October 25, 2007

BP Criminal Fines & Safety Upgrades For Air Violations Approach $500 Million

BP Products North America has agreed to pay a total criminal fine of more than $60 million for violations of federal environmental regulations in Texas and Alaska. In addition to the penalty, the company will spend approximately $400 million on safety upgrades and improvements to prevent future chemical releases and spills.

BP will pay $50 million for an explosion in 2005 that killed 15 people and injured more than 170 others at its Texas City refinery. BP will also pay a $12 million fine for spilling 200,000 gallons of crude oil onto the Alaskan tundra and onto a frozen lake in March 2006.

This is the largest criminal fine ever assessed against a corporation for Clean Air Act violations and the first criminal prosecution of the requirement that refineries and chemical plants take steps to prevent accidental releases.

In addition to the $50 million fine, the company pleaded guilty to a felony violation of the Clean Air Act and will serve three years of probation for the Texas City incident. BP is also required to complete a facility-wide study of its safety valves and renovate its flare system to prevent excess emissions at an estimated cost of $265 million.

For the Alaska spill, BP pleaded guilty to one misdemeanor of the Clean Water Act and will serve three years probation, pay $4 million to the National Fish and Wildlife Foundation to support research and activities on the North Slope, and pay $4 million in restitution to the State of Alaska. BP is required to replace 16 miles of pipeline at an estimated cost of $150 million.

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