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Oklahoma-based pipeline company to pay $5.3 million for petroleum discharges

Release Date: 06/17/2008
Contact Information: DOJ (202) 514-2007 EPA (202) 564-4355

WASHINGTON—June 16, 2008 Magellan Midstream Partners agreed to pay a $5.3 million civil penalty for alleged violations of the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today. The alleged violations include illegally discharging gasoline and fuel oil from pipelines in Illinois, Kansas, Iowa, Minnesota and Arkansas into nearby waterways over the past 10 years.

According to the complaint, the company allegedly discharged more than 17,000 barrels of gas and fuel oil on 11 different dates in violation of the Clean Water Act between March 1999 and May 2006. Two of the largest spills flowed into a tributary and into the Missouri River itself in 1999 and 2005. In 2005, approximately 2,830 barrels of unleaded gasoline spilled from a ruptured pipe near Kansas City, Kan., most of which flowed into the Missouri River, and in 1999, over 4,500 barrels of diesel fuel spilled into the Missouri River near Atchison, Kan.

The spills had a number of causes, including third party damage from farm equipment and bulldozers, corrosion, leaks and pipeline operator error.

Magellan also agreed to resolve allegations related to Spill Prevention Control and Countermeasure regulations for violations found at two facilities in Iowa and Nebraska. The Clean Water Act authorizes EPA to establish SPCC regulations for preventing, preparing for and responding to oil spills or hazardous substances that may reach surface waters.

Along with the civil penalty, Magellan will set up a program to minimize third-party damage to the pipeline system, a cause of some of the spills, and will spend $750,000 on removing or minimizing any external threats along selected segments of its pipeline. The company will also implement system-wide changes to improve employee training, leak response procedures and protocols for detecting and responding to leaks and ruptures.

"Today's penalty should serve as a reminder that the Department of Justice and the EPA will pursue those who fail to comply with the laws that protect our environment," said Ronald J. Tenpas, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This agreement will also ensure that the company will take steps "Today's penalty should serve as a reminder that the Department of Justice and the EPA will pursue those who fail to comply with the laws that protect our environment," said Ronald J. Tenpas, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This agreement will also ensure that the company will take steps to prevent members of the general public from accidentally damaging this pipeline, the most common cause of the pipeline spills addressed in this action."

“Pipeline owners and operators must take steps to minimize the potential of fuel and oil spills," said Granta Y. Nakayama, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will prevent spills that can pollute our waters and harm sensitive ecosystems.”

Magellan is the owner and operator of a 6,700 mile long petroleum pipeline network and 39 terminal facilities in the states of North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Wisconsin, Illinois, Missouri, Arkansas, Kansas and Oklahoma. The pipeline transports petroleum products, including gasoline, diesel and aviation fuel, from refineries through interconnections with other interstate pipelines to retail gasoline stations, truck stops, railroads, airports and other end users.

The consent decree, lodged in the U.S. District Court for Kansas, is subject to a 30-day public comment period and approval by the federal court. Magellan is required to pay the penalty within 30 days of the court's approval of the settlement. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html .