Chevron to pay $4.5 million for Utah oil spills

JOSH LOFTIN - Associated Press

SALT LAKE CITY (AP) — Chevron Corp. has agreed to a $4.5 million settlement with Salt Lake City and state environmental officials for two oil spills that polluted a creek and city pond, city officials announced Tuesday.

Mayor Ralph Becker said the money will be used to repair the waterways and riparian corridors damaged by the two spills.

According to the settlement, the company will pay $3 million for mitigation projects, $1 million to help affected residents and businesses, and a $500,000 civil penalty to the state. It does not end Chevron's responsibility for the cleanup, which is overseen by federal regulators.

It also doesn't limit private claims that have been filed by people living along Red Butte Creek.

"We expect Chevron to continue ... to be responsible for residual oil that needs to be cleaned up, responding to the public as concerns arise and virtually anything else that comes up because of this oil spill," Becker said.

The Utah Rivers Council, which has been working with residents along the creek, questioned whether the settlement went far enough. Executive Director Zach Frankel said the group had pushed for $15 million to track the long-term health effects of the spills.

Without the study, people who develop illnesses attributable to the spills — especially cancer — will be "in it alone, having to fight with their insurance company and Chevron's attorneys," Frankel said.

Chevron spokesman Mickey Driver said the company was happy with the settlement.

"We're glad to reach this milestone and be able to move on with our clean-up efforts," Driver said.

According to the settlement agreement, Chevron has spent $37 million on its own remediation efforts following the two spills. In addition, it has paid almost $6 million for restoration work done by the city, state agencies or private parties.

A pipeline failure in June 2010 in the mountains above Salt Lake City sent 33,000 gallons of oil downstream and killed all the fish at Liberty Lake, state regulators said, as well as large trees and insects.

About 300 birds were coated in oil and had to be cleaned at Hogle Zoo. Fewer than 10 died.

The city decided to stop the oil spill at Liberty Lake and use it as a collection point. The lake was drained, dredged of contaminated sediment, then lined with a protective concrete barrier and rock wall before it was reopened 11 months later.

Chevron was fined $423,000 after federal regulators determined the oil company needed better leak detection safeguards.

About 500 barrels spilled nearby in December that officials blamed on a frozen valve. That oil did not make it to the creek.