SD sues Chevron over oil leak cleanup money

Thursday, January 20, 2011

South Dakota is suing Chevron, saying the company should return taxpayer money it took to clean up leaks from underground oil tanks because it also collected insurance money for the jobs.

Chevron spokesman Sean Comey told the Argus Leader newspaper that the company acted in good faith and complied with the law. South Dakota's lawsuit was filed on behalf of the state Petroleum Release Fund, which was created in 1988 in the wake of new federal regulations that fund Executive Director Dennis

Rounds said required the reporting and cleanup of leaks. States responded by creating funds for cleanups. South Dakota's fund uses 10.65 percent of the state's 2-cents-per-gallon tank inspection fee to help underground storage tank owners manage cleanup costs. South Dakota, Illinois, Alabama and West Virginia in separate lawsuits are now accusing Chevron of dipping into those funds while also taking insurance money, the Argus Leader said.

South Dakota's suit does not specify how much Chevron has collected from the state fund and Rounds declined to say. The lawsuit asks a jury to decide damages.

The state Petroleum Release Fund has paid $82 million for cleanups since 1988 at 4,301 sites, according to its 2010 annual report. The fund has $3.9 million in the bank and an estimated $4.5 million in future cleanup costs.

Most of the major leaks in South Dakota were discovered in the 1990s, said Doug Miller, tank coordinator for the state Department of Natural Resources. In 1984, the federal government mandated the registration and inspection of all underground storage tanks. By 1998, all tanks had to be registered and outdated tanks removed. As tanks were dug up, inspected and replaced, leak reports to the department spiked, some from abandoned tanks installed as far back as the 1940s, he said.

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