January 20, 2012 in City

Exxon settles with Montana over spill

Company to pay $1.6 million, revises oil loss estimate upward
Matthew Brown Associated Press
 
Associated Press photo

Oil from a ruptured Exxon Mobil pipeline is seen in the Yellowstone River and along its banks near Laurel, Mont., last July.
(Full-size photo)

BILLINGS – Exxon Mobil agreed Thursday to pay $1.6 million in penalties to the state of Montana over water pollution caused by a pipeline break last summer that fouled dozens of miles of shoreline along the scenic Yellowstone River.

Montana Department of Environmental Quality Director Richard Opper said the penalties in the case mark the largest in the agency’s history.

The Texas oil company will pay $300,000 in cash and spend $1.3 million on future environmental projects, according to a copy of the settlement obtained by the Associated Press.

Also Thursday, Exxon increased its estimate of how much crude spilled into the river during the July 1 accident near Laurel to 1,509 barrels, or more than 63,000 gallons.

That’s up from earlier estimates of 1,000 barrels spilled – a number that Gov. Brian Schweitzer had disputed as too low.

Schweitzer said Thursday that the settlement and revised spill estimate came only after the state pressured Exxon to be more accountable in the aftermath of the spill.

“They’re not prepared to give you any accurate information if you don’t hold their feet to the fire,” the Democratic governor said.

In an emailed statement, Exxon spokesman Alan Jeffers reiterated that the company “takes full responsibility” for the accident.

“We are pleased to be able to resolve this environmental compliance issue with the State of Montana,” Jeffers wrote of the settlement.

Only about 10 barrels of crude were recovered by cleanup crews, federal officials have said. That’s less than 1 percent of the total spilled.

The cause of the spill remains under investigation.

The 12-inch Silvertip pipeline was buried just a few feet beneath the riverbed when it was installed 20 years ago. High water last spring and summer eroded that cover, which officials have speculated could have exposed the line to damaging debris.

Thursday’s settlement came after more than three months of negotiations between attorneys for Exxon and the state.

The agreement contains provisions to shield the company against any future lawsuits from state agencies, although it will not become final until after a 30-day comment period.

“It was a significant violation. There were hundreds and hundreds of acres of land affected and it was a major oil spill,” Opper said. He added the penalties likely would have been “a lot higher” if Exxon had not cooperated on the cleanup.

The settlement requires continued monitoring of environmental damage by Exxon and for the company to clean up any more oil that is discovered.

Testing of river sediments near public water supply intakes also will be required.

As part of the settlement, Exxon will reimburse more than $760,000 in emergency response costs racked up by state agencies.

Still pending against the company is a lawsuit from a group of riverfront property owners who are seeking tens of millions of dollars in damages over allegations that the company failed to properly clean up after the spill.

Plaintiffs’ attorney Cliff Edwards said the company’s revised spill estimate was suspect and that he had “no faith in that number.” Edwards added that the settlement with the state did not alter the fact that the company failed to protect the line as the Yellowstone was flooding in the weeks leading up to the spill.

“They just continued to run crude,” he said.

Attorneys for Exxon have asked U.S. District Judge Richard Cebull in Billings to dismiss the lawsuit. A decision is pending.

Since the spill, Exxon has installed a new section of the pipeline buried several dozen feet beneath the riverbed.

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