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Exxon Reiterates Spill Volume Was Correct

Updated with Exxon Mobil's remarks in a Wednesday media conference call.

NEW YORK (TheStreet) -- Exxon Mobil (XOM) Wednesday reaffirmed its original estimate that its burst pipelinespilled tens of thousands of gallons of oil into the Yellowstone River in Montana.

The reiteration came in response to a federal agency that said the company took twice as long than it initially claimed to completely seal the pipe.

The Department of Transportation reported that it took 56 minutes for Exxon to fully shut down the burst pipeline, which was longer than the 30 minutes the company stated earlier on Tuesday.

But Gary Pruessing, president of Exxon Mobil Pipeline said that the proper time it took to shut down the pipe had no bearing on the volume of oil the company predicted spewed into the river.

"Our best engineering analysis is our 750 [barrel] number," Pruessing said about the volume of oil that leaked, but he added that it was possible that the pipe released as much as 1,000 barrels.

The Department of Transportation directed Exxon to bury the pipelines deeper beneath the riverbed, which had only been five to eight feet underground when a 12-inch crude pipe failed and spewed oil into the river on Saturday.

Pruessing reiterated on Wednesday that Exxon believed burying the pipes five to eight feet was still the correct way to do it.

The DOT said it wouldn't permit Exxon to resume the pipeline's operations from Silver Tip, Mont. to Billings, Mont. until the company had reburied the pipeline and had submitted a restart plan. Exxon said that service restoration is not its main focus right now.

"Focus is on getting to the spill," Pruessing said.

"It is our responsibility to ensure pipelines are safely delivering energy to U.S. households and businesses, and when companies are not living up to our safety standards, we will take action," DOT Secretary Ray LaHood said in a statement. "The safety of our nation's pipelines is a priority and the investigation into this incident is ongoing."

The government reported that Yellowstone River oil deposits traveled downstream about 240 miles, which Pruessing said Exxon had not confirmed itself. Exxon initially said the leak would affect a 10-mile stretch of the river, but acknowledged the leak's impact could spread beyond its initial estimates.

Pruessing said that the reason Exxon and other oil pipeline companies do not use cut-off valves like gas companies do is because the mass and weight of the rapidly moving liquid could damage the pipes if it came to a sudden stop.

Exxon became notorious in 1989 for the Exxon-Valdez oil tanker blunder that released some 11 million gallons of oil into Prince William Sound, Alaska. It impacted about 1,300 miles of shoreline and 11,000 square miles of water.

Exxon shares closed down 3 cents to $81.57 on Wednesday.

-- Written by Joe Deaux in New York.



>To submit a news tip, send an email to: tips@thestreet.com

Copyright 2011 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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