ConocoPhillips to Pay $540,000 for Oil Spill

ConocoPhillips (COP) will pay $540,000 to Washington state for a 1,000-gallon oil spill that marred 21 miles of Puget Sound shorelines in 2004, state officials announced Friday.

The state Department of Ecology said the Houston-based company agreed to pay the entire fine by the end of next week.

The fine is the largest the state agency has ever issued for a spill in marine waters, and the maximum allowed under state law.

Still under negotiation is a separate state, federal and tribal assessment of damage from the spill. Hundreds of thousands of dollars are being sought to compensate the state for the spill's effects on environmental resources.

Polly Zehm, Ecology's deputy director, said ConocoPhillip's agreement to pay the civil penalty was a welcome step.

"We are disappointed, however, that we haven't heard to date the company standing up and overtly saying 'yes, we are responsible, we are sorry, we made a mistake,'" she said at a news conference on the two-year anniversary of the spill. "They have not yet made that gesture of saying they are responsible."

ConocoPhillips officials did not return several phone calls seeking comment.

The Oct. 13, 2004, spill — never reported by the company — was first reported by a tugboat operator in Dalco Passage before dawn the next morning. The sheen spread as far south as the Tacoma Narrows and as far north as Eagle Harbor on Bainbridge Island. Much of the residue was at the south ends of Vashon and Maury islands.

Investigators determined the oil matched Alaska crude that the tanker "Polar Texas" had delivered to a refinery at Tacoma. The tanker — owned by Long Beach, Calif.-based Polar Tankers, Inc., a subsidiary of ConocoPhillips Co. — has since been decommissioned.

An investigation by the state and Coast Guard determined that the oil likely flowed out when the aging ship took on ballast water — filling empty cargo tanks with water to maintain stability. If not done correctly, residual oil in the on-board tanks or pipelines can escape when water is drawn in.

"It could have been human error, it could have been mechanical, we'll never know for sure," Zehm said.

Cleanup costs exceeded $2.2 million in federal funds, including $483,000 spent by state agencies that were later reimbursed by a federal oil-spill contingency fund. State officials said the federal government is seeking reimbursement from the company for the total amount.

Response to the spill included more than 280 people, 10 oil-skimming vessels and three helicopters. Shoreline cleanup recovered about 50 tons of oily debris; skimming operations removed 6,842 gallons of oily water.

Federal lawyers announced last month there would be no criminal charges filed and that officials with ConocoPhillips were negotiating a civil penalty. State officials said no deal was made with the company to avoid charges by paying the fine.