Tuesday, November 2, 2010

Chevron (NYSE:CVX) Ordered to Improve Inspection and Leak Detection Systems in Utah

A summer leak near the University of Utah campus resulted in about 800 barrels of oil spilling into Red Butte Creek for close to 10 hours before Chevron (NYSE:CVX) even found out about it, suggesting their inspection and leak detection system needs to be significantly improved, according to the Transportation Department.

Chevron will reportedly be required to respond to allegations and comply to the order within a 30-day period.

Chevron spokesman Mickey Driver said, “Chevron has not yet received the order. When we do receive the order, we will review the agency findings before making any comments on them.”

The agency said in a statement that the oil giant may have failed to patrol its pipeline rights of way, control corrosion on its system and protect its pipeline from stray electrical currents.

A fine of $423,600 has been proposed by the U.S. Transportation Department.

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