Top pollution regulator wants more BP oversight

Commissioner says corporation mishandled two North Slope spills

Posted: Thursday, January 15, 2004

ANCHORAGE - Alaska's top pollution regulator wants more federal oversight of oil giant BP.

Ernesta Ballard, commissioner of the state Department of Environmental Conservation, said BP has failed to meet its "corporate accountability and environmental responsibility objectives" and needs elevated scrutiny by federal authorities.

In making her argument, Ballard cited two mishandled North Slope spills. BP failed to promptly report a 6,000-gallon spill last year, and it quickly and illegally pumped spilled liquids underground in February 2001 without getting permission from state regulators, Ballard said in a Dec. 18 letter to an EPA official.

"Failure to follow state oil spill reporting requirements is unacceptable," she wrote.

BP is Alaska's No. 2 oil producer and runs most of the North Slope oil fields, including giant Prudhoe Bay.

Ballard also argued that BP has not fully abided by an agreement it struck with the federal government in 1999, when BP pleaded guilty to a criminal pollution violation. That agreement required BP to develop an environmental management system to track and immediately report spills and cooperate better with state regulators.

"Unfortunately, these objectives have not always been met," Ballard wrote in the letter.

Ballard sent the letter to Jeanne Pascal, the EPA's department counsel in Seattle. In that role, Pascal oversees cases involving companies that do business with the federal government. Such business can include, for example, fuel contracts between BP refineries and the military, or leases to explore for oil and gas.

EPA officials can prevent or debar a company from further federal contracts if the company commits repeat violations.

BP spokesman Daren Beaudo said his company plans to request a meeting with Ballard to talk about the letter and her concerns. He defended the company's environmental reporting system, calling it "state of the art" but imperfect.

A federal judge in February 2000 sentenced London-based BP's Alaska subsidiary, BP Exploration (Alaska) Inc., to five years probation and ordered it to pay $15.5 million for failing to immediately report hazardous materials dumping by a contractor at the Endicott oil field on the North Slope.

BP has implemented the required environmental management system and it works well, Beaudo said, but he acknowledged that brief delays and procedural misunderstandings can occur as hundreds of BP workers and contractors work on the North Slope's sprawling, frigid oil fields.

He said BP long ago provided information to court and EPA officials, including Pascal, on the two spills that Ballard referred to in her letter.

Beaudo also said BP has not applied for an early release from its criminal probation, which is due to expire at the end of January 2005.

Beaudo said it's a constant battle to make sure everyone working on the Slope knows the importance of prompt spill reporting. He acknowledged some confusion and misunderstandings of regulatory requirements in the two spills.

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