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With Unusual Speed Officials Slap Exxon with Oil Spill Lawsuit. Why?

The suit that state and federal officials recently filed could signal they are especially upset with Exxon's conduct. It could also be politics as usual.

Jun 19, 2013
Stream near the site of ExxonMobil's Arkansas spill in the town of Mayflower.

The lawsuit that state and federal officials in Arkansas filed last week against ExxonMobil is unusual, pipeline experts say, because government agencies usually wait much longer—sometimes even years—before filing lawsuits against companies involved in pipeline accidents.

Exxon's Pegasus pipeline ruptured on March 29, spilling at least 210,000 gallons of heavy Canadian crude oil into Mayflower, Ark. about 25 miles northwest of Little Rock.

"And this [the lawsuit] comes along three months after?" said Carl Weimer, executive director of the Pipeline Safety Trust, a nonprofit watchdog organization based in Bellingham, Wash. "There's something at work here we simply don't know about."

Philadelphia attorney Andy Levine, a former senior assistant regional counsel for the U.S. Environmental Protection Agency, described the legal strategy being pursued in Arkansas as "a head scratcher."

"It makes you wonder what was happening behind the scenes that caused this to ramp up so quickly to full-blown litigation," Levine said.

Exxon has publicly apologized for the spill and has offered to buy the 22 houses that were evacuated and still remain empty. Much of the cleanup now focuses on a cove of Lake Conway, a popular recreation area renowned for its fishing and scenic setting. In an April 26 accident report, Exxon put the cost of the spill at $16.4 million. 

The 65-year-old Pegasus line runs 850 miles across four states from Patoka, Ill. to Nederland, Texas. It has been closed since the spill and Exxon hasn't revealed when it might be re-opened.

The lawsuit filed against Exxon was filed by Arkansas Attorney General Dustin McDaniel and U.S. Attorney Chris Thyer on behalf of the EPA. It claims that the oil that spilled into the water around Mayflower created pollution levels above acceptable human health and aquatic life criteria and that Exxon has improperly stored petroleum-contaminated waste collected during the cleanup near the spill site.

EPA spokeswoman Jennah Durant declined to discuss why the lawsuit was filed so quickly. She referred that question to the Arkansas Attorney General's office.

Aaron Sadler, a spokesman for the Attorney General’s office, said the timing was right for litigation.

"ExxonMobil's liability is clear," he said. "We filed because we were ready to file."

Sadler also said that if the office didn't file quickly it risked losing its standing to sue, because civil litigation already has been filed by homeowners alleging violations of the federal Clean Water Act. But Sadler later downplayed that point, saying it wasn't the primary motivation.

The lawsuit outlines the potential civil penalties and damages Exxon could face for violating the Clean Water Act, the Arkansas Hazardous Waste Management Act, and the Arkansas Water and Air Pollution Control Act. Federal civil penalties could range from $1,100 to $4,300 for each barrel of oil spilled, depending on whether Exxon is found guilty of negligence or willful misconduct. An estimated 5,000 barrels spilled from the pipeline.

Exxon spokesman David Eglinton said the company does not comment on pending litigation.

"It is important to note that EMPCo (ExxonMobil Pipeline Company) has been operating transparently under the direction of the Unified Command, which includes the U.S. EPA, Arkansas Department of Environmental Quality and Faulkner County, along with the Arkansas Department of Health," Eglinton said in an email. "This cooperation has included emergency response and cleanup operations, monitoring air quality levels and developing waste disposal plans."

Levine, the former EPA attorney, said a number of interim steps are usually taken before a lawsuit of this nature is filed.

The first step is asking for voluntary compliance, Levine said. The company and the regulators agree on what remediation is needed and what additional safeguards need to be put into place.

"Then there would be a period of time—longer than three months—where the company would act and regulators would monitor the progress," he said.

If a more formal plan is needed, Levine said regulators usually devise a consent order spelling out what the company needs to do. It is signed by both the regulator and company officials and can be enforced in court, if necessary.

A more aggressive form of compulsory compliance would be a consent decree, Levine said.  Here a judgment confirms a voluntary agreement between parties to a lawsuit in return for withdrawal of the case.

Typically, consent decrees are orchestrated ahead of the litigation, Levine said, so by the time the case gets to court both parties have agreed to the terms. 

It's usually only after these interim steps fail that regulators resort to litigation, he said.

"Environmental regulators have a wide variety of tools to gain compliance," Levine said. "In this instance regulators have chosen the most aggressive course of action from the beginning."

