $18.6 million against each company, based on the quantity of gasoline discharged. To determine the actual amount of the penalty, the court will weigh a variety of factors including the seriousness of the incident, the degree of each company's fault, other penalties paid for the same incident and each company's history of prior violations.

The lawsuit also seeks to impose pipeline management, maintenance and repair requirements on Olympic to prevent or minimise future oil spills.

The government alleges that the gross negligence of Shell and Olympic included inadequacies in the design, construction and operation of a pump station on the pipeline system. Further, the United States asserts that the companies failed to supervise construction activity near the pipeline that caused the damage contributing to the rupture and to detect and repair the damage before the rupture. The suit also alleges that there was an inadequate computer system used to monitor and control the pipeline, insufficient operator training and operator error.

The rupture resulted in release of enough gasoline to form a layer approximately three inches thick on the surface of Hanna and Whatcom Creeks over a distance of approximately 1.33 miles. Within 45 to 90 minutes of the rupture, the gasoline ignited, resulting in a fireball that travelled along Whatcom Creek for more than a mile, devastating everything in its path and generating a plume of smoke approximately six miles high.

As a result of the incident, three people were killed, including two ten-year-old boys, and at least nine others were injured. In addition, one home was completely destroyed. The gasoline spill and resulting fire killed more than 100,000 fish and other aquatic organisms in the impacted area. Other species of wildlife also were killed.

The habitats for these aquatic organisms and wildlife also were damaged or destroyed, necessitating extensive restoration work to rebuild an environment in which those organisms could live. The fire destroyed 2.5 miles of riparian vegetation along both banks of Whatcom Creek and also killed and injured mature growth trees within a burn zone encompassing 26 acres.

Olympic owns the pipeline. At the time of the rupture, Shell's corporate predecessor, Equilon Pipeline Company, along with ARCO and GATX, owned Olympic. Equilon managed the pipeline under an operating agreement with Olympic. In 2000, BP/Amoco Corporation acquired ARCO and GATX's shares of Olympic, became Olympic's controlling shareholder, and took over operations. Shell still owns over one-third of Olympic.

The civil lawsuit is authorised by the US Clean Water Act as amended by the US Oil Pollution Act of 1990. The US Congress enacted the Oil Pollution Act of 1990 in the aftermath of the Exxon Valdez oil spill, to significantly increase the civil penalties for oil spills pursuant to the Clean Water Act.

The action is separate from the criminal proceedings being pursued by EPA and the Department of Justice in connection with the incident. An indictment was issued against Shell, Olympic, and three of their employees on September 13, 2001. The criminal case still is pending.