Prosecutors are seeking to revoke the criminal probation imposed on BP in a 2007 settlement agreement, claiming the company violated probationary terms by continuing its pattern of sloppy management, ultimately resulting in another pipeline spill in 2009.
The hearing in Anchorage, which is expected to last several days, comes as BP continues to rebuild its image after taking the bulk of the blame for the largest U.S. offshore oil spill last year in the Gulf of Mexico.
In 2007, BP pleaded guilty to a Clean Water Act charge stemming from its 2006 spill of 212,000 gallons of crude oil from a corroded pipeline at Prudhoe Bay in Alaska, the nation's largest oil field.
The spill was the biggest on record at the North Slope oil fields. To settle the case, BP paid $20 million in fines and restitution and pledged to undertake a series of operational improvements over its three-year probation period.
But a December 2009 pipeline rupture at the BP-operated Lisburne field, next to Prudhoe Bay, showed that the criminal punishment imposed in 2007 was not harsh enough, prosecutors are set to argue, according to a pre-hearing brief, filed earlier this month.
That two-foot (0.6m) -long rupture resulted from high pressures that built up when BP allowed the contents of the pipeline to freeze, ignoring warnings evident for months and the recommendation of its own experts, prosecutors have alleged.
Several ice plugs, including one estimated to be 1,500 feet long, accumulated in the line, according to Alaska environmental regulators.
This rupture was the result of a predictable and preventable freezing of produced water within the pipeline that caused the pipe to over-pressurize and burst. Eerily similar to the 2006 spill, BP ignored alarms that warned of the pipe's eventual rupture and leak, government prosecutors said in a brief filed on November 14.
BP argues that, at least since its 2006 Prudhoe Bay woes, it has exercised reasonable care on the North Slope fields it operates, and that the Lisburne pipeline rupture was an unexpected and unprecedented event.
The Lisburne spill was an unfortunate incident, but it was not a crime, BP said in its pre-hearing brief, also filed November 14.
The Lisburne pipeline rupture poured 45,828 gallons of an oil-produced water mix onto the tundra.
Prosecutors and BP are at odds over the amount of damage and environmental threat posed by the spill.
Prosecutors argue that the spill of that material, which included about 13,500 gallons of crude oil, amounted to a new Clean Water Act violation because it fell on permafrost, which is classified as wetlands, holding groundwater that flows into rivers, lakes and the ocean.
BP argues that the oil-produced water mix did not reach any federally controlled waters, so there was no such legal violation.
The revocation-of-probation hearing -- essentially a miniature trial -- is expected to last for several days. Both sides plan to call expert witnesses. Among those testifying for the government will be a former BP environmental-compliance officer who is expected to speak about BP's operational shortcomings. BP witnesses will include a former program manager for the U.S. Army Corps of Engineers, the agency that oversees federal wetlands.
U.S. District Court Judge Ralph Beistline, who approved the 2007 criminal settlement, will preside over the hearing and decide whether BP violated its probation and whether sentencing terms should be reopened.
(Editing by Bill Rigby; editing by Sofina Mirza-Reid)