May 02, 2007
Wednesday

ANCHORAGE, Alaska -- Congressional leaders say they've obtained e-mails and other documents suggesting a "severe cost-cutting atmosphere" at BP that might have led to pipeline corrosion and leaks last year in the giant Prudhoe Bay oil field.

The documents show that BP considered reducing the use of corrosion-inhibiting chemicals in pipelines to save money, according to a letter two congressmen sent to a BP executive. The company also might have skimped on corrosion monitoring techniques such as running pigs - devices that slide through pipes looking for trouble spots - and digging up road crossings to visually inspect pipes, the letter says.

The letter sets up a Thursday hearing in Washington, D.C., on last August's partial shutdown of Prudhoe, the nation's top-producing oil field, due to pipeline leaks.

The shutdown rattled world oil markets, and a major spill from a corroded pipe months earlier remains under scrutiny by federal criminal investigators. The 201,000-gallon release was the largest oil spill ever on the North Slope.

U.S. Rep. John Dingell, D-Mich., who chairs the House Energy and Commerce Committee, and the chair of the oversight and investigations subcommittee, Rep. Bart Stupak, D-Mich., sent the letter to BP America president Bob Malone.

The congressmen based the letter on documents they say BP recently turned over to the subcommittee.

"We have no direct comment as to the content of the letter, except to say we're cooperating with the subcommittee and will provide information," BP spokesman Ronnie Chappell said.

The letter asks Malone to answer questions such as, "At any time from 2000 to 2005, did BP managers order corrosion inhibitor injection to be turned off, specifically to save money or stay within budget constraints?"

The letter cites an April 15, 2004, e-mail to two people, including BP's former North Slope corrosion manager Richard Woollam, referring to a proposal to cancel corrosion inhibitor at "GC's," an apparent reference to gathering centers, key oil-field plants that separate oil from water and natural gas.

Woollam appeared before the Energy and Commerce Committee last September but refused to answer questions, invoking his Fifth Amendment right against self-incrimination.

One theory of what caused last year's problems is that anticorrosion chemicals put into key oil pipelines running out of the gathering centers were either inadequate or ineffective in stopping corrosion that ate numerous holes or near-holes through the steel pipes.

BP executives have apologized for the leaks and said they were surprised by the corrosion outbreak in oil pipes not normally susceptible to such damage. The executives also have admitted to inadequately managing corrosion in the major Prudhoe pipes, known as transit lines, which are being replaced.

The congressmen ask Malone to be ready to discuss the impact of budget cutting on BP's corrosion control unit and the morale of workers.

BP, meanwhile, ran a large newspaper ad Sunday titled "A letter to Alaskans about the future," in which BP Alaska president Doug Suttles says BP is employing hundreds of workers and spending hundreds of millions of dollars to replace pipelines and refurbish Prudhoe Bay equipment.

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