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Pipeline Inspector Guilty of Lapses

Wednesday, November 26, 2014

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A former Shell Pipeline Company employee responsible for corrosion monitoring will pay $19 million in restitution and face up to 15 years in prison for his role in a pipeline leak that released over 9,000 gallons of jet fuel from a Wisconsin airport.

Randy Jones, an onshore corrosion coordinator for Shell Pipeline Company L.P., has pleaded guilty to two violations of the Pipeline Safety Act and one charge of making false statements to the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA).

The charges stem from a January 2012 leak in Shell's pipeline at the General Mitchell International Airport (MKE) in Milwaukee, WI—a line that Jones was responsible for taking bi-monthly cathodic protection readings from pipeline rectifiers and conducting an annual cathodic protection survey.

Photo provided by Wisconsin Department of Natural Resources

Randy Jones, an onshore corrosion coordinator for Shell Pipeline, was responsible for cathodic protection monitoring of the company's pipeline at a Milwaukee airport. The pipeline leaked over 9,000 gallons of jet fuel in January 2012.

However, from January through December 2011, Jones failed to conduct the readings and the survey, later entering fraudulent data into a computer system when he learned PHMSA had scheduled an audit of the pipeline, according to court documents.

Facing 15 Years

The charges were filed Nov. 14 in an information in U.S. District Court in Milwaukee, WI, the DOT Office of Inspector General announced.

Jones pleaded guilty the same day, admitting that "these facts are true and correct and establish his guilt beyond a reasonable doubt."

Jones worked for Shell from 1992 to 2012. From 2010 to 2012, his role was onshore corrosion coordinator. He was based in Louisiana but was responsible for the Shell pipelines servicing MKE and Chicago O'Hare airports.

Each charge carries up to five years in prison and a $250,000 fine, as well a mandatory special assessment of $100 and up to three years of supervised release.

Melted Asphalt

Jones was responsible for the corrosion coordination of the pipeline at the airport, including conducting an annual cathodic protection survey of the pipeline, taking bi-monthly cathodic protection readings from pipeline rectifiers, and recording all of the data into a computer system used to generate reports for PHMSA.

In January 2012, officials at the airport starting receiving complaints from residents about a jet fuel odor in the sewer system. A few days later, jet fuel could be seen in soil around the airport and in a nearby creek. The fuel eventually reached the airport property, where it melted asphalt and filled underground drainage pipes and culverts.

Shell confirmed that the release was from the pipeline and shut it down. By that time, about 9,030 gallons (or 215 barrels) of jet fuel had leaked from a hole in the pipeline.

As part of his plea, Jones agreed to pay a restitution of $19,337,785—the cost of the cleanup.

Remote Monitoring

According to court documents, Jones first traveled to MKE in September 2010 to take cathodic protection readings. During his visit, he found that the location's two rectifiers weren't operational, but he was able to get them back in service. He returned to the airport twice in November 2010 to oversee repairs to the pipeline and to install remote monitoring units that would allow him to remotely read the rectifiers.

MKE airport

The charges stemmed from a January 2012 leak in Shell's pipeline at the General Mitchell International Airport (MKE) in Milwaukee, WI.

However, when Jones tried to access the monitoring units in January 2011 to conduct the required readings, he discovered one of the rectifiers wasn't registering voltage. He contacted a contractor to check on the rectifier, and was told it was broken, but never made any repair arrangements.

After that, he reportedly stopped checking the remote access system to take the bi-monthly readings and did not conduct a proper survey, only taking readings at the beginning and end of the pipeline instead of periodically along its length.

Taking a Cruise

Once Jones found out PHMSA scheduled an audit of the pipeline for December 2011, he entered false rectifier readings and false annual survey data, the court documents stated.

Jones did not show up for the audit "because he knew he had falsified data material," and instead told a supervisor he was on vacation and taking a cruise.

During the audit, the PHMSA inspector noticed low cathodic protection readings along the length of the pipeline and told Shell to fix the rectifier. Since the inspector only had the Jones' false data to go on, he had no idea that the rectifier had been down for over a year, "greatly increasing the opportunity for corrosion to compromise the pipeline," the court documents stated. 

Sentencing Factors

Court documents did not list a date for Jones' sentencing, but the plea agreement noted that the government will recommend an increase his sentencing guideline score because of the "loss amount" and because the offenses involved "substantial cleanup" and "use of a specialized skill."

At the same time, the government also agreed to recommend a decrease in his sentencing guideline score because Jones accepted responsibility and gave timely notification to authorities of his intention to enter a guilty plea.

The DOT-OIG is conducting the investigation with the U.S. Coast Guard Investigative Service and the Environmental Protection Agency-Criminal Investigation Division.


Editor's Note: This article was updated Dec. 2, 2014, at 3 p.m. ET to include a photo provided by the Wisconsin Department of Natural Resources.


Tagged categories: Cathodic protection; Corrosion; Department of Transportation (DOT); Ethics; Health & Safety; Laws and litigation; North America; Oil and Gas; PHMSA; Pipeline

Comment from James Albertoni, (11/26/2014, 11:27 AM)

So this guy was responsible for the pipeline for less than 2 years and when he started his responsibility both rectifiers were broken (for who knows how long) yet somehow he is fully responsible for the leak? That seems like BS. Obviously falsifying data and not fixing the rectifiers was extremely wrong and unethical (and deserves jail/fines), but the pipeline did not leak from 2 years of corrosion.

Comment from Tony Rangus, (11/26/2014, 12:33 PM)

James, your are spot-on. What about the folks who were responsible for the corrosion protection prior to September 2010? Mr. Jones needs to press the DOT-OIG, Coast Guard and the EPA to check those folks out. And do they really expect Mr. Jones to pay $19,337,785 in restitution!! Did the Exxon Valdez captain pay any restitution?

Comment from Peter Phipps, (11/28/2014, 6:29 AM)

What I would aslo be asking is, why did some one not notice that they were missing 9,030 gallons (or 215 barrels) of jet fuel, even if it is over a period of time-someone should have said we are missing x amou nt of fuel which is not topping up the tanks at the other end, surely the records of fuel transported along this pipeline should have been recorded.?.

Comment from Billy Russell, (12/1/2014, 5:13 AM)

Calling this guy an inspector is wrong title, Corrosion Coordinator is a completely different field.

Comment from Mark Lewis, (12/1/2014, 7:16 PM)

Airports are (or used to be, I thought)notorious for poor inventory. The old Stapleton Airport in Denver had the same problem back in the 1980s. A leak was not noticed until the fuel reached a creek at the edge of the property. During the investigation, it was revealed that the fueling contractor had horrible inventory controls, and basically had no accurate idea how much fuel was coming and going.

Comment from Christopher Overmyer, (12/2/2014, 12:04 AM)

Wow! there is some much more wrong with this story it's scary. I like that band aid repair on the pipe, problem solved.

Comment from Mark Lewis, (12/2/2014, 10:45 AM)

Looks to me like a 150 psi leak clamp used in the water industry.

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