Hilcorp fined for its response to Cook Inlet and North Slope leaks

An oil platform at dusk
Cook Inlet oil platforms are visible from shore near Kenai, Alaska. (Rashah McChesney/Alaska’s Energy Desk)

Oil and gas company Hilcorp paid federal regulators $180,500 for taking too long to inspect and repair dozens of leaks in Cook Inlet and on the North Slope.

The Environmental Protection Agency said the oil and gas company took twice as long as it was allowed to monitor potential gas and chemical leaks from its Beaver Creek Unit facility near Nikiski. That’s among nearly 50 counts of violations outlined in a Feb. 7 docket from the EPA.

Bill Dunbar is a spokesperson for the EPA. He said the primary emission the agency is concerned about is methane, a potent greenhouse gas.

“Methane was really the predominant pollutant that we flagged,” Dunbar said.

He said the EPA requires timely reporting so that methane and other pollutants, known collectively as “fugitive emissions,” won’t escape into the atmosphere.

For example, Hilcorp is required to repair oilfield equipment within 30 days if it discovers that equipment is leaking fugitive emissions. But in 2019 and 2020, the EPA said Hilcorp was late making 18 different repairs or replacements in Prudhoe Bay — in some instances, more than 100 days after they were discovered.

“We believe, and the regulations were written to reflect this, that 30 days is plenty of time for a big outfit to be able to use much of their resources to fix the leak,” Dunbar said. “When the company takes longer than that, they’re going to get penalized. That’s what the law says.”

In addition, the EPA has requirements about how long a company can go before inspecting newly replaced or repaired machinery. The agency said Hilcorp failed to do many of those inspections on time, too.

The EPA also said in 2018, Hilcorp submitted reports that said an inspector was taking a look at two different sites at once — one unit on the North Slope and one near Kenai.

“It was noted by our experts that you can’t be in two places at the same time,” Dunbar said.

Liz Mering, advocacy director for Cook Inletkeeper, said she finds the flagged falsified reports troubling.

“Are there other inspection reports that are also falsified or wildly inaccurate? Are they being missed because it’s not as obvious as this issue? I think that’s a concern for everybody living in the area,” she said.

Hilcorp has a history of environmental violations in Cook Inlet, where it’s Southcentral’s primary natural gas producer.

The company was fined nearly $75,000 by a state of Alaska agency for violations late last year related to well testing in Cook Inlet. It was also ordered by a federal agency to replace a pipeline in Cook Inlet that leaked several times, most recently in 2021.

The Houston-based company was asked to pay $1.62 million in civil penalties by regulators in New Mexico for compliance failures there. Hilcorp later reached a settlement agreement with the state’s Oil Conservation Division and paid $932,000, according to the Santa Fe Reporter.

Mering said Inletkeeper is concerned about that history.

“And these small fines seem to have no impact on Hilcorp’s behaviors as far as fixing the circumstances that are causing these violations,” Mering said. “Which are set up for important environmental and human health safety standards.”

In a statement, Hilcorp spokesperson Luke Miller said the company has made efforts to improve its inspection reporting process and its air emissions monitoring.

This article was updated to reflect that Hilcorp reached a settlement with New Mexico’s Oil Conservation Division this winter.

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