SEPTEMBER 30, 2010, 3:33 P.M. ET.
UPDATE:
(Updates with BP spokesmen being unavailable for comment; adds background)
By Nathan Becker and Tennille Tracy
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–BP PLC (BP, BP.LN) has agreed to pay $15 million to resolve environmental violations at its beleaguered Texas City refinery, marking the largest penalty ever recovered under the Clean Air Act at a single facility.
The settlement covers violations from two fires that occurred at the refinery in March 2004 and July 2005, as well as a leak in August 2005.
During those incidents, thousands of pounds of flammable and toxic air pollutants were released, forcing people who lived in the surrounding city to take refuge indoors. The settlement also resolves allegations that the oil giant failed to identify hazardous pollutants in documents it submitted to the U.S. Environmental Protection Agency.
The EPA identified these violations after launching an investigation of the refinery following a March 2005 fire that killed 15 people and injured dozens more.
“BP’s actions at the Texas City refinery have had terrible consequences for the people who work there and for those in nearby communities,” said Cynthia Giles, assistant administrator for the EPA’s office of enforcement and compliance assurance.
BP spokesmen were not available for immediate comment.
This most recent settlement between BP and the government occurs as the U.S. Justice Department is looking at possible fines for BP for the Deepwater Horizon oil spill.
Under the Clean Water Act, BP could be penalized up to $4,300 for every barrel of oil that leaked as a result of that spill, potentially resulting in billions of dollars of fines.
The settlement also coincides with the introduction of new offshore drilling rules, unveiled by the U.S. Interior Department Thursday in the wake of the Gulf of Mexico spill.
On Wednesday, incoming BP Chief Executive Bob Dudley unveiled changes designed to improve safety and announced the departure of the senior executive who oversaw drilling operations.
The overhaul creates a safety unit that will have sweeping powers to challenge management decisions if it considers them too risky. It will be headed by Mark Bly, currently BP’s top safety executive and author of the company’s inquiry into the Deepwater Horizon disaster.
Once the government collects the $15 million penalty from BP, it will have recovered $137 million in penalties and fines as a result of safety violations at the Texas City refinery.
BP has also spent about $1.4 billion in corrective actions and will spend about $500 million more to improve safety at that facility.
-By Nathan Becker and Tennille Tracy, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com
–Special thanks to Richard Charter