• Comment

Federal pipeline regulators fine ExxonMobil $2.6 M

Posted: November 6, 2013 - 8:25pm

Federal pipeline regulators are fining ExxonMobil more than $2.6 million for violations in connection to the Pegasus pipeline that ruptured in a Mayflower neighborhood March 29 of this year.

The U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration released a violation notification and compliance order to the company Wednesday, along with the $2.6 million civil penalty, at the end of the agency’s investigation into factors surrounding the pipeline failure.

In a letter to ExxonMobil, PHMSA says the company violated pipeline safety regulations, which include leaving out certain manufacturing information when determining risk factors.

Specifically, the letter states, the operator failed to include the susceptibility of its Youngstown-Ohio-manufactured pre-1970 low frequency electric resistance welded pipe seam to failures as a risk factor when the company implemented its own integrity management program.

Pipeline manufactured before 1970 using ERW has been documented as early as the 1980s to be prone to failure along its seams.

ExxonMobil spokesman Aaron Stryk has said the segment of the Pegasus pipeline that runs through the area was manufactured using ERW.

The line that runs through Mayflower extends to the Lake Maumelle Watershed.

According to PHMSA, ExxonMobil documented multiple hydrostatic test failures along the pipeline’s ERW seam in a test in 1991 and in subsequent hydrostatic testing in 2005 and 2006.

The letter states the hydrostatic testing failure in the history of the pipeline “provided more than adequate information for the pipe to be considered susceptible to seam failure.”

Further, ExxonMobil did not present an acceptable engineering analysis to PHMSA to demonstrate that the Pegasus pipeline was not susceptible to seam failure, the letter states.

ExxonMobil reversed the flow of the pipeline, which was carrying a mixture of Wabasca heavy crude oil and chemical diluents, in 2006, records show.

A federal corrective action order issued three days after the several thousand gallon spill stated the change in direction, along with an increase in flow pressure, could impact the hydraulic and stress demands on a pipeline.

ExxonMobil also failed to prioritize post-hydrostatic testing reassessments in high risk areas, according to PHMSA.

High risk areas are defined by PHMSA’s integrity management regulations as those with high populations.

ExxonMobil’s Pegasus ruptured in the Northwoods neighborhood off of Main Street in Mayflower.

The crude oil flowed through the neighborhood and into a series of drainage ditches, under Interstate 40 and into the Lake Conway Watershed.

About 22 homes were evacuated in the neighborhood, and since the oil spill Exxon has demolished two of the homes the company purchased from residents.

Exxon has offered a purchase program to residents in the Northwoods subdivision.

Six months after the spill, many residents were still in negotiations with ExxonMobil.

ExxonMobil issued a statement in response to PHMSA’s findings, saying the company is “disappointed that the Pipeline and Hazardous Materials Safety Administration (PHMSA) has decided to issue a Notice of Probable Violations (NOPV) on the Pegasus incident.”

Stryk said Wednesday ExxonMobil remains under the corrective action order PHMSA issued in the days after the spill and is cooperating in all matters related to the agency’s investigation.

PHMSA approved a 90-day extension last month for submitting a work plan on Pegasus to allow for the completion of previously approved supplemental testing and analysis on the pipeline, Stryk said via e-mail.

“We are committed to understanding the factors that led to the release in Mayflower first and then establishing the integrity of the entire pipeline to ensure an incident like this does not happen again,” he said in response to a question about the rest of the ERW segments that make up the Pegasus pipeline. “We will review the NOPV and will continue to work with PHMSA on any follow-up actions.”

The Pegasus pipeline is still out of commission, Stryk reminded.

He said ExxonMobil will not restart it until the company is satisfied the pipeline is safe and with PHMSA’s approval.

Stryk said ExxonMobil is reviewing the notice that was received Wednesday before determining the next step, he said when asked if ExxonMobil would follow the compliance orders PHMSA issued.

Along with additional violations, including neglecting to take prompt action on “anomalous conditions” and treating immediate conditions with “validation digs,” the letter outlines more orders to comply with federal regulations.

Revisions in several procedures and more internal investigations are part of the compliance order.

The operator ExxonMobil must update its safety regulations to include consideration of the failure-susceptible pipeline, according to the PHMSA order.

The condition is addressed in a violation that states ExxonMobil failed to update its pipeline risk assessment, and with no identified threats in the segment that includes Mayflower, made integrity decisions that relied upon incorrect analysis.

Stryk said it appears PHMSA’s analysis is flawed, and the agency made some fundamental errors.

“For example, Alleged Violation #2 claims that (ExxonMobil) failed to conduct a re-assessment of Pegasus within 5 years of the 2005-06 baseline assessments,” Stryk wrote. “In fact, (ExxonMobil) conducted the required reassessment in 2010.”

ExxonMobil has 30 days from the final order to submit a spreadsheet to PHMSA that identifies all ERW pipeline in territory which PHMSA has jurisdiction.

(Staff writer Courtney Spradlin can be reached by email at courtney.spradlin@thecabin.net or by phone at 505-1236, or on Twitter @Courtneyism. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net. Send us your news at www.thecabin.net/submit)

  • Comment