Alaska News

BP to pay $25 million fine for 2006 Alaska oil spill

BP Exploration Alaska would pay $25 million and spend another $60 million implementing a state-of-the-art monitoring system to guard against North Slope oil spills under a proposed settlement reached with the federal government over a 2006 spill.

It's the largest penalty per-barrel assessed for an oil spill to date, officials with the U.S. Environmental Protection Agency, the Justice Department, and the Pipeline and Hazardous Materials safety Administration said in announcing the settlement at a Washington, D.C. press conference Tuesday.

More than 5,000 barrels of oil leaked from a pipeline on the North Slope in March 2006, followed by a smaller spill in August 2006. In addition to the federal civil case, the state also has sued BP over the spill and a federal criminal case against the company is continuing.

Karen Loeffler, U.S. Attorney for Alaska, said Tuesday that in the consent decree BP acknowledges it "cut corners" and failed to adequately maintain its pipelines.

The company now will be required to put in place a "system-wide pipeline integrity management program" that includes beefed up monitoring, more reporting requirements and the hiring of a third-party independent inspector to review the company's efforts.

The settlement is subject to a 30-day public comment period and needs final court approval.

This is a developing story. Please check back for updates.

Contact Patti Epler at patti(at)