Chevron Letters Rile Oil Spill Victims

Judy Fahys
Tuesday, August 10, 2010

Annie Payne and her family spent two nights in a hotel after 33,600 gallons of crude oil from a leaky pipeline poured into the stream near their Yalecrest home two months ago and made them all sick. And, like many of her east Salt Lake City neighbors and others driven away by the petrochemical fumes, she took up Chevron on its invitation to submit a claim for spill-related costs.

The first of the company’s two-page response was friendly enough, even folksy. But the second page floored her. It essentially amounted to a legal waiver, releasing the company and its pipeline unit from all future liability. The $300 payment, the release said, was intended “merely to avoid litigation and buy their peace.” “I thought what anyone would think,” Payne said, “[that] if I didn’t sign this, I wouldn’t get my [reimbursement] check.” But if she did sign it — and found out later her family faced more expenses for, say, medical treatment — Payne feared she would not be able to return to Chevron to cover those bills.

In the end, Payne got reimbursed for the hotel and a meal without signing the waiver. But she is not the only one surprised and offended by the claimspapers. Salt Lake City has heard from other residents who objected. Chevron spokesman Dan Johnson, who declined to say how many applicants received liability waivers, said Monday the company is retooling its claims process. “I acknowledge the concern expressed,” he said, thanking those who raised the issue. “We are working to simplify our claims process along the lines of our original intent, which was to acknowledge that they’ve accepted receipt [for the reimbursement].”

Within a week of the June 11-12 Red Butte Creek spill, Johnson had vowed that the company would make good on costs to taxpayers (some government entities have received checks). “We have no reason, given the nature of this incident, to be difficult to work with,” he said at the time. “We’re not going to be. We’ve said we’re responsible, and we’re going to be paying legitimate claims.” Johnson explained Monday that a contractor was handling the claims and urged residents with questions about the papers to dial the hot line at 866-752-6340. He noted that about 100 claims have been filed and about half of those have been processed. Johnson could not say why some applicants received liability waivers and others did not. “I’m not sure,” he said, “exactly how it got so complicated.” The waivers met with disapproval at Salt Lake City Mayor Ralph Becker’s office. “We do not view the breadth of Chevron’s release document to be consistent with the assurances the company has given our community regarding their responsibility to deal with the present and future ramifications of the oil spill,” mayoral spokeswoman Lisa Harrison Smith said. “We continue to hold Chevron accountable and expect continued efforts for as long as is necessary to remediate and restore all affected by the spill.”

Attorney Bret Randall, who represents nearly a dozen property owners in the spill-affected area, advises any recipients against signing the waivers, emphasizing that the costs and damages from the spill remain “in flux.” He noted that the Oil Pollution Act contains provisions to ensure “damaged parties are made whole — that’s the law.” Chevron has pledged to stick with the cleanup until the job is done, with most of Red Butte’s stream beds and Liberty Park’s pond scheduled for scrubbing and washing well into fall.

The Utah Division of Water Quality has slapped the company with a notice of violation, which will, when finalized, detail a remediation plan and future monitoring, as well as a possible fine. While many government agencies have praised Chevron for its diligent cleanup work so far, the oil giant is getting dinged for the liability waiver. Zach Frankel, director of the Utah Rivers Council, said he has heard from residents worried about the letters. He called the forms “indefensible.” “This flies in the face of responsibility and accountability,” said Frankel, who urged decision makers to stand up to Chevron in defense of the residents.

Payne resolved her dispute with a letter to the claims-processing company. She noted that her family wanted to reserve the right to file a claim in the future, especially since her children are young and it might take some time for the effect of the fumes to become evident. A reimbursement check then came in an unmarked envelope, which included no more than a yellow sticky note with her address handwritten on it. She wonders why no one at Chevron has responded to her letter. She also worries that others who received the liability waiver — and felt intimidated by it, as she did at first — might have signed away future rights. “They [at Chevron] are trying,” she said, “to get away with anything they can without an explanation.”

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