Cities, county, utilities ask Justice to rethink proposed oil-spill deal

Central Arkansas Water and 10 other utilities or government entities urged the Justice Department on Thursday to withdraw or renegotiate a proposed settlement with Exxon Mobil over a 2013 oil spill in Mayflower.

In a strongly worded request, Central Arkansas Water and other Arkansas "water users" said that at "a minimum," the proposed consent decree should, among other things, require the oil giant to remove the Pegasus pipeline from the Lake Maumelle watershed.

In total, the water users serve more than 750,000 Arkansans. Central Arkansas Water provides drinking water to about 400,000 of them.

Exxon Mobil spokesman Richard Kiel said Thursday that he "honestly" did not know whether Exxon Mobil would consider moving the line out of the watershed and that he would "have to look into that" matter.

Those joining Central Arkansas Water in the petition were the cities of Little Rock, North Little Rock, Sherwood, Cabot, Bryant and Hot Springs; Pulaski County; Searcy Waterworks; Cabot Waterworks; and Malvern Waterworks.

The Justice Department announced in April that two Exxon Mobil subsidiaries, Exxon Mobil Pipeline Co. and Mobil Pipe Line Co., agreed under the proposed consent decree to pay almost $5 million in government penalties and to take corrective precautionary actions as a result of the Mayflower oil spill.

The proposed decree, arising out of a federal lawsuit filed by the state and U.S. governments in 2013, was announced by the Justice Department and Arkansas Attorney General Leslie Rutledge. The plan, which provided for a 30-day comment period, is subject to a federal judge's approval.

The water users labeled as "unacceptable" and "mere fluff" the proposed decree's statement that Exxon Mobil has agreed to treat a 650-mile stretch of the 850-mile-long pipeline as susceptible to longitudinal seam failure. The petitioners said the companies had known the line was vulnerable no later than 2006 and likely as early as 1991.

Yet, the petitioners said the companies had refused to treat the Pegasus pipeline accordingly, despite federal regulations, and as a result put "the water supply sources for three-quarters of a million people in Arkansas in serious jeopardy."

At this stage, the petitioners said, the companies should admit that their failure to treat the pipeline as vulnerable to longitudinal seam failure constituted "gross negligence" under U.S. Code 1321(b)(7).

That portion of the law relates to oil- and hazardous-substance liability and says gross negligence can result in a civil penalty of not less than $100,000 and not more than $3,000 per barrel of oil or hazardous substance discharged into U.S. navigable waters.

The proposed consent decree said 3,190 barrels, or 134,000 gallons, of oil spilled from the Pegasus pipeline when it ruptured March 29, 2013, in a Mayflower neighborhood. The oil also spilled into ditches and a cove of Lake Conway.

The amount spilled was lower than the 210,000 gallons, or 5,000 barrels, of heavy crude that Exxon previously had estimated had spilled.

Commenting by email on the petitioners' requests Thursday, Exxon Mobil spokesman Christian Flathman said, "We respect the public's role in this process. ExxonMobil Pipeline Company took immediate responsibility for the spill, cleaned it up and honored all valid claims."

The petitioners also told the Justice Department that Exxon Mobil should agree to abide by a work plan approved by the water users. Further, they said that plan should include the installation of remotely operated valves, installation of leak-detection systems and "shutdown and isolation procedure updates."

The company also should follow a water-user-approved integrity management plan that would include additional aerial, in-line and on-the-ground inspections, they added.

"The Pegasus pipeline should be removed from critical watersheds where it is clear that any leak from or rupture of the pipeline would reach the water supply body," the water users told the Justice Department.

They acknowledged, however, that the pipeline's northern segment would have to cross some creeks, streams and rivers at various locations between Corsicana, Texas, and Patoka, Ill.

But the petitioners said the pipeline "does not have to parallel the entire 13.6 miles of the northern shore of Lake Maumelle."

They added: "In many areas the Pegasus pipeline is within several hundred feet of the critical water supply lake, and any materials leaked from the pipeline will quickly flow, without any interruptions, into the lake -- thereby shutting down this important water supply source. Removal from the pipeline from Lake Maumelle's watershed is possible" and should be required.

The petitioners said Exxon Mobil should replace "all pipe sections at all river, stream or creek [crossings] up-stream from a potable water supply system's in-take sites with additional ... reinforcement and install automatic valves on both sides of the water body that close upon detection of a leak."

Exxon Mobil also should agree "to a third-party monitoring of compliance with and enforcement of the Consent Degree by the Water Users" and should make annual payments to the water users for such monitoring, the petitioners said.

Kiel, of Exxon Mobil, said the company believes "an appropriate regulatory oversight policy is already in place."

In a separate summary of the proposals to the Justice Department, Central Arkansas Water said remedies available under Arkansas law are limited but that the U.S. government could do more.

"Federal law has declared 'that it is the policy of the United States that there should be no discharges of oil or hazardous substances into or upon navigable waters of the United States,'" the utility said, citing a segment of the Clean Water Act.

"This is a zero tolerance pronouncement, but [the Pipeline and Hazardous Materials Safety Administration] has not adopted zero tolerance standards for pipeline operations," it added.

The safety administration, also called PHMSA, regulates pipelines and has been considering whether to find Exxon Mobil guilty of nine safety violations since November 2013.

In the filing with the Justice Department, the petitioners said they "have little or no confidence in the ability of PHMSA to independently and thoroughly enforce the requirements of [its own] Corrective Action Order or the remedial work plan" for the Pegasus pipeline.

Also, the petitioners do not have confidence in the oil companies' "ability or intent to comply with the letter or intent of the Consent Decree given [their] history of non-compliance."

Central Arkansas Water spokesman John Tynan said the utility has "real concerns" about the safety administration's "ability to thoroughly enforce [its] regulations, as well as hold Exxon's feet to the fire."

"That's one reason why we requested third-party enforcement" of the ultimate consent degree, any future corrective-action orders from the regulatory agency, and Exxon Mobil's work and integrity-management plans for the Pegasus.

The petitioners' other recommendations included one that would require Exxon Mobil to complete a "spike hydrotest" of the pipeline at specified minimum pressures "at all locations in the watersheds of public drinking water."

Independent third parties and water users could review the test results under this proposal.

The water users also said Exxon Mobil should have to provide spill-response training for all first responders and affected water suppliers, rather than just the company's first responders. Local responders such as police and firefighters were the first on the scene after the Mayflower spill, they noted.

State Desk on 05/29/2015

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