Two Major Lawsuits Filed Against ExxonMobil for Arkansas Tar Sands Spill

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Two major lawsuits were recently filed in the U.S. District Court for the Eastern District of Arkansas against ExxonMobil, the โ€œprivate empireโ€ behind the March 2013 Pegasus tar sands pipeline spill of over 1.1 million gallons of diluted bitumen (โ€œdilbitโ€) into the neighborhoods and waterways of Mayflower, AR, located in Faulkner County.ย 

One is a class-action lawsuit filed by the Duncan Firm, Thrash Law Firm and Parker Waichman LLP on June 27.ย The other is a suit filed on June 13 by the U.S. Environmental Protection Agency (EPA) in concert with the Arkansas Attorney General’s Office, led by AG Dustinย McDaniel.

Collectively, both lawsuits lay out the damning facts of the second biggest tar sands pipeline spill in U.S. history, caused by a 22-foot gash in the pipeline, second only to Enbridge’s โ€œdilbit disasterโ€ in Kalamazoo, Michigan. The cases also call for the spill’s victims – both people, government bodies and the ecosystem – to receiveย reparations.ย 

Among other things, both suits clarify that ExxonMobil Pipeline Company dilbit has contaminated Lake Conway, the largest man-made game and fish commissionย lake*** in the United States, which serves as a tributary of the Arkansasย River.

The class-action tort lawsuit slaps ExxonMobil with willful negligence under Arkansas state law, alleging Exxon knew Pegasus – built in the 1940’s far before the age of โ€œextreme energyโ€ and designed to carry light crude – would spill at some point. The suit also reveals for the first time that the spill was just the biggest of 13 other spills preceding it, meaning it was not just a spill out of the blue.ย ย 

The joint EPA/Arkansas AG civil lawsuitย cites Exxon for violating the Clean Water Act, Arkansas’ Hazardous Waste Management Act and Arkansas’ Water and Air Pollution Controlย Act.

Taken together, both suits keep the heat on ExxonMobil and on Alberta tar sands production at-large as the battle over the proposed northern half of TransCanada’s Keystone XL tar sands pipeline heats up. U.S. President Barack Obama’s State Department is expected to make a decision on that pipeline’s fate in the next fewย months.ย 

Class-Action Tort Lawsuit Lays Out Ecological Costs of Exxon’sย Negligence

Arkansas’ class-action suit legally covers โ€œall real property owners who haveโ€ฆproperty abutting Lake Conwayโ€ฆwhich has been physically contaminated and polluted by ExxonMobil’s toxic and dangerous Tar Sands released from ExxonMobil’s unsafe and deficient oil and gasย pipeline.โ€ย 

A major crux of the suit is that dilbit is more corrosive to pipelines than conventional crude, a fact ExxonMobil knew but allegedly disregarded for the sake of profit when proposing Pegasus’ flowย reversal.

โ€œBitumen blends are more acidic, thick and sulfuric than conventional crude oil,โ€ explains the suit. โ€œ[B]itumen contains 15 to 20 times higher acid concentrations than conventional crudes and five to ten times as much sulfur. Bitumen blends are 70 times more viscousโ€ฆthan conventional crudes. Additional sulfur, acid and viscosity in the bitumen leads to weakening or embrittlement ofย pipelines.โ€

In 2006, Pegasus underwent a transformation from a 20-inch pipeline carrying conventional light crude from Texas up to the northern U.S. into a dilbit line carrying Alberta’s tar sands from Patoka, IL to Nederlands, TX for refining on the Gulf Coast. The pipe wasn’t built to carry tar sands crude and was only meant to carry a maximum of 95,000 barrels of light crude per day, the suit explains, a fact Exxon allegedlyย knew but proceeded with the tar sands projectย anyway.ย 

Exhibit A: Enbridge attempted to team up with Exxon in a joint venture partnership that would entail replacing the pipeline. Exxon turned down the deal and insteadย increased tar sands carrying capacity through the antiquated line to a level surpassing the maximum limit for light crude, an example the class-action cites as willfulย negligence.ย 

โ€œExxonMobil discarded this joint plan for a new, safer and larger pipeline to replace the sixty-seven year oldโ€ฆPegasus Pipeline,โ€ write the plaintiffs. โ€œInstead, ExxonMobil, in order to increase its profits at the expense of public safety, made a deliberate corporate decision to increaseโ€ฆPegasus Pipeline by 50% [in 2009], from 66,000 barrels per day to 99,000 barrels perย day.โ€

Rather than responding to the spill honestly, ExxonMobil tried to cover the situation up through its โ€œcommand center,โ€ also running the Federal Aviation Administration’s โ€œno fly zoneโ€ on the FAA‘s behalf. Thus, the class-action lawsuit also sues Exxon for its response to the spill, in which deployment of crisis communications public relations tactics were favored over a legitimate all-out on-the-ground crisis spill responseย effort.

