Judge approves Mayflower settlement, rejects bid to force Exxon to move pipeline | Arkansas Blog

Wednesday, August 12, 2015

Judge approves Mayflower settlement, rejects bid to force Exxon to move pipeline

Posted By on Wed, Aug 12, 2015 at 1:45 PM

click to enlarge OILED: A scene from Dawson's Cove near Mayflower after the spill.
  • OILED: A scene from Dawson's Cove near Mayflower after the spill.

U.S. District Judge Kristine Baker
today signed off on a settlement agreement between ExxonMobil and several state and federal entities concerning the 2013 rupture of the Pegasus pipeline in Mayflower. The agreement (which has been on the table since April) awards around a combined $5 million in fines, legal fees and an environmental remediation project, and was based in part on the amount of oil spilled in the disaster.

The news is a setback for Central Arkansas Water, which has been fighting make the terms of the consent decree tougher. The water utility wanted Exxon to remove a portion of the Pegasus pipeline that runs through the Lake Maumelle watershed, the reservoir supplying water to Little Rock and other communities in the area.

Since the 2013 oil spill, the Pegasus has been turned off. Exxon has not announced when (or whether) it intends to restart the flow of oil through the pipeline, but the conclusion of the suit today removes one impediment if the company does intend to resume use of the Pegasus. CAW has said in the past that it may sue separately if the pipeline operator attempts to restart the line without fully addressing the utility's safety concerns.

The suit that was resolved today is only one piece of litigation regarding the Mayflower spill. The company also faces additional legal action from public agencies under a civil damages claim, as well as several separate private suits from homeowners and others in the community.

UPDATE, 5 p.m.: John Tynan, Director of Customer Relations & Public Affairs at Central Arkansas Water, said CAW would continue to fight to safeguard Lake Maumelle against a future oil spill.

"Obviously, CAW was hoping for a different outcome of this settlement process," he said. "We'd hoped the judge would have rejected the settlement and asked the parties to renegotiate a stronger one, at least until after the PHMSA proceedings were complete."

PHMSA is the Pipeline and Hazardous Materials Safety Administration, the federal agency responsible for pipelines. In late 2013, PHMSA found that ExxonMobil had violated safety regulations in its operation of the Pegasus and proposed civil penalties of $2.6 million, which Exxon then appealed. A PHMSA hearing officer heard the case in July 2014, but there's been no action since.

"CAW asked to attend that [hearing] and we were denied access," Tynan said. "At this point, we're just waiting on that decision, to see whether or not the notice of violation, the fines, and the compliance requirements will remain in effect." Tynan said the utility will work at the local, state and federal levels to push for more stringent safety and integrity improvements to the Pegasus before it's restarted.

CAW also retains the ability to sue, Tynan confirmed.  "We're obviously going to continue to try to pursue collaborative dialogue with Exxon," he said, but "we still have a notice of intent to sue under the Pipeline Safety Act pending ... [as an] administrative placeholder. That still remains an option on the table."

Here's Judge Baker's order from today:

And here's the consent decree itself, which was first made public in April:

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