Colonial to pay $34 million fine for spills

By OGJ editors

WASHINGTON, DC, Apr. 1 -- The Department of Justice and the Environmental Protection Agency announced Tuesday that Colonial Pipeline Co. based in Alpharetta, Ga., will pay a $34 million fine and spend another $30 million in environmental upgrades to resolve charges that the company violated the Clean Water Act on seven recent occasions by spilling 1.45 million gal of petroleum products from its 5,500-mile pipeline in five states. US officials said the fine is the largest civil penalty a company has paid in EPA history.

Payment will go to the US Oil Spill Liability Trust Fund that underwrites oil spill cleanup activities nationwide.

"Colonial has worked diligently with DOJ for several years to negotiate a settlement," stated Colonial CEO David Lemmon. " We are pleased that this has been accomplished and this legacy issue put behind us."

"Commitment to safety and preservation of the environment is and always will be the number one priority at Colonial," stated Lemmon. "That said, we strive every day to continually improve our company, with our goal being zero spills and zero errors."

According to the company's website, Colonial transports more than 2 million b/d of gasoline, heating oil, jet fuel, defense fuels, and other refined products. That equates to about 20% of all petroleum products delivered nationwide.

DOJ officials maintained that the seven spills resulted from various causes, including pipeline corrosion, mechanical damage, and operator error. In one spill, more than 950,000 gal of diesel fuel spilled into the Reedy River in South Carolina in 1996, killing 35,000 fish and other species of wildlife and dispersing more than 34 miles downstream, officials said.

Other spills occurred in Georgia, Tennessee, Louisiana, and North Carolina.

"Maintaining the integrity of our nation's industrial infrastructure, such as oil pipelines, is a critical priority for the Justice Department," said Attorney General John Ashcroft. "Today's settlement sends the message that we will vigorously pursue violations of environmental laws that subject our citizens and our environment to potentially catastrophic consequences."

In a related action, Colonial earlier this year pled guilty to criminal charges in connection with the Reedy River spill. The company was ordered to pay a $7 million fine and serve a 5-year probation.

This latest settlement requires Colonial to designate its entire pipeline as potentially affecting "high consequence areas." This will subject the entire 5,500-mile pipeline to the pipeline integrity regulations of the US Department of Transportation's Office of Pipeline Safety (OPS). Under the terms of the settlement, Colonial is also required to:

-- Inspect its corrosion prevention system along the entire pipeline system every 5 years.

-- Repair problems detected in the corrosion prevention system to meet the standards developed by the National Association of Corrosion Engineers.

-- Maintain its right-of-ways, including mowing and removing debris.

-- Have personnel on site when utility or other excavation is occurring within 5 ft of the pipeline.

-- Survey and inspect the pipeline where it crosses water, and address areas where the pipeline is exposed or insufficiently buried.

Finally, the settlement requires Colonial to pay for an independent monitoring contractor, approved by EPA, to ensure that the company incorporates these requirements into its existing programs and then implements the requirements.

The settlement agreement was filed at the US District Court for the Northern District of Georgia in Atlanta and is subject to a 30-day public comment period and final court approval.