ExxonMobil to pay $12 million in Montana oil spill settlement

(Reuters) - ExxonMobil Corp. has agreed to pay $12 million to Montana and the U.S. government to restore natural resources damaged or destroyed by a pipeline rupture in 2011 that spilled oil into the Yellowstone River, according to a settlement proposed on Wednesday.

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ExxonMobil Pipeline Company’s Silvertip pipeline burst July 1, 2011 at a crossing beneath the flood-swollen Yellowstone River near Billings, Montana, about 150 miles (241 km) downstream from Yellowstone National Park.

The release of 1,500 barrels of crude oil affected 85 miles of a river known for its near pristine waters, wealth of wildlife and world-class fisheries.

Under the agreement unveiled Wednesday, funds from Exxon would be used to mitigate harm caused by the spill to fish, wildlife, migratory birds and aquatic habitat.

A restoration plan drafted by the state and federal governments would, among other things, seek to restore riparian and terrestrial habitats, stabilize river banks and expand fishing access in and around the river.

The deal struck between the Texas-based oil company and Montana, the U.S. Department of Justice and other federal agencies still must be approved by a U.S. District Court judge in Montana and is subject to 30 days of public comment, legal documents show.

The settlement and proposed restoration plan follow a years-long assessment of damages from the pipeline leak to the river and its floodplains.

Montana Governor Steve Bullock and Attorney General Tim Fox hailed the agreement for holding Exxon accountable and helping to make whole a state that boasts a $6 billion outdoor economy.

But Alexis Bonogofsky, whose pastures along the Yellowstone River were fouled five years ago by oil-tainted water said she was disappointed by the size of the settlement.

“I’m sorry, but $12 million is a drop in the bucket for ExxonMobil and doesn’t teach them anything about accountability,” she said.

Exxon spokeswoman Ashley Smith Alemayehu said the company was sorry for the accident.

“We regret this spill happened and are committed to learning from it to prevent similar incidents from occurring in the future,” she said in a statement.

Under a 2012 deal between Exxon and the Montana Department of Environmental Quality, the oil company paid a fine of $1.6 million in connection with the spill, the largest penalty ever levied in the state for violations of its water quality regulations.

The same year, Exxon estimated its overall response to the spill, including cleanup, would cost $135 million and said it had reached compensation agreements with more than 95 percent of affected property owners.

Reporting by Laura Zuckerman in Salmon, Idaho and Tim Ahmann in Washington; Additional writing by Mohammad Zargham; Editing by Sharon Bernstein and Alan Crosby