Utility’s warning to Exxon: Will sue

Notice requests 6 watershed fixes

Worried about potential problems with the Pegasus pipeline that runs through the Lake Maumelle watershed, Central Arkansas Water has notified Exxon Mobil and the U.S. pipeline regulatory agency that the utility will sue them unless the agency works diligently to address what the utility said are six violations of a federal safety law.

Central Arkansas Water, which oversees the drinking-water supply for about 400,000 central Arkansans, will file “a citizens suit” seeking an injunction to prevent Exxon Mobil Corp. from operating the Pegasus pipeline until the oil giant and two subsidiaries correct any violations within the watershed, the notification letter said. The utility also would ask that the pipeline be relocated outside the watershed.

The letter, dated Thursday and released to the public Friday, came almost six months after the 65-year-old Pegasus pipeline ruptured in a Mayflower subdivision on March 29, sending an estimated 210,000 gallons of thick crude oil into a residential neighborhood and a cove of Lake Conway. The cleanup there continues.

The letter advised Exxon Mobil Corp., Exxon Mobil Pipeline Co. and Mobil Pipe Line Co. of the utility’s intent to sue in U.S. District Court in 60 days. Such notification is required under the federal Pipeline Safety Act, the utility’s watershed-protection manager, John Tynan, said Friday.

The U.S. Pipeline and Hazardous Materials Safety Administration also would be a defendant, said the letter, signed by North Little Rock attorney James McHaney Jr. The letter also went to U.S. Transportation Secretary Anthony Foxx, whose department includes the safety administration.

Unless the pipeline administration is “diligently pursuing an administration proceeding for the violations set forth” in the letter, the utility intends to sue, the letter stated.

Damon Hill, a pipeline administration spokesman, said he could say only that agency officials “are currently reviewing the notice … and will respond accordingly.”

The notification letter disclosed that two pipeline ruptures had occurred within the watershed during a hydrostatic, or water pressure, test in 2006, when Exxon Mobil was preparing to restart the long idled line.

“Neither Exxon Mobil nor PHMSA reported these ruptures to CAW,” and the utility just recently learned of them, McHaney wrote.

In an email, Exxon Mobil spokesman Aaron Stryk said, “We are currently reviewing the letter and are in the process of developing a response.”

Despite the notice, the utility remains committed to working with Exxon Mobil and may not have to sue if needed actions are taken, Graham Rich, the water utility’s chief executive, said in a separate letter to six political leaders with constituents in central Arkansas.

To ensure drinking-water safety, the utility needs “comprehensive, unredacted information regarding the pipeline and its integrity,” Rich wrote.

“However, despite our best efforts for complete public transparency, ExxonMobil claims that much of the information that we have requested is protected from disclosure due to security and/or competitive advantage concerns. We have continuously requested this information since early April, but have yet to receive any requested information directly from Exxon-Mobil,” Rich wrote.

The utility had “reluctantly” on Aug. 27 provided Exxon Mobil with a confidentiality agreement that, Rich said, the oil company proposed as a way to share such information while also addressing the company’s security and competitive concerns, Rich said. But the utility still has not received an executed copy of the agreement or access to the agreed-upon information, he said.

“The continued lack of critical data requested by CAW has raised legitimate concerns regarding the potential of the Pegasus Pipeline restarting before CAW has sufficient time to review the necessary information and make informed decisions regarding the protection of the Maumelle Watershed,” Rich wrote.

The utility’s letter to Exxon Mobil and the U.S. government alleges these violations of the Pipeline Safety Act:

Failure to implement an adequate written integrity management program for each segment of the pipeline within the watershed, a “high-consequence” area. The watershed qualifies as such an area because the sole alternative water supply, Lake Winona, can provide only about 38 percent of Central Arkansas Water’s average daily consumption.

Failure to choose a testing method capable of assessing the pipeline’s seam integrity and finding hook cracks and other anomalies known to occur in the low-frequency welding used in this and some other pipelines built before1970. The 22-foot rupture in the Mayflower segment occurred along a seam in part because of such cracks, a laboratory hired by Exxon Mobil has determined.

“Specifically, the 2006 hydrotest appears to have been structured solely to establish the maximum operating pressure for the pipeline,” wrote McHaney, the utility’s attorney. Testing in the watershed was at such low pressures that it “was woefully inadequate for a test which should have been structured for an integrity management program,” he wrote.

Failure to change Exxon Mobil’s integrity management program to respond to the 2006 hydrostatic test results and to evaluate the consequences should a failure occur in the watershed.

“ExxonMobil knew or should have known from its analysis of the ruptures which occurred along the Pipeline during the 2006 hydrotest that the pipeline seam was at high risk of failure due to the presence of manufacturing cracking threats … yet it failed to conduct subsequent in-line inspections in the watershed with tools designed for the purpose of determining the existence of such manufacturing cracking threats,” McHaney wrote. Instead, Exxon Mobil used a tool “that is only capable of detecting corrosion and dents” in 2010, he said.

Failure to take adequate measures to mitigate consequences should there be a pipeline failure that could affect the watershed. McHaney said Exxon Mobil has failed to place enough pipeline valves in the watershed.

The only valve station for the pipeline in the watershed includes a check valve and two manually operated shutoff valves. And it would take “two hours at an absolute minimum” before a company representative could drive there and shut it off, the letter said.

“Up to 800,000 to 1,200,000 gallons of diluted bitumen [oil] could potentially escape into the watershed during this two hour period, depending on the location of the break and speed of detection and pipeline shutdown,” McHaney wrote. Further, in one scenario, oil could drain unimpeded into the Maumelle River.

Failure by Exxon Mobil to modify its response plans for the watershed to take into account the kind of oil the pipeline began transporting in 2006 - a Canadian crude oil with “the consistency of peanut butter” that must be diluted with chemicals, including the carcinogen benzene, to flow properly through the pipeline, McHaney wrote. When that kind of oil - called diluted bitumen - spills, it may sink - as happened after a large spill in the Kalamazoo River in Michigan in 2010, he said.

Failure to install adequate leak-detection technology capable of detecting releases into the watershed and failure to create the proper emergency notification protocol.

The pipeline, which extends about 850 miles from Illinois to the Texas Gulf Coast, has been shut down since the Mayflower accident. Exxon Mobil has not said when it hopes to restart the line and has not ruled out the possibility of permanently closing it.

U.S. Rep. Tim Griffin, R-Ark., one of the elected officials getting Rich’s letter, said he stands “shoulder to shoulder with CAW.”

“I must say that Exxon Mobil’s intransigence has forced CAW to take this extraordinary step in order to get Exxon Mobil to address serious questions about the safety of 400,000 Arkansas’ drinking water,” Griffin added. “Arkansans deserve transparency and openness from Exxon Mobil,” he said.

Sen. John Boozman, R-Ark.,said, “Adequate precautions must be in place to minimize the risk of our natural resources, including our water supplies.” He said he would “continue to track the investigation.”

Sen. Mark Pryor, D-Ark., said that for months, “we have called on Exxon and the Pipeline and Hazardous Materials Safety Administration to answer our questions. Unfortunately, we’re still waiting.”

“I will continue to push for the necessary data and information,” Pryor added.

The letter also went to Little Rock Mayor Mark Stodola, North Little Rock Mayor Joe Smith and Pulaski County Judge Buddy Villines.

Front Section, Pages 1 on 09/21/2013

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