The usual crap behind BP's "surprise" problems with the pipeline

Wednesday, August 09, 2006 at 03:34 PM

Here's something that will really surprise WTW readers: (1) BP had every reason in the world to know that their damn pipeline was about to rust to pieces, (2) BP's cost cutting contributed to the problem, and (3) they didn't care because that pipeline wasn't subject to regulation.

Bloomberg news reports that BP was informed of the decrepit condition of the pipeline way back in February of 2004 (a full two and one-half years ago), when a survey was conducted to help the company plan its future activities (emphasis added):

BP Plc was alerted by employees and contractors in a February 2004 survey that the now shut Alaskan pipeline network probably wasn't being adequately examined, according to a company report.

``If we find pipe that we know is rotten, they have to replace it,'' said an unidentified employee in a report posted on BP's Web site. ``My concern, however, is that they are not taking a look at every piece of pipe that they need to be'' examining.

Prudhoe Bay, the largest oilfield in the U.S., is being closed after a pipeline that leaked four to five barrels of oil was shut down on Aug. 6, BP said two days ago. Crude climbed as high as $77.30 a barrel in New York as the London-based company said a full closure would curb supplies by 400,000 barrels of crude oil a day.

The Alaska unit used the survey, prepared by research company McDowell Group Inc., ``to help formulate plans for future activities,'' Toby Odone, a London-based spokesman for BP, said today by telephone.

BP, the world's third-largest oil company by market value, said today it has shut half of the field.

Cost cuts created ``anxiety in the workforce, and that impacts safety,'' a contractor and supplier said in the report. ``Contractors, suppliers and the conservation community were concerned about BP's purported drive to support the highest standards, yet push for reduced costs in its operations,'' the report said.
The company ``has been cutting corners'' since around 1999, said Charles Hamel, a former oil broker, who today lobbies government regulators on behalf of Alaskan oil industry workers. BP ``shareholders were not well served by'' the oil producer's cost reductions, he said Aug. 7 in an interview.

Having read that, I'm sure there's no shock value left in today's Houston Chronicle headline

BP line was not subject to oversight  Its location and low risk allowed company to use own inspections

The section of BP's Alaskan pipeline shut down due to corrosion and a leak was exempt from regulatory oversight because such pipelines are considered low risks for ruptures.

The 22-mile Prudhoe Bay production system operates under relatively low pressure and is in an unpopulated area away from major waterways, exempting it from oversight by the Department of Transportation's Office of Pipeline Safety.

That meant BP was allowed to follow its own inspection regimen, which the company now acknowledges wasn't adequate.

BP and others in the industry had not experienced leak problems due to corrosion on such lines in the past, so it felt the level of corrosion monitoring it did was sufficient, said BP spokesman Daren Beaudo.

Wanna know why they hadn't experienced corrosion leaks in the past?  Because the f'ing pipeline wasn't old enough to have gotten that corroded.  Did no one with any authority at BP understand that this would change as the pipes aged?  Did know one in the regulatory authority understand that age has this tendency to produce corrosion in metals?

You want to know why nuclear power is still not a good idea?  Read the above story again and imagine the very same people, principles, and incentives at work in a nuclear power plant.

Corporations will kill the God damned world if we don't start taking charge of them again, if we don't start treating them as the frauds waiting to happen that the founding fathers of this country considered them.