Underground fuel pipe danger revealed

Problem not addressed for more than five years

Two underground petroleum
pipelines, which posed a potential safety hazard to residents of a George Town
apartment complex, were not dealt with for years despite the fact the problem
was identified in 2004, the Caymanian Compass has learned.

The fuel pipes, which originate at
the Jackson Point fuel terminal in South Sound and then veer apart to terminate
at the Caribbean Utilities Company plant and Owen Roberts International
Airport, are operated by CUC and Chevron-Texaco.

According to a March 2004 risk
management report done by the Advantage Risk Solutions consulting company,
major concerns were identified about the fact that the two fuel lines – one 4
inches in diameter and the other 8 inches – run underneath a multi-unit
apartment building that was apparently constructed over the fuel lines.

“This is clearly not an acceptable
situation,” Advantage Risk Solutions President Phillip Myers wrote in a 31
March, 2004 memo. “There are obvious risks with the potential for pipeline
failures and releases of diesel fuel or aviation jet fuel under, into and
around the apartment building and subsequent hydrocarbon contamination or fire.

“Further, the result of inspections
of the diesel pipeline…using a mechanical ‘pig’ indicated that a deformation
in the pipeline exists at the location of the apartment building site. This is
probably the result of damage during construction activities.”

Mr. Myers recommended that both
fuel lines be re-routed around the apartments – which were not named in the
memo – within a year.

An internal government audit
obtained by the Caymanian Compass via the Freedom of Information Law indicated
that the situation still existed in September 2009, five-and-a-half years after
Mr. Myers’ memo identified the problem.

According to CUC officials, the
company’s diesel fuel pipe was moved in late November or early December 2009.
However, they believed the Chevron-Texaco operated pipeline was still
underneath the apartments. Texaco Caribbean officials could not be reached for
comment. 

CUC’s Neil Murray said the
apartment complex owner was notified when the utilities company performed work
to move its pipeline to the edge of the property and away from the building
itself. He could not comment on who initially gave approval to build the
structure directly over the fuel conduit. 
“We weren’t aware of it when the person started building (over the
pipeline),” Mr. Murray said.

The Caymanian Compass determined
through further investigation that the six-unit apartment complex built over
the fuel pipelines are between Newport Avenue and Anthony Drive in the Windsor
Park area. Outside one complex along Anthony Drive – Newport Garden – a small
circular sign has been implanted in the sidewalk. It reads: “CUC – WARNING:
buried fuel pipeline” with phone numbers listed below the warning urging people
to call before they start digging.

The Internal Audit Unit noted in
its September 2009 report that the chief petroleum inspector had attempted to
address the pipeline re-routing some years ago, seeking legal advice about
issuing a remedial notice to have the pipes moved. However, the report notes
that the Legal Department advised the petroleum inspector he could not do so
because Texaco did not own the pipeline at the time.

The situation has since changed,
and the petroleum inspectorate has now been informed that Chevron-Texaco and
CUC are the pipeline operators.

“Should an incident occur before
the pipelines are re-routed, the chief petroleum inspector, the legal
department and government may be required to explain why the consultant’s
advice was not heeded,” the internal audit team stated in its report. “Such an
event could potentially increase the government’s legal exposure.”

According to Chief Petroleum
Inspector Gary McTaggart’s response to the audit, pipelines carrying fuel
should never be located under houses as a matter of policy. However, the
petroleum inspector also stated “the likelihood of a release while the ground
remains undisturbed is not likely”.

Negotiations aimed at re-routing
the remaining pipeline have been held between Cayman Islands Cabinet members
and the oil companies, as well as Cayman’s Civil Aviation Authority, according
to auditors.

“All agreed that the lines should
be moved, but for many reasons, some political, the pipelines are still intact
in the same location,” the chief petroleum inspector’s response noted. “Should
a leak occur, Chevron or CUC would be liable, depending on which line leaked.”
(His response was issued before CUC moved its pipelines.)

The Internal Audit Unit disagreed
with the petroleum inspector’s assessment of the situation, quoting section 27
of the Dangerous Substances Handling and Storage Law (2003). The law states
that the government and the petroleum inspector cannot be held liable for
damages in the case of death, injury or loss incurred by any person due to any
fire or explosion or any release or spillage involving dangerous substances
“unless it can be established that there was negligence in carrying out” their
duties under the law.

Part of the difficulty, according
to Mr. McTaggart’s response in the audit, is that agreement about what to do
with the pipeline operated by Chevron-Texaco must be reached by the oil
companies before any works can begin.

The petroleum inspector also made
reference to “mitigating issues involving the Civil Aviation Authority” that
were of a “competitive and political nature”. Mr. McTaggart said those matters
had “escalated beyond the control of this department”. The audit did not
identify the nature of those issues.

According to the September 2009
audit report, CUC apparently agreed to move their diesel fuel pipeline in
October or November, and he supposed Chevron-Texaco would “follow suit”. If no
agreement could be reached with Chevron-Texaco about moving its aviation fuel
pipeline, government would have to issue a remediation notice – basically an
order to force the company to move the pipeline.

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CUC warning sign
Photo: Brent Fuller
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