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Vol. 12, No. 48 Week of December 02, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

BP pleads guilty to Clean Water violation

The Alaska subsidiary of oil giant BP pleaded guilty Nov. 29 to a federal environmental crime for failing to prevent a crude spill in America’s largest oil field.

BP Exploration Alaska Inc. pleaded guilty to one misdemeanor violation of the Clean Water Act for a 200,000-gallon spill at the Prudhoe Bay field in March 2006.

The company had agreed in October to a sentence of $20 million in fines related to the spill, the largest ever on the North Slope.

The settlement was one of several struck between the oil and gas giant and federal investigators.

BP agreed to pay another $353 million in fines and restitution over the manipulation of energy markets in the Midwest and a refinery explosion that killed 15 people in Texas.

For years, the company denied allegations that a culture of cost-cutting was hurting the quality of maintenance on the network of steel pipes at the 30-year old Alaska field.

But after the spill in March, federal prosecutors said millions of company documents and interviews with scores of North Slope employees told a different story.

They discovered a “failure to allocate sufficient resources to ensure safe and environmentally protective operation of the pipelines that leaked,” according to court documents.

Prosecutors estimate BP saved $9 million by choosing not to regularly clean and inspect two of its pipelines over the course of several years. The estimated savings represented less than half of 1 percent of BP’s adjusted net profit of $22 billion in 2006.

Both of those pipelines sprung leaks in 2006 and prompted BP to halve production at Prudhoe Bay to 200,000 gallons a day for several weeks.

BP manages Prudhoe Bay on behalf of its production partners Exxon Mobil Corp., ConocoPhillips and Chevron. The company has said it is investing heavily in upgrading its North Slope operations.

—The Associated Press



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