AP News, December 6th, 2007
BP PLC recently agreed to pay millions in federal criminal fines over a 2006 oil spill in the nation's largest oil field, but state officials said Wednesday they are building a case to pursue their own damages related to two spills at Prudhoe Bay last year.
Alaska, which relies almost exclusively on oil revenue, is considering a civil lawsuit over "liability to the state resulting in lost revenues" and "damages for discharging petroleum on state land," according to documents from the state Department of Law posted online.
"Our investigation is continuing," said Steven Mulder, chief assistant attorney general of the department's environmental section. He did not say when a lawsuit would be filed.
The 201,000-gallon crude spill in March 2006 and a smaller spill five months later ultimately caused BP to halve production at Prudhoe Bay for several weeks starting in August 2006. Roughly 85 percent of the state's general fund comes directly from oil company income taxes.
Both leaks were traced to the failure of BP Exploration Alaska Inc., a subsidiary of London-based BP, to regularly clean and inspect two of its pipelines over the course of several years.
BP recently agreed with federal prosecutors to pay $12 million in fines for the first spill in March 2006, which was the largest ever on Alaska's oil-rich North Slope.
Under the agreement announced last month, the company also paid $4 million in restitution to the state of Alaska and $4 million to the National Fish and Wildlife Foundation for Arctic environmental research.
The Justice Department and Alaska agreed not to bring further criminal charges against BP Exploration in connection with the spills, but they left room for civil claims.
BP spokesman Steve Rinehart said he was not in the position to discuss ongoing or pending cases, but he confirmed that the payments in the federal settlement have been made.
"We don't discuss ongoing litigation," Rinehart said.
The state has retained Anchorage law firm K&L Gates to help it sort through a copious number of documents subpoenaed from BP and its production partners at Prudhoe Bay, the largest being Texas-based oil companies Exxon Mobil Corp. and ConocoPhillips.
"The state's investigation is ongoing and I don't wish to comment," said K&L Gates attorney Louisiana Cutler.
Following the production cut in August 2006, state attorneys issued subpoenas to Jim Bowles, president of ConocoPhillips Alaska Inc.; Richard Owen, former Alaska operations manager of ExxonMobil Alaska Production Inc.; and Steve Marshall, former president of BP Exploration Alaska Inc. The Alaska heads of Chevron Corp. and Forest Oil Corp., which no longer has holdings in Alaska, also received subpoenas.
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On the Net:
Alaska Department of Law: http://www.law.state.ak.us
BP: http://www.bp.com
