Exxon is fined $2.6M for spill

Pipeline agency cites safety lapses

A federal regulatory agency fined Exxon Mobil $2.6 million on Thursday over a series of safety violations that preceded an oil spill in Mayflower more than two years ago.

The fine levied against the oil giant's subsidiary, Exxon Mobil Pipeline Co., totals $2,630,400, which is $28,800 less than the regulatory Pipeline and Hazardous Materials Safety Administration, or PHMSA, had proposed in November 2013.

In a one-sentence emailed statement, corporate spokesman Christian Flathman said, "ExxonMobil Pipeline Company has received and is evaluating its options with respect to PHMSA's final order for the 2013 Mayflower incident."

The company has 20 days to pay the fine unless it petitions the agency's associate administrator during that time to reconsider the 46-page order.

The government found that the company had committed nine violations dealing with integrity management, or safety, practices.

Among other things, the safety administration ordered the company to modify its integrity management program to ensure that risks are adequately identified, especially those common to pre-1970 pipe made with electric resistance welding.

The industry has known for decades that such pipe -- which no longer is made -- is prone to the kind of seam cracks that ruptured in the Mayflower segment of the Pegasus pipeline.

Exxon Mobil must submit to the safety administration within 30 days a spreadsheet identifying all such pre-1970 pipe covered by the company's integrity management program and subject to a federal regulation for pipelines carrying hazardous liquids.

A section of the roughly 650-mile northern section of the Pegasus, built in 1947-48, cracked open between two houses in Mayflower's Northwoods subdivision on March 29, 2013, sending an estimated 134,000 gallons of heavy crude into the neighborhood, drainage ditches and a cove of Lake Conway.

Twenty-two homes were evacuated for months, and Exxon Mobil demolished three of them because of oil beneath their foundations. Some residents never moved back.

The line, extending from Patoka, Ill., to Corsicana, Texas, has been shut down since shortly after the spill, with only a 211-mile southern section, all in Texas, resuming service.

Thursday's order found that Exxon Mobil did not:

• "Properly consider the susceptibility of its ERW [electric resistance welded] pipe to seam failure" when establishing an integrity-management schedule based on the line's risk factors.

• Document its decision to merge four testable segments of the pipeline into two, thereby "diluting risk scores of higher threat segments, such as the Lake Maumelle Watershed and Mayflower populated areas."

• Perform a reassessment, or inspection, of the line's "seam integrity on the Patoka to Corsicana segment ... within a period of five years, not to exceed 68 months."

• Follow safety procedures, including those requiring notification of the Office of Pipeline Safety when scheduled seam inspections were delayed.

• Prioritize seam inspections of higher-risk segments of the pipeline over less risky sections.

• "Take prompt action to address [abnormal] conditions by temporarily reducing operating pressure or shutting down the pipeline until immediate repairs were completed."

• Obtain sufficient information about pipeline conditions within 180 days after an inspection or test.

• Follow its own plan related to periodic evaluation when it extended the timing of an inspection without evaluating the effect that delay could have on the company's ability to assess the line's risks.

• Comply with its own program by incorrectly indicating that a specific test had been performed and failing to correct that information when the test was delayed.

About 13.5 miles of the pipeline lie in the Lake Maumelle watershed, which provides drinking water for more than 400,000 central Arkansans. Central Arkansas Water has repeatedly urged Exxon Mobil to move the pipeline if ever it's restarted.

Utility spokesman John Tynan said Thursday that the federal order "confirms our statement that Exxon should have known about the susceptibility of seam failure and should have taken action prior to this rupture."

"And, frankly, that gives us concern with respect to how Exxon designs and implements its integrity management plan and [reduces] the ability to have faith" that the company will operate the pipeline safely should it restart, Tynan said.

According to the order, Exxon Mobil argued that it had complied with all applicable pipeline safety regulations and said a pipeline accident alone was not a basis for a civil penalty.

The pipeline safety agency on Thursday also announced a proposed rule to require that all hazardous-liquid pipelines have a system for detecting leaks and that they establish a timeline for inspections of affected pipelines after an extreme weather event or natural disaster. Among other changes, the proposed rule also would establish stricter repair guidelines for high-risk pipelines.

Under federal procedures, it will be more than a year before the proposed rule can take effect, even if it's approved.

State Desk on 10/02/2015