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Analysis: Congress probes BP corrosion

By DONNA BORAK, UPI Energy Correspondent

WASHINGTON, Sept. 6 (UPI) -- U.S. lawmakers are launching an investigation into the August shutdown of BP's Prudhoe Bay operations after corrosion was detected in the 29-year-old pipeline.

Half of the oil field's production operations were shutdown Aug. 7 in its Eastern Operating Area after a leak was detected. Downgraded operations closed 16 miles of oil transit lines and halted 400,000 barrels of oil production a day in the Alaskan oil field, reducing 8 percent of U.S. domestic production.

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Energy committees in both the U.S. Senate and House will hold hearings starting Thursday to examine BP's operational abilities to detect corrosion and maintain U.S. industrial standards on its oil transit lines.

U.S. federal regulators have issued repeated warnings to BP calling on the oil company to rectify its smart pigging system used to detect leaks and corrosion since the March 2 oil spill on the Alaskan North Slope, which spilled 250,000 barrels of oil.

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The U.S. Department of Transportation issued a corrective action order to BP on March 15 to "conduct cleaning and smart pigging operations on the lines in order to prevent and detect further corrosion."

But according to documents obtained through the U.S. Pipeline and Hazardous Materials Safety Administration, a branch of the Transportation Department, BP failed to meet its June 15 deadline to hold inspections.

The oil company said in its correspondence to PHMSA that "factors outside of its control" led to its failure to hold corrosion inspections via its smart pigging system. BP completed inspections on July 30 on the Eastern Operating Area. BP explained that Alyeska Pipeline Company refused to "allow pigging due to concerns of receiving high volumes of solids."

Alyeska, which BP co-owns along with four other companies, operates the Trans Alaska oil pipeline and the Valdez tanker port.

"We have insisted that BP clean its line without undue delay, and any plan for doing so must provide for safe handling of solids that will be removed in the process," said Thomas J. Barrett, administrator of the Pipeline and Hazardous Materials Safety Administration in a July 26 letter to Rep. John D. Dingell, D-Mich., ranking member of the House Energy and Commerce committee.

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The oil company contends that lines had to be cleared first using a scraper pig to remove the buildup of sludge and other deposits collected over the last decade. BP shortly thereafter downgraded its estimates of sludge.

"I was disappointed by the lack of progress BP had made in addressing risks to TAPS (Trans Alaskan Pipeline System) operations and by BP's failure to plan for and more promptly invest in bypass solutions," Barrett said in his July 26 letter to Dingell.

BP says it spent nearly $72 million on its corrosion program this year, not including repairs made on equipment. The program includes treatments to control corrosions.

In the days following the gradual shutdown of the Eastern Operating Area, BP acknowledged that there had been "a gap" in their corrosion program.

"Our program was insufficient and will be rectified going forward," Steve Marshall, president of BP Alaska, said during a news conference in August.

"We based our corrosion program in cooperation with agencies what we thought was an adequate program. Clearly it is not," said Bob Malone, president of BP America who is due to testify before a House panel on Thursday.

There has been strong speculation that BP is directly at fault for the shutdown due to its negligence to monitor and inspect lines routinely.

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"BP's chronic neglect directly contributed to the shutdown," Rep. Joe Barton, R-Texas, said in an Aug. 11 letter to John Browne, chief executive of BP.

Part of the reason BP until now has escaped scrutiny has been its efforts to "obfuscate the root cause of the spill and the subsequent shutdown of the EOA oil field," Charles Hamel, an energy industry watchdog, told reporters in a news conference at the National Press Club in Washington. In light of the upcoming hearing on Thursday, Hamel sent two separate letters to Barton and Dingell.

According to Hamel, BP did everything in its power to divert blame for malfunctions in their transit lines.

Energy analysts also blame the lack of upgraded technologies used industry-wide by other oil companies to detect corrosion problems.

"BP discovered these weak spots in its pipeline because the Department of Transportation ordered the company to apply techniques used by the rest of pipeline industry for the past five years to prevent leaks," said Benjamin S. Cooper, executive director of the Association of Oil Pipelines.

A five-year study by the nonprofit pipeline group found through the use of smart pigging reduced the number of pipeline spills to 51 percent, while the number of cases of corrosion dropped 67 percent and spills due to operator error dropped 63 percent.

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(Comments to energy@upi.com)

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(This column is being resent to correct a technicl problem.)

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