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September 2009

Vol. 14, No. 39 Week of September 27, 2009

Alaska, BP sign $1.7 million settlement

State pollution regulators said company failed to provide adequate spill containment around some North Slope holding tanks

Wesley Loy

For Petroleum News

BP has paid the State of Alaska more than $1.7 million in penalties to settle oil spill containment violations at the Prudhoe Bay, Endicott and Badami oil fields.

The violations generally focused on undersized holding pens around a variety of storage tanks and tanker truck loading areas.

Inspectors with the state Department of Environmental Conservation in 2007 found some containment areas with less capacity than required, and BP later found more problem sites during its own survey, a state news release issued Sept. 22 said.

DEC and BP’s local subsidiary, BP Exploration (Alaska) Inc., signed a pair of compliance orders to fix the problems. One order covers Greater Prudhoe Bay and the other covers the Endicott and Badami fields. BPXA is the operator for all the fields.

“Secondary containment is a key line of defense. In the event of a spill, the enclosed space can stop oil from reaching the tundra,” said DEC Commissioner Larry Hartig.

The state “takes these types of pollution prevention violations very seriously,” said Alaska Attorney General Daniel Sullivan. “This settlement demonstrates our resolve to recover substantial civil assessments when those requirements are not met.”

Breck Tostevin, a senior assistant attorney general who negotiated the settlement agreements with BPXA, told Petroleum News this case is independent of the corrosion-related pipeline oil spills in Prudhoe Bay in 2006. Those spills led to a federal environmental misdemeanor conviction for BPXA, which now is defending civil suits the federal and state governments brought against the company in March.

BP’s response

“Proper secondary containment areas are important precautions, and we have already addressed most of the deficiencies,” BPXA spokesman Steve Rinehart said.

State officials confirmed BPXA has cured the bulk of the problems, with the remaining work to be completed next year.

Under state law, major oil installations must be situated within a containment area specially designed to capture oil or other liquids in the event of a spill, state officials said.

DEC inspections in October 2007 found that at least three spill containment areas at Prudhoe failed to meet size requirements.

“Some were significantly smaller than represented to the agency in BP’s approved Oil Discharge Prevention and Contingency plan,” the state press release said.

A subsequent BPXA survey of its containment areas across the slope found 16 additional problem sites, the state said.

Tostevin likened a spill containment area to a saucer with a certain capacity for catching and holding spills. They typically consist of a gravel berm encircling a holding tank.

After DEC inspector Gary Evans noticed what appeared to be undersized containment areas, he proposed filling areas with water to determine their capacity, Tostevin said.

But BPXA discouraged that idea, he said, citing the potential for freeze-up. DEC agreed to let the company proceed with an alternate plan: hiring a surveyor to measure the elevation of berms to figure holding capacity.

Variety of tanks involved

The two compliance orders contain extensive detail of the problems DEC and BPXA itself found.

At Prudhoe, the deficiencies involved tanks and loading areas at the Crude Oil Topping Unit, the Main Construction Camp, flow stations and gathering centers, and Drill Site 6.

As an example, the Prudhoe compliance order says the containment basin for the tanker truck loading area at the Crude Oil Topping Unit was supposed to be 30 feet by 80 feet with a spill holding capacity of 570 barrels. A BPXA survey, however, found a capacity of 312 barrels.

The containment issues involved a wide variety of tanks: diesel tanks, spicer tanks, slop oil tanks, chemical tanks, ullage tanks and surge tanks.

In some cases, containment areas had diminished holding capacity because berms had eroded over time, or were worn down from trucks driving over them, Tostevin said. Some areas also had been filled to some degree with gravel over time.

The Prudhoe compliance order cites other problems such as inadequate or damaged containment area liners.

BPXA agreed to pay $37,825.53 to DEC as partial compensation for the state’s “investigation and oversight costs.” The company also agreed to pay the state $1,671,673 in civil fines to “reflect economic savings resulting from the violations.”

The company must make monthly reports to DEC until all corrective actions are completed.






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