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Regulatory World
Largest Civil Penalty Paid to EPA: $34 Million
In a joint
announcement with the Department of Justice, the Environmental
Protection Agency settled with Colonial Pipeline
Company. Under the agreement, Colonial will upgrade environmental
protection on the pipeline at an estimated cost of at least $30
million, and pay $34 million, the largest civil penalty a company
has paid in EPA history. The $34 million civil penalty will go
to the United States’ Oil Spill Liability Trust Fund, which
underwrites nationwide oil spill cleanup activities.
Colonial
Pipeline, headquartered in Atlanta, Georgia, transports an
average of 93 million gallons of refined petroleum products
each day through an underground pipeline that stretches from
Texas to the New York Harbor – and passes through Louisiana,
Mississippi, Alabama, Georgia, Tennessee, South Carolina, North
Carolina, Virginia, District of Columbia, Maryland, and Pennsylvania.
The government
found Colonial violated the Clean Water Act when the company’s
pipeline corrosion, mechanical damage, and operator error resulted
in the release of approximately 1.45
million gallons of oil and other petroleum products into the
environment. Oil spills from the pipeline damaged a variety of
aquatic systems in numerous rivers, streams, and wetlands. In
one spill, more than 950,000 gallons of diesel fuel spilled into
the Reedy River in South Carolina, killing 35,000 fish and other
species of wildlife, and dispersing more than 34 miles downstream.
An ecosystem can take years to recover from damage caused by
an oil spill. Other spills resolved in this action occurred in
Georgia, Tennessee, Louisiana, and North Carolina.
Today’s settlement requires Colonial to designate its
entire pipeline as potentially affecting “high consequence
areas.” This subjects the entire 5,500-mile pipeline to
the pipeline integrity regulations of the U.S. Department of
Transportation’s Office of Pipeline Safety (OPS). Under
the terms of the settlement, Colonial is also required to:
Inspect
its corrosion prevention system along the entire pipeline system
every five years;
- Repair
problems detected in the corrosion prevention system to
meet the standards developed by the National Association of
Corrosion Engineers (NACE);
- Maintain
its right-of-ways, including mowing and removing debris;
- Have
personnel on-site when utility or other excavation is occurring
within five feet of the pipeline;
- Survey
and inspect the pipeline where it crosses water;
- Address
areas of the pipeline that are exposed or insufficiently buried;
and
- Pay
for an independent monitoring contractor, approved by EPA,
to ensure that the company incorporates these
requirements into its existing programs and then implements
the requirements.
“
This settlement is another example of EPA’s ‘smart
enforcement’ approach, illustrating how an enforcement
decision translates into the very real results of cleaner air,
purer water and better protected land. The combined efforts of
EPA and DOJ successfully address environmental damage and prevent
future harm to public health and the environment,” said
EPA Administrator Christie Whitman. “Both Attorney General Ashcroft and I are committed to
maintaining the integrity of our nation’s industrial infrastructure,
such as oil pipelines, as a critical priority for the Justice
Department,” said Tom Sansonetti, the Assistant Attorney
General for the Environment and Natural Resources Division. “Today’s
settlement sends the message that we will vigorously pursue violations
of environmental laws that subject our citizens and our environment
to the potentially catastrophic consequences of a breakdown of
that infrastructure.”
Separately Colonial Pipeline Company pled guilty in 1999 to
criminal charges in connection with the 1996 Reedy River, S.C.,
spill. The company was ordered to pay a $7 million fine and serve
a five-year term of probation.
In addition to this settlement, the United States has taken
action recently against several other pipeline companies for
oil spill violations. In January of this year, the United States
and the State of Washington reached civil settlements with Olympic
Pipe Line Company and Shell Pipeline Company that included penalties
totaling $15 million plus injunctive and other relief for violations
leading to a fatal pipeline rupture in Bellingham, Wash., in
1999. In December 2002, Olympic and Shell entered pleas and agreed
to pay $21 million in criminal fines for criminal violations
arising from the same incident.
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