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BP Exploration (Alaska) reaches plea agreement with Justice Department, will spend $22 million to resolve criminal case, civil claims Illegal disposals of hazardous waste at Endicott Island by drilling contractor occurred from 1993 to 1995 Kristen Nelson PNA News Editor
BP Exploration (Alaska) Inc. pleaded guilty Sept. 23 to a federal crime related to the illegal disposal of hazardous waste at Endicott on the North Slope, and agreed to spend $22 million to resolve the criminal case and related civil claims.
The company said in a Sept. 23 statement that it has reached an agreement with the U.S. Justice Department acknowledging illegal disposals of hazardous waste at Endicott because it failed to adequately supervise the activities of its drilling contractor.
The Justice Department said in a Sept. 23 statement that from 1993 to 1995, Doyon Drilling Inc. employees illegally discharged waste oil and hazardous substances by injecting them down the outer rim, or annuli, of the oil wells. Illegally injected wastes included paint thinner and toxic solvents containing lead and chemicals such as benzene, toluene and methylene chloride, the department said.
Material should have been stored, shipped out of state for disposal BP Exploration (Alaska) spokesman Ronnie Chappell told PNA that the company estimates that less than 70 barrels of wastes were illegally injected. Chappell said that materials such as paint thinners and solvents should have been stored and shipped out of the state to a hazardous disposal site approved by the U.S. Environmental Protection Agency. Used oil, he said, could have been reused to freeze protect wells, but was improperly disposed of instead.
The Justice Department said that Doyon Drilling pleaded guilty in April 1998 to 15 counts of violating the Oil Pollution Act, agreed to pay a $1 million fine and spend $2 million to develop an environmental compliance program and environmental training program for employees. Justice said that three Doyon employees were convicted; one was sentenced to a year in jail.
BP said the agreement with the Justice Department was reached Sept. 15. The company said it also pled guilty to a single felony count of violating Comprehensive Environmental Response, Compensation and Liability Act reporting requirements when it delayed notifying the EPA for two weeks while it investigated allegations of the illegal disposals.
Richard Campbell, president of BP Exploration (Alaska), said in the company’s statement: “We deeply regret the illegal disposals that occurred at the Endicott oil field between 1993 and 1995.”
Changes made since 1995 “These violations occurred because our systems for ensuring environmental compliance weren’t working as well as we believed. Since discovering these violations in 1995, we’ve made significant changes in the way we train our employees and in the way we monitor and manage environmental compliance,” Campbell said.
The company said allegations of the illegal disposals were first brought to the attention of BP Exploration (Alaska) management Aug. 31, 1995. The company conducted an internal investigation and alerted EPA when it determined that violations had likely occurred.
“We believed CERCLA allowed us to determine if the allegations were credible before reporting them,” Campbell said. “We were mistaken.”
Agreement with Justice Justice said that BP’s nationwide implementation of best environmental practices will cost the company $15 million. As a condition of probation, Justice said, the company will establish an environmental management system at all of BP Amoco’s facilities in the United States and the Gulf of Mexico that are engaged in exploration, drilling or production of oil. This system, Justice said, will be the first of its kind in the oil industry to result from a federal prosecution.
BP said that it has agreed to five years probation, establishment of an environmental management system and monitoring of that system by a court-approved monitor, changes in the company’s Gainshare (performance bonus) program to enhance reporting of environmental fractions and a $500,000 fine. In a companion civil settlement, BP agreed to pay a $6.5 million civil penalty.
Also an internal investigation by BP BP said the company fully cooperated with EPA and the Justice Department in their four year investigation of the company’s North Slope waste management systems, turning over almost 2 million pages of paper and electronic data, including the results of an extensive internal investigation that involved interviews of more than 120 people.
The company said its internal investigation found no similar violations in the company’s operations elsewhere on the North Slope and turned up no evidence that BP Exploration employees knowingly violated the law.
Materials injected “We do not believe these improper disposals resulted in harm to the environment,” Campbell said. “These materials were not dumped on the surface or stored in pits.” BP said the materials were mixed with a large volume of drilling muds and cuttings and injected into a confined layer of porous rock 2,700 feet to 5,000 feet deep in a location where no potable ground water exists.
“Still, the disposals were illegal, should not have occurred and we accept that we have a responsibility to ensure that our operations comply with all laws and regulations,” Campbell said.
“We have learned from our mistakes at Endicott,” Campbell said. “As part of this agreement we will share across BP Amoco’s U.S. operations the lessons we have learned and the improvements we have made at Endicott. We are absolutely committed to preventing a recurrence.”
One of largest Alaska investigations Robert Bundy, U.S. Attorney for the District of Alaska, said: “This has been one of the largest and most complex criminal investigations ever conducted in Alaska. The case underscores our commitment to investigate and prosecute violations of environmental laws. Corporations that benefit from Alaska’s resources must also be good stewards of Alaska’s environment.”
“This case forces a company that should have known better to do better,” said Lois J. Schiffer, assistant attorney general for environmental and natural resources at the Department of Justice. “Our goal is to deter such violations by all oil companies.”
The Justice Department said BP had spent approximately $5 million in Alaska to improve environmental management during the criminal investigation, and has taken steps to cooperate with the government’s continuing investigation. Because of BP’s efforts, Justice said, additional criminal charges relating to the illegal injections were not filed. The department’s 1991 Voluntary Disclosure Policy grants prosecutors the discretion to forego prosecution when certain conditions are met, Bundy said. Those conditions include cooperation, remedial measures and the existence of an adequate compliance program.
Both the civil settlement and the plea agreement must be approved by the court before they become final.
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