BP fined $25 million over Alaska oil spill

May 03, 2011
This 2006 handout picture from energy giant BP shows the pipes at the oil production facility in Prudhoe Bay, Alsaka. BP has been fined $25 million and ordered to spend an estimated $60 million to improve pipeline safety in Alaska after a 2006 oil spill there, US authorities said Tuesday.

BP has been fined $25 million and ordered to spend an estimated $60 million to improve pipeline safety in Alaska after a 2006 oil spill there, US authorities said Tuesday.

The penalties, including the largest ever per-barrel fine for a US oil spill, were slapped on BP in an agreement with the US Department of Justice and the (EPA).

In March 2006, BP Alaska spilled over 5,000 barrels of on the North Slope in Alaska, in what investigators said was due to its failure to properly inspect and maintain the pipeline to prevent corrosion.

"This penalty should serve as a wake-up call to all pipeline operators that they will be held accountable for the safety of their operations," said Ignacia Moreno of the DoJ's Environment and Natural Resources Division.

As well as the fine, BP is required to "develop a system-wide program to manage pipeline integrity for the company’s 1600 miles of pipeline on the North Slope," at an estimated cost of $60 million over three years.

Those costs are in addition to the $200 million BP Alaska has already spent replacing the lines that leaked on the North Slope, said the joint statement.

"Companies like BP Alaska must understand that they can no longer afford to ignore, neglect or postpone the proper monitoring and maintenance of their pipelines," said Moreno.

"This agreement will help prevent future environmental disasters and protect the fragile ecosystem of Alaska’s North Slope."

BP did not immediately respond to request for comment on the Alaska penalties.

The British company said last week that the 2010 Deepwater Horizon disaster and spill, which killed 11 workers and caused millions of barrels of oil to spew into the Gulf of Mexico, would cost BP $41.3 billion.

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User comments : 3

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SemiNerd
5 / 5 (1) May 03, 2011
2006? That took awhile! Doesn't seem much in light of the violations.
Cin5456
5 / 5 (1) May 03, 2011
This is a pitance compared to BP profit margin. They rake in billions, and they are fined only 25 million? That seems like favoritism in the courts. Will they pay the same for the Gulf oil spill?
plasticpower
not rated yet May 04, 2011
That's like saying "BP detonated a small nuke in Alaska and was fined 1% of what they make per hour". WTF