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BP brass grilled over Prudhoe Bay spill Add to ...

BP PLC executives pledged to regain the trust of Americans during intense grilling yesterday by members of Congress eager to know how persistent pipeline corrosion woes hobbled the country's largest oil field in Prudhoe Bay, Alaska.

"We are firmly committed to rebuilding public confidence in BP America," Robert Malone, the company's top U.S. executive, said as he began nearly four hours of often intense questioning by a Congressional subcommittee.

Mr. Malone vowed BP would have its entire production from Prudhoe Bay back on stream as early as next month. He also said the company has hired a former U.S. federal judge to be its ombudsman, named an external advisory board and assigned an internal team to look at safety, ethics and environmental issues.

Critics have complained that BP willfully ignored employee concerns about pipeline safety and other environmental issues for years, while promoting itself as the greenest of the major oil companies.

In March, one of its feeder pipelines burst, causing the worst oil pipeline spill in Alaska's history.

Mr. Malone and other top U.S. executives offered apologies, but no full explanation for an embarrassing series of lapses that led to this summer's shutdown of a field that feeds 8 per cent of U.S. oil needs.

"These spills occurred on my watch," acknowledged Steve Marshall, president of BP Exploration Alaska Inc. and head of the company's operations in Alaska since 2001.

"I commit my team will do everything possible, going forward."

But as the hearing began, the former head of BP's pipeline-corrosion monitoring in Alaska refused to testify under oath. Richard Woollam invoked the Fifth Amendment of the U.S. Constitution in refusing to answer all questions from a House subcommittee. "Based upon the advice of counsel, I respectfully will not answer questions," he told the subcommittee. Mr. Woollam is now on paid leave from the company.

The British-based company is facing a swirl of criminal and civil probes over the massive oil spill in March and a partial shutdown of its operations five months later. Last week, FBI agents raided the offices of several top Alaska state politicians, seeking evidence of financial ties to a major oil field services company that worked for BP in Prudhoe Bay. And yesterday, BP officials said a key section of its broken pipeline has been subpoenaed by the Justice Department as part of its criminal probe into allegations the company may have violated U.S. environmental laws.

The promises, the explanations and Mr. Woollam's decision to plead the 5th didn't sit well with several members of the oversight and investigations subcommittee of the House of Representatives' energy and commerce committee.

"If a company -- one of the world's most successful oil companies -- can't do the basic maintenance needed to keep Prudhoe Bay's oil field operating safely and without interruption, maybe it shouldn't be operating the pipeline," warned committee chairman Joe Barton, a Texas Republican and long-time ally of the oil and gas industry.

Democrat Diana Degette of Colorado mocked BP's famed ad slogan -- beyond petroleum.

"I applaud BP for trying to move beyond petroleum, but maybe it should start by sticking to the basics and begin to focus on rudimentary pipe maintenance."

Until last month's shutdown, Prudhoe Bay had been producing roughly 400,000 barrels per day, or 8 per cent of total U.S. output. Production is at roughly half that level now.

BP officials said early tests show that oil-eating bacteria may have contributed to the Alaska pipeline corrosion. Excrement from the bacteria inside the pipes produces an acid that eats through carbon steel.

Mr. Marshall acknowledged that the corrosion problem could have been mitigated by more consistent inspection and flushing -- or "pigging" -- of sludge that builds up on the inner walls of oil pipelines, providing shelter for the bacteria.

"Clearly, in retrospect, pigging would have been a positive step we could have taken," said Mr. Marshall, who repeatedly pointed out that he was not a pipeline or corrosion expert.

BP's spending on maintenance at Prudhoe Bay would rise to $195-million (U.S.) in 2007, a fourfold increase from 2004, he said.

Another $150-million will go toward replacing a 25-kilometre stretch of corroded pipeline.

Follow on Twitter: @barriemckenna

 

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