ExxonMobil to challenge $1.7m penalty for Yellowstone pipe rupture

14 May 2013 22:52  [Source: ICIS news]

HOUSTON (ICIS)--The US Department of Transportation (DOT) has scheduled a hearing on 17 July for ExxonMobil to challenge a $1.7m (€1.3m) civil penalty for the July 2011 pipeline rupture and spill into the Yellowstone River, a spokesman at the agency said on Tuesday.

The DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) can not provide additional comment on open enforcement cases and pending hearings, the spokesman said.

In March, the PHMSA sent a letter to the US oil giant, saying that severe flooding caused erosion and scouring of the Yellowstone River, exposing the crude oil pipeline. Debris gradually increased external stress on the exposed pipeline, causing a “guillotine break” on 1 July 2011, which resulted in over 1,500 bbl of oil spilled.

The PHMSA alleged that ExxonMobil failed to properly address known seasonal flooding risks to the safety of its pipeline system and to implement measures that would have mitigated a spill.

The agency added that ExxonMobil failed to establish written response procedures for personnel to protect the pipeline from natural disasters and minimise the volume of oil released.

In response, ExxonMobil said it would review the letter and continue to work with the PHMSA on any follow-up actions.

However, the company sent a letter on 25 April, requesting a hearing on the probable violation and proposed civil penalty.

“We respectfully request that all of these allegations, including precautionary shutdowns of the line on two occasions, reflect the appropriate response of [ExxonMobil], rather than suggest that the company as not aware or involved with local conditions and concerns,” the letter said.

ExxonMobil said its Integrity Management Program did address flooding and that the day of the incident exceeded 500-year-flood thresholds.

The company added that it did address preventative and mitigative measures and adopted those measures at the Yellowstone River crossing.

ExxonMobil also had procedures consistent with regulatory requirements that addressed seasonal flooding and released amounts.

“For all of the reasons identified above in this response, including the fact that [ExxonMobil] has cooperated with PHMSA from the outset of this matter, and other matters as justice may require, the company respectfully requests that the PHMSA reduce the amount of the civil penalty as proposed,” it said.

ExxonMobil did not immediately respond to requests for comments on Tuesday.

($1 = €0.77)

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By: Tracy Dang
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