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Utility objects to settlement on oil pipeline

Agency: Proposed decree ignores risks to watershed by Debra Hale-Shelton | July 17, 2015 at 4:02 a.m.

A federal judge should reject or at least delay the Justice Department's proposed settlement with Exxon Mobil, Central Arkansas Water said in a letter that assailed the government for dismissing the utility's request to move the Pegasus pipeline away from the Lake Maumelle watershed.

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The underground pipeline, built in 1947-48, runs through about 13.5 miles of the lake's watershed. Central Arkansas Water had said the oil giant should be required to relocate the Pegasus.

The proposed consent decree with the state and federal governments would settle a lawsuit filed against two Exxon Mobil Corp. subsidiaries, Exxon Mobil Pipeline Co. and Mobil Pipe Line Co., shortly after the Pegasus pipeline ruptured in March 2013 and spilled tens of thousands of gallons of heavy crude oil into a Mayflower neighborhood.

"The United States ... ignores the long-term risks and impacts of allowing an aging, decrepit, and flawed pipeline to remain and potentially operate in the drinking water supply for over 400,000 people, only 8 miles from where the Mayflower rupture occurred," utility spokesman John Tynan wrote in the letter, released Thursday.

"If the Mayflower rupture (or the future rupture that the [Justice Department's court] Brief presupposes) had occurred within the Lake Maumelle watershed, the results would have been (or will be) catastrophic," the letter added. "The long-term costs and impacts on the affected communities were apparently not considered by the United States in their negotiation of the Consent Decree."

The Justice Department has said negotiating the pipeline's relocation is "'not a reasonable alternative'" because of "'the current long-term idling of the pipeline, the uncertainty of future operations, and the immense cost and effort that would be involved in ExxonMobil rerouting the existing pipeline,'" Tynan noted in the letter, dated Wednesday.

Exxon Mobil spokesman Christian Flathman said Thursday that the oil company was reviewing the utility's letter.

Justice Department spokesman Wyn Hornbuckle said the department had no further comment beyond what it already has said in court filings.

As an alternative to rejecting the proposed decree, the utility suggested that U.S. District Judge Kristine Baker delay signing and entering it until after the federal Pipeline and Hazardous Materials Safety Administration rules on Exxon Mobil's appeal of nine "probable" safety violations and a proposed compliance order. At that point, the utility said, the court should give the public time to evaluate safety improvements and protections that may be achieved through that process.

In November 2013, the safety administration proposed that Exxon Mobil pay a total of $2,659,200 in fines as a result of the "probable" violations of federal regulations. Exxon Mobil appealed, but the agency has yet to rule.

Central Arkansas Water also argued in its letter that the Justice Department "repeatedly states in the brief that the proposed Consent Decree will be available as a hammer when the next spill occurs rather than taking meaningful and measurable steps to ensure that another spill is prevented. In fact, by its own admission, the United States believes another pipeline spill will occur in the future."

In the brief at issue, the department said the utility "fails to recognize the significance" of a safety provision in the decree that would require Exxon Mobil to treat its entire northern section as "susceptible to longitudinal seam failure" under federal regulations and, as a result, mean more testing and monitoring.

That utility's letter also complained that the Justice Department has said the proposed decree requires Exxon Mobil to acknowledge that it will comply with a federal regulatory agency's corrective-action order "as a condition of this settlement."

"This statement is incorrect," Tynan wrote.

"Compliance is not a condition of this settlement; rather, stating that ExxonMobil intends to comply is an introductory statement within the settlement. A representation or intention is not a binding commitment, nor is it enforceable," he added.

The utility said the negotiated payments of $1,880,000 to the state and $3,190,000 to the United States "are not nearly sufficient to deter any future misconduct on ExxonMobil's behalf."

State Desk on 07/17/2015

Print Headline: Utility objects to settlement on oil pipeline


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