No state or federal lawsuits have been filed in another major pipeline accident involving Canadian heavy crude—a 2010 spill that sent more than a million gallons into and around Michigan's Kalamazoo River. That pipeline, owned by Enbridge Inc., was repaired and re-started less than two months after the accident.

The speedy filing of the lawsuit against Exxon suggests to Levine that something went on behind the scenes. But he said the lawsuit doesn't offer much insight into what that might be. He said the only clue was the allegation that Exxon had missed the deadline to remove the contaminated debris.

"Prosecutors will [often] throw in some barbs that signal their irritation," he said. "That's lacking in this case."

Levine said there could also be political reasons for the lawsuit. These are the most subtle of motives and are difficult to discern and interpret.

"This is the part we are not privy to," he said. "The state may have felt that Exxon was not taking them seriously enough and this lawsuit is what you do to be perceived as a big player."

Some suspect that McDaniel, the attorney general, is pursuing the case because he wants to make the most of the 18 months remaining in his second and last term in office. Earlier this year he dropped out of the race for the Democratic nomination for governor after acknowledging an extramarital relationship.

John Fiveash, a Tallahassee, Fla. attorney whose practice includes representing companies in criminal cases involving the Clean Water Act, said the litigation smacks of regulators being especially upset with Exxon.

A lawsuit certainly is an attention getter, he said.

"If [regulators] don't think things are being done properly or with the diligence they think is required in a matter, they have this option available to compel compliance," Fiveash said.

A day after the lawsuit was filed in Arkansas federal court, Rep. Ed Markey, a Massachusetts Democrat and member of the House Natural Resources Committee, sent a letter to Exxon raising questions about another aspect of the spill: He said Exxon was using an unapproved response plan that gave it 18 minutes to respond to a spill instead of the 12 minutes that federal regulators had approved in the company's 2009 plan. Exxon submitted the new plan just two weeks before the spill.

Exxon has said it shut down the pipeline within 16 minutes of discovering a pressure drop on the line. Police transcripts obtained by InsideClimate suggest that the company arrived at the scene of the spill 24 minutes after the police alerted the company about the rupture, and that it shut off the pipeline minutes after that. 

Exxon Vice President Theresa M. Farielflo said the 2013 plan superseded the 2009 plan.

"Any suggestion that detection and shutdown efforts were untimely or inconsistent with its Emergency Response Plan is simply incorrect," Farielflo said in a May 28 letter to Markey.

Markey has asked the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) to review Exxon’s response to the spill.

"It is imperative that oil companies operate under an oil spill emergency response plan that has been approved by your agency," Markey said in a June 14 letter to PHMSA Administrator Cynthia Quarterman.

The questions Markey wants PHMSA to answer by July 1 include what penalties or enforcement actions could be taken against the company for operating under an unapproved response plan, and the rationale Exxon provided PHMSA for wanting to extend its response time.

Response times are critical because a difference of just a few minutes could send thousands of additional gallons of oil into the environment, said Jonathan Phillips, Senior Policy Advisor for the House Natural Resources Committee.

That additional time could take on even more significance for pipelines carrying diluted bitumen, or dilbit, the type of oil involved in both the Arkansas and Michigan spills. Because bitumen is too thick to flow through pipelines, it is diluted with natural gas liquids and turned into dilbit. When dilbit spills into water, the natural gas liquids gradually evaporate, allowing the bitumen to sink.

The proposed Keystone XL pipeline from Canada to the Texas coast would also carry dilbit.

Phillips said PHMSA should ask Exxon to answer another important question: Why did Exxon revise its plan and include more time to react to a spill?

"You could conclude Exxon had some additional information that allowed them to determine internally they needed more time to respond," Phillips said. "Something changed. The question is what."

When asked by InsideClimate News to explain the need for additional time, Exxon's Eglinton declined to answer. He said the company will respond to the official inquires.

In the meantime, PHMSA has granted Exxon additional time to submit its final metallurgic analysis of the 22-foot section of pipeline that split open.

Exxon submitted a preliminary report to PHMSA in May, but requested more time for the final report.

"Upon review of the draft report, [Exxon] believes additional mechanical and metallurgical testing is warranted to better understand the pipe properties and potential failure mechanisms," the company said in its June 6 request.

PHMSA granted the extension and set a deadline of July 10 for the final report.

Both PHMSA and Exxon have refused to release the preliminary report.

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