Oil Company Pleads Guilty In Oil Spill

Thursday, November 29th 2007, 3:18 pm
By: News On 6

ANCHORAGE, Alaska (AP) - The Alaska subsidiary of British energy company BP PLC pleaded guilty on Thursday to a federal environmental crime for failing to prevent a 2006 spill in America's largest oil field. BP Exploration Alaska Inc. pleaded guilty to one violation of the Clean Water Act for a 200,000-gallon spill at the Prudhoe Bay field in March 2006.

The company had agreed last month to a sentence of $20 million in fines related to the spill, the largest ever in the vast, oil-rich region of Arctic Alaska known as the North Slope. The settlement was one of several struck in October between BP and federal investigators over separate incidents.

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, Steward said. The estimated savings represented less than half of 1% 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. and ConocoPhillips. The company has said it is investing heavily in upgrading its North Slope operations.