For our 300th episode, the Pipeliners Podcast is rebroadcasting Episode 79 – our conversation with Larry Shelton about the Bellingham Incident in Bellingham, Washington. Due to the significance of the incident, our conversation with Larry is one of the most important episodes we have produced out of the last 300, and we believe it’s one that everyone in the pipeline industry should listen to.

On the 20-year anniversary of the Bellingham Incident in Bellingham, Washington, Pipeliners Podcast host Russel Treat welcomed retired pipeline professional Larry Shelton to share his first-hand recollections and reflect on the importance of pipeline integrity management.

Operations Excellence (OE) is the driving force of Mr. Shelton’s story. He defines OE as “achieving business goals with no harm to any person, property, or the environment.” Simply stated, the mantra is “Business Goals, No Harm.”

The mantra has a deep emotional connection for Mr. Shelton, whose professional career was forever-changed in 1989 when the Exxon Valdez oil spill in Alaska created a permanent mark for pipeliners such as himself working for the Alyeska Pipeline Service company.

Ten years later, the Bellingham Incident forever altered the community of Bellingham, Washington. The Olympic Pipeline ruptured on June 10, 1999, due to a similar series of “domino” events as Exxon Valdez. At the time, Mr. Shelton was ARCO’s pipeline integrity representative. He walked the path of the gas rupture that cost human life. In those moments, he saw the human element of operational excellence, realizing that it dwarfs numbers, records, and programs.

In the 20 years since the Bellingham Incident, Mr. Shelton has served on numerous industry committees and work groups, including chairman of the API Operations Technical Group. He also served on the Office of Pipeline Safety’s Hazardous Liquid Technical Advisory Committee. In his experience, Mr. Shelton has come to realize that “Business Goals, No Harm” is a difficult balance, but it must be done. Listen to his poignant reflections in this sobering and valuable episode of the Pipeliners Podcast.

Bellingham, A Personal Account: Show Notes, Links, and Insider Terms

• The Bellingham Pipeline Incident (Olympic Pipeline explosion) occurred on June 10, 1999, when a gas pipeline ruptured near Whatcom Creek in Bellingham, Wash., causing deaths and injuries. Three deaths included 18-year-old Liam Wood and 10-year-olds Stephen Tsiorvas and Wade King.
• The NTSB accident report attributed the cause of the rupture and subsequent fire to a lack of employee training, a faulty SCADA system, and damaged pipeline equipment. [Read the NTSB Pipeline Accident Report]
  • Larry Shelton spoke on the importance of Integrity Management at the 2012 Pipeline Safety Trust Conference. [Video: Watch His Presentation]
  • The 2019 API Pipeline Conference was held April 9-11 in St. Louis. A letter from the father of one of the Bellingham victims, Liam Wood, was read aloud during the conference.
• The Alyeska Pipeline Service Company owns and operates the Trans-Alaska Pipeline System (TAPS) that transports product from Prudhoe Bay to the Marine Terminal at Valdez on Prince William Sound.
• Thomas Barrett is a former Vice Commandant of the U.S. Coast Guard, was the first officially appointed PHMSA administrator, and served as Deputy Secretary of the U.S. DOT. Mr. Barrett currently serves as the president of Alyeska Pipeline Service Company, overseeing operations for TAPS.
• The Exxon Valdez Oil Spill occurred on March 24, 1989, when an oil tanker struck Bligh Reef at Prince William Sound, leading to approximately 11 million U.S. gallons of crude oil spilling into the water.
• Operations Excellence (OE) can be defined as achieving business goals with no harm to any person, property, or the environment.
• NEWLY ADDED: Death Cab for Cutie released a new song, “Kids in ’99,” that pays tribute to the boys who died in the pipeline incident.

Bellingham, A Personal Account: Full Episode Transcript

Larry, welcome to the Pipeliners Podcast.

Larry Shelton:  Well thanks for having me, Russel.

Russel:  You’re an operations guy. Maybe you could tell us a little bit about your background and how you got into pipelining.

