Exxon Agrees to Pay U.S. Fine in Settling 2013 Oil Sands Spill

ExxonMobil Corp. agreed to pay more than $5 million, including a federal fine, as part of a settlement for the 2013 rupture of a pipeline in Arkansas that was carrying oil sands from Canada.

Exxon’s Pegasus pipeline failed in March 2013, spewing 134,000 gallons of oil in a suburban housing development near Mayflower, Arkansas. The pipeline hasn’t been used since then.

In addition to the $3.19 million federal fine, Exxon must comply with a series of government requirements, including placing spill-response equipment in three places along the pipeline route, before it can reopen, the Environmental Protection Agency said Wednesday in a statement. The company also must pay state and local fines of $1.88 million.

“Companies need to take the necessary precautions to make sure oil is transported safely and responsibly,” Cynthia Giles, head of enforcement for EPA, said in the statement. “This settlement puts in place essential pipeline safety and response measures that are important to make this industry safer for communities.”

The spill in Mayflower, where video showed crude oil flowing down neighborhood streets and into nearby Lake Conway, took on greater political importance because it was carrying oil derived from Canadian oil sands to Texas refineries.

President Barack Obama is considering an application from TransCanada Corp. for the Keystone XL pipeline, which would also carry oil sands from Alberta across U.S. states to refineries near the Gulf of Mexico.

Environmentalists who oppose construction of the Keystone pipeline say that type of oil is heavier and more difficult to clean up in the event of leaks or ruptures.

In the settlement, Exxon will pay $1 million in state penalties, $600,000 for a project to improve the water at Lake Conway and $280,000 to Arkansas for the state’s litigation costs.

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