Mobil, Firefighters Settle on $50,000 for Oil-Spill Cleanup

Mobil Oil Corp. will have to reimburse the Los Angeles Fire Department $50,000--about one-fourth the amount fire officials sought--for the department’s expenses in cleaning up two 1988 oil spills in the San Fernando Valley, authorities said Tuesday.

Los Angeles Municipal Judge Owen L. Kwong approved the $50,000 payment at a hearing held to resolve the cost dispute. The Fire Department billed Mobil for $215,689 in cleanup costs. Mobil disagreed with the method of calculating the department’s expenses, however, and estimated actual costs at just $11,000.

The oil spills occurred on Sept. 10, 1988, in Encino and Sept. 27, 1988, in Sherman Oaks when the company’s Bakersfield-to-Torrance pipeline ruptured. About 130,000 gallons of crude oil spilled into the Los Angeles city sewer system, disrupted traffic and access to a neighborhood, and killed two dozen birds in Los Angeles River Channel marshes.

Mobil spent more than $3 million on cleanup costs, officials said. The company has also paid $204,602 to owners of damaged property and was fined $85,000 by the state Regional Water Quality Board.

On Nov. 30, 1989, the company pleaded no contest to two counts of unlawfully allowing oil to be dumped into state waters. Kwong ordered Mobil to pay $4,500 in fines and penalty assessments and sentenced the company to pay the emergency response costs of all public agencies that dealt with the oil spills.

Though Mobil paid more than $90,000 to various agencies, the oil company balked at the Fire Department bill.

Deputy City Atty. Vincent B. Sato said Mobil had computed the Fire Department’s costs at about $11,000.

“The judge told us to tell the Fire Department and Mobil to talk and discuss a compromise,” Sato said. “They compromised at $50,000 and Mobil paid.”

Sato said the dispute was over the manner in which the Fire Department computed its costs.

He said department officials used a budgeting formula routinely used when billing airports for responding to such emergencies as plane crashes.

But the department agreed to a compromise because of Mobil’s objections to the use of a set formula that was not specific to the two oil spills.

“The formula was unsuitable,” said Russell F. Sauer Jr., an attorney for Mobil. “The Fire Department relented.”