โ€œAfter the [spill], [ExxonMobil] gave false, inconsistent and misleading factual assurances to the media and publicโ€ฆExxon’s suppression, concealment and omission of material facts gave a false impression to the public that the Pipeline had only experienced a three inch gashโ€ฆand there was no bitumen in the oil,โ€ the lawsuit filingย explains.ย 

The ecological hazards of the spill, which the lawsuit says Exxon actively attempted to cover up in wholesale fashion, are nothing short ofย catastrophic.

โ€œThe hazardous materials being transported through Arkansas and which Mayflower citizens were exposed to are known to pose serious health effects, including lung damage if aspirated, skin cancer, irritant to eyes, mucous membranes and lungs, nausea, unconsciousness, loss of coordination, central nervous system depression, narcosis and death,โ€ the suitย states.

The โ€œLake Conway Classโ€ seeks absolute liability, nuisance, and negligence tort charges for ExxonMobil, demanding a jury trial. They seek tort repayment for damages suffered above $75,000 for each category as individuals and tort repayment for damages suffered above $5 million as aย group.ย 

EPA/Arkansas Attorney General Civilย Lawsuit

By comparison, the EPA/Arkansas AG civil lawsuit is much more straightforward, though it could end up with ExxonMobil doling out much more money at the end of the day.ย The two respective bureaucracies have demanded ExxonMobil pay fines for gross violations of bread-and-butter environmental laws, just as a citizen who got a ticket for speeding would have to pay aย fine.

Main problem: ExxonMobil has yet to admit, as explained in the class-action case, that it’s done anything wrong. Exxon’s now caught in a bind, having to choose between settling out of court with the plaintiffs and claiming no wrong-doing, or duking it out in court and making its case that it did nothing wrong inย Mayflower.ย 

EPA is holding ExxonMobil accountable for $1,100 per barrel of dilbit spilled if not willful negligence and $4,300 per barrel spilled if it was willful negligence. That equates to a steep fine ranging from between $29.7 million to $116.1 million**. The state-level penalties could amount to another $4.23 million owed by ExxonMobil, as of July 1,ย 2013.

On the whole, ExxonMobil could owe the EPA and Arkansas AG between $33.93 million and $120.33 million if it loses the suit, at mostย a third of a percent of its 2012 annual profit, at minimum .0008 of its 2012 annual profit.**

Environmental Refugees: A Teachable Moment for Keystone XL?

The โ€œLake Conway Class,โ€ put another way, are environmental refugees who may never be able to return to their homes again.ย 
ย 

โ€œExxonโ€™s Mayflower spill is a reminder of who bears the risks of fossil fuel development like the Keystone XL pipeline,โ€ย wroteย Greeenpeace USA‘s Jesse Coleman in a recent blog post, summing up the situation. โ€œ[T]he residents of Mayflower must now live in a contaminated environment and many families will never be able to go back to theirย homes.โ€

Keystone XL proponents claim because it is a newer pipeline, it is safe and sound and another Mayflower or Kalamazoo would never happen. The facts defy this logic,ย though.

The southern half of Keystone XL –ย already over 75-percent completeย via an Obama Administrationย March 2012 Executive Orderย – hasย been plagued byย faulty welding and anomalies. Icing on the cake: theย original Keystone pipeline has already spilled 14 times.

As the Mayflower lawsuits proceed and the Keystone XL northern half decision approaches, Mayflower can serve as a teachable moment as it applies to Keystone XL. Or it can serve as just yet another lesson not learned. Class beginsย now.ย 

** This post has been updated to correct figures on Exxon’s potential liabilities and fines, which we overstated due to miscalculation based on gallons instead of barrels. DeSmog and the author regret theย error.**

***This post has been updated to correct Lake Conway’s status, not as the โ€œlargest man-made lake in the United States,โ€ but as the โ€œlargestย man-made game and fish commission lake in the United States.โ€ย DeSmog and the author regret theย error.***

Image Credit:ย ShutterStockย |ย Ralfย Kleemann

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Steve Horn is the owner of the consultancy Horn Communications & Research Services, which provides public relations, content writing, and investigative research work products to a wide range of nonprofit and for-profit clients across the world. He is an investigative reporter on the climate beat for over a decade and former Research Fellow for DeSmog.

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