Larry:  Yeah, sure. I was actually in Alaska in the Air Force building radio and television stations for American Forces Radio and Television when Alyeska, a pipeline service company — they’re operators of the Trans Alaska Pipeline — were increasing capacity and adding a couple of pump stations.

I had an opportunity to interview with an engineering manager, who’s the product manager for building the new pump stations, and I actually ended up interviewing with an operations manager who hired me for his crew as a station operator. That was the start of my life as a pipeliner.

That term is significant to me. In the Army, everyone from a private to a general is known as a soldier whether they carry a weapon or a computer. Everyone in the Navy is a sailor. In this business, you’re a pipeliner. It’s not just what you are. It’s who you are.

I worked as a pipeliner, as a technician and project manager. Then I went into supervision. Then I was district manager responsible for pipeline operations from Prudhoe Bay down to the Yukon River when I was loaned to ARCO as part of a management development program.

ARCO at that time was one of the owners of the Trans Alaska Pipeline system. ARCO sent me to Texas to manage their Gulf Coast marine terminals and offshore pipelines during the time that I was on loan. After 18 months, that was over.

I went back to Alaska for six months to help implement Alyeska’s version of an operations excellence program. After grilling Christmas dinners for two years, we decided to return to Houston. I went back to work for ARCO as a regular employee this time and managing health, safety, environment, and OE (operations excellence).

Russel:  That’s actually interesting to me, Larry, this idea of operations excellence. It’s near and dear to my heart. I’m wondering if you could maybe give us a little background or maybe your perspective on what is operations excellence and why is it important?

Larry:  Certainly, nobody gets hurt is part of it. That was one of the catchphrases that we had. If we just shut it all down and stayed home, we could keep everybody from getting hurt. That wouldn’t pay the bills for long. That wouldn’t make it a successful business. There’s got to be more to it.

I define OE as achieving our business goals with no harm to any person, property, or the environment. Actually, I state it in four simple words: business goals, no harm.

Russel:  I don’t think I’ve ever heard that before, Larry. I think that’s really excellent. I tend to state it as on-time, on-spec delivery without incident. I actually think yours is better. [laughs] I’m going to co-opt it. I’m using it now. I’ll attribute it.

Larry:  Permission granted. [laughs]

Russel:  Thank you very much.

Before we got onto the podcast, we were talking a little bit. You brought up this idea of significant emotional event. You and I both have a background in the Air Force. Part of the leadership training in the Air Force is this idea of what is a significant emotional event.

Maybe you could unpack that for us a little bit.

Larry:  Yeah, sure.

A significant emotional event is one of those things that happens in your life, something you experience that has a very deep impact, down to the deepest emotional level. The result of it is that it changes the way you perceive things, the way you think, the way you behave for the rest of your life.

Everybody has had significant emotional events. Everybody can look back at something that happened that changed the way they think and the way they behave.

There have been a number of significant emotional events that I have seen in other people in the industry and experienced myself, as well.

Russel:  I think an easy example of that is when your first child comes along. That’s obviously a significant emotional event. It changes the whole way you perceive everything.

Larry:  It is. For me, that was my first day as an adult.

Russel:  That’s very well said.

How does this play? Another good point you made, too, is this idea of we’re all pipeliners. How does a significant emotional event play into pipelining?

Larry:  It would have been, as I said, a number of incidents that I’ve seen happen in the pipeline industry over time that certainly affected people who were in a leadership position and changed the way that they managed the industry. Some of them in very influential positions.

As a result, they became people who shaped the industry as a result of these, and myself, as well.

The thing about the pipeline industry and what makes it different from other parts of the oil industry is where we operate. ARCO was part of an integrated oil company. Parts of the company involved refineries.

The people who went through the gate of that refinery every day knew that there was some risk involved in it. They knew what was being done to manage the risk. They accepted that when they went into that gate.

What’s different about the pipeline industry is that we operate in people’s backyards, in their communities. We run through schoolyards. When we have an incident, it’s with people who haven’t been a part of the risk analysis and the opportunity to be a part of the risk management.

We’ve got a higher level of responsibility to those people. When we do have an incident, and we do see how we affect a community, there is a lot of emotion involved with it.

