Back in 1989, legislature was passed in the state of Utah which created the Petroleum Storage Tank Fund. The idea was that small gas station owners would pay into the fund each year, then in the event of a leaky storage tank the owners of the small gas station could request help from the fund to pay for repairs; a bit like insurance. And there is one of the provisos, only companies that do not already have insurance coverage for damaged storage tanks can take advantage of the fund.
Chevron (NYSE:CVX) has just recently paid Utah a total of $1.8 million in a settlement over the claims that the oil company had been using money from the Petroleum Storage Tank Fund when they already had insurance that would have covered them.
Chevron received the reimbursement from the fund for clean-up work that it had paid for after the leak from an underground storage tank, after it misrepresented the facts about the extent of its insurance coverage.
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Despite the settlement Chevron have always denied the allegations made against them, believing that they were legally entitled to the money. Company spokesman, Brent Tippen, said that "Chevron acted at all times in good faith and believes its dealings with the state's underground storage tank fund have been proper and without fault. It is advantageous for both sides, however, to bring this matter to a conclusion."
It is the first case of Utah actually reaching a settlement with a company accused of exploiting the fund. ConocoPhillips and BP Amoco are being charged with similar offences but have refused to negotiate any settlement, leaving Utah no choice but to sue the two companies.
BP is accused of using the fund for 12 years or so, and has taken around $1.5 million, whereas ConocoPhillips managed to swindle $25 million in false claims over the past 14 years.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More