Oil & Gas

April 16, 2018

New York Court Affirms Gas Company on the Hook for Environmental Cleanup Costs

Source: https://www.insurancejournal.com. April 16, 2018
By: Elizabeth Blosfield

The New York Court of Appeals has ruled that KeySpan Gas East Corporation is responsible for costs to clean up environmental contamination caused by manufactured gas plants owned by its predecessor during years when there was no pollution property damage liability insurance coverage available in the market. The court rejected KeySpan’s proposition to instead hold its insurer Century Indemnity Company liable for the cleanup costs.

“Long-tail claims present unique difficulties,” Judge Stein wrote in the New York Court of Appeals opinion document, adding that for long-tail claims, the injury producing harm is gradual, continuous and typically spans multiple insurance policy periods. In this case, the harm involved years when insurance coverage was in place in addition to years when no coverage was purchased.

“In these situations, courts across the country have been tasked with determining the appropriate distribution of liability among various insurers and between the insurers and the policyholder,” Stein wrote.

This case, Keyspan Gas East Corporation v. Munich Reinsurance America, Inc., Century Indemnity Company et al., comes after the New York Department of Environmental Conservation (DEC) found long-term, gradual environmental damage at two manufactured gas plants in Rockaway Park and Hempstead owned and operated by KeySpan’s predecessor, Long Island Lighting Company (LILCO), decades after gas production began in the late 1880s and early 1900s. At both sites, the DEC found contaminants, such as tar, had seeped into the ground and leeched into the groundwater.…

March 29, 2018

New York Court Affirms Gas Company on the Hook for Environmental Cleanup Costs

Source: https://www.insurancejournal.com, March 29, 2018
By: Elizabeth Blosfield

The New York Court of Appeals has ruled that KeySpan Gas East Corporation is responsible for costs to clean up environmental contamination caused by manufactured gas plants owned by its predecessor during years when there was no pollution property damage liability insurance coverage available in the market. The court rejected KeySpan’s proposition to instead hold its insurer Century Indemnity Company liable for the cleanup costs.

“Long-tail claims present unique difficulties,” Judge Stein wrote in the New York Court of Appeals opinion document, adding that for long-tail claims, the injury-producing harm is gradual, continuous and typically spans multiple insurance policy periods. In this case, the harm involved years when insurance coverage was in place in addition to years when no coverage was purchased.

“In these situations, courts across the country have been tasked with determining the appropriate distribution of liability among various insurers and between the insurers and the policyholder,” Stein wrote.

This case, Keyspan Gas East Corporation v. Munich Reinsurance America, Inc., Century Indemnity Company et al., comes after the New York Department of Environmental Conservation (DEC) found long-term, gradual environmental damage at two manufactured gas plants in Rockaway Park and Hempstead owned and operated by KeySpan’s predecessor, Long Island Lighting Company (LILCO), decades after gas production began in the late 1880s and early 1900s. At both sites, the DEC found contaminants, such as tar, had seeped into the ground and leeched into the groundwater.…

January 5, 2018

Mariner East 2 construction has resulted in dozens of spills, documents show

Source: https://stateimpact.npr.org, July 19, 2017
By: Susan Phillips

Construction of Sunoco Pipeline’s $3 billion 350-mile long Mariner East 2 pipeline resulted in at least 61 drilling mud spills from April 25 through June 17, 2017, according to newly released documents. The spills have occurred in ten of the 12 counties along the route and range from minor releases of five gallons to larger more serious releases of tens of thousands of gallons. The documents, pasted below, include reports of “inadvertent returns,” and were released by the Department of Environmental Protection as part of ongoing litigation by the Clean Air Council challenging the department’s issuing of water crossing permits for the project last February.

The Council wants the Environmental Hearing Board to suspend construction while its case is pending review, but has so far been unsuccessful.

