Former Alaskan Refinery Owners Ordered to Pay $29.4M

The former owner of an Alaska oil refinery has been ordered by state court to pay $29.4 million for releasing toxic solvents into the groundwater and polluting water wells nearby.

Superior Court Judge Pro Tem Warren Matthew ordered Williams Alaska Petroleum, former owners of a refinery in North Pole, Alaska, to pay future response costs and reimburse current refinery owner Flint Hills Resources to provide clean water to residents.

“Williams knew that the then-unregulated chemical sulfolane, a solvent, was present in refinery property groundwater, but it did not know that the sulfolane had migrated off the refinery property via underground water flow,” court papers state.

The plume leaking into local groundwater was determined to be approximately 1,300 feet wide. Refiners use sulfolane to strip out parts of crude oil used to make gasoline.

State environmental regulators state that a very large but unknown amount of petroleum products leaked from above ground storage tanks in the late 1970s and early 1980s.

The state informed Flint Hills shortly after the refinery's purchase in 2004 that sulfolane would be regulated in future and that it was being found in local groundwater. Perimeter wells drilled in 2008 revealed that sulfolane in ground water was migrating beyond its property.

Beginning in 2010 landowners filed suit against Williams and Flint Hills alleging damages from the contamination. That same year Flint Hill filed a cross-claim against Williams for expenses incurred in remediation efforts.

In 2016, the state Supreme Court overturned previous rulings that Flint Hill's contractual indemnity clause claim and its statutory claim for off-site damage against Williams were barred under the statute of limitations. However, Flint Hill's indemnity claim was subject to the damage cap specified in the original contract.