BP to pay $25 million to resolve 2006 ANS pipeline spill charges

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 3 -- BP Exploration Alaska Inc. agreed to pay a $25 million fine and carry out a system-wide pipeline integrity management program as part of a settlement for spilling more than 5,000 bbl of crude oil from an Alaska North Slope pipeline in 2006, the US Department of Justice, Environmental Protection Agency, and Pipeline & Hazardous Materials Safety Administration jointly announced.

It is the largest federal per barrel penalty so far for an oil spill, the agencies said. PHMSA Administrator Cynthia L. Quarterman said it was a stern reminder to pipeline operators to follow the US Department of Transportation agency’s orders or risk a federal civil lawsuit and steep fines. “Also, it is a warning that operators must know, test, and maintain their pipelines or risk harming people and the environment and having to spend, as in this instance, hundreds of millions of dollars replacing those pipelines,” she said.

BP Alaska spilled 5,054 bbl of crude from an ANS pipeline in March 2006 and another 24 bbl the following August, the agencies said in their May 7 announcement. They said EPA and PHMSA investigators determined that the spill’s resulted from the company’s failure to properly inspect and maintain the pipeline to prevent corrosion.

PHMSA issued a corrective action order to BP Alaska that addressed the pipeline’s risks and ordered repairs or replacement. When it did not fully comply with the order’s terms, PHMSA referred the case to DOJ. The settlement also addresses Clean Air Act violations arising out of BP Alaska’s improper asbestos removal along the pipeline in the spills’ aftermath, the agencies said.

They said the settlement requires BP Alaska to develop a system-wide program to manage pipeline integrity for the company’s 1,600 miles of ANS pipeline based on PHMSA’s integrity management program. The program will address corrosion and other threats to these oil pipelines and require regular inspections and adherence to a risk-based assessment system, according to PHMSA. It will cost an estimated $60 million over 3 years and comes in addition to the nearly $200 million BP Alaska has already spent replacing the lines that leaked on the North Slope, the agency indicated.

Of the $25 million fine, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act. The remaining $4.95 million will be paid to the US Department of Treasury. The funds paid to the Oil Spill Liability Trust Fund will be used to finance federal response activities and provide compensation for damages sustained from future discharges or threatened discharges of oil into water or adjoining shorelines.

BP Alaska pleaded guilty in 2007 to one misdemeanor violation of the Clean Water Act for the March 2006 spill, DOJ said. The company was sentenced to 3 years probation and ordered to pay a $20 million criminal penalty, including a $12 million fine, $4 million to the National Fish and Wildlife Foundation to support research and activities on the North Slope, and $4 million in restitution to the State of Alaska.

The settlement’s consent decree is subject to a 30-day public comment period and final court approval.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Kerry expects to receive other agencies’ Keystone XL reports soon

02/02/2015 US Sec. of State John F. Kerry said he expects to receive other federal agencies and departments’ reports soon on the proposed Keystone XL crude oi...

Union strike under way at US refineries, petchem plants

02/02/2015 The United Steelworkers Union (USW) has instituted a strike at nine US refining and petrochemical production plants following a breakdown in negoti...

Victoria extends drilling, fracing ban

01/30/2015 The new Victorian Labor government of premier Daniel Andrews has extended the coal seam gas (CSG) exploration and hydraulic fracturing ban in the s...

US Senate passes bill approving Keystone XL pipeline project

01/30/2015 The US Senate has passed a bill approving construction of the proposed Keystone XL crude oil pipeline by a 62-36 vote after 3 weeks of debate. Nine...

Pennsylvania governor reinstates state forest drilling moratorium

01/29/2015 Pennsylvania Gov. Tom Wolf (D) signed an executive order fully reinstating a 2010 moratorium on new oil and gas leases in state forests and parks. ...

DOE could meet 45-day LNG export decision deadline, Senate panel told

01/29/2015 The US Department of Energy would have no trouble meeting a 45-day deadline to reach a national interest determination for proposed LNG export faci...

PHMSA outlines community steps to reduce pipeline incident risks

01/27/2015 The US Pipeline and Hazardous Materials Safety Administration released a guide to best practices for communities to reduce risks from pipeline inci...

DOI’s 2017-22 draft proposed OCS program includes Mid-Atlantic sale

01/27/2015 The US Department of the Interior released a draft proposed 2017-22 Outer Continental Shelf management program that included 14 potential oil and g...

OGUK: Push to ban fracing in UK ‘ill-informed’

01/26/2015 The House of Commons Environmental Audit Committee’s proposed amendment to the infrastructure bill that would introduce a moratorium on hydraulic f...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected