Oil Company Agrees to Pay $7M over 800,000-Gallon Tar Sands Pipeline Spill

A four-year class action lawsuit over the largest and most expensive inland oil spill in U.S. history has reached a tentative settlement, with the company responsible agreeing to pay $6.75 million to those who lived and owned property near the spill.

The lawsuit was brought by thousands of plaintiffs who claimed they were subject to toxic fumes, noise, and general degradation of life following the July 2010 oil spill, which saw more than 800,000-gallons of thick Canadian tar sands crude oil flow out of a ruptured pipeline and into Michigan’s Kalamazoo River.  The pipeline, called Line 6B, is owned and operated by a company called Enbridge Inc., based in Calgary, Alberta.

Under the agreement with Enbridge, plaintiffs who lived or owned property within 1,000 feet of the river will split a total of $2.2 million, meaning each plaintiff stands to get anywhere from a couple thousand to a couple hundred dollars depending on the size of the class.  In addition, a $1.5 million fund will be set up for people who can show they made out-of-pocket expenses — stayed in hotels, bought meals, etc. — during the time the spill was at its worst. Enbridge will also be required to implement a $50,000 testing program for well water, and has agreed to donate $150,000 to local environmental conservation organizations.

The lawsuit itself is far from the only time Enbridge has had to shell out cash for the historic spill, which caused many local residents to permanently relocate in the wake of toxic fumes and the difficulty in cleanup.  Indeed, the difficulty in cleaning up tar sands oil — which is thicker and more sludgy than conventional oil — made it the most expensive inland oil spill in U.S. history.  Enbridge has estimated cleanup costs to be about $1.2 billion out of its own pocket.

Some plaintiffs have also sued Enbridge personally, and some have already settled.  The company was also fined $3.7 million by The Department of Transportation, a record-setting civil penalty for what the agency called “pervasive organizational failures” and a “complete breakdown of safety.”

The main reason why this spill was so disastrous was because of the type of oil involved.  When it spills, tar sands oil does not float on top of water like conventional crude.  Instead, like what happened in this case, it gradually sinks to the bottom.  And as Elizabeth McGowan and Lisa Song noted for InsideClimateNews, this makes normal cleanup techniques and equipment of little use.  And because tar sands oil needs chemicals like benzene to liquefy it, those chemicals evaporated into the air while the oil sank.

InsideClimate News also reported at the time that the Environmental Protection Agency didn’t know until more than a week after the spill that the pipeline was carrying tar sands oil.

For many environmentalists, the 2010 Enbridge spill represents a cautionary tale when it comes to building the controversial Keystone XL pipeline.  If approved, Keystone XL would carry approximately 830,000 barrels of tar sands oil from Alberta, Canada to refineries on the Gulf Coast of the United States.

Read more at Oil Company Agrees to Pay $7M over 800,000-Gallon Tar Sands Pipeline Spill