Russel:  Yeah. I think that’s well said. When you have one of these incidents and you had no idea that there was a pipeline in your neighborhood, that’s very different. A local experience about a local community is also always very different.

I think that’s well said.

What would you say are some of the pipeliner, oil and gas-related events that affected your experience leading up to…I’m going to ask you here in a second about your experience with Bellingham. Leading up to that, what were some of the events that affected your experience?

Larry:  One of the things that affected my experience early on was in March of 1989. We were in Florida on a family vacation. We had taken delivery of a motor home down there in Florida. I had taken three weeks off from work to do all this.

Just before I left work, we had a situation at pump station two, where I was a supervisor at the time, involving a valve out in the yard where we noticed a defect in the weld. We were deciding how we were going to mitigate that weld defect when I left on vacation.

In Florida, in a campground with a brand-new motor home, I had just put in my new Alaska license plates on the motor home. Somebody walked by and said, “You’re from Alaska, huh?” I said, “Yeah.” He said, “Wow, that’s really something. The biggest oil spill in history.”

I thought, “What?” I just knew that valve had come apart. I went running straight to the community center in there. I could see the newspaper box as I was approaching. Looking through the window in the front of it, in big letters, were the words, “Tampa Man at the Helm.”

Of course, it wasn’t the valve at pump station two. It was the Exxon Valdez that had run aground. That was a significant emotional event for all Alaskans, especially Alaskans who lived on, or around, or experienced, even, Prince William Sound. It’s such a pristine paradise. It’s an incredible place.

To know that it had been fouled and working for the company that had been a part of the incident and was catching a lot of the blame for the slow response when the Exxon Valdez ran aground was just devastating to all of us and to all Alaskans.

When people started to find out who I worked for, at the time, too, a lot of the anger got directed that way. My kids, three of the kids played hockey. One was a figure skater. We were going to the ice skating rink all the time. Parents get to know each other. People ask, “What do you do?”

I started telling people, “I sell shoes,” because the conversation about the oil spill was just too intense.

We learned a lot from that. We learned the importance of clear policies and procedures. We learned the importance of auditing to make sure that they were actually effective and actually being followed.

A person who said something that really struck home with me at that time was Captain [Thomas] Barrett, who the Coast Guard had sent to manage the oil spill as the federal on-scene coordinator. Captain Barrett later became Admiral Barrett. He was the head of PHMSA for a while and for quite some time now has actually been the president of Alyeska Pipeline Service Company.

He said something once that really stuck with me and really rings true in our industry. He said that after thousands of safe and uneventful tanker transitions in Prince William Sound, when the Exxon Valdez ran aground, he learned that in this industry 99.9 percent is not an A. It’s a disaster.

Russel:  I say this often, Larry, that being a pipeliner’s kind of like being an offensive lineman. The only time you get your number called on the PA system is when you screw up.

Larry:  Yeah, that’s right.

Russel:  The best operators are the ones you never hear about.

Larry:  Exactly right.

Russel:  To some degree, if you’re a — this is a bit of an overstatement, of course — a pipeline operator and a well-known name, that’s not a good thing because if you’re doing your job and doing it well, people shouldn’t know you.

Larry:  That’s exactly right. There used to be an industry publication called, “Quiet Steel.” After a series of events another publication came out from another direction. It was called “Quiet No More.” It speaks exactly to what you were saying.

Russel:  I think that’s a really good tee up, because I think anybody who was alive when the Exxon Valdez happened has some sense of how significant an event that was. Certainly, if you’ve ever been up to Alaska and you’ve been to some of those wilderness areas, you have a sense of how the native people were impacted by it.

I think you only have a sense. I don’t think you can really understand that unless you’re part of that community and grounded in that area. You just can’t understand it.

Larry:  That’s a fact. That’s correct.

Russel:  I asked you on to talk about Bellingham. As this episode comes out, we’re right at the 20th anniversary. Bellingham was June 10th, 1999. I think I’m going to step back. I’d ask you to tell us your story about your involvement with Bellingham.

Larry:  Sure.

