By Alison Sider
Exxon Mobil Corp. must pay a $1.05 million penalty for safety
violations related to a 2011 pipeline break under Montana's
Yellowstone River, federal regulators said Friday evening.
The pipeline was buried beneath the riverbed, but flooding amid
a summer snow melt exposed it and stressed it to the breaking
point. An estimated 1,500 barrels of oil spilled into the river and
were carried miles downstream.
The Yellowstone River is again the site of a major cleanup
effort, following another pipeline break last week about 230 miles
east of Exxon's spill. It isn't yet clear what caused Bridger
Pipeline LLC's Poplar pipe to fail under the river. The company now
estimates that about 960 barrels--more than 40,000 gallons--spilled
into the partially iced-over river.
That incident fouled drinking water for residents of the city of
Glendive, Mont., but state officials said Friday that the water is
once again safe to drink.
In the case of the 2011 spill, Jeffrey Wiese, associate
administrator of the Pipeline and Hazardous Materials Safety
Administration, upheld a finding that Exxon hadn't adequately
prepared for the possibility that flooding could cause the pipeline
to fail--something that had happened to pipelines in the area in
the past. Exxon had argued that its line had survived more severe
floods intact and it didn't have reason to believe that the line
was in danger.
Exxon spokesman Christian Flathman said in a statement Saturday
that Exxon is reviewing the agency's final order. The company has
20 days to ask the agency to reconsider the ruling.
The agency found that Exxon complied with federal regulations
and did take steps ahead of time to prevent and mitigate a
potential spill in the area, withdrawing one of its previous
allegations against the company. That helped reduce the fine by
nearly $700,000 from what the agency proposed in 2013.
Also on Friday, Exxon agreed to a $2 million settlement of
claims relating to seven private properties impacted by the oil
spill, said Jory Ruggiero, an attorney for the plaintiffs.
"Exxon Mobil Pipeline Company committed to paying for the
cleanup and all valid claims related to the incident. This
settlement was an extension of that process," Mr. Flathman
said.
Exxon reached a $1.6 million settlement with the state of
Montana in 2013 and agreed to reimburse the state for more than
$760,000 in cleanup costs.
Write to Alison Sider at alison.sider@wsj.com
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