Thursday, October 1, 2015

Regulators fine ExxonMobil $2.6 million on pipeline failure and specify safety steps

Posted By on Thu, Oct 1, 2015 at 5:29 PM

PENALTY SET: For safety violations in Mayflower oil spill.
  • PENALTY SET: For safety violations in Mayflower oil spill.

A federal regulatory agency has issued a final order in its review of the break of Exxon Mobil's Pegasus pipeline that spewed  heavy crude on a Mayflower subdivision and into nearby wetlands in March 2013. It confirms safety violations in operation of the line. An original estimate of 5,000 barrels spilled was reduced to 3,190 in a separate case.

The Pipeline and Hazardous Materials Safety Administration assessed a civil penalty of $2.63 million, reduced slightly from a preliminary finding for nine violations of safety regulations that ExxonMobil had appealed, and spelled out actions for the company to take to comply with safety regulations in the future.

ExxonMobil was ordered to improve its system for assessing potential for failures in welding seams and identify pipe more susceptible to failure. It must assess risk factors regularly within established time frames and meet other heightened standards on detecting problems and recording problems.

John Tynan, director of public affairs for Central Arkansas Water, said the order confirms the water utility's belief that ExxonMobil should have known that the line was susceptible to seam failure since at least 1991 and had failed to take appropriate steps to operate safely.

The pipeline runs through the watershed for Lake Maumelle, CAW's main water supply, and it would like to see the line if ever reopened, removed from the watershed. Tynan commented:

We’re glad to see PHMSA take this action to identify these violations and fine Exxon. However, the actions required in the compliance order are largely administrative or procedural and do not appear to achieve any meaningful, on-the-ground changes to the pipeline or its operation.

Given the findings of the order and the rupture in Mayflower, CAW would have expected PHMSA to require Exxon to replace segments of the defective pipe, or, at minimum, to test the pipeline according to specific, PHMSA-defined parameters to ensure the pipeline’s safety and integrity. CAW has submitted proposed testing parameters to ExxonMobil and PHMSA that we believe would provide this assurance. However, these requirements are not spelled out in the proposed compliance order and ExxonMobil is given a great deal of leeway in its follow up actions.

Moving forward, CAW will be monitoring the information submitted by ExxonMobil closely in order to ensure that the safety of the drinking water supply for 400,000 individuals in our region.

I'm seeking a comment from Exxon. Until now, it hasn't announced plans for when or if it might restart the line's operation. It will still contain miles of pipe made with a welding technique prone to crack. It faces damage lawsuits by people harmed by the break. It has also agreed to pay $5 million in penalties in a separate federal complaint.

Pipeline safety officials ordered the line shut down pending its inquiry. The agency's letter says when the penalties are paid and additional safety requirements are met, the enforcement action will be over.

Here's the federal order in the case.

UPDATE: A comment from ExxonMobil:

ExxonMobil Pipeline Company has received and is evaluating its options with respect to PHMSA’s final order for the 2013 Mayflower incident.

There is a separate corrective action proceeding before the regulatory agency and ExxonMobil has yet to approve plan. If approved, it would take a year or more to implement necessary changes in the line, Tynan estimated.

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