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Pipeline company to pay Alabama $3.3 million for 2016 oil spills

16 March 2018

Colonial Pipeline Co will pay $3.3 million to the state of Alabama to cover damages and penalties from an explosion and a spill on its gasoline line in 2016, the state’s attorney general said on March 15.

Representative image - Shutterstock
Representative image - Shutterstock

A combined 11,800 barrels of gasoline were spilled in rural Shelby County, causing pump prices to soar in much of the southeastern United States, which depends heavily for supplies on the Colonial Pipeline system, the largest refined product pipeline system in the country.

The settlement includes a $1.3 million civil penalty and $1.8 million in projects for the state. Colonial Pipeline also still has to complete the cleanup of fuel released into the soil and waters of the state.

“This agreement first and foremost addresses the environmental damage to land and water caused by significant gasoline spills in Shelby County during 2016,” Alabama Attorney General Steve Marshall said in a statement.

A nine-man crew was working on the Colonial pipeline system at the time of the Oct. 31 explosion, killing a worker and sending five to the hospital. More than 4,400 barrels spilled. The explosion was caused by an accidental strike to the pipeline by excavating equipment, the statement said.

In the September incident, nearly 7,400 barrels leaked below ground, and the leak was caused by pipe fatigue that resulted from improper compaction of soil below that portion of the pipeline, the attorney general’s office said.

The affected pipeline is one of two that connects more than two dozen refineries in Texas and Louisiana with cities in the East, from Atlanta to New York. It provides nearly 40% of the region's gasoline and usually runs at full capacity. The spill in September shut the line for 12 days, cutting supplies to 50 million US consumers.

Colonial installed a new section of pipe to bypass the first leak but the second incident resulted in the closure of both the gasoline and the jet fuel/diesel pipelines, which caused severe fuel shortages and fuel price rises.

Colonial plays a key role in supplying the area because there are no refineries between Alabama and Pennsylvania that produce substantial quantities of transportation fuels. Its pipelines have a capacity of 2.6 million barrels a day of refined products.

The company said it had installed new systems to improve safety in the light of the 2016 incident.

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