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Documents Show BP Ignored Pipeline Woes for Years

Documents Show BP Ignored Pipeline Woes for Years


By Jason Leopold
t r u t h o u t | Report
From: http://www.truthout.org/docs_2006/081106J.shtml

Friday 11 August 2006

Hundreds of pages of documents highlighting BP's nearly decade-long neglect of its Prudhoe Bay pipelines, its internal safety regulations, and the company's alleged cover-up of past oil spills that resulted from severely corroded pipelines are archived on a little known web site maintained by a former oil industry analyst who also acts as a spokesman for BP whistleblowers.

The documents showcase the genesis of a corporate scandal that parallels the financial machinations that brought down Enron Corp.

The BP documents, which include emails, photographs, videos, and letters sent to BP executives and Democratic and Republican lawmakers, and even President Bush, as well as internal reports, all of which were early warnings about problems plaguing BP's Prudhoe Bay operations, were written by more than 100 company whistleblowers and date back as far as 1999.

The documents are extraordinary in that they provide a detailed picture of how BP seemingly ignored dozens of early warnings from employees that its drilling operations on Alaska's North Slope would be doomed if the company did not take immediate steps to upgrade its pipelines and other infrastructure.

Moreover, these records show how, over the course of five years, federal and state lawmakers and other officials routinely failed to follow up on the warnings and take direct action to ensure that BP did not jeopardize a critical part of the country's oil production and that it maintained the safety of its workforce.

Instead of heeding the early warnings from BP whistleblowers, the Bush administration and Republican lawmakers debated the merits of opening up the nearby Arctic National Wildlife Refuge to oil exploration, which BP would have led if legislation had passed through both houses of Congress.

The web site housing the smoking-gun emails, letters and reports, ANWRnews.com, was launched by Chuck Hamel, an activist and former oil broker and analyst based in Alexandria, Virginia. Hamel was contacted five years ago by a group of BP employees who were concerned that the company's massive cost-cutting measures at its Prudhoe Bay operations would have an adverse impact on safety and operations.

"We were concerned about BP's cost cutting-efforts undermining our ability to respond to emergencies, and reducing the reliability of critical safety systems," states a letter sent to Hamel signed by dozens of BP's Prudhoe Bay employees on April 13, 2001. "We were concerned about the lack of preventative maintenance on our equipment. We had suffered a major fire, which burned a well pad module to the ground, and nearly cost one of our operators his life."

Hamel, who is credited with exposing weak pollution laws at the Valdez tanker port in the 1980s and electrical and maintenance problems with the trans-Alaska oil pipeline, immediately took up the BP whistleblowers' cause and in mid-2001 wrote a letter to BP president Lord John Browne raising the issue of safety and maintenance problems at the Prudhoe Bay facilities.

"Courageous 'Concerned Individuals' contacted me for assistance in reaching you," Hamel's April 11, 2001, letter to Browne says. They have not succeeded in being heard in the past two years in London, Juneau or Washington. I am again a reluctant conduit. They hope that you will take whatever action appropriate to effect corrective action which would protect the environment, the facilities, and their safety."

Hamel sent a copy of the letter to President Bush. While Browne promised to look into the issues plaguing Prudhoe Bay, the situation there worsened, oil spills became routine, and pipelines continued to rupture.

Additional whistleblowers came forward to expose the flaws at BP's North Slope operations, in some cases warning company executives and lawmakers that an Exxon Valdez-type disaster was bound to happen if BP did not invest additional funds in upgrading its corroded pipelines and non-operational safety valves.

"The situation will continue to deteriorate for the workers' safety and the environment until one of two things happen: Either there will be a major environmental catastrophe at Prudhoe Bay, similar to the Exxon Valdez, or there will be a change in environmental and employee safety oversight in Alaska before that disaster occurs," according to a March 4, 2002, copy of BP employee William Burkett's testimony before a Senate Committee chaired by Sen. Joseph Lieberman (D-Conn.) and Sen. Bob Graham, (D-Fla.).

BP refused to budge, and on several occasions, Hamel alleges, company executives lied to Congress and Alaska state regulators about the condition of its Prudhoe Bay facilities and the amount of money the company was spending on maintenance and pipeline upgrades.

