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Archive for Tuesday, July 24, 2001

Records show Koch’s spotty safety history

Pipeline corrosion resulted in two Texas deaths

July 24, 2001

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— Court records and depositions in lawsuits against Koch Industries Inc. point to a troubled history involving corrosion in pipelines near Lively and Corpus Christi.

Ruptures that led to two deaths in Lively and environmental damage near Corpus Christi were the result, in part, of corrosion. The Austin American-Statesman reported Monday that court records show that underground devices designed to counteract corrosion were inadequate.

Court records from a lawsuit filed after the deadly August 1996 pipeline explosion in the small northeast Texas town of Lively show that Wichita-based Koch knew about problems with the pipeline that ran through the area but continued to operate it.

Danielle Smalley and her friend Jason Stone, both 17, were on their way to report a gas leak in the butane pipeline when their truck apparently ignited the fumes, killing them both.

Senior Koch officials insisted that the pipeline ruptured without warning.

"From the very beginning, we accepted responsibility for this tragic incident, which is the only one of its kind in Koch's 50-plus years of transporting fuels throughout North America," Marc Palazzo, a Koch spokesman, told the newspaper. "We regret the loss suffered by the families involved, and we have worked hard along with federal and state officials to discover the cause of the accident and to help prevent similar incidents from occurring again."

Danny Smalley, Danielle's father, sued Koch for $100 million in damages. A Kaufman County jury ordered the company to pay Smalley $296 million, nearly three times the amount he had sought. Koch appealed, and in April the company settled with Smalley for a confidential sum.

Kenneth Stone, Jason's father, also sued Koch. He settled with the company for an undisclosed amount.

Court records from the Smalley lawsuit show the corrosion problems with the pipeline started virtually when the pipeline was installed in 1981. The pipeline runs for 570 miles from Medford, Okla., to Mont Belvieu, east of Houston.

Corrosion was found at 583 spots just in sections of the pipeline in Kaufman County, Edward Ziegler, a safety consultant hired by Danny Smalley's attorneys, testified.

"In the industry, that would be called Swiss cheese, which means essentially the pipeline is gone," Ziegler told the jury in the case.

The newspaper said Koch replaced or repaired sections where 30 percent or more of the pipe's wall had rusted away, but not spots with lighter corrosion, including the area near Smalley's home.

Company officials said this was a standard industry practice and they were confident that it ensured the pipeline was sound.

Testimony showed that in February 1996 the company discovered that the pipeline's electrical system to protect against corrosion was not meeting industry standards.

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