BP reaches settlement for Alaska spills

Wesley Loy

For Petroleum News

BP Exploration (Alaska) Inc. has reached a proposed $450,000 settlement to resolve federal and state pollution violations in the Greater Prudhoe Bay unit.

The settlement covers four oil discharges from BP-operated pipelines from 2007 to 2011.

Federal and state officials outlined the alleged violations in a joint civil suit filed against BP on July 25 in U.S. District Court in Anchorage.

The same day, a “joint stipulation of settlement and judgment” was filed specifying the $450,000 civil penalty. The stipulation “does not constitute any admission” by any party, the document says.

“The two governments will divide the penalty, with $269,900 going to the federal government and $180,100 to the state.

BP will not bear the penalty alone. Rather, it will share the pending judgment with the other owners in the Prudhoe Bay unit. The major partners are ConocoPhillips and ExxonMobil.

The civil suit was brought on behalf of the U.S. Environmental Protection Agency and the Alaska Department of Environmental Conservation.

The suit alleges violations of the Clean Water Act as well as certain state pollution laws.

“We are pleased to resolve these issues with the EPA and the state of Alaska,” BP said in a statement provided to Petroleum News. “Our ownership share of the judgment is approximately $118,620. BP is focused on moving forward and operating North America's largest oil field in a safe, reliable and compliant manner to the benefit of Alaska and the United States.”

The civil suit details the four spills covered under the settlement:

• On Oct. 15, 2007, a discharge occurred from the DS-16 flowline in the Greater Prudhoe Bay unit. BP reported an estimated 46 barrels (or 1,932 gallons) of oil mixture spread over nearly an acre of tundra wetlands in the area of Flow Station 2.

• On Nov. 29, 2009, a discharge occurred from a line carrying crude oil, natural gas and produced water near the Lisburne Production Center. BP reported an estimated 321 barrels (or 13,482 gallons) of oil mixture covering 8,400 square feet of tundra wetlands, about a mile from the Lisburne Production Center.

• On Dec. 21, 2009, a discharge occurred from a line carrying oil, gas and water from a wellhead near Drill Site 6. BP reported an estimated 12 barrels (or 504 gallons) of oil mixture covered tundra wetlands.

• On July 18, 2011, a discharge occurred near Lisburne Drill Site L-1. BP reported an estimated 42 barrels (or 1,764 gallons) of oil mixture covered approximately 2,040 square feet of tundra and 4,960 square feet of gravel pad.

The settlement does not take effect immediately. Rather, it stands as a proposal subject to a 30-day public comment period, court papers said.

“Upon expiration of that comment period, the United States will notify the court, in light of any comments received, whether it believes that entry of the proposed settlement is appropriate,” the papers said.

The papers also make reference to a “separate settlement” with the state under which BP agrees to complete site restoration at certain locations.