The spills primarily contain bentonite, a muddy clay substance used as a lubricant in drilling beneath waterways during horizontal directional drilling. Bentonite is non-toxic but can do damage to drinking water wells by clogging up an aquifer. A recent incident in Chester County forced 15 families to switch to bottled water and the company has since agreed to pay to hook residents up to the public water supply after some resident’s water wells went dry, and others experienced cloudy water.…

January 5, 2018

Sunoco Working To Contain Spill Linked To Pipeline

Source: http://philadelphia.cbslocal.com, July 18, 2017
By: Ian Bush

A week after Sunoco agreed to address concerns that its pipeline construction was tainting well water in one Chester County community, two new problems have cropped up — this time, in part of Media, Delaware County.

Its plastic barrier and hay bales, are no match for the deluge along Martins Lane and Glen Riddle Road in Middletown Township.

A spokesman for Sunoco’s Mariner East 2 pipeline calls it a “considerable amount of groundwater” pouring from the drill pad.

He notes no reports of problems with public or private water sources.

It’s the same spot that saw what the company calls “an inadvertent return of drilling mud” — a mixture of water and bentonite clay used to lubricate the underground horizontal boring equipment.

About 1,500 gallons spilled into Chester Creek. Crews worked to pump out that mud.

The state Department of Environmental Protection says there’s no health risk, no reported fish kills from the non-toxic mixture, and no expected long-term impact to the creek.…

January 5, 2018

Pennsylvania Shuts Down Construction On Sunoco Gas Pipeline

Source: http://philadelphia.cbslocal.com, January 3, 2018
By: Jim Melwert

The Pennsylvania Department of Environmental Protection has ordered all construction work to be halted on the $2.5 billion natural gas pipeline that runs from western Pennsylvania to Delaware County’s Marcus Hook.

A 24-page report from DEP cites numerous permit violations by Sunoco on the Mariner East 2 pipeline and suspends all construction permits until the company meets the requirements outlined in the order.

DEP Secretary Patrick McDonnell says in a press release, “Until Sunoco can demonstrate that the permit conditions can and will be followed, DEP has no alternative but to suspend the permits.”…

August 30, 2017

Lead-Based Paint Is a “Pollutant” within CGL Pollution Exclusion

Source: http://www.constructionrisk.com, August 2017
By: Kent Holland

Where lead-based paint was ingested by a tenant’s child, the tenant sued her landlord for injuries allegedly sustained by the child. The landlord tendered the claim to its commercial general liability (CGL) insurer who, instead of defending the case, filed a declaratory judgment action seeking a determination that the pollution exclusion of the CGL policy barred coverage for the alleged injuries. The Owner held that, although not specifically listed in the pollution definition as a “pollutant,” lead-based paint is, in fact, a “pollutant” within the meaning of the policy. The policy’s pollution exclusion was, therefore, applicable, and the insurer had no duty to defend and indemnify the landlord. See Georgia Farm Bureau Mut. Ins. Co. v. Smith, 298 Ga. 716, 784 S.E.2d 422 (2016).

The terms of the CGL policy required the insurer “to pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’” … “only if: (1) the ‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence’ that takes place ….” An occurrence is defined as “an accident.” Coverage was subject to exclusions, including the pollution exclusion, which provided that the insurance does not apply to “(1) ‘[b]odily injury’ or ‘property damage’ arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’: (a) [a]t or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured.”…

May 13, 2016

Because Spills Happen, Oil and Gas Contractors Need Insurance

Source: http://www.canadianunderwriter.ca, May 12, 2016

The oil and gas businesses are messy ones, as contractors who work in those fields can attest. That’s because accidents happen, as they do in just about any other industry. But because of that risk, it’s important for contractors working for oil and gas companies to have their own insurance policies above and beyond whatever a company may provide. This can add significant peace of mind for a low cost, and would therefore likely be a boon to any worker in the industry.

In the past several years, Alberta in particular has been the site of many spills from oil and gas pipelines, which is understandable given how much industry activity takes place in the province, according to a report from the CBC. But it’s worth noting that the frequency of these unfortunate incidents is starting to draw significant attention from a number of independent groups and officials in provincial government agencies. In the past five years or so, there have been at least a handful of major spills that led to some sort of action being taken against the companies in charge of the pipelines.

