BP's probation over Alaska oil spill challenged

ANCHORAGE, Alaska Thu Nov 18, 2010 4:26pm EST

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ANCHORAGE, Alaska (Reuters) - BP's Alaska unit should have its criminal probation revoked and be subject to additional penalties because the company continued negligent behavior even after pleading guilty over its 2006 Prudhoe Bay pipeline spill, a federal probation officer said.

A 2009 spill of crude oil from a ruptured pipeline at the BP Exploration (Alaska) Inc.-operated Lisburne field showed that the company had failed to undertake the reforms it promised in its 2007 Prudhoe Bay criminal plea agreement, federal probation officer Mary Frances Barnes said in a petition filed Wednesday in U.S. District Court in Alaska.

The move comes as BP faces scrutiny over its role in the massive Deepwater Horizon rig spill, with initial findings suggesting the company failed to identify critical mistakes.

The Lisburne spill resulted when a pipeline exploded after being over-pressured. A long ice block caused internal pressure to build up, but BP ignored warning signs and its own policies about preventive measures, Barnes said in her petition. BP should have known to take those measures because it had a similar pipeline rupture caused by an ice plug in 2001, Barnes said.

In all, 45,828 gallons of crude oil and produced water -- a byproduct of the oil production process -- spilled from the two-foot long- (0.6 meter-) rupture in the Lisburne line, according to the Alaska Department of Environmental Conservation.

The spill violated the federal Clean Water Act and state spill statutes, Barnes said. Such criminal violations breached terms of BP's plea agreement, in which the company promised a series of reforms, paid a total of $20 million in fines, restitution and community service and was placed on one to three years' probation.

Barnes said Wednesday that she could not comment about the specifics of the BP case. In general, a petition to revoke probation can result in an evidentiary hearing and imposition of new punishment, she said.

"When probation has been violated, the judge can go back and resentence the defendant to any sentence that was available," she said.

The Prudhoe Bay oil spill, in which 212,000 gallons of crude leaked onto the snow-covered tundra from a corrosion-eaten hole in a major transit line, was the biggest on record on the North Slope, Alaska's main oil-producing region. That and a subsequent corrosion-cause spill five months later prompted a partial shutdown of the field, which is North America's largest. It also resulted in the criminal penalty and civil complaints filed by the state and federal governments.

BP wound up replacing its entire Prudhoe Bay transit line system, at a cost of $500 million.

BP spokesman Steve Rinehart said the company will respond to Barnes' allegations.

"We know that the privilege of working in Alaska comes with a responsibility to maintain high standards. We understand that earning and maintaining trust is key," he said in an email Wednesday.

"In line with those principles, BPXA has worked with the Department of Justice to try to resolve certain legal issues remaining from North Slope oil spills at Prudhoe Bay in 2006, and Lisburne in 2009. Unfortunately, that has not yet been successful," he said.

BP has cleaned up the site of the Lisburne spill and, over the summer, transferred new tundra sod to restore it to its natural state, he said.

(Editing by Bill Rigby and Sofina Mirza-Reid)

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