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BP Alaska involved in big EPA settlement Subsidiaries agree to pay $426,500 penalty, arrange ‘financial assurance’ to close and clean up contaminated industrial sites Wesley Loy For Petroleum News
BP Exploration (Alaska) Inc. is among several subsidiaries of BP America Inc. involved in a complex, multistate settlement of “financial assurance” violations with the U.S. Environmental Protection Agency.
“Financial assurance protects taxpayers from having to foot the bill for costly cleanups,” Cynthia Giles, assistant administrator for the EPA’s Office of Enforcement and Compliance Assurance, said in a Nov. 29 press release out of Washington, D.C.
The EPA determined that BP Alaska, BP Products North America Inc., BP West Coast Products LLC, BP Corporation North America Inc. and Atlantic Richfield Co. had inadequate finance assurance.
The settlement “will ensure that BP’s subsidiaries have the funds available to cover any necessary cleanup costs,” Giles said.
Terms of settlement The settlement covers hazardous waste facilities and Superfund sites in eight Lower 48 states, plus 10 “non-hazardous waste underground injection control (UIC) wells” on Alaska’s North Slope.
The BP subsidiaries have agreed to pay a $426,500 penalty and ensure that more than $240 million in funds are secured to resolve violations of hazardous waste, drinking water and Superfund financial assurance requirements, the EPA press release said.
Under the settlement, BP has lined up financial assurance such as letters of credit, insurance policies and other forms of coverage, the EPA said.
In Alaska, the 10 injection wells were subject to financial assurance requirements under the Safe Drinking Water Act.
BP has provided assurances of $19.2 million to address the closure, plugging and abandonment of the UIC wells, the EPA said.
BP also had inadequate financial assurance coverage for facilities, including the wells, for which the states have primary enforcement responsibility, the agency said.
“EPA worked with its state partners to obtain from BP a total of $76.4 million in compliant financial assurance coverage for these obligations,” the EPA said.
Petroleum News on Nov. 29 asked BP for additional information on the alleged Alaska violations, including the field location and function of the injection wells.
BP Alaska uses the injection wells “to dispose of non-hazardous waste at remote oil field sites at Prudhoe Bay, Badami, Northstar, Milne Point and the Duck Island/Liberty project,” BP spokesman Scott Dean said by email. “Most of the injected fluids are brine, which is produced when oil and gas are extracted from the field.”
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