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Tesoro to buy Chevron pipeline near Willard Bay for $355M

By Amy Joi O'Donoghue | Posted - May 25th, 2013 @ 12:23pm

SALT LAKE CITY — Tesoro Logistics announced Monday it is buying the Chevron pipeline system that leaked diesel fuel at the north section of Willard Bay State Park, which remains closed more than two months after the spill.

Chevron, however, will retain liability and responsibility for cleanup operations for two years at the Willard site as part of the purchase agreement for $355 million.

The price is short of the planned $400 million deal, with Tesoro citing the spill at Willard Bay as the reason for the discount.

San Antonio-based Tesoro says the deal includes an investment by the company of $15 million to $25 million over the next two years to implement an inspection program aimed at boosting the integrity of the 760-mile system.

The system consists of the northwest product pipeline, which stretches from Salt Lake City north to Spokane, Wash., and a five-mile jet fuel pipeline to the Salt Lake City International Airport. It also includes product terminals in Idaho and Washington, which have a total storage capacity of 1.3 million barrels.

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A March 18 fracture of the 8-inch pipeline north of Ogden at Willard Bay State Park contaminated wetlands and adjacent areas with 600 gallons of diesel fuel. The diesel spill destroyed several beaver ponds, which are credited with keeping the petroleum product from contaminating more areas. Several of the injured beavers remain in the care of the Wildlife Rehabilitation Center of Northern Utah.

Absorbent booms remain in place at Willard Bay, with its northern half off limits to boating and fishing. The campground and the launch area, too, remain closed.

John Whitehead, assistant director of the Utah Division of Water Quality, said some cleanup work remains, but the hard part for Chevron appears to be nearing an end.

A series of a half dozen ponds has been installed — as recently as last week — to help in the containment and capture of water.

Ultimately, Whitehead said, the goal is to restore the natural landscape that was lost.

"The idea is to re-establish the wetlands and get them back into shape."

The idea is to re-establish the wetlands and get them back into shape.

–John Whitehead, assistant director of the Utah Division of Water Quality

Chevron crews and state water quality regulators continue to monitor for any groundwater contamination, with Whitehead adding that soil is now being churned to clean up any remnant of the spill.

"There is really very little product left," he said. "My sense is that they are probably a week or two away from cleaning up what is left."

Chevron was issued a notice of violation for the release of product into a Utah waterway and Whitehead said the company did not contest the facts contained in the violation. As part of the order contained in the violation, the division has a series of steps and studies Chevron must complete.

Several hundred samples will be taken of water and soils to determine the extent of any remaining contamination, and the division will conduct a human health and ecological risk assessment to determine how clean the area is.

Whitehead said state park officials continue to be in discussions about the duration and extent of the closure.

Chevron could not be reached for comment on the sale or the status of its cleanup operation at Willard Bay.

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Amy Joi O'Donoghue

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