Colonial Pipeline faces enormous daily fine after massive NC gasoline leak, feds say

Colonial Pipeline Co. faces a $200,000 a day fine if it fails to improve monitoring of its U.S....
Colonial Pipeline Co. faces a $200,000 a day fine if it fails to improve monitoring of its U.S. pipeline system after a massive gasoline leak in Huntersville, according to a settlement agreement with the U.S. government.(PATIENCE REO COLONIAL PIPELINE CO.)
Published: Jul. 9, 2021 at 10:13 PM EDT
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CHARLOTTE, N.C. (The Charlotte Observer) - Colonial Pipeline Co. faces a $200,000 a day fine if it fails to improve the way it detects leaks in its U.S. pipeline system, after a massive gasoline leak in Huntersville, according to a recent settlement in the case with the U.S. government.

The agreement orders Colonial to find and use a better leak detection system across its entire network, citing several newly disclosed leaks over the years.

Colonial, meanwhile, faces separate potential action by the state Department of Environmental Quality for the August 2020 leak in Mecklenburg County’s Oehler Nature Preserve, State Sen. Natasha Marcus, D-Huntersville, told The Charlotte Observer.

Two teenage ATV riders chanced upon and reported the Huntersville leak in August.

The spill was among the worst in the state, Michael Regan, then-NCDEQ secretary, said in September. Regan now heads the U.S. Environmental Protection Agency.

The company eventually reported that almost 18 times more gasoline leaked from its pipe than its original estimate, according to the June 15 settlement with the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA).

An administration spokesman wouldn’t say why the agency didn’t issue a fine for the spill as part the settlement. In an email, he instead pointed the Observer to the potential $200,000-a-day fine in the agreement.

But the leak in Mecklenburg’s Oehler Nature Preserve was just the latest of several large spills in Colonial’s pipeline system, the settlement revealed.

“Colonial has experienced several other accidents that were not detected by its leak detection system or by Colonial personnel.,” federal officials wrote.

Leaks included 309,540 gallons of gasoline near Pelham, Ala., in September 2016; 588 gallons in Gwinnett County, Ga., in February 2016; and 4,000 gallons in Centreville, Va., in September 2015, according to the settlement.

The company has until Oct. 15 to show how and by when it will improve its leak detection process, according to the settlement with PHMSA.


In a statement emailed to The Charlotte Observer on Thursday, a Colonial Pipeline spokesperson said:

“In accordance with our safety management practices, Colonial Pipeline began to implement learnings from the Huntersville incident almost immediately after it occurred.

“The consent agreement outlines a number of steps that Colonial has agreed to undertake and we appreciate the opportunity to settle this matter following consultation with PHMSA.”


Colonial Pipeline Co. crews have recovered at least 1.2 million gallons of gasoline and continue to determine how much more may be in the ground, according to a July 1 update posted on the company’s website.

In September, NCDEQ ordered the company to restore groundwater quality to state standards and submit detailed monthly reports on everything from the results of soil, surface water and well water sampling to its excavation and disposal of contaminated soil.

Colonial said weekly tests continue of water supply wells for homes within a 1,500-foot radius of the leak.

“No petroleum constituents have been detected in water supply well samples. Environmental monitoring, including air quality and noise, continues,” the company said.

“Colonial remains committed to protecting human health and the environment and we will be here for as long as it takes to recover product and safely remediate this area.”


Marcus, the state senator who represents the Huntersville area, said she expects the company, at some point, to separately face a stiff financial penalty from North Carolina environmental regulators.

The state was not involved in the June 15 settlement, Marcus said in an email to the Observer.

The federal settlement “will not impact DEQ’s decision about the appropriate amount of penalties,” she said, referring to the state Department of Environmental Quality. “That decision will be made when all of the relevant facts are known, such as how long the pipe was leaking, why it was leaking, why Colonial did not detect the leak, and how much gasoline leaked into the soil and water in Huntersville.

A state DEQ spokeswoman couldn’t be reached on Friday for an update on the state inquiry into the spill.

“We know it’s more than 1.2 million gallons, but do not yet have an estimate of how many gallons are in the newly-discovered deeper pocket,” Marcus said. “When all the facts are known, I’m confident that NCDEQ will assess significant penalties as are appropriate given the stunning size of the leak and the disruption it has caused for residents.”

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