Exxon says it will pay costs of cleaning up Arkansas oil spill

exxon mobil logos 435x252 Exxon says it will pay costs of cleaning up Arkansas oil spillExxon Mobil officials say that the company will assume all of the costs stemming from the cleanup of the oil spill that originated from a ruptured pipeline in Arkansas last week. The spill occurred on Friday, March 30, when a breach in Exxon Mobil’s 60-year-old Pegasus pipeline sent thousands of barrels of sticky Canadian crude oil into the Arkansas community of Mayflower.

The company told ABC News that it is actively cleaning up the spill and has deployed a number of claims adjusters to the area to assist residents harmed or displaced by the spill, which prompted the evacuation of at least 22 homes so far.

Several reports began circulating this week giving the impression that Exxon Mobil would not have to pay for the cleanup costs associated with the spill, thanks to a loophole in the law about the type of oil involved.  Most of those reports, however, pertain to a technicality that could allow Exxon Mobil to avoid paying into a national oil-spill response fund established to cover some of the expenses incurred by the government in responding to future oil spills.

According to Think Progress, “diluted bitumen or dilbit, which is the type of oil that has spilled in Arkansas, is not classified as oil and companies shipping it are not required to pay an 8-cents-per-barrel excise tax into the federal Oil Spill Liability Trust Fund, as companies shipping conventional oil do.”

This means that oil companies sending tar sands from Canada to Gulf refineries are exempted from paying the eight-cents-per-barrel excise tax that goes to cleaning up oil spills. It’s a nonsensical exemption because tar sands must be mixed with lighter oils and gasses in order to move through the pipeline and, unlike natural crude, this diluted bitumen mixture is heavier and costlier to clean up than natural crude oil. According to Inside Climate News, cleanup costs for conventional oil run about $2,000 per barrel, but for diluted tar sands, cleanup costs an average of $29,000 per barrel of spilled oil.

As for the immediate cleanup costs in Arkansas, Exxon says they are covered.

“We’ve opened the claims line, put in ads in the local paper and have a number of claim adjusters in the community that have been handing out checks as early as two or three days ago,” Exxon Mobil spokesman Alan Jeffers told ABC News. “We’re trying to do it with a minimal amount of discussion to reduce the amount of inconvenience we’ve already caused these people.”

The company said that workers are in the process of removing oiled vegetation and replacing lawns in the neighborhoods effected. Aerial footage shows large plots of forest and shrub awash in oil while local waterways are attempting to contain the oil with boom and absorbent pads.

Arkansas Attorney General Dustin McDaniel arrived in Mayflower to tour the affected areas, which he told ABC News looked “like a scene from The Walking Dead.”

The Pegasus Pipeline runs from Illinois to the Texas Gulf Coast, with certain sections of it underlying the Mississippi River. Exxon Mobil has not been able to provide any information about its maintenance of the pipeline, which was built in the 1940s. Nobody yet knows how much oil has spilled from the broken pipeline, but Exxon Mobil has said cleanup workers have recovered about 12,000 gallons of oil and water so far.

“The state of Arkansas stands with the people of Mayflower and no one will rest until this is made right,” McDaniel said. “After seeing the source of the leak, I have more questions than answers.”


ABC News
Inside Climate News
Think Progress