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Pipeline Company to Pay $34 Million for Spills
WASHINGTON, April 1 _ The government announced today that an Atlanta-based pipeline company would pay $34 million in fines under the Clean Water Act, the largest civil penalty ever paid by a company in the 32-year history of the Environmental Protection Agency. The Colonial Pipeline Company, which owns a 5,500- mile underground pipeline that stretches from Texas to New York City, was charged in November 2000 with gross negligence that contributed to seven spills that released a total of 1.45 million gallons of oil. The largest, which took place in South Carolina in 1996, spilled almost a million gallons that traveled 34 miles down the Reedy River and killed 35,000 fish. The company paid a $7 million criminal fine in 1999. "There is a price to being a consistent violator," said Thomas L. Sansonetti, the assistant attorney general for the environment division at the Justice Department. Colonial Pipeline, which is privately held, transports more refined petroleum products than any other company in the world. It moves approximately 20 percent of what is produced in the United States. The pipeline, about 40 years old, snakes through 14 states: Texas, Louisiana, Mississippi, Alabama, Georgia, Tennessee, South Carolina, North Carolina, Virginia, the District of Columbia, Maryland, New Jersey, New York and Pennsylvania. In addition to Reedy River, the other major spills for which Colonial Pipeline is being penalized include one in 1999 in Goose Creek, Tenn.; another in 1997 at Bear Creek, Ga.; and continual leaks at Darling Creek, La. The previous record for a civil penalty at the E.P.A. was $30 million, paid by Coke Industries in January 2000 for a series of some 300 oil spills. Exxon Mobil paid $1.1 billion in damages for the 1989 Valdez spill to compensate for the environmental harm. But damages, unlike penalties, are not punitive. The distinction is important in terms of how negligent a company was in actions that led to a spill. The federal government said pipeline corrosion, mechanical damage and operator error had all contributed to the spills. "Colonial had known for years that the pipe at the Reedy River was exposed, rusted and even missing a protective coating," said J. R. Suarez, an assistant administrator of enforcement at agency. The $34 million is a significant threshold, the prosecutors said. "Someone's going to have to goof up pretty spectacularly to break that one," Mr. Sansonetti said. As part of today's settlement, Colonial Pipeline said it would upgrade its pipeline maintenance, which the federal government says will cost $30 million, an estimate the company disputes as too high. Colonial Pipeline says that since a management change took place between 1996 and 1998, the company has moved toward a more environmentally friendly philosophy. A spokeswoman, Susan Castiglione, said the company spilled 51,000 gallons of oil in 1998 but only 700 gallons in 2000. "We have been committed to system integrity for the last six or seven years," Ms. Castiglione said. "We agreed to things that we are already doing." The $34 million in penalties will go toward the Oil Spill Liability Trust Fund, which is run by the Coast Guard to help pay for oil spill cleanup nationwide. In another recent enforcement case involving pipeline companies, the federal government and Washington State reached a civil settlement in January with the Olympic Pipe Line Company and the Shell Pipeline Company for a 1999 rupture in Bellingham, Wash. The civil penalty was $15 million plus other requirements. The two companies also paid $21 million in criminal fines in December 2002. Copyright New York Times
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