Although fundamentals in natural gas…
The oil price crash has…
Exxon Mobil Corp.’s agreement in federal court to pay more than $5 million over its 2013 pipeline spill in Mayflower, Ark., isn’t enough for the town’s residents, nor does it satisfy state fish and game officials.
The energy giant agreed April 22 in a US District Court in Little Rock to pay $5.07 million to settle claims that it violated state environmental laws as well as the federal Clean Water Act on March 29, 2013, when its Pegasus pipeline broke open about 25 miles north of Little Rock, spilling more than 3,000 barrels of crude oil into a Mayflower neighborhood.
The oil not only contaminated homes and yards, but also oozed into a nearby creek, a wetlands area and a cove of nearby Lake Conway. Because of the spill, some residents were ordered out of their homes and could not return for weeks, even months in some cases.
Related: How To Spot An Undervalued Oil Company
Under a consent decree filed in the court, Exxon Mobil agreed to pay $3.19 million in federal civil penalties, heighten the safety of its pipelines and strengthen the company’s ability to respond to an accident. It also will pay $1 million in civil penalties to the state of Arkansas, $600,000 to improve water quality in Lake Conway and $280,000 to cover state’s legal costs in the case.
The public has 30 days to comment on the agreement, after which the court must either approve it or reject it.
“Oil spills like this one in Mayflower, Ark., have real and lasting impacts on clean water for communities,” said Cynthia Giles, assistant administrator of the Office of Enforcement and compliance Assurance for the US Environmental Protection Agency. “This settlement puts in place essential pipeline safety and response measures that are important to make this industry safer for communities.”
Related: Putin Betting On An Argentinian Shale Boom
ExxonMobil issued a statement saying, “We regret that this incident occurred and apologize for the disruption and inconvenience that it caused. ExxonMobil launched a rapid and effective response and worked closely with the US EPA and the Arkansas Department of Environmental Quality to ensure cleanup and restoration took place as quickly as possible.”
The April 22 agreement included damages for those evacuated from Mayflower and several who gave up entirely and sold their homes to Exxon or to its subsidiaries. But that doesn’t seem to be enough for the residents of the damaged neighborhood and the stewards of its nearby wetlands. A federal case filed by a group of residents is pending.
Related: Corruption Scandal Will Cost Petrobras At Least $2.1 Billion
Other claims have been filed locally, in Faulkner County Circuit Court. A lawyer for some of Mayflower’s residents, Ross Noland, said at least one of those claims has been accepted for trial in October. “Mayflower residents in civil suits seek compensation for exposure, disruption of their lives and reduction in the value of their property caused by the Pegasus Pipeline rupture,” Noland said.
Further, Rick Chastain, the assistant deputy director of the Arkansas Game and Fish Commission, says his agency has brought in a consultant to assess the damage to Lake Conway, its drainage systems, habitat and animal population. He said the commission will soon complete this assessment, and will then open negotiations with Exxon Mobil on covering the cost of repairing the damage.
If these negotiations fail, Chastain said, the state will file yet another lawsuit against the oil company.
By Andy Tully of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com