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Magellan Midstream Partners to Pay $5.3M in Civil Penalties for 11 Petroleum Pipeline Spills in Six Midwestern States

Release Date: 06/16/2008
Contact Information: Chris Whitley, 913-551-7394, [email protected]

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Environmental News

FOR IMMEDIATE RELEASE

(Kansas City, Kan., June 16, 2008) - Magellan Midstream Partners has agreed to pay $5.3 million in civil penalties for alleged violations of the Clean Water Act related to illegal spills or discharges of petroleum products from its pipeline network at 11 locations in six states over the past 10 years, officials of the U.S. Environmental Protection Agency and the U.S. Department of Justice announced today.

"Pipeline owners and operators must take steps to minimize the potential of fuel and oil spills," said Granta Y. Nakayama, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Today's settlement will prevent spills that can pollute our waters and harm sensitive ecosystems."

According to a complaint and consent decree filed today in U.S. District Court for the District of Kansas, Tulsa-based Magellan allegedly spilled or discharged more than 17,000 barrels of unleaded gasoline, diesel fuel, low-sulphur diesel or fuel oil on 11 different dates from March 1999 through May 2006. Six of the 11 spills, including the two largest, occurred in Kansas.

Specifically, the legal filings allege that Magellan was responsible for spills or discharges on:

• March 24, 1999; at Braidwood/Wilmington, Ill., involving 2,693 barrels of unleaded gasoline.
• May 10, 1999; at Atchison, Kan., involving 4,564 barrels of diesel fuel.
• May 24, 1999; at Hartland, Iowa, involving 73 barrels of low sulphur diesel.
• August 17, 1999, at Humboldt, Kan., involving 316 barrels of unleaded gasoline.
• February 5, 2000, at Coralville, Iowa, involving 745 barrels of diesel fuel.
• April 26, 2000, at Sioux Falls, S.D./Alexandria, Minn., involving 50 barrels of unleaded gasoline.
• March 21, 2002, at Fort Smith, Ark., involving 73 barrels of gasoline.
• July 18, 2002, at LaHarpe/Allen, Kan., involving 541 barrels of fuel oil.
• October 6, 2003, at Shawnee, Kan., involving 700 barrels of diesel fuel.
• May 23, 2005, at Kansas City, Kan., involving 2,830 barrels of unleaded gasoline.
• January 13, 2006, at Independence, Kan., involving 3,215 barrels of unleaded gasoline.

The 11 spills occurred from a variety of causes, including corrosion, leaks, pipeline operator error, and third-party damage from farm equipment and bulldozers.

Today's settlement also includes an agreement by Magellan to resolve allegations involving federal Spill Prevention, Control and Countermeasure (SPCC) violations at its facilities in Coralville, Iowa, and Rocca, Nebraska.

Under the Clean Water Act, EPA is authorized to establish SPCC regulations for preventing, preparing for and responding to spills of oil or hazardous substances that may reach surface waters.

Besides agreeing to pay the $5.3 million civil penalty, Magellan has promised to set up a program to minimize third-party damage to its pipeline system, and will spend $750,000 to remove or minimize external threats along selected segments of its pipelines. Additionally, the company will implement system-wide changes to improve employee training, leak response procedures, and protocols for detecting and responding to leaks and ruptures.

Magellan owns and operates a 6,700-mile petroleum pipeline network and 39 terminal facilities in Arkansas, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota and Wisconsin. The pipeline transports petroleum products, including gasoline, diesel and aviation fuel, from refineries through interconnections with other interstate pipelines.

The consent decree is subject to a 30-day public comment period and approval by the federal court. Magellan would be required to pay the monetary penalty within 30 days of the court's approval of the settlement.