Exxon Mobil's agreement to treat the northern segment of the Pegasus pipeline as susceptible to seam failure has renewed a debate that began more than two years ago in the months after the pipeline cracked open in a Mayflower subdivision, spilling thick, black crude through the neighborhood.
That agreement is a key element of a proposed consent degree on which two Exxon Mobil subsidiaries officially concurred with the federal and state governments Wednesday, and it's an issue in other litigation and discussion resulting from the March 29, 2013, oil spill.
"That's something that we believe they should have been doing since 2006," when the Pegasus resumed operation after having been shut down for years, Central Arkansas Water spokesman John Tynan said Wednesday. So "that provision [in the consent decree] is something that does surprise us a bit."
Central Arkansas Water is the utility that oversees Lake Maumelle, which provides drinking water to more than 400,000 central Arkansans. The underground pipeline runs through about 13.5 miles of the lake's watershed.
An attorney with the U.S. Justice Department said Tuesday that Exxon Mobil had not treated the entire 650-mile northern section, which runs through Arkansas and three other states, as susceptible to longitudinal seam failure before the Mayflower accident. But the industry has known for decades that the type of pipe, made in 1947-48, was prone to manufacturing defects, specifically hook cracks, that could burst open -- exactly what happened in Mayflower.
Exxon Mobil had not answered a question by late Wednesday on whether the oil giant disputes the Justice Department attorney's statement. Exxon spokesman Christian Flathman said in an email that he was having to run the information "by law" -- meaning the corporations's legal department -- and it might be today before he could say more.
The seam issue is the first item under the "Injunctive Relief" section of the proposed consent decree, filed in U.S. District Court in Little Rock early Wednesday.
The document says the two Exxon Mobil subsidiaries "will henceforth treat the northern segment of the Pegasus Pipeline ... as 'susceptible to longitudinal seam failure,' within the meaning of [federal Pipeline and Hazardous Materials Safety Administration] regulations, for all risk assessment and operational purposes."
The proposed decree adds, however, that it "does not address whether [the companies] were required to make such a determination prior to the Mayflower oil spill under existing regulations applicable to the Pegasus Pipeline."
That part of the proposed decree quickly drew the attention of attorneys for the plaintiffs in nine consolidated lawsuits against Exxon Mobil in Faulkner County Circuit Court over the spill.
In a news release Wednesday, those attorneys said they expect to prove that Exxon Mobil restarted the 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," they stated.
The consolidated lawsuits involve about 130 households, businesses and property owners and are scheduled for trial starting Oct. 20 in the circuit court in Conway.
In November 2013, the Pipeline and Hazardous Materials Safety Administration notified Exxon Mobil of nine "probable violations" of federal safety regulations and proposed fines totaling $2,659,200.
In a letter that month to the president of Exxon Mobil Pipeline Co., the regulatory agency wrote: "The integrity assessment schedule established by the operator [of the pipeline] did not include consideration of certain manufacturing information in their determination of risk factors as required. Specifically, the operator failed to include the susceptibility of its Youngstown, [Ohio], pre-1970 low frequency electric-resistance welded ... pipe seam to failures as a risk factor for the Pegasus Pipeline System in the implementation of its integrity management program."
Further on, the letter says, "The operator failed to consider all risk factors ... when they did not consider the pipeline's manufacture and results of the previous integrity assessments to conclude that the pipeline was susceptible to seam failures."
In December 2013, Exxon Mobil Pipeline Co. appealed the agency's findings. In that appeal, the company wrote that its integrity-management plans "did properly consider seam failure and pressure cycling as risks" but that the analysis "resulted in the determination that the Pegasus Pipeline was not seam failure susceptible."
Even so, the company said, it conducted additional tests that weren't required in 2012 and 2013 "to further evaluate the potential risk of seam failure."
The regulatory agency had not ruled on the appeal as of Wednesday.
Another element of the proposed consent decree would require Exxon Mobil to place caches of specified response equipment at three more stations along the Pegasus pipeline, with one of them in Mayflower.
Tynan of Central Arkansas Water said Exxon Mobil already has such a cache in the Lake Maumelle watershed. But he said an important item is missing from the list of items the corporation must provide -- equipment aimed at removing thick, heavy oil that sinks rather than floats in water.
"We saw from Mayflower the likelihood of this product ... sinking," Tynan said. "We were surprised to see that there wasn't any inclusion of any materials that address sinking products."
Tynan said the booms that Exxon Mobil is set to provide won't remove any oil other than that on the water's surface or just beneath it.
The proposed consent decree calls for Exxon Mobil to pay almost $5 million in penalties, with $3.19 million of that going to the federal government and the remainder to the state. The plan is subject to a federal judge's approval.
Earlier Wednesday, Arkansas Attorney General Leslie Rutledge issued a statement calling the proposed consent decree "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," Rutledge said. "Today, ExxonMobil is being held accountable for the estimated 134,000 gallons of oil that flowed out of the ruptured pipeline."
Becky Keogh, director of the Arkansas Department of Environmental Quality, said the agreement "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," Keogh said.
An additional $600,000 will go to improve water quality in Lake Conway and its watershed, she said.
In an email, Exxon Mobil spokesman Flathman said, "We regret that this incident occurred and apologize for the disruption and inconvenience that it caused.
"ExxonMobil launched a rapid and effective response and worked closely with the U.S. EPA and the Arkansas Department of Environmental Quality to ensure cleanup and restoration took place as quickly as possible," he added.
All but the southernmost, 211-mile segment of the Pegasus has remained shut down since the Mayflower accident.
The proposed decree's introduction says Exxon Mobil has indicated that if it seeks to restart the northern segment of the Pegasus, it will do a "spike" hydrostatic, or water-pressure, test as part of an eight-hour "sustained-pressure" test, among other things.
The agreement does not say what the highest pressure would reach.
"That important detail is missing," said Richard Kuprewicz, a pipeline safety consultant who has been advising Central Arkansas Water.
State Desk on 04/23/2015