AL: It's Watershed vs. Pipeline in Latest Fracking Battle
Don't forget these pipeline spills getting into water:
It's Watershed vs. Pipeline in Latest Fracking Battle
High-Profile Spills Prompt Water Utilities to Fight Oil-and-Gas PipelinesJune 4, 2014 7:26 p.m. ET
In Mobile, Ala., the water utility spent decades buying 8,000 acres of land to protect drinking water for around 200,000 people. So alarms went off when officials learned that Plains All American Pipeline PAA +0.07% LP planned to build a line to transport up to 8 million gallons of crude oil a day through the property.
"Do we really want oil in our drinking water?" said a black-and-blue banner on the Mobile Area Water & Sewer System's home page.
The pipeline opened in early April, sending crude oil from a storage terminal in the Mobile area to a refinery 40 miles away in Pascagoula, Miss.
But that was after the utility unsuccessfully fought Plains in court and settled the case in February rather than appeal.
The Mobile legal battle reflects growing conflict between some water systems and pipeline companies. Environmental activists have long cited drinking-water concerns as a basis for opposing pipelines.
But in the past few years, utilities have begun voicing similar worries too—in lawsuits and regulatory comments, with the media and on the Web. Officials say they have been motivated by recent high-profile spills in Arkansas, Michigan and elsewhere, as well as by the race to build and upgrade pipelines to accommodate the U.S. oil-and-gas boom brought on by hydraulic fracturing.
"It's about critical infrastructure coexisting," saysLisa Ragain, a risk consultant for water systems. "It's an awareness-building campaign…getting a sector that is very far removed from the provision of safe drinking water to understand what that entails."
Around 31,000 miles of pipelines carrying oil and other hazardous liquids, 17% of the nation's total, run through areas that could put drinking water at risk in the event of a spill, according to the U.S. Pipeline and Hazardous Materials Safety Administration. There were 182 pipeline spills in such areas from 2010 through early May—58 of which the agency determined were significant.
Incidents of chemicals reaching drinking water and causing significant problems have been rare. But there have been close calls.
A 2005 oil spill in Louisville, Ky., required a utility to adjust its water treatment to keep out chemicals. In 2000, 564,000 gallons of gasoline contaminated Lake Tawakoni, a drinking-water source in the Dallas area, causing several water systems to close intakes, according to government records.
Pipeline companies say they offer a safer way to transport oil than alternatives such as barges, trucks or rail, the latter of which has been responsible for several explosive crashes in the past year. The companies say they are trying harder to avoid hazardous areas. Operators have to take special precautions when their pipelines are located within 5 miles of drinking-water intakes or close to wells that are a community's sole source of water.
Water officials say that they are taking steps now to prevent disaster, or at least be better prepared.
Portland, Maine, water-district trusteeGary Libby says that until recently, the utility's attitude toward a World War II vintage oil pipeline was "out of sight, out of mind." The pipeline had flowed for decades without incident within roughly 10 miles of Sebago Lake, the sole source of drinking water for around 200,000 people. But in March, trustees voted to hire a safety expert to study the pipeline, particularly concerned that the operator would reverse the flow to bring tar-sands oil from Canada.
"We never were focused on the potential that it had to rupture and to really cause a problem," Mr. Libby says.
Portland Montreal Pipeline Co. says it continues to work on safety with officials and doesn't plan to reverse the pipeline's flow. "It has operated up there with a high degree of integrity and excellence for over 70 years," says spokesmanJim Merrill. "It has an impeccable safety record."
Water officials in Little Rock, Arkansas, have asked Exxon Mobil Corp. XOM +0.51% to move an old pipeline away from the city's drinking-water source and filed a notice of intent to sue. The request came after a different section of the pipeline burst last year and spilled 210,000 gallons of crude oil into a residential neighborhood. The pipeline-safety administration fined Exxon $2.7 million for "probable violations" of pipeline-safety rules.
The company is appealing the fine and says it is studying the pipeline and negotiating with Central Arkansas Water.
Salt Lake City recently submitted public comments to the U.S. Forest Service expressing concerns about an oil pipeline planned near drinking-water sources.
Public Utilities DirectorJeff Niermeyer says crude-oil production in Utah has increased substantially over the last five years and that he began to take more of an interest in pipelines after ruptures in 2010 sent more than 54,000 gallons of oil into neighborhoods and waterways. The spills didn't affect Salt Lake City's water supply, but in a different spot they would have, he says.
"It really elevated in my mind that I needed to engage the oil companies," Mr. Niermeyer says. The Forest Service is reviewing the public comments and plans to respond next summer.
Oil refiner Tesoro Corp. TSO +1.11% says it is working with water utilities in the early stages of developing its pipeline.Michael Gebhardt, the company's vice president of strategy and business development, says crossing drinking-water sources are unavoidable along the pipeline's 140-mile route but that the pipeline can be operated safely.
In Mobile, where the contested crude-oil pipeline recently opened, the water system got wind of the planned line after Plains All American received a permit from the Army Corps of Engineers to cross waterways. The state Public Service Commission already had granted the company the right to build on about 3,000 feet of land owned by the water system. The plan called for the 24-inch-diameter subterranean pipeline to pass within 2 miles of a drinking-water intake.
When Mobile Area Water & Sewer refused Plains's rights to the land, the company sued in state court.
"When we took everything into account from a safety perspective, this was the best route," saysDwayne Koehn, vice president of engineering for Plains, which says the pipeline meets safety standards.
An Alabama judge ruled in favor of the pipeline, determining that the state couldn't impose stricter safety standards than the federal government did.
The water system decided not to appeal after the company agreed to pay the utility $2.7 million, use thicker pipes than originally planned and bury them deeper in the ground.