YELLOWSTONE SPILL:

Mont. lawmakers, feds press Exxon on cleanup costs, remediation

Montana Sen. Jon Tester (D) yesterday asked the CEO of Exxon Mobil Corp. to pay for the full cost of cleaning the estimated 1,000 barrels of oil that spilled from the company's Silvertip pipeline into the Yellowstone River last weekend.

In a phone call yesterday with CEO Rex Tillerson, Tester said the company should draw from its nearly $11 billion in first-quarter profits and must do so in order to continue its role as a responsible corporate neighbor.

"Exxon has responded to this accident quickly and effectively. But as taxpayers and customers, we have done our part," Tester said in a statement. "Exxon has the means to fully absorb the cost of cleanup and recovery without squeezing Montana taxpayers or hurting local refinery jobs, and it should."

Soon after Tester's call, the Pipeline and Hazardous Materials Safety Administration issued a corrective order that requires Exxon to drill beneath the river and replace the ruptured section of Silvertip as well as conduct a comprehensive risk assessment of water crossings along the line. PHMSA's order also mandates that Exxon pinpoint the cause of the line break within 60 days, obtain the agency's approval of a restart plan before restarting Silvertip and perform a follow-up inspection within 90 days.

"It is our responsibility to ensure pipelines are safely delivering energy to U.S. households and businesses, and when companies are not living up to our safety standards, we will take action," Transportation Secretary Ray LaHood, whose agency supervises PHMSA, said in a statement on the order. "We will continue to work with [U.S.] EPA, while ensuring that those responsible are held accountable."

Montana's senior senator, Max Baucus (D), also queried Tillerson yesterday requesting information on the integrity of the 20-year-old Silvertip line, as well as the company's inspections and correspondences with federal regulators and the status of cleanup efforts and oil spill claims.

"As a longtime operator in the Billings area, your company knows how vital the river is to the economy and quality of life of southern Montana," he said. "I trust that this understanding will infuse your continuing response to the spill."

Montana Rep. Denny Rehberg (R) said he has been receiving regular updates from cleanup crews on the ground and that his primary concern is minimizing potential health concerns and limiting damage. He emphasized that Exxon provides important jobs in Montana and is a crucial partner in developing the state's energy reserves.

"Our ability to respond quickly and effectively to this sort of crisis is unrivaled anywhere in the world, but the better approach is to make sure nothing like this can ever happen again," he said in a statement.

Montana Gov. Brian Schweitzer (D) yesterday toured Laurel, Mont., the site of the spill, and said the cleanup effort would continue with the full support of state agencies including Montana Disaster and Emergency Services and the Department of Environmental Quality.

"The cleanup is done when the state of Montana says it's done," Schweitzer said. "State agencies will monitor Exxon Mobil and any other responsible parties until this spill and impacts of this spill are completely cleaned up. The parties responsible will restore the Yellowstone River."

Gary Pruessing, president of ExxonMobil Pipeline Co., said yesterday that the company has about 350 people working on the response effort, including about 150 to 200 in the field. But the company has not estimated the total cost of the cleanup.

"Quite frankly that is not our primary focus right now. Our focus is making sure we go out and find where the oil is and go out and clean it up," he told reporters in a conference call. "It's not about the dollars or the numbers, it's about making sure we complete the response properly."

Pruessing said the company has 8 miles of booms and 2,000 pads to isolate and absorb the oil. It also has eight watercraft on standby that are hindered by the Yellowstone's high flows.

He said no oil has been detected beyond 25 miles from the site of the spill and that the oil has been in "small patches."

"In no case have we found large sections of the bank to all be contaminated in one area," he said, adding that it was not known what percentage of the riverbank would need to be treated.

He added that water samples taken by U.S. EPA downstream of the spill await lab results in the next couple of days and that he was not aware of any downstream municipalities whose water intakes continued to be shut down.

The cities of Billings and Huntley had temporarily shut down their intakes after the spill as a precaution, he said.

Pipeline safety debated

Meanwhile, the new leak continued roiling the climate surrounding broad pipeline safety legislation, a historically bipartisan effort that lawmakers began debating last year and have vowed to advance this summer (E&ENews PM, July 5).

The House Energy and Commerce Committee's senior Democrat, Rep. Henry Waxman of California, took the opportunity to prod Republicans for pursuing measures to speed approval for Keystone XL -- a controversial $7 billion U.S.-Canada link -- before moving forward on safety reform.

"The Yellowstone River is flowing with Exxon Mobil oil, TransCanada's Keystone pipeline has had 12 spills in the last year, and Enbridge's massive spill in Kalamazoo still isn't cleaned up," Waxman said through a spokeswoman, invoking the current Montana leak as well as two recent incidents along Midwestern pipelines.

"These spills should serve as a wake-up call. Instead of fast-tracking approval of a new, massive tar sands pipeline from the Canadian border to the Gulf coast, the Congress should be updating our pipeline safety laws."

Keystone XL would cross the Yellowstone River on its route through six states, shipping Canadian oil sands crude to Gulf Coast refineries, if it wins a permit from the State Department following a final environmental review set for completion by the end of this year.

Underscoring the likelihood of resurgent momentum for pipeline safety reform, PHMSA's statement accompanying its corrective order to Exxon yesterday included a summary of draft legislation that LaHood proposed to lawmakers last year. That framework for a safety bill would hike the maximum civil fines for rule-violating pipeline operators while authorizing new inspectors at the agency and advancing new data collection standards that could be used to strengthen safety regulations.

Pruessing, of Exxon, said yesterday that the company would work with federal pipeline regulators on a strategy for excavating into the riverbed where the rupture occurred to monitor conditions ahead of any future restart of Silvertip.

When the pipeline was shut for one day in May as a precaution, he added, the company restarted crude flow after being "comfortable, at the time, that this was a safe pipeline to run." At that time, he said, there were between 5 and 8 feet of cover above the oil line.

"Obviously, conditions changed that we hadn't anticipated, and we regret that we weren't able to perceive that," Pruessing told reporters.

Click here to read PHMSA's corrective order to Exxon on Silvertip.

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