Montana Sues BP, Subsidiaries Over Cleanup Money

By Beacon Staff

HELENA – The state of Montana has sued BP and its subsidiaries alleging they sold gas stations in the 1980s to avoid responsibility for cleaning up underground fuel tank leaks and kept millions of dollars in insurance settlements in contamination cases while a state fund paid for the cleanup work.

“Over the course of a number of years, defendants engaged in a number of carefully contrived, deceptive and fraudulent schemes to … avoid responsibility for clean-up and mediation of the environmental pollution caused by their leaking PSTS (petroleum storage tank systems) at their formerly and current owned, operated, leased and supplied facilities,” the state alleges in a lawsuit filed Tuesday in District Court in Helena.

The state accuses BP of telling buyers the facilities had no history of fuel leaks and financing the purchases through a subsidiary, so environmental assessments wouldn’t take place.

When contamination was found, the new owners applied to the state for cleanup money funded by a 0.75-cent-per-gallon fuel tax.

Terry Wadsworth, executive director of the state petroleum compensation board, said the state has been investigating the case for a few years.

“The lawsuit has to do with the fact that we think there’s been some double dipping by some large oil companies, and BP happens to be one of them,” Wadsworth told the Independent Record.

Large oil companies realized their gas stations were contaminated with the passage of environmental laws, so they sold the properties to Montana fuel station managers, who ran them under the same name, he said.

The managers eventually applied to the compensation board to clean up the fuel spills. The lawsuit alleges BP and its subsidiaries settled contamination cases with their insurance providers and kept the money. Wadsworth said he believes millions of dollars are involved.

“When you come to the petro fund, we ask if somebody else is responsible and they said nobody else is, so the petro fund does the cleanup as required by law,” Wadsworth said. “Then we found, lo and behold, that somebody was responsible for it and they settled with the insurance company.”

The petroleum tank compensation fund was created in 1989 to address the cleanup of releases from leaking fuel tanks at service stations and convenience stores. It receives a majority of its revenues from a tax on gasoline, heating oils and other fuels. The fund has paid out $77.5 million in cleanup costs.

The state filed nine claims against BP alleging unjust enrichment, fraud and deceit. The state is seeking reimbursement for cleanup costs along with punitive and exemplary damages.

The lawsuit also names Standard Oil, Amoco and Atlantic Richfield, all companies that either merged with or became subsidiaries of BP.

The state did not want to sue BP but the company “didn’t appear amenable to discussions,” Wadsworth said.

BP America officials did not return an e-mail from The Associated Press seeking comment Thursday morning.

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