Wednesday, April 22, 2015

ExxonMobil to pay $5 million to settle claims in feds' complaint on Mayflower oil spill

Posted By on Wed, Apr 22, 2015 at 5:46 AM

PRODUCES PENALTY: The Mayflower spill.
  • PRODUCES PENALTY: The Mayflower spill.

A consent decree will be filed this morning in federal court in which ExxonMobil agrees to pay civil penalties, fund an environmental project and take other corrective steps in response to alleged violations of environmental laws in the 2013 rupture of the Pegasus pipeline that produced a damaging spill in Mayflower.

The federal consent decree announcement is shown below in full. The agreement may be viewed in its entirety here. 

The state of Arkansas also participated in the action against ExxonMobil. Lawyers for landowners suing ExxonMobil were quick to note this settlement does nothing to affect that lawsuit or contribute anything to repayment of damages to property owners. They note this follows a pattern of other ExxonMobil environmental disasters.

ALSO: If you think any agreement by ExxonMobil has much meaning for the long term, read Politico's latest, which outlines the inadequacy of the federal government's pipeline regulation agency. As Charles Pierce writes, lax federal regulation is EXACTLY what the Republican congress — many of them heavily backed by carbon industrialists — wants.

The federal government release:

WASHINGTON - ExxonMobil Pipeline Company and Mobil Pipe Line Company (ExxonMobil) have agreed to pay civil penalties, fund an environmental project and implement corrective measures to resolve alleged violations of the Clean Water Act and state environmental laws stemming from a 2013 crude oil spill from the Pegasus Pipeline in Mayflower, Arkansas, the Department of Justice and the Environmental Protection Agency (EPA) announced today.

Under a consent decree lodged today in federal court, ExxonMobil will pay $3.19 million in federal civil penalties and take steps to address pipeline safety issues and oil spill response capability. In addition, ExxonMobil will pay $1 million in state civil penalties, $600,000 for a project to improve water quality at Lake Conway, and $280,000 to the Arkansas Attorney General’s Office for the state’s litigation costs.

The oil spill occurred on March 29, 2013, after the Pegasus Pipeline, carrying Canadian heavy crude oil from Illinois to Texas, ruptured in the Northwoods neighborhood of Mayflower, Arkansas. Oil flowed through the neighborhood, contaminating homes and yards, before entering a nearby creek, wetlands and a cove of Lake Conway. Some residents were ordered to evacuate their homes after the spill and remained displaced for an extended period of time. The spill volume has been estimated at approximately 3,190 barrels, or 134,000 gallons.

“This settlement holds ExxonMobil accountable for this very serious oil spill and its disastrous impact on the Mayflower community and environment,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This agreement is also an excellent example of federal and state cooperation that will benefit public health and the environment for years to come and most importantly prevent future disasters by requiring better pipeline safety and response measures.”

“Oil spills like this one in Mayflower, Arkansas have real and lasting impacts on clean water for communities,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “Companies need to take the necessary precautions to make sure oil is transported safely and responsibly. This settlement puts in place essential pipeline safety and response measures that are important to make this industry safer for communities.”

“The U.S. and the state of Arkansas have worked together since the first barrel of oil was spilled in 2013 to provide relief and assistance to the residents of Mayflower and Faulkner County and to hold ExxonMobil accountable for this serious spill,” said U.S. Attorney Christopher R. Thyer for the Eastern District of Arkansas. “This settlement does both. In addition to paying significant civil penalties, ExxonMobil will provide money for safety and water-quality projects to help ensure that the residents of the affected area never have to go through an ordeal like this again. This resolution to a terrible disaster is a testament to the partnership between our federal and state governments to protect the citizens of Arkansas.”

“Pipeline companies have the responsibility to protect both our water resources and people from oil spills,” said Regional Administrator Ron Curry for EPA. “Today’s settlement will help protect the environment by preventing the high economic and environmental costs of future oil spills.”

The penalties owed by ExxonMobil under the consent decree are in addition to the money that the company has already paid to reimburse federal and state response efforts and comply with orders and directives issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA). The segment of the Pegasus Pipeline that includes the rupture site has not been used since the March 2013 spill, and under the terms of the settlement agreement, ExxonMobil must comply with all PHMSA corrective action requirements before returning the pipeline to operation. The consent decree also requires ExxonMobil to take other important pipeline safety corrective action to help prevent future ruptures and improve its spill response capabilities by providing additional training to its oil spill first responders. In addition, ExxonMobil is required to establish caches of spill response equipment and supplies at three strategically-chosen sites along the pipeline, including one location near Mayflower in Faulkner County, Arkansas.

