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TheStreet Open House

Alaska Sues Over North Pole Chemical Spill

FAIRBANKS, Alaska -- The state of Alaska has sued current and former owners of a North Pole refinery, claiming both caused or failed to stop a chemical spill that has damaged soil and groundwater.

The lawsuit filed Thursday claims current owner Flint Hills Resources and former owner Williams Alaska should pay for cleaning up sulfolane in North Pole, the Fairbanks Daily News-Miner reported.

The two caused or permitted the release of sulfolane, a liquid used in refining oil, leaving groundwater unfit for human use, and neither company has made reasonable efforts to contain and clean up releases, the lawsuit said. The Department of Law in a statement Friday said the lawsuit's goal is to determine where responsibility rests for the cleanup.

"Resolution of this matter will help ensure that the contamination is properly cleaned up and advance the sale of the refinery to a new operator," the statement said.

Flint Hills last month announced plans to shut down refinery operations because of competitive disadvantages, including the high cost of energy and ongoing costs connected to contaminated soil.

Flint Hills has paid $25 million of its own money and $50 million in insurance money for response to the spill, including water deliveries to nearby property owners.

The Koch Industries-owned Flint Hills, however, said former owner Williams Alaska and the state, which owned land beneath the refinery, must also bear responsibility. Spokesman Jeff Cook repeated that statement in response to the lawsuit.

"We view this as a positive development," Cook said of the lawsuit. "We have said from the beginning that the contamination was caused when the refinery was owned and operated by Williams and the land under the refinery was owned by the state of Alaska. We consider Williams and the state of Alaska to be the responsible parties in this matter. We look forward to our day in court."

Court documents said an environmental consultant hired by Williams Alaska discovered sulfolane on refinery property in 2001. Flint Hills bought the refinery in April 2004.

In 2006, the environmental consultant delivered a report stating that sulfolane levels were increasing. Flint Hills took another two years to react, according to the lawsuit.

By 2008, sulfolane had migrated and affected the local water supply, according to the lawsuit.

Gov. Sean Parnell in the last week rejected an offer by Flint Hills to settle the matter. The company offered to pay for 10% of a piped water system.

The Department of Law said the parties could reach a settlement outside of court.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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