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Scott G. Winterton, Deseret News
Salt Lake City is conducting its annual draining of Liberty Lake and prepares the the cleanup of last spring's oil spill once the Chevron plan earns approval.

SALT LAKE CITY — It was nearly five months ago that residents living between Emigration Canyon and Liberty Park were concerned with thick, black sludge running through their backyards and streams. What ended up closing down the pond at Liberty Park — and spurring all kinds of complaints along the stream leading into it — could end up costing the Chevron Pipe Line Co. nearly a half-million dollars.

The U.S. Department of Transportation on Monday announced that its Pipeline and Hazardous Materials Safety Administration is proposing a $423,600 civil penalty against the local oil company after an investigation into the June pipeline failure.

"The department's top priority is safety, and we remain committed to ensuring America's pipelines are capable of safely delivering vital energy products to U.S. households and businesses," U.S. Transportation Secretary Ray LaHood said in a news release.

According to the release, the pipeline, located above Red Butte Creek, leaked 800 barrels — or 33,600 gallons — of crude oil into the ground and water supply.

The subsequent investigation found that Chevron "may have failed to institute and follow required procedures to patrol its pipeline rights-of-way, control corrosion on its system and protect its pipeline from stray electrical currents," the release stated. The agency also found that Chevron may not have the resources properly allocated to detect leaks along its pipeline system.

PHMSA says the pipe oozed oil for 10 hours before Chevron received a notification of the failure from the local fire department.

Independent investigations have determined that an electrical storm on the evening of June 11 caused a nearby power line to arc, sending electric current through a metal fence pole that was placed just above the underground pipeline. The electricity burned a dime-sized hole into the pipe, allowing oil to flow freely.

U.S. Rep. Jim Matheson, D-Utah, heavily questioned the spill in a letter to USDOT, and in a response to Matheson's questions, Chevron officials noted that detecting the leak was "challenging" because pressures inside the 182-mile pipeline are constantly changing.

"To prevent future disasters, it's important that Chevron make improvements as soon as possible," Matheson said. "Only the quick work by local responders and Salt Lake City water department officials saved us from an environmental catastrophe."

Chevron spokesman Dan Johnson said the company had to review the order and study its findings before it would make a comment on the issue.

In addition to the violation notice, a compliance order was issued on Monday to Chevron, requiring the company to improve its inspection process, take certain protection measures to keep lightning or stray currents from damaging its lines and to improve its leak detection capabilities. Chevron has 30 days to respond to the federal agency and can take action before the order is finalized.

Chevron began draining Salt Lake's Liberty Park pond Monday to clean out sediments from the June oil spill.

e-mail: wleonard@desnews.com