Environmental Law Prof Blog

British Petroleum agrees to pay $70 million USD for environmental crimes

Acting Attorney General Peter D. Keisler announced yesterday that the energy company British Petroleum (BP) has agreed to pay approximately 70 million dollars in fines and restitution for environmental crimes. This includes a criminal fine of $50 million for Clean Air Act violations resulting from an explosion at BP's Texas City refinery in 2005.

"This is the largest fine ever assessed to a single entity under the Clean Air Act. And this is the first criminal prosecution under a section of the Act specifically created to prevent accidental releases that result in death of serious injury," said Keisler.

BP has also agreed to pay a $12 million criminal fine, $4 million in community service payments, and $4 million in criminal restitution for Clean Water Act violations associated with pipeline leaks of crude oil in Alaska. Additionally, BP agreed to three years of probation for the Clean Air Act and Clean Water Act violations.

"BP committed serious environmental crimes in our two largest states, with terrible consequences for people and the environment" said Granta Nakayama, EPA’s Assistant Administrator for Enforcement and Compliance Assurance. "Today's agreement sends a message that these types of crimes will be prosecuted."

The fines are part of BP's plea agreement to pay more than $373 million for environmental crimes, fraud and market manipulation. BP and several of its employees were charged by an indictment issued by a federal grand jury in the Northern District of Illinois with conspiracy to manipulate the price of propane in 2004, wire fraud, and several violations of the Commodity Exchange Act. BP will pay $303 million in restitution and criminal and civil fines for these crimes under the terms of a  deferred prosecution agreement.

Read the Department of Justice's press release.

Kansas denies air quality permit for expansion of coal-fired power plant over climate change concerns

The Kansas Department of Health and Environment has denied an air quality permit for the expansion of a coal-fired power plant because the expansion would cause a significant increase in carbon dioxide emissions. One commentator suggested that this may be the first instance where expansion of a power plant has been denied solely because of climate change concerns.

In a press release dated October 18, 2007, Secretary Roderick L. Bremby of the Kansas Department of Health and Environment (KDHE) announced his decision to deny Sunflower Electrical Cooperative's application for an air quality permit to expand operation of its Holcomb, Kansas coal-fired power generation facility. Bremby cited several state laws granting him authority to deny or modify an air quality permit to protect the health of persons or the environment. "I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing,” said Bremby.

KDHE's website makes reference to the Intergovernmental Panel on Climate Change Fourth Assessment Report, the United States Supreme Court's decision in Massachusetts v. EPA, and a policy statement issued by the Center for Disease Control and Prevention as background information in support of the Secretary's decision. The website also contains a link to a letter jointly submitted by the Attorneys General of eight states, including California and New York, urging KDHE to deny the permit. The letter states that "[c]limate change is the single greatest environmental challenge facing the world today" and that "effective action is necessary at the national, regional and state level...to achieve the necessary reductions in CO2 emissions."