BP Exploration (Alaska) Inc. (BPXA) will spend $22 million to resolve criminal and civil charges relating to the illegal disposal of hazardous waste on Alaska's North Slope.
The US Department of Justice said BPXA pleaded guilty in US District Court at Anchorage to failing to notify authorities immediately about a release of hazardous substances to the environment and agreed to pay the maximum criminal fine of $500,000.
As part of the plea agreement, BPXA also admitted that it failed to provide adequate oversight, audits, and funding to ensure proper environmental management on Endicott Island, Alaska.
Under the terms of the plea agreement, BP Amoco PLC will establish an environmental management system at all of its US facilities that are engaged in the exploration, drilling, or production of oil. DOJ said the system will be the first of its kind in the oil industry to result from a federal prosecution.
The federal government and BPXA also agreed to a civil settlement involving related environmental claims. The settlement, filed in Anchorage federal court, requires BPXA to pay $6.5 million in civil penalties to resolve allegations that it illegally disposed of hazardous waste.
Waste disposal
The criminal plea and civil claims stem from the injection of hazardous wastes on Endicott Island over a 3-year period beginning in 1993. The gravel island northeast of Prudhoe Bay was built to produce Beaufort Sea oil. BXPA operated Endicott Island and contracted with Doyon Drilling Inc. to drill wells there.
DOJ said that, during 1993-95, Doyon Drilling employees illegally discharged waste oil and hazardous substances by injecting them into the annu* of oil wells. It said BPXA failed to report the illegal injections as soon as it learned of them, in violation of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The wastes included paint thinner and toxic solvents containing lead and chemicals such as benzene, toluene, and methylene chloride.
In April 1998, Doyon Drilling pleaded guilty to 15 counts of violating the Oil Pollution Act. Doyon agreed to pay a $1 million fine and spend $2 million to develop environmental compliance and training programs for employees. Three Doyon employees were convicted in 1998, and one was sentenced to 1 year in jail.
Justice said it did not file additional criminal charges relating to the illegal injections because, during its criminal investigation, BPXA not only cooperated but also spent about $5 million to improve environmental management.
As a result of the criminal plea agreement, BPXA must use best environmental practices to protect workers, the public, and the environment. The court will appoint an environmental monitor to oversee BPXA's nationwide implementation of the $15 million management system during a 5-year probation period.
BP Alaska Pres. Richard Campbell said the company did not know in 1995 that it was violating a federal law. "We believed CERCLA allowed us to determine if the allegations were credible before reporting them. We were mistaken."
