U.S. sues BP unit over Alaska oil spills

WASHINGTON Tue Mar 31, 2009 9:33pm EDT

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WASHINGTON (Reuters) - The U.S. government has filed a civil complaint against BP Exploration (Alaska) Inc alleging that the Alaska-based company violated U.S. clean air and water laws, the U.S. Justice Department said on Tuesday.

The complaint, filed in U.S. District Court in Anchorage, accuses BPXA of illegally discharging more than 200,000 gallons of crude oil from its pipelines in Prudhoe Bay onto the North Slope of Alaska during two major oil spills in the spring and summer of 2006.

The complaint also alleges that BPXA failed to prepare and implement adequate spill prevention measures required under the Clean Water Act.

"We have taken significant steps to ensure that our operations are safe and reliable, and protect the environment," said BP Exploration Alaska spokesman Steve Rinehart.

BPXA is a wholly owned subsidiary of BP America, a unit of London-based BP.

The lawsuit, filed by the Justice Department on behalf of the Environmental Protection Agency and the Department of Transportation, asks the court to order BPXA to take appropriate action to prevent spills in the future.

The government is also seeking the highest amount of civil penalties possible by law, the Justice Department said.

The biggest oil spill-related civil penalty in Alaska to date was the $900 million settlement struck by Exxon Corp, now part of oil giant Exxon Mobil Corp, and the U.S. and Alaska governments in 1991 for the 1989 Exxon Valdez disaster, the nation's worst tanker spill.

The fine was paid out over a period of 10 years to a state-federal organization to fund restoration and environmental research on Alaska's affected Prince William Sound.

That 1991 settlement also included a $125 million payment from Exxon and Exxon Shipping to settle criminal charges stemming from the spill.

The U.S. Justice Department in late 2007 settled criminal charges against BP that stemmed from the pipeline spill, part of a wider settlement that also included charges related to a fatal fire in 2005 at the company's refinery in Texas City, Texas, and propane-market manipulations by BP futures traders in 2004.

Under the 2007 criminal settlement, BP paid $20 million in fines and restitution for the Prudhoe Bay spill after pleading guilty to a sole violation of the Clean Water Act. The $20 million payment was considered high for a single misdemeanor violation, but was set at that level because of BP's previous record of criminal environmental violations on the North Slope, federal officials said at the time.

The company in 1999 pleaded guilty to illegally dumping hazardous waste at its Endicott oil field on the North Slope, eventually paying $7 million in criminal and civil penalties and serving five years' probation.

The state of Alaska also filed a lawsuit against BP on Tuesday, relating to the 2006 oil spill, but did not specify a proposed fine.

Alaska's Department of Law said the state is requesting penalties for environmental violations and "just compensation for state revenues lost as a result of BPXA's negligent corrosion prevention practices."

(Reporting by JoAnne Allen and Yereth Rosen; Editing by Gary Hill and Bill Rigby)

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