Chevron, Utah Settle Over Using State Money for Spill Cleanups

Chevron Corp. and the state of Utah have settled a dispute involving fraudulent collection of money for cleaning up leaking petroleum tanks.

The $1.8-million settlement marks the first resolution of claims made by the state against big oil companies accused of double-dipping, or receiving money from a state fund for cleanup when private insurance should have picked up the costs, according to the Desert News.

Companies without that insurance are able to tap into the state's Petroleum Tank Fund. The fund was established in 1989 to help owners and operators of gas stations cover costs when a tank has spills or release. Members of the fund are assessed a surcharge on the petroleum products dispensed from their gas stations to help pay for the expense of cleanup if a leak happens, the news outlet reported. The state Division of Environmental Response and Remediation regulates the fund.

Utah's Petroleum Tank Fund requires gas station operators to pay the first $10,000 of the costs associated with cleanup. After that, the fund will pay up to $1 million or $2 million in costs, depending on when the leak happened. At the time a claim is submitted, environmental regulators say companies are required to check a box on the paperwork indicating there is no insurance that would pay for that type of cleanup, according to the newspaper.

In the agreement, Chevron denied the state's allegations and contended it was legally entitled to payments from the fund. However, the agreement states both Chevron and the state wanted to bring about an "amicable" resolution without having to resort to legal action, the Desert News added.

The settlement money will go into the Petroleum Storage Tank's cleanup fund. Convenience Store News

BP Amoco Double-dipped on Insurance

Utah is suing BP Amoco for allegedly double-dipping insurance reimbursements tied to cleanups of leaking underground tanks.

The civil suit was filed by the Utah Attorney General’s Office in 3rd District Court on behalf of the Division of Environmental Response and Remediation. It says the company illegally took $1.5 million from the state’s Petroleum Storage Tank Fund, a state insurance pool, to cover cleanup costs at BP Amoco service stations from 1995 to 2007, even though the company already had insurance.

"We have a responsibility to make sure the fund is used appropriately," said Brent Everett, director of the state’s environmental cleanup programs.

The state insurance pool allows oil companies to be reimbursed from the tank fund only when they lack private pollution liability coverage. But BP Amoco did not tell the state it already had coverage. The state is seeking reimbursement of the $1.5 million, in addition to interest and penalties. Salt Lake Tribune