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State sues BP over cleanup costs of leaky storage tanks

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The state of Minnesota filed a $25 million suit against oil giant British Petroleum in Ramsey County District Court on Monday.

The Associated Press reports the suit accuses BP of double dipping, claiming it took state money even after it had already accepted insurance payments to clean up contamination from underground storage tanks. The state's Petroleum Tank Release Cleanup Fund, known as the Petrofund, assists service station operators in paying costs associated with leaking tanks. The Star Tribune adds that the state's suit also accuses BP of misrepresentation, fraud and unjust enrichment.

BP’s retail network includes former Standard, Amoco and Arco stations across the state.

Minnesota Commerce Commissioner Mike Rothman says BP took more than $25 million from the fund between 1988 and 2012 for decontamination work at 1,407 of its gas stations. Before seeking state funds in each case, Petrofund applicants must disclose whether they have insurance, and whether it covers environmental damages. Rothman says BP denied having insurance to pay for cleanup but that the company had received hundreds of millions of dollars worth of insurance claims to clean up Minnesota sites.

"They lied on their applications,” said Rothman.

BP will defend itself against the allegations.

“BP acted at all times in good faith, and believes its dealings with the Minnesota state underground storage tank fund have been proper,” spokesman Jason Ryan said in an e-mail to the newspaper.

MPR News reports that last year, the state settled similar allegations of double dipping with oil companies Chevron, ExxonMobil, and ConocoPhillips. The BP case is the largest the state has brought against an oil company for allegedly double dipping. The Petrofund was created by the Legislature in 1987, and is supported by fees on petroleum products.

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