ANCHORAGE, Alaska – BP’s subsidiary in Alaska will pay a $25 million civil penalty under a settlement announced Tuesday that comes five years after more than 200,000 gallons of crude oil spilled from company pipelines on the North Slope.

The penalty is the largest per-barrel civil penalty assessed, exceeding the statutory maximum because the settlement resolves claims other than the spill, according to the EPA. The settlement also calls for BP Exploration Alaska Inc. to install a systemwide pipeline integrity management program, estimated to cost $60 milliion.

“This penalty should serve as a wake-up call to all pipeline operators that they will be held accountable for the safety of their operations and their compliance with the Clean Water Act, the Clean Air Act and the pipeline safety laws,” Assistant U.S. Attorney Ignacia S. Moreno said in a conference call with reporters.

U.S. Attorney for Alaska Karen Loeffler said the penalty underlines the seriousness of BP’s conduct. She said BP Alaska admitted that it cut corners and failed to do what was required to maintain its pipelines.

BP Alaska spokesman Steve Rinehart in emails acknowledged the settlement terms, including an independent contractor to monitor operations at the vast Prudhoe Bay field. He said the penalty was not a per-barrel assessment.

“A penalty was agreed upon,” he said. “We believe the terms of the agreement are fair.”

Advertisement

A March 2006 leak in a transit line, also called a feeder line, between a gathering center and a pump station for the trans-Alaska oil pipeline in March accounted for most of the oil spilled, about 212,000 gallons. Oil from the spill reached a lake.

BP four months later had begun inspecting pipelines with “smart pigs,” devices inserted to detect abnormalities, when a second leak occurred. The tiny second leak allowed about 1,000 gallons more to spill from another transit line.

The settlement requires BP Alaska to compile information on pipelines and what they carry, provide an electric Web portal and post reports.

The independent monitor will confirm that BP is complying with requirements of the settlement, said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

“We are not going to just take BP at its word,” Giles said.

 


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.