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Oil and Gas Giant BP to Pay Fines Totaling $373M

In the refinery explosion case, Europe’s second-largest company agreed to plead guilty next month to a felony violation of the Clean Air Act for the March 2005 blast at a BP facility in Texas City, Texas, and pay a $50 million fine. The explosion killed 15 refinery workers.

U.S. Attorney for the Southern District of Texas Don DeGabrielle said that the company lacked important safety systems, placed flimsy trailers in unsafe areas and failed to inform workers about a dangerous ignition process at the plant, the Houston Chronicle reported.

In addition to that plea deal, the company will also admit to an environmental crime and pay $20 million to the state of Alaska and the National Fish and Wildlife Foundation for 2006 oil leaks in pipelines in Prudhoe Bay, Alaska. Two corroded pipelines spilled more than 200,000 gallons of oil on the Alaskan tundra, the nation’s largest oil field.

In another case, the company will pay $303.5 million in an agreement to settle allegations of a propane price-gouging scheme in 2004.

Federal investigators looked at whether BP energy traders attempted to artificially increase the price of propane by buying a large supply of the gas and then withholding those supplies to force other buyers to pay more for the scarce resource, the Associated Press reported.

Additionally, a federal grand jury in Chicago on Thursday indicted four former BP employees who were caught on tape discussing the alleged scheme to corner U.S. propane markets, news agencies reported. BP is the largest propane supplier in North America.

BP American Chairman and President Bob Malone released a statement admitting that his company was responsible for the violations.

“[The agreements] represent an absolute commitment to work with the government as we continue our efforts to prevent another tragedy like Texas City, to make our Prudhoe Bay pipeline corrosion program more responsive to changing operating conditions and to ensure that our participation in the nation’s energy markets is always appropriate,” he said.

DeGabrielle said that while the company is no longer in legal jeopardy, individual employees could be charged with crimes.

“Part of the agreement with BP is that they will continue to cooperate as they have throughout this investigation with us,” he said, according to the Houston Chronicle’s report. “This includes making employees and witnesses available to us, making other documentary and physical evidence available to us as needed or requested.”

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