ConocoPhillips will pay a $540,000 fine to the state, stemming from a 2004 oil spill into Puget Sound between Tacoma and Vashon Island that was linked to a company oil tanker.

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Two years after an oil slick hit 21 miles of Puget Sound beaches, ConocoPhillips has agreed to pay a $540,000 fine for the spill linked to its tanker, the Polar Texas.

The fine, issued by the state Department of Ecology, is the largest ever by the state for an oil spill in salt water, and the maximum allowed under state law.

Environmentalists and oil-spill watchdogs praised Ecology for pursuing the toughest penalty it could. But some suggested the state Legislature needs to consider allowing bigger fines.

“It seems like half a million, while it might be a lot to most of us, is not a lot for a major oil company,” said Kathy Fletcher, executive director of People for Puget Sound.

It represents only about one-ten-thousandth of ConocoPhillips’ nearly $5.2 billion in profit in the quarter ended June 30 — the equivalent of a quarterly $2 fine for someone earning $80,000 a year.

ConocoPhillips could wind up paying more for the spill, which occurred in Dalco Passage, between Tacoma and Vashon Island.

State, federal and tribal officials are negotiating with the company over a price tag for environmental damage from the more than 1,000 gallons of oil. State officials are still tallying that damage, but the bill will likely be hundreds of thousands of dollars, not millions, said Laura Watson of the state Attorney General’s Office.

The Justice Department is also negotiating with the company to pay government cleanup costs that totaled $2.2 million, as well as fines. Federal prosecutors recently decided not to pursue criminal charges in the case.

The state’s fine was for negligence; failing to report or clean up the spill; and failing to follow the company’s oil-spill response plan.

“We welcome this step by ConocoPhillips and hope that after two long years, ConocoPhillips is stepping up, that it is responsible,” said Polly Zehm, deputy director at Ecology.

But she expressed frustration that, while agreeing to pay the fine, the company has yet to publicly say that its ship caused the spill.

“We are disappointed that to this point we haven’t heard the company standing up and saying, ‘We are responsible, we are sorry,’ ” she said.

A ConocoPhillips spokesman declined to say if the company was accepting blame for the spill. Its subsidiary, Polar Tankers, owned the Polar Texas.

“Polar Tankers is committed to having proper operational and environmental practices throughout the fleet,” said ConocoPhillips spokesman Phil Blackburn, reading from a statement. “The settlement with the Washington state Department of Ecology reflects our commitment to good corporate stewardship.”

State officials on Friday offered their first detailed account of what they think went wrong the evening of Oct. 13, 2004.

They suspect the spill happened when the Polar Texas took in ballast water to add weight, making it more stable.

In older ships like the Polar Texas, much of the ballast water is stored in tanks also used to carry oil. The ballast water is sucked into the ship through the same pipes used to pump out oil, said Norm Davis, supervisor of the Puget Sound field office for the Ecology Department’s spill-prevention program.

It’s possible to let oil flow out of a pipe while trying to suck up ballast water, if valves aren’t opened in the correct order or if a pump isn’t working properly, he said. The crew on the Polar Texas denied that happened, Davis said. But state investigators think otherwise.

“We think that it did backflow through the system, and whether they did know it or didn’t know it, they made the mistake,” he said.

State investigators found nothing suggesting someone on the ship knew of the spill but didn’t report it, Zehm said. The spill’s impact continues to be felt in state government, which is revamping its spill protections amid criticism over the response time.

The spill is now thought to have happened as early as 6 p.m. Oct. 13, Ecology officials said. A tugboat operator alerted the state to a possible oil spill shortly after 1 a.m. on the 14th. But investigators didn’t go out until daylight, and then the response was stalled by fog.

An advisory council created by the Legislature after the spill is recommending the state increase its spending on oil-spill protections by as much as $9 million a year.

Warren Cornwall: 206-464-2311 or