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BP Faces Fines Over Unreported Alaskan Oil Spills

BP Faces Huge Fines Related To Unreported Oil Spills in Alaska; Is ANWR Next?


By Jason Leopold

While the hacks working for mainstream news organizations were busy chasing the story about the Runaway Bride late last month, a real scandal was just beginning to unfold as Congress inched closer to approving a controversial measure to open up a couple thousand acres of the Artic National Wildlife Refuge to oil exploration.

It was then, unbeknownst to the federal lawmakers who debated the merits of drilling in ANWR, that the Alaska Department of Environmental Conservation started to lay the groundwork to pursue civil charges against UK oil and gas behemoth BP and the corporation's drilling contractor for failing to report massive oil spills at its Prudhoe Bay operation, just 60 miles west from the pristine wilderness area that would be ravaged by the very same company in its bid to drill for oil should ANWR truly be opened to further development.

BP has racked up some hefty fines over the years due to a number of mishaps at its Prudhoe Bay operations. In 2001, the Alaska Oil and Gas Conservation Commission found high failure rates on some Prudhoe wellhead safety valves. The company was put on federal criminal probation after one of its contractors dumped thousands of gallons of toxic material underground at BP's Endicott oil field in the 1990s. BP pleaded guilty to the charges in 2000 and paid a $6.5 million fine, and agreed to set up a nationwide environmental management program that has cost more than $20 million.

The latest charges against BP stem from claims made recently by BP whistleblowers who exposed their company's severe safety and maintenance problems that have caused at least a half-dozen oil spills at Prudhoe Bay-North America's biggest oil field-and other areas on Alaska's North Slope, which the whistleblowers say could boil over and spread to ANWR if the area is opened up to further oil and gas exploration.

Despite those dire warnings, neither Congress nor the Senate plans to investigate the whistleblowers claims or plan to hold hearings about drilling in ANWR, according to aides for Sen. Pete Domenici, R-N.M, chair of the Senate Energy and Natural Resources Committee. Even more troubling is the fact that the federal Environmental Protection Agency still refuses to investigate the whistleblowers claims of frequent oil spills and BP's alleged attempts to cover it up.

No one at the EPA returned calls for comment.

Chuck Hamel, a highly regarded activist who is credited with exposing dozens of oil spills and the subsequent cover-ups related to BP's shoddy operations at Prudhoe Bay, sent a letter to Domenici April 15 saying the senator was duped by oil executives and state officials during a recent visit to Alaska's North Slope.

"You obviously are unaware of the cheating by some producers and drilling companies," Hamel said in the letter to Domenici, an arch proponent of drilling in ANWR. "Your official Senate tour" of Alaska in March "was masked by the orchestrated 'dog and pony show' provided you at the new Alpine Field, away from the real world of the Slope's dangerously unregulated operations."

Alaska environmental officials are expected to meet with BP Alaska's top brass sometime this month to discuss either levying a hefty fine on BP or forcing the company to make changes to its internal regulations because BP and its drilling contractor Nabors Alaska Drilling failed to immediately report oil spills in July 2003 and December 2004.

BP operates the 24 year-old Prudhoe Bay oil field on behalf of ConocoPhillips and ExxonMobil and is responsible for maintaining the safety and maintenance of the drilling operations on the North Slope.

Hamel filed a formal complaint in January with the EPA, claiming he had pictures showing a gusher spewing a brown substance in July 2003 and December 2004. An investigation by Alaska's Department of Environmental Conservation determined that as much as 294 gallons of drilling mud, a substance that contains traces of crude oil, was spilled on two separate occasions when gas was sucked into wells, causing sprays of drilling muds and oil that shot up as high as 85 feet into the air.

Because both spills exceeded 55 gallons, BP and Nabors were obligated under a 2003 compliance agreement that BP signed with Alaska to immediately report the spills. But they didn't, said Leslie Pearson, the agency's spill prevention and emergency response manager.

BP spokesman Daren Beaudo said the spill wasn't that big of a deal.

"In this case, the drilling rig operators did not feel this type of event qualified for reporting," Beaudo told the Anchorage Daily News in March. Beaudo said BP's own investigation indicated that the spills did not cause any harm to the environment, aside from some specks on the snow.

President Bush has said that the oil and gas industry can open up ANWR without damaging the environment or displacing wildlife. But the native Gwich'in Nation, whose 7,000 members have lived in Alaska for more than 20,000 years, say President Bush is wrong.

"Existing oil development has displaced caribou, polluted the air and water and created havoc with the traditional lifestyles of the people," said Jonathon Solomon, chairman of the Gwich'in Steering Committee, in a May 7 interview with the Financial Times. "No one can tell us that opening the Arctic Refuge to development can be done in an environmentally sensitive way with a small footprint. It cannot be done."

*************

(C) 2005 Jason Leopold

Jason Leopold's explosive memoir, Off the Record, was days away from being printed when his publisher, Rowman & Littlefield, abruptly canceled the book after receiving a complaint from an attorney representing Steve Maviglio, the former press secretary to California Gov. Gray Davis, over the way he was portrayed in the publisher's press release about the book. Leopold has since signed with a new publisher who will publish his memoir in early 2006 under a new title: NEWS JUNKIE. Visit Leopold's website at http://www.jasonleopold.com .

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