Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 23, 1994                   TAG: 9403230057
SECTION: VIRGINIA                    PAGE: C-3   EDITION: STATE 
SOURCE: Associated Press
DATELINE: CHESAPEAKE                                LENGTH: Medium

PIPELINE COMPANY TO PAY $100,000 PENALTY FOR SPILL

"We just wanted to get this out of the way," said Timothy Hayes, a Richmond lawyer representing Colonial Pipeline. "We thought it was a reasonable way to handle it."

The spill occurred after Virginia Power hired a Richmond contractor, Seaboard Boring Ltd., to drill under railroad tracks near the Chesapeake-Suffolk line.

Seaboard's drill hit a pipe owned by Colonial Pipeline, but the rupture was not immediately discovered because the pipe contained no fuel at the time.

When marine diesel fuel was pumped through the line Aug. 29, 1990, an estimated 67,200 gallons gushed out the hole, flooding a nearby marsh and Drum Point Creek, a tributary of the Elizabeth River.

About 46,200 gallons were recovered, but the spill killed most of the plants in the marsh and many of the fish in the creek.

In addition to the $100,000 penalty, the settlement requires the company next month to submit to the state water and soil data from the site. Colonial also is expected to monitor the site, submitting three reports over the next 18 months.

Colonial Pipeline agreed to a separate settlement with Virginia Power, Hayes said. The Daily Press in Newport News quoted an unnamed state official as saying Virginia Power would reimburse Colonial Pipeline.

The settlement is confidential, but George Brown, director of Virginia Power's Claims Management Office, said the two companies have negotiated a couple of proposals and should agree to one of them soon.

Virginia Power will then seek reimbursement from Seaboard Boring, Brown said.

State regulators could have sought a penalty from Seaboard Boring, but they were told the owner of the company "is a person of very modest means," said Amy Clarke, a state Department of Environmental Quality lawyer who handles oil spill cases.

Brown said Virginia Power will seek money from Seaboard or from its insurance company.

The spill occurred less than two months after a new state oil-spill law became effective. The law allows the state to collect as much as $100 for every gallon of oil spilled.

State regulators decided against the maximum penalty, because they decided no one meant to break the pipe and the damage to the environment wasn't serious enough to warrant a larger fine.