Date: 201211
Local time of day: 0601-1200
Location: ZZZ.Airport, US
Flight conditions: VMC
Light: Daylight
Aircraft: B737-700
Operator: Air Carrier
Operating under: Part 121
Flight plan: IFR
Mission: Passenger
Flight phase: Climb
ATC / advisory: TRACON ZZZ
Aircraft component: Turbine Engine
Component problem: Malfunctioning
Reporter organization: Air Carrier
Reporter function: Captain; Pilot Flying
Reporter qualification: Flight Crew Air Transport Pilot (ATP)
Second reporter function: First Officer; Pilot Not Flying
Anomaly: Aircraft Equipment Problem Critical
Detector: Person Flight Crew
When detected: In-flight
Result: Flight Crew Inflight Shutdown; Flight Crew Returned To Departure Airport; Flight Crew Landed in Emergency Condition; General Declared Emergency
Contributing factors: Aircraft
Primary problem: Aircraft

Narrative: Preflight; engine start; taxi; and takeoff were all normal.  Briefed flight attendants to remain seated due to expected turbulence in climbout; and turbulence box was shown on weather sheet.  Light to moderate chop/turbulence on climbout; which was more intense after 10;000 feet.  Slowed from 250 KTS and selected 225 KTS to expedite climb.  Heading Select/Level Change engaged.  Number two thrust lever retarded; then advanced; retarded; advanced to overspeed.  Number one thrust lever automatically moved opposite of #2 until A/T disconnect.  By then we had overspeed and overtemp on #2 followed shortly by [overspeed and overtemp on] #1.  Right turn back toward [departure airport] for return to field.  Declared emergency.  Started Overtemp checklist and #2 engine insidiously failed.  Aircraft had moderate yaw and pitch oscillation.  Took a long time to stabilize aircraft.   Talked to flight attendants: engine surges; return to field; and I did not expect to evacuate upon landing.  Single Engine Landing Checklist for Flaps 15.  Fire equipment requested.  Uneventful landing; cleared runway; and fire crew checked both right and left engines and aircraft.  Taxied back to gate; gave aircraft to Maintenance; debriefed fire department; Ops; Inflight; Flight Ops; and police.  Conducted 15-minute debrief of entire Crew with Chief Pilot; Inflight Recurrent Trainer; and Inflight representative present.  Important to note: crew functioned exceptionally well; managing aircraft; passengers; also; those assisting after return to gate to accommodate passengers and their needs of travel.  The insidious; rapidly changing situation and high speed development of this incident is something I have never seen in 32 years of flying.  Flight duration was 13 minutes from takeoff to landing.


Second narrative: Climbing through approximately 12;000 feet; the power seemed to reduce and the autothrottles commanded the thrust levers back. As this is not normal with a Level Change autothrottle climb; the Captain put his hand on the thrust levers as to correct the situation; but momentarily thereafter the engines began to surge and the Captain disengaged the autothrottles. Within a matter of seconds; the engine surges resulted in alternating overspeed/overtemp conditions on both engines. The Captain positioned the thrust levers in the mid-range; disconnected the autopilot; and began a level out. I called Departure and told them we needed to stop the climb; that we were working an engine issue.I reached for the QRH and began to turn to the Engine Limit/Surge/Stall Checklist when I noticed the #2 Engine had failed with ENG FAIL displayed on the display. I then turned to the Engine Failure/Shutdown Checklist and began reading off the items. We completed the checklist following the steps to shut down engine #2. We quickly discussed restart potential once established on downwind and decided against it considering the overspeed/overtemp condition and proximity to the landing runway.


Synopsis: B737-700 flight crew experienced surging/overspeed/overtemp on both engines on climbout from a high altitude airport. Number 2 engine spontaneously failed; so after running the checklists the flight declared an emergency and returned to departure airport.