The Clean Water Act makes it unlawful to discharge oil or hazardous substances into or upon the navigable waters of the U.S. or adjoining shorelines in quantities that may be harmful to the environment or public health. The penalty paid to the U.S. for this spill will be deposited in the federal Oil Spill Liability Trust Fund managed by the National Pollution Funds Center. Those funds will be available to pay for federal response activities and to compensate for damages when there is a discharge or substantial threat of discharge of oil or hazardous substances to waters of the U.S. or adjoining shorelines.

The joint federal and state complaint in the case, filed June 13, 2013, in the U.S. District Court for the Eastern District of Arkansas, alleges that ExxonMobil discharged crude oil in violation of the Clean Water Act. The complaint also asserts state claims for civil penalties for improper storage of hazardous waste generated during the cleanup and for water and air pollution violations pursuant to the Arkansas Water and Air Pollution Control Act and the Arkansas Hazardous Waste Management Act.

The proposed consent decree, lodged in the Eastern District of Arkansas, is subject to a 30-day public comment period and court review and approval. 

Lawyers for residents suing ExxonMobil over damages issued a statement about the deal:

Lawyers representing Mayflower residents suing ExxonMobil for civil damages say the government’s recent settlement with ExxonMobil in no way compensates the hundreds of residents seriously and permanently impacted by the 2013 Good Friday Pegasus Pipeline rupture. ExxonMobil pays fines assessed pursuant to state and federal environmental laws directly to the U.S. Treasury and the State. The law limits the amount of the fine the government can assess based on the number of barrels spilled.

“This government settlement clearly establishes ExxonMobil’s liability for the rupture,” said attorney Sam Ledbetter of McMath Woods P.A. in Little Rock. “However, ExxonMobil is yet to take responsibility for the harm caused to the residents of Mayflower, and the damages it must pay.” Mayflower residents in civil suits seek compensation for exposure, disruption of their lives, and reduction in the value of their property caused by the Pegasus Pipeline rupture. This type of toxic oil contains hydrogen sulfide, aromatic hydrocarbons, napthalenes, and benzene.

The Mayflower settlement is one in a recent pattern involving ExxonMobil. In 2012, ExxonMobil’s North Line pipeline ruptured in Pointe Coupee Parrish, Louisiana, spilling more than 80,000 gallons of oil. ExxonMobil settled the government’s resulting suit for $1.4 million.

On July 1, 2011, a break occurred in the ExxonMobil owned Silvertip pipeline, spilling 42,000 gallons of oil into the Yellowstone River. As a result of the Silvertip spill, ExxonMobil expended $135 million for property damage, cleanup and repair work, paid the State of Montana nearly $2.4 million, and is the subject of a $1 million dollar fine proposed by the Pipeline Hazardous Materials Safety Administration (PHMSA). ExxonMobil is appealing a proposed PHMSA fine of $2.6 million (the second largest ever proposed by that agency) for safety, operation, inspection and maintenance violations associated with the Mayflower pipeline rupture.

Faulkner County Judge Charles Clawson consolidated residents’ cases filed by Hare, Wynn, Newell & Newton, LLP, McMath Woods P.A., Brazil, Adlong & Mickel, PLC, Davis & Whitlock, P.C., and Johnson & Vines, PLLC. The cases involve hundreds Mayflower residents. “Judge Clawson scheduled a five week trial for several of the plaintiffs beginning October 20, 2015,” said Tom Mickel of Brazil, Adlong & Mickel, PLC in Conway.

Attorneys for the Mayflower residents expect to prove ExxonMobil restarted the 1947 pipeline in 2006, reversed the flow, introduced thick Wabasca Heavy Crude, and increased pipeline pressure despite knowing the pipeline’s serious seam weld problems would likely result in a rupture. ExxonMobil’s intentional actions, including failure to consider the defective pipe susceptible to seam failure, and failure to conduct required testing and maintenance, harmed Mayflower residents.

The Arkansas attorney general's office touted the settlement of the action, which was brought by then-Attorney General Dustin McDaniel.

Attorney General Rutledge said, “This consent decree is a critical victory for the State and the Mayflower community. ExxonMobil was responsible for the damage to the environment and for disrupting lives of Arkansans. Today, ExxonMobil is being held accountable for the estimated 134,000 gallons of oil that flowed out of the ruptured pipeline.”

Director Keogh said, “This settlement marks an important step forward. The civil penalty of $1 million will greatly supplement funds available for use to address emergency actions and to address contaminated sites across Arkansas. ADEQ has agreed to the use of $600,000 in the form of a Supplemental Environmental Project where the immediate local community will realize benefits. The project will improve water quality in Lake Conway and its watershed under a plan approved by and overseen by ADEQ.”

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