BP faces two civil cases over Alaskan oil spills

Federal and state claims launched over Prudhoe Bay pipeline leaks in 2006

By Sarah Arnott
Wednesday 03 July 2013 04:10

Both the US federal government and the State of Alaska filed civil cases against BP yesterday over oil spills at Prudhoe Bay in 2006.

The US Justice Department accusation maintains that the energy giant illegally discharged more than 200,000 gallons of oil from its pipelines, and failed to prepare and implement adequate spill prevention measures required under the Clean Water Act.

BP has already pleaded guilty to misdemeanour in a criminal action, resulting in a $12m (£8.3m) fine, three years' probation and $8m in other costs, in October 2007. The Justice Department is now seeking civil penalties "up to the maximum amount authorised by law," a statement issued yesterday said. The complaint also accuses BP of improperly removing asbestos-containing materials from its facilities and non-timely compliance with a federal order for tests, inspection and repairs.

The state of Alaska is filing a second civil claim on the matter, alleging environmental violations and calling for "just compensation for state revenues lost as a result of BP's negligent corrosion prevention practices", a statement said. The state estimates revenues from some 35 million barrels of oil were lost because the spills themselves, and the resulting pipeline replacement programme, reduced production significantly for more than two years.

BP said it had no comment on the legal issues yesterday. "We've taken significant steps to ensure that our operations are safe and reliable and protect the environment," a spokesman for the company said. "These include building a new $500m system of oil transit lines at Prudhoe Bay."

The leaks in March and August 2006 were caused by corrosion in the pipelines moving oil around the facilities on the North Slope of Alaska.

BP has a chequered history in the US. The fines already paid for the Prudhoe Bay spills were set extra-high because of BP's past history of environmental violations on the North Slope. In 1999, the company admitted dumping hazardous waste at its Endicott Field in the region, and was fined $7m.

In 2007, the group's US products business pleaded guilty to a felony, and was fined $50m, for safety failures at the Texas City refinery relating to an explosion in 2005 that killed 15 workers and injured hundreds more. In the same year, BP America entered a deferred prosecution agreement with the US Justice Department under which it admitted the manipulation of propane prices on two occasions in 2003 and 2004. The company paid fines of more than $304m to settle the case.

Meanwhile, BP also announced yesterday that it is to axe more than a quarter of its solar power workforce. Some 620 jobs will go, 480 of them with the closure of two cell manufacture and module assembly plants in Spain, and another 140 from a module assembly facility in Maryland in the US.

Reyad Fezzani, the chief executive of BP Solar, said: "This comes at a time when solar markets are unsettled by the impact of the global economic environment, an over-supplied market, increased competition and rapidly falling prices."

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