Yellowstone spill to cost Exxon $135m

2011-11-05 17:28

Matthew Brown

Montana - Exxon Mobil said on Friday it expects to incur costs of about $135m - more than triple an earlier estimate - from an oil pipeline break beneath Montana's Yellowstone River that triggered a massive effort to limit damage to the scenic waterway.

The cost figure was released to The Associated Press. It includes for the first time the expense of replacing the section of broken pipeline with a new one buried more deeply beneath the river.

The company's Silvertip crude oil pipeline broke July 1 during severe flooding.

In the 56 minutes it took Exxon Mobil to seal off the line, an estimated 1 000 barrels of oil poured into the river. That fouled dozens of miles of riverbank, numerous islands and swaths of low-lying cropland with crude.

More than 1 000 workers were involved in the cleanup effort at its peak.

Work to remove the damaged pipeline began on Monday and is expected to take several weeks.

Clean-up efforts

An Exxon Mobil spokesperson declined to release a breakdown of the company's costs, providing only a broad overview of expenses.

"This estimate includes costs for overall emergency response and clean-up efforts including personnel, equipment, landowner claims and projects associated with the restart of the pipeline such as the horizontal directional drill," company spokesperson Claire Hassett said.

"Horizontal directional drill" refers to the process the company used to bore a new route for the pipeline dozens of feet beneath the riverbed. That move was mandated by US pipeline regulators.

The original pipeline was buried only a few feet beneath the riverbed. State and federal officials have speculated that summer flooding scoured the riverbed and left the pipe exposed to damaging debris and the sheer force of the rushing river.

An investigation into the cause is pending.

Failed to heed warnings

State officials said they hope to learn more when the damaged section of pipeline is pulled from the river, possibly as early as Saturday. Those pieces will be sent to an independent laboratory for analysis, according to the company and state officials.

Some landowners along the river have sued Exxon Mobil in federal court, accusing the company of a "haphazard, sloppy" clean-up.

The landowners also claim the company failed to heed warnings from local officials who raised concerns about Silvertip months before the accident.

In a response filed on Thursday, Exxon Mobil attorneys rejected many of the lawsuit's assertions and suggested some of the injuries suffered by the plaintiffs were caused by their own negligence.

Exxon Mobil's Hassett said the company has reached settlements with 95% of the affected property owners.

State agencies through October spent about $900 000 on the spill and clean-up, said state Department of Environmental Quality deputy director Tom Livers.

Livers said the state expects to be fully reimbursed by Exxon Mobil and through an oil industry fund set up to pay for emergency spill response costs.

- SAPA