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Vol. 16, No. 47 Week of November 20, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

BP’s probation showdown

Prosecutors: Alaska subsidiary was negligent in Lisburne spill, is repeat offender

Wesley Loy

For Petroleum News

In advance of an upcoming hearing on whether BP violated its criminal probation in Alaska, federal prosecutors and company lawyers on Nov. 14 filed briefs outlining their positions on the matter.

If the paperwork is any indication, the hearing promises to be feisty.

Prosecutors say a November 2009 pipeline rupture near BP’s Lisburne oil production center showed the company “has now proven itself to be a recidivist offender and repeated violator” of environmental laws and regulations.

BP’s attorney, Jeff Feldman of Anchorage, has a whole different take: “The Lisburne spill was an unfortunate incident, but it was not a crime.”

The charges

BP Exploration (Alaska) Inc. is charged with two violations of the probation imposed on the company following a major pipeline leak in the Prudhoe Bay oil field in 2006. BP pleaded guilty to a misdemeanor violation of the Clean Water Act in that case.

The first probation violation alleges BP violated Alaska law with a negligent discharge of a pollutant to state land and water.

The second probation violation alleges BP violated the Clean Water Act, which prohibits a pollutant discharge to “waters of the United States.”

The Justice Department says BP easily could have prevented a rupture in a pipeline, 18 inches in diameter, that carried a mix of crude oil, natural gas and water from well sites to the Lisburne facility.

The pipeline froze up and burst, and BP employees ignored warning alarms indicating a problem with the line, prosecutors say.

More than 13,000 gallons of oil spilled from the ruptured line.

“The 2009 spill vividly demonstrates that BP has not adequately addressed the management and environmental compliance problems that have plagued it for many years, and that continue to result in operational, process safety, and equipment failures,” says the brief prosecutors filed Nov. 14. “These failures are not only reasonably foreseeable, but are also completely within BP’s power to control. BP’s choices have been reckless, and further violations of state and federal law are the result.”

An evidentiary hearing on the alleged probation violations is scheduled to begin in federal court in Anchorage on Nov. 29 and last four days. If convicted, BP could face more probation and fines.

BP’s defense

The pipeline that ruptured carried oil in concert with — that is, it was “looped” with — a larger, parallel 24-inch pipeline. The presence of this second line masked the freeze-up in the first, as the larger line continued to deliver all the oil operators expected at the Lisburne facility.

BP’s lawyers are attacking the charges on two fronts.

First, they contend that BP and its employees did not act negligently, that the Lisburne rupture was an “unprecedented event” for a BP pipeline of that type on Alaska’s North Slope and that employees were highly trained and responded appropriately to the conditions.

BP operators discovered the no-flow condition of the pipeline on Nov. 14, 2009, but it ruptured 15 days later, before an assessment of how to deal with the problem was completed, BP says.

Second, BP argues that the Lisburne spill isn’t subject to Clean Water Act jurisdiction because the wetland spill site is not directly adjacent to navigable waters, including nearby Prudhoe Bay.

“We expect the government’s ‘negligence’ case to be almost exclusively built on 20/20 hindsight,” says BP’s hearing brief filed Nov. 14. “We believe it will proceed backwards from the spill’s occurrence and conclude that BPXA must have been negligent — or even criminally negligent — when it failed to anticipate or to discover sooner the first unplanned stoppage in the 18-inch pipeline’s 25-year history. The evidence presented during the hearing will demonstrate that BPXA acted well within the applicable standard of care based on the circumstances and the information it knew or reasonably should have known at the time.”

The witnesses

Both sides expect to call multiple witnesses to the stand at the Nov. 29 hearing.

BP says its witnesses will include lead operators, as well as highly experienced engineers who will “explain the cause of the rupture and why BPXA’s actions fully comported with applicable standards, regulations, and standards of care.”

BP also intends to call John Studt, identified as a former national program manager for the U.S. Army Corps of Engineers at its Washington, D.C., headquarters, to “explain why the spill site is not a ‘water of the United States’ and therefore falls outside of Clean Water Act jurisdiction.”

The government says its witness list includes a former BP employee who was “the Compliance and Ethics Officer for BP in Alaska following the 2006 oil spill, until 2010.”

The former employee wrote a letter to the government in April 2010 citing the management culture, budget constraints and other issues as possible factors in the Lisburne spill.

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