As you said, June 10th, 1999, that was a pivotal moment in our industry. For those who may not have been part of the industry at that time, what happened was that the Olympic Pipeline ruptured at a location where there had been excavation damage. That damage had gone undetected.

This was a classic demonstration of what I call the domino theory that we saw in the Exxon Valdez and every other disaster in our industry where it wasn’t just one thing that happened that caused it, but a whole series of little things that individually don’t seem to be significant. When you line them all up as dominoes, one goes over and they all go all the way to the end where there’s a disaster waiting. Remove any one of those dominoes, it doesn’t happen but they were all lined up.

The first domino in the case of Bellingham was a pipeliner who had too much on his plate. He had been assigned to monitor third-party excavations, but the two excavations that he been assigned to that day were about 50 miles apart. He checked in at 7:30 in the morning in Bellingham, where they were excavating at the water plant.

The pipeline ran right through the water plant at that point. They were putting additional pipes into the water plant. He went there, checked, saw what they were doing, talked to them about their plan for the day, and he left and went to the other site, as I said, about 50 miles away.

During the day, the excavator at the plant apparently struck the pipe and didn’t report the damage. Then, they re-buried it before the pipeliner had a chance to return the next morning. It was unknown that the pipe had been struck at that point.

A few years later, more dominoes. A new terminal was built downstream of the water plant. I can’t remember exactly how far, 20 miles, say. It was some distance downstream from the water plant. The original design had called for 600-pound class phalanges and fittings because it was tied directly to the pipeline.

Then, for economic reasons, that was changed to 150-pound class, which the pipeline pressure could exceed, but under normal operations for the pipeline hydraulics would not. They protected the piping with a relief valve and a high pressure that would close the upstream block valve, isolating the new terminal if the terminal piping did become over-pressured.

Unfortunately, the relief valve was not calibrated properly. There was a specific procedure for it. That wasn’t known. It was calibrated for static conditions rather than the dynamic conditions of the pipeline actually flowing.

The block valve upstream, then, because the relief valve was non-effective, that upstream block valve tied to the high pressure switch cycle closed 51 times after the terminal was constructed. After a while, it just became routine. There’d be a surge on the line. The pressure switch would tell that valve to go closed. It would cycle close. The line would shut down. The operators would routinely start it back up. Open the valve. Start the line back up. That was normal operations for a while.

Another thing that happened during this time was in-line inspection. Two separate tools, one for geometry and one for metal loss, were run through the pipeline. Normal five-year inspection intervals. The tools detected a minor metal loss anomaly and a small dent.

I’m going to tell you, they were small. The final report, however, did not show that they were located in the same location. It didn’t overlay the defects and show that they were intersecting. It didn’t identify them, most importantly, as new defects that had not been seen in previous tool runs.

The fact that we had a new dent with some metal loss associated with it was not detected by the analysis of these tool runs. An engineer, however, did go out to investigate but when he got to the water plant and he saw this tangle of piping and the muddy conditions out there and so on, the decision was made to not excavate these two small anomalies that were out there.

I’m going to say, I took a copy of the dig sheet. I posted it on my whiteboard later on in my career when I was managing pipeline integrity. My new integrity engineers, I had a few dig sheets on the whiteboard. I’d ask, “Take a look at these and tell me which ones you would excavate.”

Nobody ever chose the one from Bellingham because, again, it was a small dent located near but not on a small metal loss.

Another domino, then, was the SCADA computer. It was used for more than just SCADA. On the morning of June 10th, it was bogged down by a report that was being run by the control center that came from the same computer.

The control center could still send commands, but they had as much as a 20-minute delay in receiving and displaying data back from the pipeline. During this time, the line shut down and high pressure at the terminal. That valve closed for the 52nd time.

As they had done 51 times before, they opened the valve and restarted the line, even though they couldn’t monitor the pressures as the line came back up. What they didn’t know was that the pressure was actually not building in the line because, back at the water plant, that dent with metal loss had cycled due to pressure, and flexed enough times that it ruptured.

Thousands of barrels, almost 300,000 gallons of gasoline, suddenly rushed out of that pipe and went flowing down Whatcom Creek and through Bellingham’s park.

