Exxon Mobil Expects Montana Spill to Cost $135M

November 7, 2011

Exxon Mobil said it expects that its response to a July oil spill into the Yellowstone River in Montana will cost about $135 million, the company said Friday.

Exxon Mobil said it has reached compensation agreements with over 95 percent of property owners who were affected by the spill, which released some 1,000 barrels of crude oil into the river.

The leak occurred on July 1 on the Silvertip pipeline, in a section that ran under the Yellowstone River and carried crude oil to refineries in Billings, Montana.

The spill was handled by the Exxon Mobil Corp division Exxon Mobil Pipeline Co, which was responsible for the line.

The company said in a statement that it “expects total costs associated with the incident response to the Silvertip pipeline breach to be approximately $135 million.”

Raging high water from a season of heavy rains and record snowmelt appear to have played a role in causing the pipeline break, but a definitive cause has not been found, Richard Opper, director of the Montana Department of Environmental Quality, told Reuters.

The ruptured pipeline will be retrieved this weekend and sent to be examined by a metallurgical lab in Ohio to obtain more details on the exact cause of the break, he said.

Exxon Mobil said that more than 1,000 workers, including employees of the hazardous waste management company Clean Harbors, took part in response and cleanup efforts to deal with the spill.

The company said it continues to work with the U.S. Environmental Protection Agency and the Montana Department of Environmental Quality to ensure clean-up goals are met.

For its part, the state is working with federal agencies to examine claims of damage to natural resources, Opper said. And in the spring, officials will check if more oil surfaces after water levels rise, he said.

“Exxon, all in all, has been pretty responsive,” Opper said. “There were some hiccups with some of the landowners. But cleanup is a very complex process with many moving parts.”

(Reporting by Braden Reddall and Laura Zuckerman: Writing by Alex Dobuzinskis; Editing by Cynthia Johnston and Carol Bishopric)

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