When spills happen, contractors need the right insurance.…

April 13, 2016

Exxon pays $10.7 million for N.Y. pollution cleanups

Source: Times Union (Albany, NY), April 8, 2016
Posted on: http://www.advisen.com

Oil giant Exxon Mobil has paid the largest single settlement ever into a four-decade-old state fund that cleans up oil and petroleum spills.

The company is paying $10.75 million to the taxpayer-supported Environmental Protection and Oil Spill Fund to cover the state’s costs in cleaning up eight former gas stations, including a location on North Pearl Street in the city of Albany, according to an announcement by Comptroller Tom DiNapoli and Attorney General Eric Schneiderman.

The state started paying for the initial cleanups in 1989 and began pressing Exxon for payment in 2004, with the most recent claims dating to 2012. Cleanups are run through the state Department of Environmental Conservation.

Under the settlement, Exxon will also take over responsibility for remaining cleanup costs at four of the eight gas stations, which also includes a location in Amsterdam, Montgomery County. The other spills were in Putnam, Orange, Sullivan, Onondaga and Erie counties.

“This settlement transfers the responsibility of eight oil spill cleanups from taxpayers to the spiller, where it belongs,” said DiNapoli. “The Oil Spill Fund is designed to help protect our families and our communities from the consequences of oil spills, because New Yorkers shouldn’t have to bear the burden of these costs.”

The fund gets most of its cash from taxpayers in the form of a gasoline tax. Added Schneiderman: “This settlement ensures that the state will not be forced to foot the bill to clean up hazardous oil spills.”

In 2013, Exxon paid the then-largest single payment to the cleanup fund — more than $8 million — to cover disputed costs of a state-run cleanup of a former oil terminal on the St. Lawrence River.

At that time, the fund, had spent more than $464 million since 1978 on spill cleanups, $306 million to run the program, and collected $196 million from polluters. During that same period, the gasoline tax kicked in $577 million.

By 2015, the fund had spent $490 million, $342 million to run the program, and had collected $219.8 million from polluters like Exxon. The share to support the program from the gasoline tax rose to $622 million.

 …

January 9, 2015

EPA steps in to finish cleanup of diesel fuel spill on Richardson Hwy.

Read here about clean up of an fuel spill in Alaska that will be taken over by the EPA as a result of the responsible party being “financially incapable of completing the cleanup.”…

December 5, 2014

Insurance to cover $17,000 in damages from Line Mountain oil spill

Source: http://www.dailyitem.com, December 4, 2014
By: Justin Strawser

The Line Mountain School Board will receive more than $17,000 from its insurance provider to cover damages related to a heating oil leak inside a former district property, but Liberty Mutual will not be covering the costs of cleaning up the Lower Mahanoy Township Municipal Authority wastewater treatment plant.

Board President Troy Laudenslager said the school board members voted 8-0 Wednesday night to accept a sworn statement from Netherlands Insurance Company, a subsidiary of the district’s insurance provider Liberty Mutual. The insurance company will provide $17,367.90 to cover the damages at the former Dalmatia Elementary School and the district is responsible for a $2,500 deductible.

A matter of a $143,453 bill from the authority to clean up their property is still in limbo, placed in escrow until a lawsuit filed by the authority is settled.

The authority is suing the district in Northumberland County Court for failure to pay a bill to clean up spilled heating oil in the sewer system. On Feb. 10, a leak from a broken pressure gauge at the school building dumped 1,250 gallons of heating oil into the authority’s wastewater treatment plant.

The insurance company cited a “pollution exception” for not covering the authority’s portion of the bill, Laudenslager said.

The elementary school in Dalmatia was closed before the 2013-14 school year as a result of elementary school realignment.

It was sold to Jeremy A. and Sara L. Stohecker, of Klingerstown. Their main goal is to transform the gymnasium/auditorium into a reception hall for weddings, birthday parties and other events. The classrooms will be transformed into rooms for any event-related businesses that want to rent or storage units.

At Wednesday night’s meeting, the school board also voted to keep their officers the same: Laudenslager will remain president and Dennis Erdman, who was absent from the meeting, will remain vice president.

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