- The Washington Times - Thursday, September 7, 2006

ASSOCIATED PRESS

The former head of pipeline-corrosion monitoring for BP in Alaska refused to testify under oath today as outraged lawmakers questioned company officials over the causes of a massive oil spill earlier this year.

Richard C. Woollam invoked the Fifth Amendment in refusing to answer all questions from a House subcommittee. “Based upon the advice of counsel, I respectfully will not answer questions,” he said.

Other BP executives apologized and pledged to fix operational lapses on the North Slope that led to the region’s biggest-ever oil spill in March and the partial shutdown last month of the country’s largest oil field.

Lawmakers said BP’s mistakes in Alaska — as well as its responsibility for a deadly refinery fire in the spring — were particularly unacceptable given the industry’s record profits and the relatively inexpensive measures that might have prevented the oil spill.

With Congress aiming to wrap up its current session by the end of the month, today’s hearing was not expected to result in any specific legislative action. It did, however, offer lawmakers an opportunity to talk tough to Big Oil at a time of soaring prices and ahead of November elections.

“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,” said Rep. Joe L. Barton, Texas Republican.

Rep. Diana DeGette, Colorado Democrat, said she was especially disappointed in BP because it professes in advertising to pride itself on protecting the environment. “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,” she said.

Rep. Bart Stupak, Michigan Democrat, said the spill-related shutdown raises questions about why redundancies weren’t built into the pipeline system that carries Prudhoe Bay oil to market so the shutdown wouldn’t have been necessary.

“It is not Monday morning quarterbacking to suggest BP should have had a plan,” Mr. Stupak said.

Robert A. Malone, head of BP PLC’s U.S. operations, conceded that the company’s reputation has suffered, and he vowed to manage Prudhoe Bay in “a safe, efficient and environmentally sensitive way.”

In March, more than 200,000 gallons of oil leaked from a 34-inch pipeline that crosses the Alaskan tundra. Follow-up inspections mandated by federal investigators led to the discovery of another, much smaller leak, as well as “significant” corrosion, according to BP, which briefly shut down the entire Prudhoe Bay field Aug. 6.

“We have fallen short of the high standards we hold for ourselves and the expectations that others have for us,” said Mr. Malone, who has been the chairman and president of BP America since July.

Shortly before the hearing, BP announced that the company has hired three outside corrosion experts to independently review the incident and make recommendations for improving BP’s corrosion-prevention policies.

In an effort to address criticism that the company for years has ignored employee concerns about pipeline safety and other environmental issues, BP on Tuesday asked a former federal judge to serve as its ombudsman and hear complaints from workers in Alaska and elsewhere about the company’s operations.

“The problem has not been in workers raising concerns — sometimes it’s been our responsiveness,” Mr. Malone testified.

Prudhoe Bay isn’t BP’s only problem.

The London company faces victims’ lawsuits from a deadly explosion last year at its Texas City, Texas, refinery. And in June, federal investigators said BP energy traders had cornered the U.S. propane market in winter 2004 and illegally manipulated prices. Investigators also are reported to be looking into whether BP manipulated crude-oil and gasoline markets.

Today’s hearing by the House Energy and Commerce oversight and investigations subcommittee was the first of several that will focus on BP in coming weeks.

Until last month’s partial shutdown, Prudhoe Bay had been producing roughly 400,000 barrels per day, or 8 percent of total U.S. output. BP is currently pumping 220,000 barrels a day and has given no timetable for when it expects to be back to normal levels.

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

Steve Marshall, president of BP Exploration Alaska Inc., acknowledged that the corrosion problem could have been mitigated by more consistent inspection and removal — 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,” he said.

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