BP America President Robert Malone has finally acknowledged on Wednesday that budget pressures made life difficult for company workers trying to safely operate BP’s pipelines in Alaska’s giant Prudhoe Bay. However, Malone has stopped short of conceding that cost cutting was to hold directly responsible for the company’s failure to notice the corrosion that caused two pipelines to leak, forcing the company to close down a segment of the nation’s largest oil field and sending crude prices soaring. US lawmakers vehemently condemned BP for withholding corrosion documents about its troubled Alaska oilfield and for not forcing the man who led its corrosion program to co-operate with government investigators.
The US Department of Transportation has revealed that a safety regulator is highly expected to fine BP for operating defective pipelines at its Prudhoe Bay field in Alaska. The announcement came as a House of Representatives committee investigating the area’s worst oil spill reported that it had unearthed a ‘mountain’ of evidence that cost-cutting was responsible for undermining the safety of the pipelines.
According to reports a penalty could be pronounced in coming months and would be for a ’small number of probable violations, which carry the maximum fine of $100,000 per day per violation, informed Stacy Gerard, acting assistant administrator of the transportation department’s pipeline and hazardous materials safety administration.
The House committee that carried out inquiry into the Alaska spills, which forced a partial shutdown of Prudhoe Bay oil production last summer, has divulged a half dozen e-mails and other documents that explain that anticorrosion programs repeatedly were targeted for cost-cutting, including on the lines that eventually failed. The corrosion caused a leakage and spill on a feeder line in March 2006 followed by another leak in August at a second line.
After the second occurrence, the firm shut down the damaged lines, resulting in Prudhoe Bay production being reduced by half. BP is now spending $250 million to replace 16 miles of questionable pipes.
Representative Bart Stupak, Democrat of Michigan, chairman of the Energy and Commerce investigations subcommittee went on to say, ‘BP field managers were being asked to choose between saving money and critical maintenance.’ An e-mail read that budgetary constraints would force the end of a program to inject corrosion inhibitor directly into the pipeline system.
An October 2001 e-mail called for preventing the function of a pipe corrosion inhibitor since there was not money for a full year’s supply of the chemical. The e-mail, calling for ending use of the inhibitor ‘as soon as possible’ said, ‘We are under huge budget pressure for the last quarter of the year and therefore we have to take some rather disagreeable measures’.
