The central Arkansas spill caused by Exxon’s aging Pegasus pipeline has reportedly unleashed 10,000 barrels of Canadian heavy crude – but a technicality says it’s not oil, letting the energy giant off the hook from paying into a national cleanup fund.
Legally speaking, diluted bitumen like the heavy crude that’s overrun Mayflower, Arkansas, is not classified as ‘oil’. And it’s that very distinction that exempts Exxon from contributing to the government’s oil spillage cleanup fund.
ExxonMobil has already confirmed that the compromised pipeline was transporting “low-quality Wabasca Heavy crude” from Canada’s Alberta region. That particular form of crude contains large quantities of bitumen – a “thick, sticky, black semi-solid form of petroleum which is transported in a diluted form (dilbit) as it makes its way from Canada to US refineries,” explains Oil Change International, which has brought attention on the strange legal exemption.
Companies that transport oil are required to pay $.08 per barrel into the Oil Spill Liability Trust Fund. The cash is used by the US government to respond to oil spills. But there’s a catch – Exxon is exempt from paying into the fund, because its pipelines aren’t considered to be carrying “conventional oil.” However, it’s that very fund that is responsible for cleaning up at least part of Exxon’s mess.
“Exxon, like all companies shipping toxic tar sands, doesn’t have to pay into the fund that will cover most of the clean up costs for the pipeline’s inevitable spills,” Oil Change International claimed on Tuesday.
RT has contacted Exxon regarding just how much of the cleanup will be paid for by the Oil Spill Liability Trust Fund, and is currently waiting for a reply.
The strange exemption of heavy bitumen crude from classification as oil dates back to a time when the extraction of tar sands on a large scale was thought improbable with technology available at the time. However, while oil companies developed the means to transform Canadian tar sands into a booming energy sector, the legal definition of oil remained the same.
Money from that same fund has already helped to clean up another spill caused by a ruptured pipeline. In 2010, more than 1 million barrels of diluted bitumen (crude oil) were spilled into the Kalamazoo River. To make matters worse, unlike conventional crude oil, bitumen heavy crude sinks. The ensuing environmental impact has made that Michigan spill the most expensive in US history, as toxic substances seeped into the surrounding soil.
There is also the fear that bitumen heavy crude could be more corrosive to pipelines than conventional crude. Lorne Stockman, research director at Oil Change International, told ThinkProgress that it’s past time for the law to be changed:
“The question is why we should continue this exemption given that it’s clear tar sands oil is more likely to spill because it’s more corrosive… and more and more tar sand is coming into the US.”
For its part the oil industry disputes the claim, and has produced scientific impact research that does not reflect higher corrosion by transporting bitumen heavy crude.
Judge Allen Dodson of Arkansas’ Faulkner County seemed to reflect the concerns of those impacted by the latest spill of heavy bitumen crude, saying: “Crude oil is crude oil. None of it is real good to touch.”