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Cost of Doing Business: BP’s $730 million in fines/settlements + 2 criminal convictions

05/05/2010

BP is a London-based oil company with the worst safety and environmental record of any oil company operating in America. In just the last few years, BP has pled guilty to two crimes and paid over $730 million in fines and settlements to the US government, state governments and civil lawsuit judgements for environmental crimes, willful neglect of worker safety rules, and penalties for manipulating energy markets.

WORKER SAFETY – $215 million in penalties/settlements

• BP paid the two largest fines in OSHA history – $87.43 million and $21.36 million – for willful negligence that led to the deaths of 15 workers and injured 170 others in a March 2005 refinery explosion in Texas.
o In September 2005, OSHA cited BP for 296 “Egregious Willful Violations” and other violations associated with the explosion, fining BP $21.36 million and entering into a settlement agreement under which BP agreed to corrective actions to eliminate hazards similar to those that caused the explosion. In October 2009, OSHA determined that BP was in non-compliance with the settlement agreement, finding 270 “notifications of failure to abate” and 439 new willful violations, resulting in the $87.43 million fine. The U.S. Chemical Safety & Hazard Investigation Board concluded in 2007 that “The Texas City disaster was caused by organizational and safety deficiencies at all levels of the BP Corporation. Warning signs of a possible disaster were present for several years, but company officials did not intervene effectively to prevent it.” This followed an August 2004 OSHA fine against BP for $63,000 for violations at the same facility. In December 2009, a Texas jury returned a $100 million award against BP on behalf of workers injured in 2007 at the texas city refinery while making repairs after the 2005 blast.

• Just last month, BP paid $3 million fine to OSHA for 42 willful safety violations at one of its refineries in Ohio. This follows a $2.4 million fine BP paid for safety & health violations at this refinery in April 2006.

In september 2001, OSHA fined BP $141,000 after an explosion killed 3 workers at BPs Clanton Road facility.

In October 2007, the Minerals Management Service fined BP $41,000 for various safety violations.

In October 2006, the Minerals Management Service fined BP $25,000 because “operations were not performed in a safe and workmanlike manner. While making an assessment of the unsafe conditions on the platform that needed repairing, the construction crew did not barricade a 3’4″ x 3’4″ opening in the stairway landing. Later, one of the crew members was injured when he fell through the open hole approximately 20′ and into the Gulf of Mexico.”

In July 2004, BP paid a $190,000 penalty to MMS for safety violations that resulted in a fire. In February 2004, MMS fined BP $25,000 because “The Rig’s Gas Detection System was bypassed with ongoing drilling operations being conducted.” In November 2003, MMS fined BP $25,000 for violations that resulted in an oil rig crane falling into the Gulf of Mexico. In July 2003, MMS fined BP $20,000 because a subsurface safety valve was “blocked out of service.” In January 2003, BP was fined $70,000 by MMS for a faulty fire water system. Also that month, BP was fined $80,000 by MMS for  bypassing “Relays for the Pressure Safety High/Low for four producing wells.” In January 2002, MMS fined BP $20,000 for a safety violation. In May 2002, MMS fined BP $23,000 for a workplace safety violation that resulted in a worker having his hand injured from an electrical shock. In September 2002, MMS fined BP $39,000 for missing 13 monthly tests of an “oil low level sensor.” In February 2001, MMS fined BP $20,000 for workplace violations resulting in serious injury to an employee.

ENVIRONMENTAL VIOLATIONS – $153 million in penalties/settlements, plus a guilty plea to an environmental felony and one criminal misdemeanor.

• In October 2007, BP agreed to pay a $50 million fine and plead guilty to a felony violation of the Clean Air Act and will serve three years of probation for the Texas City refinery explosion. Additionally, the EPA required BP to pay $785,662 to resolve Emergency Planning and Community Right-to-Know Act violations at its Texas City refinery in March 2009. In 2006, the Texas Commission on Environmental Quality fined BP $130,625 for unlawful releases of harmful pollutants at its Texas City refinery.

• In October 2007, BP plead guilty to one misdemeanor of the Clean Water Act, agreed to serve three years probation, pay $4 million to the National Fish and Wildlife Foundation to support research and activities on the North Slope, pay $4 million in restitution to the State of Alaska and a $12 million fine for spilling 200,000 gallons of crude oil onto the Alaskan tundra in March 2006. Investigators determined the leak was caused by a build up of sediment in the pipe, and that BP failed to properly inspect or clean the pipeline, which is required by law to prevent pipeline corrosion. The investigation revealed that in 2004, the company became aware of increased corrosion in the pipeline. In March 2009, the Department of Justice filed a civil lawsuit against BP for failing “to comply in a timely manner with a Corrective Action Order” involving this oil spill.

