Energy Firm Pleads Guilty to Oil Spill Charges

In a rare criminal prosecution concerning the environment, a Texas-based energy company that owns much of California’s pipelines pleaded guilty Tuesday to charges relating to a rupture that dumped 103,000 gallons of diesel fuel into a Bay Area marsh last year.

The company, Kinder Morgan Energy Partners, also announced that it had agreed in principle to settle similar misdemeanor charges in Los Angeles County over a five-gallon spill at its terminal in Los Angeles Harbor in May 2004. Both spills occurred at facilities owned by one of the company’s subsidiaries, Santa Fe Pacific Pipeline.

Atty. Gen. Bill Lockyer said the Bay Area plea agreement, which included $5 million in fines, was necessary because the company had not been effectively chastened by civil fines for previous spills.

“The company has sort of brushed off civil penalties in the past and thought they were just the cost of doing business,” Lockyer said.

In the plea bargain filed in Solano County Superior Court, the company pleaded guilty to two counts of failing to promptly report the spill to responsible state agencies, and two counts of discharging the fuel into Suisun Marsh, the state’s largest wetland and a haven for many shorebirds and waterfowl. All the counts were misdemeanors, but Lockyer said any future problems could result in felony charges that would make the company ineligible for many federal contracts.

“They needed to know that they’ve got to fix their system in California,” he said in a telephone interview.

The spill, from a 14-inch pipeline that carries diesel, jet fuel and gasoline from Bay Area refineries east to Sacramento, occurred April 27, 2004. The company did not notify regulators until 18 hours after learning of it. Lockyer said his office had found other instances in which the company’s subsidiaries delayed reporting spills or did not furnish all necessary information.

In a statement posted on the company’s website, Chairman Richard D. Kinder said, “While we continue to believe that KMP, its subsidiaries and our employees acted in good faith when these incidents occurred, and that no additional environmental impact was caused by the notification procedures we followed, we have determined that it is in the best interest of the company, our employees, our unitholders and the State of California to settle this issue and put it behind us.”

Inland oil spills have become one of the most pressing concerns for state regulators who once focused primarily on offshore spills. Last year, 241,997 gallons of oil were spilled on California land, while only 1,732 gallons were spilled in the water, according to the state Office of Spill Prevention and Response.

As part of the plea agreement, Kinder Morgan accepted a three-year probationary period during which it would be expected to strengthen its inspection and reporting methods. The company had pledged to make reports of previous leaks after civil prosecutions brought in 1996 and 2000, according to Solano County Dist. Atty. David Paulson.

Kinder Morgan said it installed a $95-million pipeline last year that replaced the one that ruptured in the marsh.

Kinder Morgan owns or operates more than 25,000 miles of pipelines and 135 terminals. It is valued at $26 billion.