At the same time, there were two 10-year-olds who had chosen a hidden spot in the park. They were, let’s say, investigating the wonders of a fireplace lighter at the time. Before the control center even knew that they had a release, three young people had died in that park.

At the time of the release, Olympic was a joint venture of three companies. One company was the operator. The other two were the non-operating partners in it. The board of directors consisted of two people from each company. All six of the directors, prior to the incident in Whatcom Creek, were business development people.

After the incident, the two non-operating partners replaced one of the business development people with an operations or pipeline integrity person. At that time, I worked for ARCO. ARCO was one of those non-operating partners. I was their pipeline integrity person placed on the board.

The first event for the new board members was what they called a two-day immersion session in which we had a long lineup of managers, consultants, lawyers come in and brief us in a hotel conference room about all the issues, all the histories, everything that was known about the incident.

As you can imagine, one of the things for the briefings was, here’s what we’re doing to minimize the business impacts. I’ll confess, Russel, I got caught up in that, myself, as a director.

I was interested in how we were managing the costs and how the profitability of the company was going to be maintained. I was so caught up in it, in fact, that I’m ashamed to admit it, but when they got on to one of the items in the expenses — $600 a day for counseling for one of the parents — my thought was, “My gosh, $600 a day. Some doctor is really taking advantage of this.”

After the immersion session, on Day 3, we actually went out to the park. We walked down the path from the water plant to the bridge at the far end of the park, where the burn had ended.

The first thing that impressed me was the stillness in the park. A lot of the trees had been severely scorched. All of them along the Whatcom Creek, which actually ran down in the bottom of a gorge. All the trees were scorched and burned away, way up.

There were no leaves to rustle. There were no birds in those trees to sing. There were no squirrels running up and down the trees. It was just quiet. The only sound that you could hear was the creek itself, gurgling away down at the bottom of that gorge.

On this walk, the first place that we came to was where Liam Wood had been asphyxiated by the vapors. Liam was an 18-year-old. He had graduated from high school the day before. He was celebrating by doing the thing that he loved most: fishing in Whatcom Creek.

As I stood there on the edge of the gorge, looking down into it, suddenly I could envision what happened. I could see Liam suddenly surprised and surrounded by a wall of gasoline. Can you imagine what that’s like, standing in a creek in a park that you’d been to so many times and, all of a sudden, you’re surrounded by gasoline? How can this happen.

I can envision him panicking, scrambling to get out. He’s bogged down by his waders. The sides are very steep. All the oxygen’s been displaced by this gasoline running through and overcome by the exertion and hampered, robbed of oxygen. He collapsed and he died right there next to his favorite fishing hole.

We walked down the creek from there, further down. We came to a glade at the top of the gorge. This is where Wade and Stephen had been playing with the lighter. As we stood there looking at that side, I turned around and I noticed a path into the park. I’m still not really sure why, but I decided to follow that path and see where it went.

It came out in a cul-de-sac. I recognize it as the cul-de-sac in which one of the two boys had lived. I recognized the address from our briefings. I walked over and I stood in front of this house. Russel, that’s where I had my significant emotional event.

I was standing there and I was imagining what we had been told in the briefings. One of the parents, suddenly aware that something was terribly wrong outside, rushing out the door and seeing the park fully engulfed in flames.

Again, how can this happen? It’s a park. Suddenly, instantly, the park is nothing but flames. There’s no time to stop and think about how does this happen because the boys are in the park. Then, Wade emerges from the flames. He’s barely recognizable. His hair’s burned away. His skin is burned and there’s smoke actually coming off him.

He’s crying and he’s screaming. He’s yelling, “I’m sorry! I’m sorry!” because he thought it was his fault that the park was on fire.

I don’t have to tell you that it wasn’t his fault that thousands of gallons of gasoline had rushed through the park, but I will tell you that the town of Bellingham considered Wade and Steve to be heroes because if the gasoline had not ignited in the park, it was headed under that bridge at the end of the park and into the developed area of Bellingham, where the consequences would have been even greater.

Wade’s parents sat at their son’s hospital bedside that night, and although they wanted nothing more than to hold their son, the only part of his body that they could touch was the soles of his feet. It was the only part that wasn’t burned.

