September 13, 2006
Wednesday

WASHINGTON -- BP's failure to maintain and test key North Slope pipelines has shattered its claim of a "gold standard" of environmental stewardship and has jeopardized efforts to open sensitive areas to drilling in Alaska and elsewhere, several pro-development Republican senators said Tuesday.

Republicans and Democrats alike took turns pounding on BP officials at a Senate Energy and Natural Resources Committee hearing. The panel was called to investigate two pipeline leaks this year from corroded transit lines that span the Prudhoe Bay oilfield.

Among the senators to question BP officials on Tuesday were top congressional advocates and opponents of opening the Arctic National Wildlife Refuge to drilling, a two-decade battle that came closest to passage last year. The last two votes taken on Senate budget bills authorizing drilling passed 51-49. But New Mexico Sen. Pete Domenici, the committee's Republican chairman, said BP's conduct might have cost advocates their slight edge.

"ANWR might go backwards with this kind of event," Domenici said.

After last week's explosive hearings before an investigative panel of the House Energy and Commerce Committee - in which BP's former top corrosion official in Alaska claimed his Fifth Amendment rights against self-incrimination and refused to testify - there seemed to be little new factual information for the senators to uncover in their two-hour hearing. Instead, they referred to the discoveries by House of Representatives investigators for fodder to criticize BP and analyze the likely political fallout.

The nation's top pipeline official and a witness at both hearings, Thomas Barrett of the Pipeline and Hazardous Materials Safety Administration, said BP failed to follow normal industry practices by neglecting to run maintenance and electronic "pigs" through 16 miles of unregulated, low-pressure transit lines. The maintenance pigs would have discovered isolated spots of decayed pipe before they became dangerous, he said.

Instead, BP relied on ultrasonic spots tests, which are effective only in the immediate area of the instrument, Barrett said. And BP corrosion workers who had concerns about the safety and the effectiveness of their program felt they'd be fired if they complained, according to several internal BP investigations.

Corrosion was blamed for a spill of at least 200,000 gallons in March and a smaller spill in August.

When BP finally pigged the line in August, it discovered so many troubling locations that it decided to shut down the entire Prudhoe operation, causing a brief $2-a-barrel spike in the price of oil. BP since decided to close only the eastern half, roughly cutting Prudhoe production by 200,000 barrels. While it plans to replace the entire 16 miles of transit pipeline eventually, BP said it hopes to restore eastern production by the end of next month.

BP officials repeatedly apologized for the spill and vowed to do better, but several senators said that wasn't enough.

After Alaska's tiny but powerful congressional delegation, Domenici has been one of the staunchest supporters of opening the coastal plain of the Arctic refuge to development.

"We've always been told that BP's operations on the North Slope of Alaska are the cleanest and most environmentally friendly in the world," said Domenici, who has traveled there. "What I'm hearing here today is very troubling."

Sen. Lisa Murkowski, R-Alaska, spoke of the betrayal she felt after years of trying to sell refuge drilling as completely safe.

"This is a painful hearing for me as an Alaskan, to be talking about corrosion that has allowed for a spill on the North Slope," she said. "We have said the operations on Alaska's North Slope are the gold standard. That's what we believed; that's what we want to continue to believe. But that faith has been shattered by what we're seeing up north now."

Sen. Dianne Feinstein, D-Calif., after sharply questioning BP America President Bob Malone about evidence that BP traders attempted to manipulate the West Coast propane market, turned to Murkowski and said, "If it were my state, I would not be as gracious as Senator Murkowski is today."

Taken aback by the remark, Murkowski took a second round of floor time to suggest that BP might be too optimistic in its promise to do better over the next 50 years in Alaska - it may not be allowed another half-century there, she said.

"If BP cannot bring the standard up, I don't know that we want a 50-year vision," she said. "That's a difficult statement for me to make."

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