In May 2002, the Alaska Department of Environmental Conservation required BP to pay a $150,000 fine for pipeline leaks.

• In February 2009, BP paid a $12 million civil penalty for “noncompliance with a 2001 consent decree and Clean Air Act regulations requiring strict controls on benzene . . . generated during petroleum refining” at BPs Texas City refinery.

In March 2005, the South Coast Air Quality Management District forced BP to pay a $25 million penalty and $6 million in past emissions fees for air quality rule violations at BPs Carson refinery.

• In October 2006, BP paid a civil penalty of $900,000 for producing and distributing gasoline that failed to meet Clean Air Act standards.

• In October 2007, BP paid a $6,350 fine for failing to perform adequate corrosion protection inspections at three underground gasoline storage tanks. In June 2007, the Michigan Department of Environmental Quality fined BP $869,150 for leaking underground gasoline storage tanks.

• In May 2005, BP paid a $58,687 fine to settle allegations it violated the Clean Air Act at its Whiting, Indiana refinery, and paid an additional $13,203 fine in December 2006 for an illegal release of anhydrous ammonia at this same Indiana refinery.  In November 2007, the EPA cited BP for numerous Clean Air Act violations at its Whiting facility,  and amended this notice of violation in October 2008.  In June 2009, the EPA revived additional allegations of Clean Air Act violations at the same refinery.

• In June 2005, BP paid a civil penalty of $115,138 for violations of the Clean Water Act, Safe Drinking Water Act and Oil Pollution Act on the Lander and Winkleman Dome Oil Fields in Fremont County, Wyoming within the boundaries of the Wind River Indian Reservation of the Eastern Shoshone and Northern Arapaho Tribes.

• In August 2005, BP paid a civil penalty of $28,360 for violating EPA’s gasoline detergent additive regulations.

• In February 2000, BP paid $22 million to settle criminal and civil charges arising from illegally discharged waste oil and hazardous substances at the company’s North Slope drilling operations. BP was also placed on 5-year probation and was required “to establish a nationwide environmental management system designed to prevent future violations.”

• In February 1995, BP paid $3.9 million to settle charges related to a tanker accident that spilled 400,000 gallons of oil into California’s coastal waters.

• In March 1999, BP paid $1.75 million to settle allegations it violated the Clean Air Act at its Toledo, Ohio refinery.

• In January 2001, BP paid $10 million to resolve allegations it violated the Clean Air Act at 8 of its refineries.

BP was one of several oil companies found to have contaminated drinking water with MTBE. The companies collectively were required to pay $423,963,564.67 in March 2008. It is unknown what share of this settlement BP was required to pay.

PRICE-GOUGING CONSUMERS/TAXPAYERS: $363 million in penalties/settlements
• In October 2007, BP paid $303 million to settle allegations it manipulated the US propane market. The feds might still be investigating BPs broader role in manipulating crude oil markets: in a filing with the Securities and Exchange Commission on August 9, 2007, BP revealed that “The US Commodity Futures Trading Commission and the US Department of Justice are currently investigating various aspects of BP’s commodity trading activities, including crude oil trading and storage activities, in the US since 1999.”

• In two separate actions, the Federal Energy Regulatory Commission fined BP a total of $21 million for manipulating the California electricity market, Enron-style.

In October 2007, FERC ordered BP to pay a $7 million civil penalty for engaging in anti-competitative practices with its operation of natural gas pipelines.

In April 2000, the Department of Justice forced BP to pay $32 million “to resolve claims under the False Claims Act and administrative claims that the corporation underpaid royalties due for oil produced on federal and Indian leases since 1988.”

BP legally escaped paying $172,508,633 in royalties to US taxpayers on leases it operates in the Gulf of Mexico.

• In July 1997, BP’s oil traders were found to have colluded with two other firms to fix the price of commissions.

Tyson Slocum is Director of Public Citizen’s Energy Program

Flickr photo by yesil sevenler

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53 Comments leave one →
  1. Michael permalink
    05/06/2010 7:11 pm

    I think the just pay it out of the petty cash. They took that in account.

  2. Dennis permalink
    05/08/2010 9:32 am

    OSHA fines are always reduced to a much lower number. The money goes to the state in which the incident happens. Nothing goes to OSHA to expand their services and they are always working on a shoe string budget. Sad but true.

  3. sally Tessicini permalink
    05/08/2010 7:55 pm

    There is nothing good to say about BP. To be so careless about their workers, the Gulf Coast, and the environment by not putting safeguards into their oil-pumping system is just inexcusable.

