ExxonMobil estimates its July 1 pipeline oil spill in Montana's Yellowstone River to cost US$42.6M, including US$40M for emergency response work, US$2.5M for damage to public, private property

Rachel Carter

BILLINGS, Montana , August 22, 2011 (Associated Press) – Exxon Mobil Pipeline Co. said its oil pipeline spill into Montana's scenic Yellowstone River will cost an estimated $42.6 million, according to documents obtained Monday by The Associated Press.

The July 1 pipeline break spilled about 42,000 gallons, or 1,000 barrels, of crude oil into the waterway upstream of Billings, the state's most populous city. Exxon Mobil's cost estimate includes $40 million for emergency response work and $2.5 million for damage to public and private property.

The company valued the lost oil at $100,000, according to documents submitted to federal pipeline regulators and obtained after a public information request.

The documents also revealed that regulators from the Pipeline and Hazardous Material Safety Administration reassured local officials that the pipeline would be able to hold up during flooding along the Yellowstone River in late spring. The pipeline failure occurred during a second round of flooding about a month later.

After initially aiming to complete the work by Sept. 9, Exxon Mobil said last week the cleanup may continue for several more months. About 1,000 people are involved in mopping up the spill, which fouled dozens of miles of riverbank.

The company has declined to say how much the accident might cost. It was not immediately clear if the longer cleanup time was factored into the company's cost estimate, submitted July 29 in a report to pipeline safety regulators.

The pipeline agency recently approved Exxon Mobil's plans to replace the failed section of pipe by drilling a new line up to 30 feet deep beneath the riverbed.

PHMSA officials said in a statement that its engineers had completed an evaluation of Exxon Mobil's construction plan to ensure the newly constructed pipeline can operate safely.

An inspector will be present during the construction of the pipeline replacement, the agency said.

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