BP Agrees to Pay $426,000 in Penalties, Secure $240 Million for Cleanups, Closures

By Pat Ware

Several subsidiaries of BP America Inc. will pay a $426,500 fine and ensure the availability of more than $240 million for future cleanup of hazardous waste sites and for the closure, plugging, and abandonment of underground injection control wells, under an agreement announced Nov. 29.

The Environmental Protection Agency said it determined that five BP subsidiaries failed to comply with financial assurance requirements under the Resource Conservation and Recovery Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation, and Liability Act.

Financial assurance requirements ensure that companies have the financial resources available to properly close facilities and clean up contamination at industrial sites.

Company to Pay Civil Penalties

Under the administrative settlement with the agency, BP agreed to pay civil penalties of $386,000 for failure to comply with the RCRA hazardous waste financial assurance requirements for closure, post-closure, corrective action, and third-party liability obligations, EPA said.

In addition, the company agreed to a civil penalty of $25,500 for failing to comply with the Safe Drinking Water Act's financial assurance requirements for underground injection control well closure, including plugging and abandonment obligations, the agency said.

BP also will pay $15,000 for failing to comply with financial assurance requirements for cleanup under the superfund program.

The five BP subsidiaries responsible for the violations are the Atlantic Richfield Co., BP Exploration Alaska Inc., BP Products North America Inc., BP Corp. North America Inc., and BP West Coast Products LLC.

The 11 RCRA hazardous waste facilities subject to the administrative agreement are in Alaska, California, Illinois, Indiana, Ohio, Texas, and Utah, EPA said.

The 10 Class I nonhazardous waste underground injection control wells subject to the settlement are on the North Slope of Alaska, the agency said.

The five superfund sites without adequate financial assurance are in California, Montana, Nevada, and Utah, EPA said.

BP's Obligation Outlined

Under the administrative agreements, BP has obtained financial assurance instruments in the form of letters of credit, standby trusts, and insurance policies for more than $149.1 million in obligations, according to EPA.

That includes assurances covering $129.8 million for its RCRA hazardous waste facilities and $19.2 million to address the closure, plugging, and abandonment of underground injection control wells, the agency said.

EPA said BP also has provided unspecified financial assurance mechanisms covering $98.8 million in superfund obligations.

BP did not respond to a request for comment from BNA.

The administrative agreement is available at http://www.epa.gov/compliance/resources/agreements/rcra/bpcafo.pdf .

Additional information about the agreement is available at http://www.epa.gov/compliance/resources/cases/civil/rcra/bpalaskainc.html .