The Engineer

BP Alaska is penalised for North Slope oil spill

News

BP Alaska is to pay a $25m (£15m) civil penalty as part of a settlement for spilling more than 5,000 barrels of crude oil on the North Slope of Alaska in 2006.

The penalty, which was announced by the US Department of Justice, the Environmental Protection Agency (EPA) and the Department of Transportation’s (DOT’s) Pipeline and Hazardous Materials Safety Administration (PHMSA), is the largest per-barrel penalty to date for an oil spill.

‘The settlement with BP Alaska imposes a tough penalty and requires the company to take action to prevent future pipeline oil spills on the Alaska North Slope,’ said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

BP Alaska admitted that it cut corners and failed to do what was required to adequately maintain its pipelines, according to Karen Loeffler, the US attorney for the District of Alaska.

In March 2006, the company spilt approximately 5,054 barrels of crude oil on the North Slope in Alaska. A second spill occurred in August 2006, spilling approximately 24 barrels of crude oil.

Investigators from the EPA and PHMSA determined that the spills were a result of BP Alaska’s failure to properly inspect and maintain the pipeline to prevent corrosion. PHMSA issued a Corrective Action Order (CAO) to BP Alaska that addressed the pipeline’s risks and ordered pipeline repair or replacement. When BP Alaska did not fully comply with the terms of the corrective action, PHMSA referred the case to the US Department of Justice.

The settlement requires BP Alaska to develop a programme to manage pipeline integrity for the company’s 1,600 miles of pipeline on the North Slope. The programme will address corrosion and other threats to these oil pipelines, and require regular inspections and adherence to a risk-based assessment system. It will cost an estimated $60m over three years, in addition to the approximate $200m BP Alaska has already spent replacing the lines that leaked on the North Slope.

The settlement also addresses clean-air-act violations arising out of BP Alaska’s improper asbestos removal along the pipeline in the aftermath of the spill.