Belfast Telegraph

Wednesday 24 September 2014

BP pay out over Alaska oil spill

BP will have to pay a 25 million US dollar settlement over a 2006 oil spill in Alaska

BP's subsidiary in Alaska will pay a 25 million US dollar (£15 million) civil penalty under a settlement 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 most ever levied per barrel by national regulators, and US Attorney for Alaska Karen Loeffler said it underlines the seriousness of BP's conduct.

The settlement also calls for BP Exploration Alaska to install a system-wide pipeline integrity management programme.

"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 US attorney Ignacia S Moreno said.

Ms Loeffler said that BP Alaska admitted it cut corners and failed to do what was required to adequately maintain its pipelines.

BP Alaska spokesman Steve Rinehart in a short email acknowledged the settlement terms, including an independent contractor to monitor operations at the vast Prudhoe Bay field.

"We believe the terms of the agreement are fair," he said.

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

BP in August 2006 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 develop a system-wide programme to manage pipeline integrity for the company's 1,600 miles of pipeline on the North Slope.

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