Indeed, earlier this year, Glen Plumlee, a senior financial analyst with Alyeska Pipeline Service Co., operator of the trans-Alaska pipeline system of which BP is a majority owner, filed a complaint with federal labor officials alleging that company executives retaliated against him because he cooperated with the Environmental Protection Agency's criminal investigation into the company.

Plumlee, 51, of Anchorage, told federal investigators he was pressured to boost estimates of how much Alyeska was spending to fight corrosion on the trans-Alaska oil pipeline. Severe corrosion in one of BP's transit pipelines at Prudhoe Bay, which connects directly to the trans-Alaska pipeline, is the reason the company shut down its North Slope operations this week.

Neither BP nor Alyeska spokespeople would comment on Plumlee's claims citing the ongoing investigation.

Plumlee claims that company executives pressured him in December 2005 to alter the amount of money BP-controlled Alyeska spent on pipeline corrosion - from $28 million to $46 million - for the previous year, which he refused to do.

Plumlee added that it wasn't the first time he had been asked to cook the books. "On September 19, 2005, an Alyeska executive asked him to pull together the numbers on corrosion spending for Steve Marshall, BP Exploration (Alaska) Inc.'s president," according to an April 5 report in the Fairbanks News-Miner.

Another high-level executive of BP-controlled Alyeska also tried to warn company executives about numerous safety and maintenance problems associated with the 800-mile trans-Alaska pipeline system that, if continued to go unanswered, would have a direct impact on BP's Prudhoe Bay operations.

Last August, Dan Hisey, the former chief operating officer of Alyeska, created a comprehensive list for Alyeska's top executives of the 101 current and potential problems plaguing the pipeline system, one of which was severe corrosion. A week after the list was circulated, Hisey's position was abolished. Click here to view file: http://truthout.org/pdf/BPCOO.pdf

Hamel also maintained voluminous documents dating back to 1998 related to Alyeska whistleblowers' concerns about the company's neglect of the trans-Alaska pipeline system at alaskagroupsix.org.

Over the past five years, with profits from drilling declining as the volume of oil extracted from the North Slope fell from 800,000 barrels per day to half that, BP began instituting cost-cutting measures. Hundreds of employees were laid off, and as a result, Hamel claims, safety and maintenance of pipelines and other infrastructure at Prudhoe Bay suffered.

In an interview with the New York Times published March 18, longtime BP employee Marc Kovac said he and his co-workers warned BP on numerous occasions that cost-cutting measures affecting routine maintenance and inspection would greatly increase the likelihood of accidents, pipeline ruptures and spills.

"For years we've been warning the company about cutting back on maintenance," Kovac told the New York Times. "We know that this could have been prevented."

At the time of the March interview with Kovac, BP was under intense fire for what amounted to one of the largest oil spills in the history oil development on Alaska's North Slope - the result of a severely corroded pipeline.

Alaskan state officials said that as much as 260,000 gallons of crude oil leaking out of a pipeline in an oil field jointly owned by Exxon Mobil, BP, and ConocoPhillips blanketed two acres of frozen tundra near Prudhoe Bay - just a short distance from where President Bush has proposed opening up ANWR to drilling.

The oil spill went undetected for about five days before a BP oilfield worker noticed the scent of hydrocarbons while driving through the area, which led him to believe a spill occurred at one of the company's facilities.

A division of the federal Department of Transportation overseeing pipeline safety quietly launched an investigation into BP's maintenance practices shortly after the spill occurred. That probe is still ongoing.

Three weeks ago, before severe corrosion was discovered in a transit pipeline, forcing the closure of BP's Prudhoe Bay operations Sunday, the company was forced to shut down 12 oil wells after whistleblowers contacted a reporter at the Financial Times to say 50 of the wells were leaking gas and hydrocarbon fluids - a serious environmental hazard as well and a risk to employees.

Hamel said the whistleblowers approached the FT reporter because BP executives had ignored their concerns.

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

Jason Leopold is former Los Angeles bureau chief for Dow Jones Newswire. He has written over 2,000 stories on the California energy crisis and received the Dow Jones Journalist of the Year Award in 2001 for his coverage on the issue as well as a Project Censored award in 2004. Leopold also reported extensively on Enron's downfall and was the first journalist to land an interview with former Enron president Jeffrey Skilling following Enron's bankruptcy filing in December 2001. Leopold has appeared on CNBC and National Public Radio as an expert on energy policy and has also been the keynote speaker at more than two dozen energy industry conferences around the country.


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