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Feds seek approval of Prudhoe settlement Consent decree would require BP Alaska to pay $25 million to resolve civil suit brought in connection with 2006 oil pipeline leaks Wesley Loy For Petroleum News
Federal prosecutors are asking a judge to approve a “consent decree” to settle a civil suit brought against BP Exploration (Alaska) Inc. over the 2006 Prudhoe Bay oil pipeline leaks.
Authorities first unveiled the proposed settlement back in early May, saying at the time they would offer it for public comment.
“The comment period is over and the comments received did not disclose facts or considerations indicating that the Decree is inappropriate, improper, or inadequate,” federal prosecutors said in court papers filed July 6 in U.S. District Court in Anchorage.
The consent decree now should be approved as the final judgment in the case, the prosecutors argued.
The judge can’t modify the terms of the decree, the court papers said. Rather, he may only approve or reject it as a whole.
As of press time, District Judge John W. Sedwick had not acted on the motion.
Suit filed two years ago The 65-page consent decree, which federal and company representatives already have signed, would require BPXA to wire the U.S. Department of Justice a $25 million civil penalty and carry out a long list of activities intended to prevent spills.
The company has said it is not admitting any liability in accepting the settlement.
BPXA operates Prudhoe Bay, the nation’s largest oil field, on behalf of itself and partners ExxonMobil, ConocoPhillips and Chevron.
The Justice Department on March 31, 2009, sued BPXA on behalf of the Environmental Protection Agency and the Pipeline and Hazardous Materials Safety Administration.
The suit asserted claims based on alleged water, air and pipeline safety violations in connection with a pair of oil spills from corroded Prudhoe oil transit lines.
One of the spills, which a BP worker discovered in March 2006, was calculated at 212,252 gallons — the largest crude spill ever in Alaska’s North Slope oil fields. That leak occurred on the western side of the field, near Gathering Center 2, and affected the tundra and the edge of a frozen lake.
Integrity management, monitoring Of the $25 million civil penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act, the Justice Department said. The remainder will go to the U.S. Treasury.
The consent decree also calls for BPXA to implement an “integrity management program” for its Prudhoe pipeline network at an estimated cost of $60 million over three years, the Justice Department said in a May 3 press release.
The decree also would require BPXA to hire an “independent monitoring contractor” to report to the government on the company’s compliance.
The court papers the Justice Department filed July 6 say the government and BPXA still “disagree about the key underlying facts.” However, the civil penalty reflected in the consent decree “is fair, adequate and reasonable in light of the risks to both parties that the Court could, if BPXA were found liable, award a penalty either higher or lower than $25 million.”
To support its motion to approve the consent decree, the Justice Department filed a declaration from its pipeline expert, James C. Towers, who said the pipeline integrity management program would “reduce the likelihood that the violations will happen again.”
BPXA is facing a separate civil suit the state filed. That case is moving toward trial in Superior Court in Anchorage.
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