  4. Antonio Antonetti permalink
    05/11/2010 2:33 pm

    I think we have to wake up and stop talking about these corporations as if they operate in another planet, is our home the only home we have! That’s what they are destroying, all for the sake of their profits, it seams that when some one bring s up the fact that they are in to make a profit it’s absolutely ok for them to kill and destroy anything that stands on their way. I think the only way to deal with this type careless organizations is to shot them down, these people are our real enemies, in my opinion they are worst than terrorist, because at least when we catch a terrorist destroying or killing they are taken to jail and pay serious consequences that can lead to the death penalty. They are so arrogant that they went to congress and pleated not fully guilty blaming Halliburton for the catastrophe, in reality what they are doing is obvious, diverting the attention to avoid their responsibility. We can’t wait for the judicial system to take care of these companies because is going to go back to $ and how much money these companies pump in to the political structure of our country, we have to take action. These people are a shame for the human race.

    Antonio Antonetti

    • Antonio Antonetti permalink
      05/12/2010 8:05 pm

      I did no mean shot them down, I meant shut them down…

  5. Ken H. permalink
    05/15/2010 6:48 pm

    Come on the companty is making near billion dollar a day profits. Millions in fine would equal a 10 cent parking fine. Nail them good just once and they will put safety first like most other industries.

  6. john freeman permalink
    05/19/2010 11:57 am

    I understand why one would boycott BP yet do we think that they are any less moral than any other oil co? Please check out David Blume’s info on the history of how and why we use gasoline instead of alcohol. The first Fords ran on alcohol. Prohabition was financed by Rockafeller to make the making of alcohol for any purpose illegal. Brazil has gotten away from useing gasoline and so can we but first we must learn the truth and be on a diet of high moral fiber.

    • Tom Brown permalink
      05/25/2010 5:56 pm

      I strongly agree. While this is a scary list of bad things BP has done it doesn’t support the argument that they have the “worst safety and environmental record of any oil company operating in America” or justify why they should be singled out. A critical reader of your site may wonder if this is typical for the industry. Maybe BP is much larger or just got unlucky to have one of their mistakes turn into a huge and visible disaster.

      While it is disgusting that they cut so many corners it is even worse that the system designed to regulate them failed.

    • Thaddeus Ames permalink
      06/09/2010 11:19 am

      A lot of people are saying “Why boycott bp?” or “Boycotting bp won’t solve anything.” or “If you boycott bp, why not the other oil companies?” While these comments are valid, think about this: If everyone stopped buying gasoline at bp or any of its affiliates, bp would definitely feel a crunch. Kind of like the crunch we feel as crude oil is gushing into the Gulf of Mexico. Think about it – if the gas stations have no customers, how will they pay their gasoline bills? If the gas stations aren’t paying their gasoline bills, how will they get more gasoline? Why would they need any gasoline without customers anyway? If the gasoline is not selling, bp isn’t making money. If bp isn’t making money, they will know why. Government fines/bills toward bp are drops in the bucket for bp, but if millions of consumers buy their gasoline from companies not affiliated with bp, guess what? That is billions of dollars bp won’t have. So, yes it does help to boycott bp – even if it is only for our peace of mind or justice for the devastation they brought to the people of the gulf coast. Stop being afraid to step up and make a stand. Boycotting bp IS something you CAN DO right in your own neighborhood. Send a clear message to bp that is NOT OKAY to let millions of gallons of crude oil pour into the Gulf of Mexico and then just continue doing business as usual. The poor gas station owners? Well, they should have researched bp and all of bp’s safety violations before buying into bp. The station owners are just as much to blame for this mess – they SELL the gasoline to us…FOR A PROFIT!!! True, in today’s world, we “need” gasoline, but that is slowly changing. All the oil companies are raping our wallets and environment, but bp in particular has gone too far. And bp CEO Tony Hayward just “wants to get his life back.” ??? By the way – about a month before this catastrophe, Tony Hayward sold enough shares of his bp stock to pay off the $1.2 million mortgage on his mansion. And bp will still pay out a dividend to its investors. WAKE UP AMERICA (and the rest of the world) – WE make this all possible for bp and its shareholders every time we stop and buy gasoline at bp. To those of you who do not see this…ignorance is bliss.

  7. Dean P. Richmond permalink
    05/20/2010 5:55 pm

    British Petroleum is not a “person” within the meaning of the Constitution. It is a criminal enterprise and must be treated accordingly.

