Oil spills: If fines don't deter polluters, maybe jail will

Posted: Oct 21, 2014

Whenever I hear the term oil “spill” – which seems too often lately – I cringe. Not just because the environment has taken another one on the chin, but because it makes the incident sounds like a tipped glass of milk that can be mopped up with a napkin. More often than not, these events are not easily rectified; the destruction continues for months, even years.

Better terms for what oil dumpers are doing are spoiling, poisoning and contaminating our environment. Changing our language to reflect what really happens when these toxins are unleashed into our air and water may be the first step in shifting to an enforcement paradigm in which the punishment matches the crime. Only then will we more effectively deter offenders.

The details of what happened before, during and after a pipeline busted and pumped crude into the Yellowstone River in Montana earlier this month are as murky as the river itself—did ExxonMobil deceive the government about how deep the pipeline was buried? Did they lie about how long it took to shut off the oil flow? Did they grossly underestimate how much oil was unleashed and far it had traveled down-river?

As they emerge, the answers to these questions will be important. The facts will separate civil violations from criminal ones. And, if it turns out that ExxonMobil told tall tales to regulators, someone (or maybe a few someones) need to sit in a jail cell or, better yet, on a clean-up crew, like those perspiration-drenched workers in haz-mat suits on the Yellowstone who struggled amid thick vegetation to rake oily slime into Hefty bags.

Enforcement of environmental statutes, including the Clean Water Act (CWA) and the Clean Air Act, are generally civil and administrative. A company that pumps oil into a wild and scenic river, for example, will generally get a slap on the wrist from the Environmental Protection Agency (EPA), some bad publicity and a fine (in addition to paying for any private property losses). Before long, the damaged pipeline or rig comes back on-line and the company chalks up the whole mess to the cost of doing business.

In Montana, just days after the Silvertip pipeline rupture near Laurel spewing at least 42,000 gallons and spoiling at least 240 miles of river, fouling the shoreline and driving out residents of nearby farms and ranches, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Corrective Action Order.

Before the cause, the extent or even the exact location of the troubled areas are established, the order outlines a plan for ExxonMobil to get back to pumping. The document requires the company to re-bury the pipeline underneath the Yellowstone river bed to protect it from external damage and to conduct a risk assessment on the 69-mile-long Silvertip where it crosses any waterway. Exxon will then need to submit a restart plan before operations can resume.

No doubt ExxonMobil will have to dig into its shareholders’ pockets for remediation and fines but, otherwise, not much will have changed. The EPA’s system of voluntary compliance is a joke for companies that, time and again risk public and ecosystem health for their own gain.

According to Reuters, after inspecting the pipeline in July 2009, PHMSA—which directly regulates most of the hazardous liquid pipelines in the nation—issued a warning letter to Exxon in 2010 regarding both oil leaking from some of the pipeline’s valves and a missing mechanism which should clearly indicate whether the valves were open or closed. The letter also references three years of corrosion surveys and faulted the company for not acting in a timely manner to address atmospheric corrosion problems.

This system of ‘pollute, pay and keep on pumping’ suffers from a lack of real accountability and, as such, is an ineffective deterrent to the committing of environmental crimes.

It’s clear, by looking at the sheer number of releases of hazardous liquids (onshore only), which have increased in the past 20 years, that as 170,000 miles of crude and refined oil pipelines in this country age, the problem is getting worse. In 2001, the number of total incidents was 128; that number spiked to 455 in 2002 and has not dropped below 328 since then.

There are criminal provisions in most environmental laws, but prosecutions have been rare. Amidst the rhetoric of wanting to reduce our dependency on foreign oil, the offenders—ExxonMobil, Conoco Phillips, BP, and other active contaminators, are persuasive in arguing for leniency.

What shifts a burst pipeline from an “accident” to a crime is straightforward in a case like ExxonMobil and the Yellowstone River. Section 301(a) of the CWA says an entity is guilty of a criminal violation if they illegally discharge hazardous materials (meaning they didn’t have a permit to do so) into water.

Companies can also be held criminally liable for negligence when they fail to exercise reasonable care that results in a violation of an environmental statute. ExxonMobil may be twice of guilty of this.

