The oil company has agreed to a $4.5 million payout to cover two separate spills one in June 2010, the other in December that spewed tens of thousands of gallons of petrol onto the ground and into waterways.
Salt Lake City Mayor Ralph Becker declared Tuesday that the deal will do what his administration has promised: "Hold Chevron accountable for damage to the health of our city's residents and natural environment."
"I am hopeful," Becker said, "that as the requirements of the settlement and agencies are met and the assessment of the affected areas is complete, the concerns of our residents will be satisfied, and the repair and restoration of the damaged riparian corridors will be accomplished."
The settlement, released Tuesday, requires Chevron to make the following two payouts to Salt Lake City:
• $3 million for the continued cleanup and protection of waterways affected by the oil spills.
• A $1 million payment to compensate the city for any claims that arise from environmental and social impacts.
The settlement also imposes a $500,000 civil fine on Chevron, payable to the state.
"We have accepted responsibility for the cleanup and restoration activities associated with both events, and are working with the state and city on those efforts," Chevron President Randy Curry said. "This agreement further demonstrates our commitment to the Salt Lake community to complete restoration activities and comply with all applicable regulatory requirements."
The payout comes after a series of oil spills released 54,600 gallons of crude into the ground and water near Red Butte Garden in the capital's foothills. The leaks left an indelible mark on Red Butte Creek that has been felt in the chemical spill that wafts from the east-side streambed and in the stains that remain on rocks along the channel.
Chevron already has put tens of millions of dollars toward cleanup. And the work isn't done. The settlement agreement released by the city identifies $42.6 million in spill-related expenses, ranging from a $100,000 waterfowl mitigation project to a $36.6 million price tag for remediation efforts in Red Butte Creek.
Becker characterized the latest $4.5 million settlement between the state, Chevron and the city as "very fair."
Harvard-Yale neighborhood resident Peter Hayes has another word for it: "inadequate." Hayes, whose son was hospitalized and whose home was evacuated during the spill, said the sum provides no deterrent for an oil company the size of Chevron to guard against future problems.
"The object of having fines and punishments is to alter behavior," he said. "This fine will do nothing to change their behavior. It is insufficient."
Becker said the settlement wasn't meant as a comprehensive fix for all the ails that have come from the two spills, only city-related claims.
For example, it did not address private claims filed against Chevron for property damage and health issues. Nor did it speak to efforts to ensure the long-term integrity of the pipeline. Those are happening separately from the city.
The settlement also omits any funds for monitoring the long-term health effects of residents exposed to oil fumes. Without that component, Brian Moench, president of Utah Physicians for a Healthy Environment, called the deal "totally unacceptable."
"Right from the beginning of this spill, community health was inadequately assessed or protected," said Moench, who has argued for a multi-year health study. "The proposed settlement dismisses the possible long-term medical consequences to the residents that have been exposed."
Becker defended the settlement, saying those health considerations fall under the regulatory eye of the state and county health departments, not the city.
City Councilman J.T. Martin praised the settlement. He described it as a sufficient starting point to move forward with restoration.
"The time is now, he said, "to begin restoring and getting back what we had before."
About the spills
Two leaks from a Chevron pipeline spilled 54,600 gallons of crude oil near Red Butte Garden in Salt Lake City's eastern foothills last year.
The June 11-12 spill unleashed 33,600 gallons of crude, scarring Red Butte Creek, the Liberty Park pond and parts of the Jordan River. The pipe was repaired and reopened little more than a week later on June 21.
A second spill, on Dec. 1, spewed 21,000 gallons near Red Butte Garden's amphitheater. The pipeline reopened Feb. 1 with safety upgrades. The Liberty Park pond, however, didn't reopen until May 14 this year.
What Chevron has paid so far
$36.6 million • Cost of cleanup along Red Butte Creek
$2.3 million • Amount paid to restore Liberty Park pond
$1.3 million • Reimbursement to the University of Utah for spill damage
$929,000 • Payout to third parties, such as homeowners, to compensate for property damage, personal inconvenience and potential injuries
$508,000 • Reimbursement to Salt Lake City for its out-of-pocket expenses for the two pipeline breaks
$462,853 • Payment to the Utah Division of Water Quality for its spill-related expenses and oversight
$424,000 • Civil penalty to the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration because of the June 2010 spill
$100,000 • Cost of a waterfowl mitigation project, according to an agreement with the Utah Department of Wildlife Resources
Note: All payments are as of July 31, 2011.
Source: Settlement agreement with Chevron