Alaska Oil Spill Will|Cost BP $25 Million

(CN) - A BP subsidiary will pay a $25 million penalty and start a pipeline-management program to compensate for its 2006 spill of more than 5,000 barrels of crude oil in Alaska. The Justice Department says the settlement is the largest per-barrel spill penalty, to date, by an oil company.

As part of its settlement with the government, BP Exploration Alaska agreed to develop a pipeline-integrity program for the company's 1,600-mile pipeline along Alaska's North Slope at a cost of $60 million over three years.

At least four-fifths of the $25 million penalty will go to the Oil Spill Liability Trust Fund, established under the Clean Water Act, which finances federal-response efforts to oil spills. The remainder of BP's payment will be deposited into the U.S. Treasury.

"Companies like BP Alaska must understand that they can no longer afford to ignore, neglect or postpone the proper monitoring and maintenance of their pipelines," Ignacia Moreno of the Justice Department's Environment and Natural Resources Division said in a statement. "This agreement will help prevent future environmental disasters and protect the fragile ecosystem of Alaska's North Slope."

BP Alaska pleaded guilty in 2007 to violating the Clean Water Act after an investigation by the Pipeline and Hazardous Materials Safety Administration found the company failed to prevent corrosion of its pipes.

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