Wade’s condition deteriorated as the night wore on, and the doctors explained the hopelessness of his condition. The machines were turned off at 2:10 a.m., and Wade’s father said to his son that it was time to go play baseball in heaven.

Then they watched as their son slipped away. Standing in front of that house, recalling all of this, I turned back to the park, and I looked at that pass. In the briefest of moments, just microseconds, that your mind will tolerate it, I imagined my son coming out of that park.

I thought, “My God, how can it be only $600 a day?” Russel, this is the humanity of operational excellence. It dwarfs all the numbers, the records, the programs, and the awards. It’s about making sure that there is no harm.

Business goals have to come with no harm. It’s not easy, but if it were easy, it wouldn’t be up to pipeliners.

Russel:  Larry, I have to take a second. Every time I hear you tell this story, I have to collect myself a little bit. Here I am, I’m stumbling through my words a little bit. It’s such a compelling story. I think it really, really cuts to what matters.

I’m so thankful that you’re willing to share this. I know it’s not an easy thing to share, to be honest with you.

Larry:  I got to tell you, 20 years later, I still feel exactly the same. It still has the same effect on me. It’s hard even to get through telling it.

Russel:  I’m so sure that’s true. It’s obvious, just listening to you tell the story. I don’t know if I told you this, but when I went to the API Pipeline Conference this year, they shared a letter from the father of Liam Wood and I guess somebody at Marathon, who’s now at Marathon Pipeline.

That father had struck a friendship. The people that were involved in this incident, many of them are still involved in pipeline safety as public advocates. I thought was a very well written letter. I thought it was very thoughtful.

He acknowledged the progress that the industry’s made in the last 20 years, but he finishes it by saying, “But you haven’t done enough yet.” I have to tell you, I think that’s right. I don’t think we’ve done enough yet.

I think it’s very easy for people who do not have any direct experience with this kind of thing. Many pipeliners do not, because by and large, we’re a pretty safe industry. It’s like aircraft. The only thing that matters is perfection, because you can’t have an incident.

I think as we were talking about you coming on here, you said something. I’ve already used this in training, because I think it’s so well said. You talk about the goal of zero incidents or triple zero, that some people call it.

When somebody says those goals are unrealistic, and we need to set something that’s more unrealistic, I remember you saying you had a boss who asked the question, “Well, who are you okay with being hurt?”

Larry:  That’s right. His name was Chuck. He had come to us from an assignment where he had been an investigator of an explosion in an offshore platform, where six people had been killed. When he came, he was the vice president of operations.

My boss at the time was the superintendent. I was a district manager, and we were all called to brief the new vice president of operations on our goals. I remember my boss, the superintendent, going through our safety goals and saying our goal was to reduce the number of accidents by 25 percent.

Chuck stopped right there and said, “25 percent?” At this point, my boss was still thinking, “Okay, he thinks this is aggressive, and he wants to know how we’re going to do it.”

In fact, what Chuck said was — and I think the number was reducing from eight to six or something like that — Chuck said, “I need the names of six people who work for you that you think it’s okay to injure, because I want to call their families and tell them about the decision we made here today.”

Russel:  Oh, my. [laughs] I don’t remember that context. My goodness.

Larry:  That brought it home right there. Point taken. From then on, the goal was zero. It had to be zero. You can’t hurt anybody. You just can’t.

Russel:  Again, Larry, I want to say thank you for coming on and doing this. I hope that everybody who’s a pipeliner listens to this, listens to your story. I hope that they can have their own significant emotional event, without having to have your personal experience.

Larry:  Exactly. That’s why I’m happy to do this. I appreciate very much that you invited me on here today.

Russel:  I hope you enjoyed this week’s episode of The Pipeliners Podcast and our conversation with Larry Shelton. Certainly, this was a very moving episode for me, and certainly, this is one of the reasons I do this podcast so that these kind of stories can be shared, and so that we as an industry, as pipeline professionals, can learn and be better at what we do. It really does matter.

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[background music]

Russel:  Thanks for listening. I’ll talk to you next week.

Transcription by CastingWords