BP Products Agrees to Pay for Oil Spill Response Violation

BP PLC has agreed to pay $210,000 to settle alleged violations of oil spill response violations at a Maryland facility, the Department of Justice and the Environmental Protection Agency said.

The EPA alleged that BP Products North America violated federal regulations requiring oil storage facilities to conduct drills and exercises to respond to oil spills at its Curtis Bay Terminal in Maryland.

Under the settlement, the oil company will implement an enhanced oil spill response program at its 33 nonrefinery petroleum products terminals nationwide. The company also agreed to an independence compliance audit of 12 of its marine and high-risk petroleum product terminals to evaluate if the facilities have the resources to respond to major spills.

The EPA and the U.S. Coast Guard twice conducted unannounced oil spill response exercises at the Curtis Bay Terminal, which can store about 22 million gallons of oil. During the drills, BP Products was required to demonstrate its response to a small-scale discharge of fuel oil from the facility into Curtis Creek by being prepared to deploy 1,000 feet of oil-containment boom within one hour. However, the company didn't complete the exercise in the allotted time on both occasions.

High-risk onshore facilities that store oil, such as the Curtis Bay Terminal, must have a plan for responding to oil spills that includes employee training, spill response equipment, and a "worst case" contingency plan for containing and cleaning up spills, the agencies noted.

The EPA had issued a notice of violation to BP Products in 2006 related to spill response training exercises conducted at Curtis Bay in 2005.

"BP is committed to safe operations and we conduct regular emergency response exercises at our fuel terminals," said Steve Pankhurst, president of BP Pipelines North America. "In 2005, our spill response contractor did not meet BP or EPA's standards for rapid response during drills. This was unacceptable to us and we took action to replace the contractor."

American depositary shares closed at $43.04 and were unchanged after hours. The stock is up 13% over the past three months.

Copyright (c) 2012 Dow Jones & Company, Inc.


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