Lawmakers seek to hold BP accountable for shutdown

Governor, legislators want oil company to pay for revenue losses

Posted: Thursday, August 10, 2006

The Murkowski administration and several lawmakers on Wednesday said they want BP to pay for losses the state will incur as a result of the Prudhoe Bay shutdown.

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"Let me assure you and all Alaskans that we will hold BP accountable for past and future field management decisions," said Murkowski, speaking to both houses of the Alaska Legislature.

Oil pipelines transporting 400,000 barrels of oil per day are being turned off while BP replaces pipes that have corroded. The Alaska Department of Revenue estimates the shutdown will cost the state $6.4 million a day in royalties and taxes.

The state attorney general will review the state's legal rights and determine a course of action to protect the state's interests - "including the state's right to hold BP fully accountable for losses to the state," Murkowski said.

Several lawmakers were quick to agree with the governor that the state should explore legal methods to recoup any losses while oil prices are at record highs.

"I think that it's not an immediate question to resolve, but something to strongly consider. Loss of income from the state from somebody's negligence means that you go after the loss of income," said Rep. David Guttenberg, D-Fairbanks.

Three Anchorage Democratic legislators wrote a letter to Murkowski on Tuesday asking for his support in calling on BP officials to explain under oath steps the company took or failed to take to maintain the Prudhoe Bay pipeline.

"The Prudhoe Bay shutdown will cost Alaskans millions of dollars in lost revenue," the letter said. "If BP has properly maintained the pipes that feed the trans-Alaska pipeline, then they should be applauded. If not, they have cost Alaskans dearly."

The letter was signed by Sen. Hollis French, Rep. Max Gruenberg and Rep. Les Gara.

Senate Natural Resources Committee Chairman Tom Wagoner, R-Kenai, plans to start meetings on Aug. 18 in Anchorage to hear updates from BP officials and findings from the attorney general and other state departments reviewing the shutdown.

Murkowski has formed a cabinet team to be led by Natural Resources Commissioner Mike Menge to monitor BP's progress in repairing the line and oversee care for the environment.

Among the governor's concerns, he said the state was not warned in advance of Sunday's shutdown, while the state was receiving numerous satisfactory maintenance reports from the company.

"What did BP learn last Saturday that it did not know previously that would cause BP to take such precipitous action?" Murkowski said.

BP officials did not return phone calls regarding Murkowski's comments before press time.

• Andrew Petty can be reached at

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