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Yellowstone River Oil Spill Will Cost Exxon $135 Million

By MATTHEW BROWN   11/ 4/11 04:22 PM ET   AP

BILLINGS, Mont. -- Exxon Mobil said Friday it expects to incur costs of about $135 million from an oil pipeline break beneath Montana's Yellowstone River that triggered a massive effort to limit damage to the scenic waterway.

The cost figure was released to The Associated Press. It is more than triple an earlier estimate and includes for the first time the expense of replacing the section of broken pipeline with a new one buried more deeply beneath the river.

The company's 12-inch Silvertip crude oil pipeline broke July 1 during severe flooding.

In the 56 minutes it took Exxon Mobil to seal off the line, an estimated 42,000 gallons of oil leaked into the river near Laurel. That fouled dozens of miles of riverbank, numerous islands and swaths of low-lying cropland with crude.

More than 1,000 workers were involved in the cleanup effort at its peak.

Work to remove the damaged pipeline began Monday and is expected to take several weeks.

An Exxon Mobil spokeswoman declined to offer a detailed breakdown of the company's costs and provided only a broad overview of expenses.

"This estimate includes costs for overall emergency response and cleanup efforts including personnel, equipment, landowner claims and projects associated with the restart of the pipeline such as the horizontal directional drill," company spokeswoman Claire Hassett said.

"Horizontal directional drill" refers to the process the company used to bore a new route for the pipeline dozens of feet beneath the riverbed. That move was mandated by federal pipeline regulators.

The original pipeline was buried only a few feet beneath the riverbed. State and federal officials have speculated that summer flooding scoured the riverbed and left the pipe exposed to damaging debris and the sheer force of the rushing river.

A federal lawsuit against Exxon Mobil is pending from landowners along the river who accuse the company of a "haphazard, sloppy" cleanup.

The lawsuit also claims the company failed to heed warnings from local officials who raised concerns about Silvertip months before the accident. The company denies the claims.

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Filed by James Gerken  |  Report Corrections