Exxon offers to buy homes near Arkansas spill site


ExxonMobil has offered to buy the homes of residents of a Mayflower, Ark., neighborhood where a pipeline ruptured last month spilling thousands of barrels of oil.

The offer is part of a compensation package that includes a $10,000 payment for each household to cover "disruption and inconvenience," as well as payment of cleaning and landscaping costs, moving expenses and rent.

The move is part of Exxon's response to the rupture of the Pegasus pipeline, which on March 29 spilled an estimated 5,000 bbl of oil into streets and yards of this tranquil community. Crews were still at work this week cleaning some areas, and the Arkansas Department of Health said Wednesday that none of the residents of 22 evacuated homes have yet returned.

Under the deal put forward by Exxon Tuesday, owners of the 11 homes "directly impacted" by the spill can sell their property to Exxon within the next three years at prices determined by appraisers approved by the US Department of Housing and Urban Development. The company also agreed to buy other homes in the neighborhood if no buyers come forward or of the spill affects the sale price.

For residents who decide to stay in the neighborhood, Exxon said it would make a one-time payment for any reduction in property value in the next three years.

The company said accepting the compensation offer won't affect a person's rights to make claims against Exxon.

"ExxonMobil will continue to work with you to resolve such claims," the letter stated. Exxon said Tuesday that 246 claims have been made to a hotline number it set up after the spill.

Exxon's bid to placate homeowners comes in the midst of increased awareness of the fragility of the nation's pipeline network. It also comes in the wake of the BP 2010 U.S. Gulf of Mexico spill, in which the UK-based oil giant spent billions compensating individuals and businesses affected by the disaster.

Jim Finton, who lives in the Northwoods neighborhood but did not have to evacuate, said he thinks Exxon's offer is fair, but he hasn't decided whether he will stay or go.

"A lot goes into that," he said. "If I do stay and they buy some of the homes, what will happen with those homes? Will this subdivision degenerate into low-rent rental-property type situation?"

The Arkansas Department of Health has approved a plan to allow residents of 10 of the 22 evacuated homes to return. Department spokesman Ed Barham said the air quality in the area is not dangerous, but other measures, such as earth moving, will need to be finished before residents can go home.

Exxon spokesman David Eglinton said some work, such as replacing part of the storm-drainage system, is still being done in the neighborhood.

"While the Arkansas Department of Health has indicated there should be no impact on the health of Northwoods neighborhood residents, some residents may not decide to return until all work involving heavy equipment within the neighborhood has been completed," Mr. Eglinton said Wednesday.

Earlier this week Exxon cut out a 52-foot-long section of pipe and sent it to a metallurgical lab for testing. On Tuesday the company replaced that section of pipe, but repair and testing plans must be approved by federal regulators before the 95,000-barrel-a-day pipeline can be restarted, a spokesman said.

Central Arkansas Water, a major public utility in the region, has asked Exxon to make certain repairs to the line before getting it up and running again. The system wants Exxon to eventually move the line out of the Lake Maumelle Watershed, where it runs for 13 miles.

US Rep. Tim Griffin, whose district includes Little Rock and Mayflower, seconded that request, asking Exxon to find a way to move the pipeline.

"I am especially concerned that the steepness of the shoreline at Lake Maumelle could exacerbate contamination of the water supply in the event of an oil spill and make cleanup more difficult," Mr. Griffin said in a press release.

A spokesman for Exxon said the company is reviewing the request.

Dow Jones Newswires

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