Iroquois Pipeline Operating Co. and four of its top officers have pleaded guilty to violating the U.S. Clean Water Act (CWA) during construction of its 375 mile natural gas pipeline from Ontario to Long Island in 1991-92.
A settlement agreement requires the company to pay $22 million in criminal fines and civil penalties and restore 29 wetlands and streams in Upstate New York damaged during construction.
The company pleaded guilty to four felony counts filed in Northern New York U.S. District Court in Syracuse, ending a 4 year federal investigation.
Iroquois will pay a $15 million CWA criminal fine, a $5 million CWA penalty, and $2 million in restitution to New York state for violating its state construction permits. Justice said $2.5 million of the funds will go to the National Fish & Wildlife Foundation to create additional wetlands near the pipeline.
Because of its criminal admissions, Iroquois will be unable to pass on to consumers in the form of higher rates another $20 million directly or indirectly related to the construction of the line.
The four company officials who individually pleaded guilty to negligently violating the CWA are subject to a maximum 1 year in jail and a $100,000 fine.
They are former Iroquois Pres. Robert Reid, former engineering and construction manager John Mackenzie, and former spread construction supervisors Michael Saley and Carl Addison.
If the four cooperate in the continuing investigation, Justice will ask the court for 6 month sentences to be served in home confinement.
What happened
Justice said one of the felony counts involved Iroquois' failure to clean up or restore 188 streams and wetlands. "After the company learned that it was the object of a federal criminal investigation, it began to restore a number of those affected streams and wetlands," Justice said.
In all, the line crossed more than 500 rivers, streams, and wetlands.
Justice said the pipeline left many mounds of soil standing within wetlands, which disrupted water circulation and damaged aquatic life and habitats.
The company also pleaded guilty to having failed to construct trench breakers at regular intervals along the pipeline ditch and at the edge of wetlands. These devices control soil erosion and corrosion of the pipeline by stopping water from migrating along the pipeline, especially where the terrain slopes.
Iroquois will be required to monitor the pipeline to ensure that no problems result from improper placement of large rocks inside the pipeline trench.
It also agreed that the Federal Regulatory Commission and Transportation Department can cite it for violations of their rules.
Reaction
EPA Administrator Carol Browner said, "The company illegally cut corners in disregard of the potential harm to the environment and public safety. They have learned a very expensive lesson."
Joseph Pavone, acting U.S. attorney for the Northern District of New York, said, "The widespread nature of the criminal violations is almost impossible to overstate.
"The pipeline construction industry is now on notice that it will be held accountable and criminally liable for failing to comply with promises made to the public and government regarding adherence to environmental and safety laws."
Iroquois Pres. Craig Frew said, "The pipeline is and will continue to be operated in a safe and environmentally responsible manner. We deeply regret that any of the activities of the company during construction of the pipeline in 1991 resulted in violations of regulatory requirements." Copyright 1996 Oil & Gas Journal. All Rights Reserved.
