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Exxon Ordered to Make Safety Improvements to Ruptured Oil Pipeline in Yellowstone River

Source: Dow Jones

Posted on 06 Jul 2011

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The Department of Transportation's Pipeline and Hazardous Materials Safety Administration, the U.S. agency that oversees pipeline safety, on Tuesday ordered Exxon Mobil Corp. to make safety improvements to a Montana oil pipeline that ruptured and spilled oil into the Yellowstone River.

The agency told the oil company to re-bury the Silvertip pipeline underneath the Yellowstone River bed to protect the line from damage and said the company will need to submit a restart plan before it can resume operation of the pipeline.

"It is our responsibility to ensure pipelines are safely delivering energy to U.S. households and businesses, and when companies are not living up to our safety standards, we will take action," U.S. Transportation Secretary Ray LaHood said in a statement.

Between 750 and 1,000 barrels of oil spilled into the Yellowstone River near Billings, Mont., after the 12-inch pipeline ruptured late Friday amid high waters, according to preliminary findings issued by the PHMSA. The agency said spilled oil in the river has travelled as far as 240 miles downstream to Terry, Montana.

The accident did not cause any known injuries, although 140 people who live near the pipeline were evacuated.

The section of the pipeline that crosses the river, near the site of the accident, was built in 1991, although original portions of the pipeline were built between 1949 and 1954, the PHMSA said.

The PHMSA has been working with the U.S. Environmental Protection Agency and the U.S. Coast Guard to investigate the incident and determine the cause of the pipeline rupture.

Exxon doesn't yet have a repair plan in place for the Silvertip pipeline, Gary Pruessing, president of ExxonMobil Pipeline Co., said Tuesday. He added that the company doesn't know when the crude-oil pipeline, which usually moves about 40,000 barrels of oil a day, could be back online, nor how much it will cost to clean up the spill.

The 69-mile pipeline delivers oil to Exxon's Billings refinery, which sits adjacent to the Yellowstone River. The facility processes crude oil from Wyoming and Alberta into gasoline and ultralow-sulfur diesel fuel, according to Exxon's website.

Last month, the PHMSA reviewed data from an inspection Exxon had completed inside the pipeline in 2005 and 2009 and did not find any defects in the pipe near the Yellowstone River crossing that would threaten the pipeline's integrity, the agency said.

Nevertheless, officials in the city of Laurel, near the pipeline, expressed concern starting last October about the safety of the pipeline, particularly where it crosses the river, according to the PHMSA. In response, Exxon completed one survey in December that showed the pipeline lay beneath at least five feet of ground at various points. After city officials in May expressed new concerns about the pipeline following heavy river flooding, Exxon reported in June that at the river crossing, the pipe lay at least 12 feet below the surface.

In its order, the PHMSA told Exxon to use horizontal drilling methods to re-bury the pipeline at the river crossing to protect the pipeline from external damage. The company also must devise a plan to operate and monitor the pipeline during flooding conditions, including increasing patrols and surveillance.