why doing the right thing is the right thing to do - steven g. jones 11.21.14

Why Doing the Right Thing

is the Right Thing to DoChevron Pipe Line Company’s Response to the Red Butte and Willard Bay Pipeline Releases

The High Cost of Non-Compliance:Risk Management and Environmental Protection Duties from the Industry Perspective

November 21, 2014

Steven G. Jones

Important Information

This presentation is similar to any other seminar designed to provide general information on pertinent legal topics. The statements made and any materials distributed as part of this presentation are provided for educational purposes only. They do not constitute legal advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the speakers. This presentation is not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

All Presentations and Other Materials © Holland & Hart LLP 2014

Red Butte Creek, June 11, 2010

Wind causes a “ground fault” at RMP substation

Current flows down fence post

Melted fence post

5

Ruptured pipeline

6

Chevron’s response – June 18, 2010

8

Red Butte Creek cleanup

Liberty Park/Tracy Aviary cleanup

Liberty Park pond cleanup

11

Liberty Park pond today

12

Improvements to private property

Before After

Before

After

Improvements to private property (cont’d)

Before

After

Wedding planning

Chevron’s Costs and Expenses for Red Butte

16

Expense AmountRed Butte Creek Clean-up Costs $26,642,254

Liberty Park Pond Clean-up Costs $2,293,540

Reimbursement to the University of Utah

$1,304,332

Payments to Third-Parties (Homeowners, etc.)

$832,476

Reimbursement to Salt Lake City $508,032

Waterfowl Mitigation Project $100,000

TOTAL $31,680,634

Willard Bay, April 13, 2013

Before and after pictures

Canal closest to release, adjacent to I-15

During cleanup, water was diverted tokeep incoming water clean

Same canal after cleanup

Looking east across park road

All surfaces where cleanup workers walked were covered with absorbent pads to avoid

spreading diesel

Same creek bed post-cleanup

Beach area – work was undertaken to ensure no diesel reached the bay

Beach area (cont’d)

Old sand was removed and replaced with clean sand

Beach area post-cleanup

Improvements to State Park

Park improvements (cont’d)

Deconstruction of Wetland Trail

$35,000

Weed & Trash Removal

$8,000

Fire Hydrant Replacement

$5,000

Door and Flooring Replacement

$7,000

Wood Boxes $772

Bat Boxes $3,464

Fencing $15,000

Safety guards $60,000

Fencing $40,000

Habitat rehabilitation $105,000

TOTAL $1,238,236

Mitigation over and above $21.5M in cleanup costs

Project CostWater Control Structures

$80,000

Erosion ControlCulvert Cleaning $5,000 Replanting Habitat Enhancement

$150,000

Re-sodding of Pavilion Area

$30,000

Paving $245,000 Slurry Seal $90,000 Invasive Species Removal

$10,000

Overflow Parking Lot $47,000

New Upland Trail $95,000 Trail Fence Rail $70,000 Sidewalk at Eagle Beach

$12,000

Temporary Fence $40,000 Beach Sand Enrichment $85,000

$1,238,236

The benefits of being proactive

• Red Butte– Early settlement with Salt Lake City– Early settlement with University of Utah– Early settlement with LDS Church– Structured settlement with State of Utah• Penalty• Funded mitigation projects

Benefits of being proactive (cont’d)

Willard Bay– Settled Parks Department’s lost use

damages– Structured settlement with State

• Penalty• Funded mitigation projects

Benefits of being proactive (cont’d)

Federal Penalty Negotiations– Negotiation of federal penalties deferred

until after the State negotiations were concluded and settlements funded

– As a result, Chevron received credit for both the State penalties and mitigation projects

Public response to mitigation

Willard state park reborn after spill cleanup, May 21, 2014

“All in all, [State Park Ranger James] Morgan says he was satisfied with Chevron’s response to the environmental crisis.

“I’d never throw them under the bus,” he said. “Would I want this to happen? No. But did they step up to the plate, and go above and beyond in fixing it? They did.”

Public response to mitigation

“‘It’s time to celebrate,’ said Willard Mayor Kenneth Braegger. … The proposal now green-lighted by the DWQ was formally called Willard Creek Nature Park & Debris Basin Rehabilitation Project.

‘We’ll probably rename it.’ Braegger said. ‘We’ll have to do that now that we’ve got the money. Maybe ‘Big Kiss on the Lips to Chevron Park.’”

Spill settlement mostly going to Willard Bay, May 28, 2014

Take aways

• S*** happens• If you’re in a business where it’s likely to

happen - do the right thing

Respond immediately Take responsibility Do a thorough job of cleanup Go above and beyond what’s necessary Ultimately, this makes dealing with both

regulators and the public much easier

For more information

Steven G. JonesHolland & Hart LLP

sgjones@hollandhart.com801-799-5828 (direct)206-356-3360 (cell)