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Former Alaska refinery owner ordered to pay for solvent leak

The former owner of an Alaska crude oil refinery has been ordered to pay millions in damages for releasing large amounts of a refinery solvent, sulfolane, into groundwater and polluting hundreds of residents’ drinking water wells.

Superior Court Judge Pro Tem Warren Matthews in Fairbanks ordered Williams Alaska Petroleum, former owner of the North Pole Refinery, to pay $29.4 million for costs and damages.

He also ordered Williams Alaska to pay future response costs and partially reimburse the company that bought the refinery, Flint Hills Resources LLC.

Flint Hills has spent more than $130 million to provide clean water to affected residents, Fairbanks television station KTVF reported, and reimbursement could add tens of millions to the judgement.

Matthews allocated 75% of the spill liability to Williams and 25% to Flint Hills in the trial to decide THE allocation of responsibility.

Alaska Deputy Attorney General Treg Taylor said Williams had not been co-operative throughout the process of attempting to assign responsibility and restore clean water to residents.

“Despite being responsible for most of the pollution, Williams chose not to work with the State of Alaska in coming up with a solution and instead chose litigation,” Taylor said in prepared statement. “We’re pleased that the court affirmed the basic principle that under Alaska law the polluter pays.”

David Shoup of Anchorage, an attorney for Williams Alaska, was travelling Friday afternoon and could not immediately respond to a request for comment, his office said.

The refinery was built in 1977 in North Pole, a city of 2,100 about 14 miles (22.5 kilometres) south of Fairbanks. The refinery tapped crude from the trans-Alaska pipeline and refined it into jet fuel, heating fuel and other products.

Williams in 2004 sold the refinery to Flint Hills Resources. Five years later, sulfolane was found in nearby water wells. Flint Hills closed the refinery a few years later.

The two companies and the state engaged in litigation surrounding the sulfolane plume for nearly a decade.

The trial opened in October. An attorney for Flint Hills, Jan Conlin, said sulfolane was not disclosed in the sale and Williams had not contributed to cleanup efforts during years of litigation.

Shoup during the trial said sulfolane was not considered a hazardous chemical by the state and was not a regulated chemical at the time of the spill. He said neither Williams Petroleum nor Flint Hills Resources was under obligation to clean the spill because the state had not set a cleanup standard.


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Major oil company plans 7 wells in Alaska petroleum reserve

A major oil company will drill seven new exploratory wells in the National Petroleum Reserve-Alaska.

ConocoPhillips is planning the work for this winter, the Alaska Journal of Commerce reported .

The wells will be focused on the prospective Harpoon area southwest of the company’s existing projects in the reserve, ConocoPhillips Alaska Vice-President Scott Jepsen said during a presentation last week to the Alaska Support Industry Alliance. The wells will better delineate the large Willow prospect.

“We want to get more confidence around the geology and reservoir characteristics of the field, so that’s one of the reasons we pushed back our startup date to around 2025-2026 now for the Willow development,” Jepsen said.

ConocoPhillips announced the Willow discovery in early 2017. The company estimates it could produce 130,000 barrels per day at its peak.

Other company plans call for shooting three-dimensional seismic data around the Putu prospect near the village of Nuiqsut. The work will require about 165 miles (265 kilometres) of ice roads, Jepsen said.

“Hopefully the weather will co-operate and we’ll be able to accomplish all this,” he said.

ConocoPhillips in June announced purchase of the Nuna project from Dallas-based independent Caelus Energy. Caelus sanctioned Nuna in March 2105 and indicated that it had authorized $480 million of expenditures on the project to that point. Caelus estimated up to 20,000 barrels per day from the project.

Jepsen said Nuna will be part of the Kuparuk River Unit and its oil will be processed through Kuparuk facilities, lowering development cost. Drilling will be done from the Nuna pad and a Kuparuk pad to minimize new infrastructure costs.

The company expects 400 labourers over one winter construction season will be able to prep the project for first production in 2022.