In October 2010, the PHMSA, the City of Laurel and its public works department observed scour and erosion on the south bank of the Yellowstone, where the Silvertip Pipeline crosses the river. Upon request, the company finished a ‘depth-of-cover’ survey and reported last December that there was “at least five feet of cover” at all measured points.

The city of Laurel became concerned again last May when there was heavy flooding on the Yellowstone and asked the PHMSA to take another look at the pipeline crossing. On June 1, just a month before the rupture, PHMSA asked ExxonMobil to confirm the depth of the pipeline and the company reported that there was “at least 12 feet of cover,” which now sounds like a pipe-dream. According to the New York Times and Montana governor, Brian Schweitzer, local residents had complained for more than a year prior to the pipe failure that it was exposed (as in no cover) due to river erosion.

Negligence may also be surmised in the company’s actions directly after the pipeline failed. When asked how long it took to shut down the gushing crude, ExxonMobil said the leak was stopped within six minutes. Documents now show that it took them nearly an hour to close down the system. The pipe ruptured at 10:40 p.m. and, at 10:47 p.m., the pumps at Silvertip Station were shut down while various valves were closed and then reopened until the last valve was closed at 11:36 p.m., finally stopping the flow of oil completely.

Getting the time right is important because it affects the estimate of how much oil was actually discharged (and, therefore, how much clean-up needs to be done and what type of resources need to be called in to do it). Obfuscating critical facts in order to minimize the scale of destruction certainly looks like a criminal failure to exercise reasonable care.

Both history and recent studies show that the threat of criminal action is an effective deterrent to committing environmental crimes. Prosecution against violations of the Clean Air Act have led to the reduction of billions of pounds of contaminants including asbestos, sulfur dioxide and PCBs. And a recent study of 100 violations of air, water and hazardous materials laws that had been criminally prosecuted was contrasted to comparable violations that were civilly pursued, and showed that future compliance was “significantly greater” following criminal enforcement.

In addition to actually protecting our air, water and soil, criminal prosecution would also improve the federal government’s compliance with the National Environmental Policy Act (NEPA) which mandates the it to ensure that all Americans have “safe, healthful, productive, and aesthetically and culturally pleasing surroundings.”

We have some excellent environmental statutes in this country, hard-won by our predecessors who watched our rivers burn, but we’ve essentially knocked out their teeth by shying away from criminal prosecution.

Imposing stiffer fines, such as the ones U.S. Secretary of Transportation, Ray LaHood, is currently pushing for in his “Pipeline Safety Action Plan” (which, if passed by Congress, would increase the maximum civil penalties for pipeline violations from $100,000 per day to $250,000 per day, and from $1 million for a series of violations to $2.5 million for a series of violations) isn’t a bad idea, but shouldn’t be the final word on punitive action.

Better yet, the Environmental Crimes Enforcement Act of 2011 (S. 350), which was drafted in response to the Deepwater Horizon debacle, would give criminal prosecution a leg up. It was approved by the Senate Judiciary Committee in May and, if it becomes law, would increase penalties for criminal violations of the CWA, and would require restitution for victims.

This type of legislation, along with a renewed commitment by regulatory agencies to pursue criminal charges against corporate officers, directors, shareholders and employees who either directly or indirectly (i.e. a higher-up instructing a subordinate) break environmental laws, would likely encourage a change in behavior. As Secretary LaHood also expressed to Congress, we need to work on closing regulatory loopholes, strengthening risk management requirements and adding more inspectors, in an effort to prevent incidents and to catch perpetrators.

Guidance should be developed to determine when it is appropriate to use criminal enforcement, and it should be made clear to industry what constitutes a criminal offense. That way, when a mega-pipeline like the Keystone XL—the controversy surrounding which HCN editor Cally Carswell writes about—eventually gets built, there will be a new understanding about the costs of shoddy maintenance and intentional transgressions.

With an aging pipeline infrastructure, a rise in offenses and a glut of corporate hubris, this is not the moment for leniency or gentlemen’s agreements. Putting some corporate VIPs in jail, or on the chain gang, is not going to drive stock prices dangerously low or put a leviathan like ExxonMobil out of business.

Having their very own skin in the game, however, may keep them invested in what’s going on ‘out there’, where the pipeline meets the river. 

-Heather Hansen

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