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Oil Giant BP to Pay Texas $50 Million for Pollution Violations

Source: AP

Posted on 04 Nov 2011

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Oil company BP has agreed to pay Texas $50 million for air pollution violations at a Gulf Coast refinery where a 2005 explosion killed 15 workers, the state's attorney general announced Thursday.

The settlement between BP Products North America and the State of Texas resolves 72 emissions violations between 2005 and now, Attorney General Greg Abbott told a Houston news conference. The violations include some that contributed to the massive explosion six years ago at the Texas City refinery.

The settlement's announcement comes as BP PLC struggles to resolve issues surrounding an April 2010 explosion at an offshore rigging platform that killed 11 people and caused the biggest offshore oil spill in U.S. history.

It also comes just a few months after the company indicated a desire to sell the Texas City refinery. The agreement could make it easier for the company to find a buyer, because its pollution liabilities with the state have been settled. In August 2010, BP reached a $50.6 million settlement with the U.S.

Occupational Safety and Health Administration for failing to correct safety violations after the 2005 explosion. At the time, OSHA indicated it was also trying to force the company to pay an additional $30 million in fines.

BP said in a statement it was pleased with the settlement.

"BP has maintained a steady focus on improving safety and compliance at Texas City, and this agreement is an important milestone in the progress of operations at the facility," the company said.

Abbott said the settlement set a record in Texas.

"There are rules that must be followed and if you violate those rules there will be consequences," Abbott said. "They exposed Houstonians ... to poor air quality and now they're paying the price for it."

The settlement also resolves a high-profile 41-day benzene release in April 2010 that prompted a class-action suit by Texas City residents and an investigation by the U.S. Environmental Protection Agency. This agreement does not resolve lawsuits or investigations by other agencies.