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Pipeline Spill Penalties Total $312K

Thursday, December 20, 2012

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ConocoPhillips has agreed to pay state and federal environmental regulators more than $312,000 in penalties and other costs related to a pair of corrosion-induced oil spills at the Kuparuk River oil field facility on Alaska's North Slope.

The penalties stem from separate oil spills in 2006 and 2007, both of which were caused by corrosion in flow lines that carry a mix of crude oil, water, gas, and solids from production wells to processing centers.

Photos: ConocoPhillips

ConocoPhillips has agreed to pay a total of $312,000 in state and federal fines stemming from two oil spills caused by pipeline corrosion in Alaska.

State and Federal Penalties

ConocoPhillips agreed to repay the state $112,273 for the investigation and spill oversight costs and $78,283 in civil assessments for the March 2006 spill and $77,009 for the December 2007 spill, according to the agreement released by the Alaska Department of Conservation on Monday (Dec. 17)

The agreement also requires the company to finish the restoration of approximately .32 acres of land impacted by the spills.

In March 2006, about 500 gallons of water contaminated with small amounts of crude oil spilled from the company's refinery. An investigation conducted by ConocoPhillips, with participation from the state DEC, found that several factors caused internal corrosion, leading to the leak.

The December 2007 leak released 2,870 gallons of contaminated water and 1,386 gallons of crude oil. It was determined that incorrectly manufactured pipe insulation allowed water to be drawn to the pipe's sidewall, the state said.

In the 2007 incident, ConocoPhillips and responders built snow berms to contain the spill and constructed a 300-yard-long ice road in subzero cold to improve access to the site, the EPA reported. The teams removed pollution with shovels and hot water. The oil was eventually hot-flushed from the ground then recovered from the snow.

Both spills happened at the company's Kuparuk River oil field facility.

“We are glad to bring this legal matter to a successful conclusion and to focus on the lessons learned from these two events,” state Attorney General Michael Geraghty. “It is important that appropriate measures be instituted to prevent these types of events from occurring in the future.”

The U.S. Environmental Protection Agency will receive $45,000 for the 2007 incident.

Remedial Measures

The settlement agreement states that ConocoPhillips will take remedial measures to address the risk of similar leaks in the future, including improvements to its program to monitor for evidence of corrosion in its flow lines.

ConocoPhillips is spending significantly on pipeline inspection, asset renewals such as pipeline replacements, and upgrades in "pigging" infrastructure, said Natalie Lowman, a company spokeswoman, in an email to Businessweek.

"The cause of these releases are reminders of the complexities of pipeline corrosion and the need to continually reassess and rapidly adapt to changing operating conditions in order to prevent spills," said Larry Dietrick, DEC's director of Spill Prevention and Response.

"DEC has instituted new requirements for leak detection, monitoring, engineering reviews, reporting and inspections for flow lines since 2007 because of risks of corrosion as evidenced by these and other leaks that have been experienced on the North Slope," he said.

Alaska's Largest Oil Producer

Headquartered in Houston, TX, and operating in almost 30 countries, ConocoPhillips is Alaska's largest oil producer.

The company has major ownership interests in two large oil fields on Alaska's North Slope, including Kuparuk, which the company operates, and Prudhoe Bay.


Tagged categories: Corrosion; Corrosion resistance; EPA; Health and safety; Oil and Gas; OSHA; Pipeline; Pipelines; Project Management

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