    • 05/25/2010 9:29 pm

      Any corporate entity is considered (in business law) as an “artificial person” with all the rights and entitlements of a real person,…except the corporation is not liable for the wrongs committed by its Execs, CEos or boardmembers, unless of course you can find a way to “pierce their corporate vail.” Because of that, the “artificial person” enjoys a status not granted to US real people. We ARE liable for all our acts no matter what…we have no “corporate veil” to protect US.

  8. MacGruber permalink
    05/25/2010 10:24 pm

    After reading about the Texas City disaster caused by BP executives, what they said to the public THEN is exactly what they are saying NOW. That BP is so concerned and contrite and will make good on every penny in damages turned out to be complete B.S. then. Instead they expressed outrage at every court judgement, tried to manipulate the jury system and required claimants to sue them. A ridiculously long list of blatant safety and emissions violations (see publiccitizenenergy.org) has ensued from 2005 until now.
    BP go home – as in send BP America packing.

  9. BillP permalink
    06/12/2010 9:03 pm

    BP is doing what the coal companies do as a matter of course.

    If the fine is less than the cost of shutting down the operation, they’ll pay the fine and keep on drilling/mining.

Trackbacks

  1. Thursday, May 6, 2010 « The Jeff Farias Show
  2. » BP’s Oil Disaster: The Numbers Will Shock You
  3. Needed Reforms in Response to The Oil Spill « Citizen Energy
  4. “Beyond Petroleum” or
  5. Public Citizen Urges Boycott of BP « Grand Rapids Institute for Information Democracy
  6. BP, Transocean and Halliburton don’t like America very much « Citizen Energy
  7. 1 Month Later: 5 Things We Know About the BP Gulf Disaster « Citizen Energy
  8. Radish Greens - Healthy Living | Blog | Robert Weissman: Boycott BP
  9. 10 Things You Need (But Don’t Want) To Know About the BP Oil Spill « Mudweiser Matt's Blog
  10. 10 Things You Need (But Don’t Want) To Know About the BP Oil Spill | USAHM News | The Media Hitman Has Arrived. Classified Information, and a Conspiracy?
  11. 10 Things You Need (But Don’t Want) To Know About the BP Oil Spill «
  12. Ten Things Dirtier than BP’s Oil Spill « The Real Agenda
  13. Time for Obama To Take Charge of Gulf Disaster « Citizen Energy
  14. 10 Things You Need (But Don’t Want) To Know About the BP Oil Spill « Bear Market News
  15. Ten Things You Need To Know About The Gulf Of Mexico Disaster « The Tonka Report
  16. Uncensored Magazine | Ten Things You Need (But Don’t Want) To Know About the BP Oil Spill
  17. BP Lies While the Gulf Dies « Citizen Energy
  18. Oil spills and economic crises: once more, with feeling
  19. Ten things you need (but don’t want) to know about the BP oil spill « COTO Report
  20. Ten Things You Need (But Don’t Want) To Know About the BP Oil Spill « The Truth About Our World…
  21. Oregonians Boycotting BP! | Progressive Oregon
  22. The Cap Is On, But Plenty of Questions Remain | Speak to Power
  23. Cost of Doing Business: BP’s $730 million in fines, settlements + 2 criminal convictions « COTO Report
  24. Obama’s Pro-Drilling Compromise Undermined His Spill Response Credibility « Citizen Energy
  25. 10 Things About The BP Oil Spill They Don’t Want You To Know « We Are Change – Rochester, NY
  26. Boycott BP | The Weekly Chronicle
  27. Marea nera, 10 cose che dovreste sapere « Ho visto cose che voi umani…
  28. BP – Establishing a Pattern of Failure | Speak to Power
  29. Cost of Doing Business: BP’s $730 million in fines/settlements + 2 criminal convictions « Gulf Spill News
  30. Cost of Doing Business: BP’s $730 million in fines/settlements + 2 criminal convictions « Gulf Spill News
  31. 10 « vendofoto
  32. 10 things you didn’t know about BP and the oil spill (but should know) | Unspillable.com
  33. 10 Things You Need (But Don’t Want) To Know About the BP Oil Spill | sar.BLOG
  34. 10 Things You Need (But Don’t Want) To Know About the BP Oil Spill « The Light among the shadows
  35. Marea nera – 10 cose che dovreste sapere - e il colibrì rispose "io faccio la mia parte" - Selvaggio Web
  36. BP tries another rebrand — as "safe and reliable" « CitizenVox
  37. U.S. Chamber complaining about regulation before proposals hit the street « CitizenVox
  38. From BP to Avandia: Public Citizen’s media hits roundup « CitizenVox
  39. Spill, baby, spill « CitizenVox
  40. Oil drilling company asks evacuated workers to sign waivers « CitizenVox

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