LITTLE ROCK, Ark. (AP) — The U.S. Chamber of Commerce is siding with Exxon Mobil in the company’s appeal of a fine and safety measures ordered by a federal regulatory agency after the company’s Pegasus pipeline burst in March 2013 and spilled tens of thousands of gallons of crude oil into a central Arkansas neighborhood.
The chamber filed a friend-of-the-court brief this week with the 5th U.S. Circuit Court of Appeals in New Orleans saying the federal Pipeline and Hazardous Materials Safety Administration revised its pipeline regulations only after the oil spill, Arkansas Democrat-Gazette reported (http://bit.ly/2c05pBi ). The brief said that allowing the order to stand would threaten existing pipeline infrastructure and adversely affect the economy.
The pipeline safety agency “has engaged in a significant, post hoc revision of important regulations governing pipelines,” according to the filing.
“Pipeline companies will think twice about further investments in pipeline infrastructure if they believe the courts will afford deference to pipeline regulators’ dramatic, post hoc changes in pipeline policy under the guise of interpretation of purportedly ambiguous regulations.”
Exxon Mobile subsidiary Exxon Mobile Pipeline Co. is challenging PHMSA’s authority to order the safety measures and wants the court to overturn a $2.6 million fine that the company paid earlier this year as a result of the spill.
The safety administration has until Sept. 16 to respond.
Justice Department attorneys have said that the company didn’t follow its own procedures when it assessed the safety of the Pegasus pipeline, which was constructed in 1947-48.
When the pipeline cracked, heavy crude oil spilled into a subdivision of Mayflower, drainage ditches and a Lake Conway cove. Government attorneys have said the accident caused more than $57 million in property damage.
The safety agency’s compliance order requirement directs the company to revise its seam-failure susceptibility process for all pre-1970 electric resistance-welded pipe in all of the pipelines it operates.
Exxon Mobil has said it operates more than 1,000 miles of pipeline that is similar to the Pegasus and that is subject to the federal agency’s safety regulations. The company has said it’s being singled out with “extensive and costly” directives that don’t apply to its competitors, putting it at a competitive disadvantage.
Oral arguments in the company’s appeal are scheduled during the week of Oct. 31.