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Federal Government Reaches Settlement with Pipeline Companies Regarding Crude Oil Spills

Release Date: 08/15/2006
Contact Information: (404) 562-8327

Pipeline Companies to Pay $2.87 Million Civil Penalty for Oil Spills in Kentucky and Louisiana

WASHINGTON – The federal government today reached a settlement with Mid-Valley Pipeline Company (Mid-Valley) and pipeline operator Sunoco Pipeline L.P. (SPLP), requiring the companies to pay a $2.57 million penalty relating to a January 2005 spill that dumped more than 260,000 gallons of crude oil into the Kentucky and Ohio Rivers.

The complaint and consent decree also address the government’s claim under the Clean Water Act against Mid-Valley and the pipeline operator, Sun Pipe Line Company (Sun), for the spill of 63,000 gallons of crude oil due to pipeline corrosion on Nov. 24, 2000, into Campit Lake in Claiborne Parish, La. The settlement requires Mid-Valley and Sun to pay a federal civil penalty of $300,000 for that spill.

The consent decree, filed today in the U.S. District Court for the Eastern District of Kentucky, represents the combined efforts of both the U.S. and the Commonwealth of Kentucky, which is party to the settlement.

“Today’s agreement demonstrates the Justice Department’s on-going efforts along with other federal and state agencies, to enforce our environmental laws,” said Sue Ellen Wooldridge, Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division. “The spill in the Kentucky River was serious, and today’s settlement will ensure that the defendants are being held responsible for their actions.”

“This settlement underscores the commitment of both the Environmental Protection Agency and our state partners to maintain an aggressive enforcement program that protects human health and the environment,” said Jimmy Palmer, EPA Regional Administrator. “This joint effort shows once again that, working together, we can achieve decisive, and very effective, results.”

Mid-Valley and SPLP will pay $1.4 million to the United States, and $1.17 million to Kentucky in penalties for the Kentucky spill. In addition, Mid-Valley and SPLP will perform measures to enhance future spill response preparation, and will reimburse the Commonwealth for response costs of more than $120,000. The defendants have already reimbursed federal response costs of at least $234,000. The settlement also requires Mid-Valley and SPLP to donate $230,000 to a non-profit organization dedicated to improving the environment of Kentucky.

The spill in Kentucky from the Mid-Valley Pipeline occurred on January 26, 2005, as a result of a girth weld failure in 22-inch diameter pipe that had been laid in 1950. The oil spill harmed hundreds of migratory waterfowl. The oil slick was over 17 miles long and reached the Ohio River.

The settlement resolves claims asserted in the complaint – filed jointly with the consent decree – pursuant to the federal Clean Water Act and the Kentucky environmental law. This settlement is in addition to the approximately $9.5 million defendants spent on their response action to clean up the Kentucky spill. The Clean Water Act makes it unlawful to “discharge oil or any hazardous substances into or upon the navigable waters of the United States [or] adjoining shorelines” and makes owners, operators, or any person in charge of onshore oil facilities which illegally discharge oil or hazardous waste liable for civil penalties.

The $300,000 penalty for the Louisiana spill is in addition to the $2.2 million spent by the defendants in response costs and restoration, and to the over $26,000 reimbursed for federal response costs.

The penalty money paid to the United States for these spills will be deposited in the federal Oil Spill Liability Trust Fund.

The proposed consent decree is subject to a 30-day public comment period and court review and approval. It can be obtained on the Justice Department Web site at
http://www.usdoj.gov/enrd/Consent_Decrees.html.