BP Resolves Series of Lawsuits

Days before the anticipated signing of the contract between the campus and energy giant BP, the company and its subsidiaries resolved a number of legal cases yesterday totaling $373 million.

The company, which signed a deal with UC Berkeley in February to build the Energy Biosciences Institute, will settle in cases over alleged price-fixing on the propane market in 2004, an explosion at a Texas oil refinery in 2005 and for crude oil leaks in Alaska.

According to a case filed by the U.S. Commodity Futures Trading Commission, BP unlawfully manipulated the February 2004 price of physical propane and attempted to do the same in April 2003 by cornering the market.

The company will pay a criminal penalty of $100 million, restitution of approximately $53 million, $25 million to the U.S. Postal Inspection Consumer Fraud Fund and a civil penalty of $125 million to the trading commission.

A 20-count indictment charging four former employees of BP America, Inc. for the incident was also issued yesterday.

The company will also face

$50 million in criminal fines, as agreed in a guilty plea to a one-count felony violation of the Clean Air Act from a 2005 explosion at a BP refinery in Texas that killed 15 and injured 180.

Additionally, the company will pay $12 million in criminal fines, $4 million in payments to the National Fish and Wildlife Foundation and $4 million in criminal restitution to the state of Alaska as part of a guilty plea for pipeline leaks of crude oil in the state.

The company will pay a $7 million civil penalty and undergo a one-year compliance monitoring plan for violations stemming from management of customers’ capacity rights on interstate natural gas pipelines and storage facilities.

Campus officials said the settlements are separate from the deal with BP.

“The contract is about biofuels­—it’s looking toward the future and we’re not focusing on anything outside that area,” said campus spokesperson Robert Sanders, adding that, while a date has not been set, he estimates the contract will be signed in early November.

Members of the Energy Biosciences Institute Executive Committee said that, while the cases have not been brought into the committee’s discussion, the legal team has considered the settlements.

“The action took lives, so it’s certainly an issue that’s of concern,” said Dan Kammen, professor in the Energy and Resources Group and a committee member. “Any time you’re dealing with a company that’s had issues ... it comes up in discussion.”

Some students said the BP deal should not be encouraged.

“I think it’s just a classic case of the way businesses work,” said Nathan Murthy, a member of student group Stop BP-Berkeley. “If it saves them money, even in light of a disaster situation, ... (they think) let’s just ignore the cost.

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