The Environmental Protection Agency announced Monday that BP Exploration Alaska has agreed to pay a $125,100 penalty related to violations of its federal hazardous waste permit for activities on Alaska’s North Slope.
BP, a major Alaska oil producer that’s asking regulators to approve the $5.6 billion sale of its Alaska assets to Hilcorp Alaska, in part did not “maintain adequate insurance for bodily injury and/or property damage to third parties” from the company’s storage and handling of hazardous waste, the EPA alleged in a statement to media Monday.
Megan Baldino, a spokeswoman with BP in Alaska, said the company “worked closely with EPA to resolve its concerns with the insurance it had obtained for this facility.” She said BP is in compliance with the order.
The penalty stems from a 14-page consent agreement between the federal agency and the oil company.
It comes at a time when many Alaskans are asking regulators to pay close attention to whether BP and Hilcorp have provided adequate financial assurances that they can pay for future cleanup costs once the oil fields are abandoned and infrastructure must be dismantled. They also want financial guarantees that Hilcorp, a smaller, private company, can pay for an unexpected disaster, such as an oil spill.
[State: BP sale of Alaska assets to Hilcorp clears federal hurdle]
The EPA found that BP’s third-party liability coverage was inadequate over five years beginning in 2014, the consent agreement shows.
The penalty followed an EPA inspection in June 2018 of a hazardous waste storage facility at Prudhoe Bay.
The EPA said in its statement that it allows BP to store more than 200,000 pounds of hazardous waste, such as flammable and toxic byproducts from oil exploration, on leased state lands.
BP must maintain a dedicated pool of funds so third parties can receive compensation for losses related to the storage or handling of the company’s hazardous waste.
EPA describes the amount BP must maintain as “$1 million per occurrence with an annual aggregate of at least $2 million," through insurance policies or other means. The EPA said federal law requires this pool of funds to be kept separate from coverage for legal defense and cleanup costs. The protection is required so third parties can receive “compensation for losses related to the storage or handling of BPXA’s hazardous waste,” the EPA said.
The Alaska Department of Natural Resources on Monday is presenting details of the proposed sale to the House and Senate Resources Committee at a hearing in Anchorage. It is the state’s first public meeting on the proposed sale.