Recent News Articles re BP North Slope GC-2 Oil Spill

 

 

Anchorage Daily News
April 21, 2006

http://www.adn.com/money/industries/oil/story/7647852p-7559388c.html

Spill alerts rang, dismissed as false
NORTH SLOPE: Several factors could have set off alarms;
oil leak went on at least five days.
By WESLEY LOY
Anchorage Daily News
Published: April 21, 2006
Last Modified: April 21, 2006 at 03:23 AM

A pipeline leak-detection system sounded warnings on four straight days in the week leading up to last month's record North Slope oil spill, but field workers interpreted the signals as false alarms, a new investigative report says.

The report, prepared by a team of BP and state investigators, confirms that the leak from a large Prudhoe Bay oil field pipeline went on undetected for at least five days "and probably much longer."

The highly technical, 125-page report also suggests that the pipeline's leak- detection system is effective only in catching leaks that release large volumes of oil rapidly. It doesn't work well in detecting small, slow leaks that over time can result in large spills.

A Prudhoe Bay worker driving along the pipeline discovered the spill March 2 after catching a whiff of petroleum in the air.

Spill responders estimate 201,000 gallons, or 4,790 barrels, of oil oozed over almost 2 acres of snow-covered tundra and the edge of a frozen lake. Corrosion was blamed for eating an almond-sized hole in the steel pipeline, which remains out of service for repairs.

The line is a major artery in the web of pipes that drain the Prudhoe Bay field, the nation's largest.

BP this week presented the investigative report to the state Department of Environmental Conservation, which continues to weigh a fine or other penalties against BP. The U.S. Environmental Protection Agency also is conducting a criminal investigation, BP spokesmen have said.

The seven-member investigative team included BP managers and engineers based in Alaska as well as Houston, BP attorney Randal Buckendorf, a Prudhoe field worker representing the United Steelworkers union, and Gary Evans, a DEC environmental specialist.

The report says that on four consecutive days, Feb. 25-28, the pipeline's leak-detection alarms went off "but were ruled out as a spill" after people monitoring the system considered a variety of technical factors.

For one thing, a leak should have been indicated by readings on an adjoining segment of the pipeline, but that wasn't the case, the investigators found.

Other factors also made the three-mile pipeline prone to false leak alarms, the report says. The oil flowing through it had a relatively high level of sediment, and the amount of oil moving through the line can fluctuate depending on output from an upstream oil processing plant.

All those factors create "noise" that can mask indications of an actual leak, especially a small one, the report says.

Under state regulations, the pipeline's detector is supposed to be able to spot a leak amounting to 1 percent or more of daily throughput. The leak was too much of a trickle to hit that trigger, the investigators found.

Still, the leak detector emitted alerts because it was set on high sensitivity to detect a leak as small as 0.5 percent of daily throughput.

Engineers and other workers who monitor the system were aware of the warnings but determined the alarms were false, the report says.

It stops short of blaming anyone for the spill.

A $6 million cleanup of the oiled tundra is essentially complete, and DEC officials say they believe environmental damage to the tundra will be minimal.

Taking the leaky pipeline out of service for weeks caused North Slope oil production to decline by as much as 12 percent or 100,000 barrels per day, but BP says it has restored most of that production by routing oil down other pipelines.

Federal pipeline regulators have ordered BP to closely inspect the leaky pipe and two other major trunk lines to look for potential trouble spots. They also ordered the company to step up the use of pigs -- bullet-shaped devices that slide through pipelines to look for corrosion or to swab out sludge.

The above-ground pipeline leaked at a point where it passed through a mound of gravel known as a caribou crossing, which works as a sort of bridge for the migratory animals. In 1998, a pig run identified six spots at the caribou crossing where corrosion was chewing pits into the pipe's inner wall. One of those six was where the oil leaked, the report says.

BP had not done another pig run since 1998 to test for internal corrosion.

Maureen Johnson, a BP senior vice president, has said the company plans to work with the DEC on ways to detect smaller spills that might evade leak detectors.

One idea, she said, might be to increase the use of aerial infrared surveys, which can spot warm oil obscured by snow.

BP runs Prudhoe and owns 26 percent of the production. The biggest Prudhoe owners are Exxon Mobil and Conoco Phillips, each with about 36 percent.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.


BP SAFETY: The chairman of BP, Peter Sutherland, told investors Thursday that the company had learned valuable lessons.


Spill report at a glance

BP and the state released joint findings Thursday on what led to the 201,000-gallon oil spill at Prudhoe Bay discovered March 2:

• A pipeline leak detector warned of a possible spill four times before March 2.

• Field workers interpreted alarms as false.

• The corroded spot where the pipeline hole developed had been known of since 1998.

 

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Wall Street Journal

April 21, 2006

 

BP Executives Defend Record On Global Safety

By CHIP CUMMINS

April 21, 2006

 

LONDON -- Executives at BP PLC strongly defended the company's global safety and environmental record, amid criticism and probes of big accidents at BP facilities in Texas and Alaska.

 

At BP's annual shareholders meeting, Chief Executive John Browne acknowledged a host of operational setbacks in 2005, including a deadly explosion at BP's Texas City, Texas, refinery and widespread damage sustained in the Gulf of Mexico during last year's hurricane season. "In many ways, 2005 was a year of mixed fortunes for BP," he said. "In some respects, it was a very difficult year."

 

But he said the company was committed to applying the lessons learned from the March 2005 refinery explosion to improve safety at BP operations around the world. And BP's nonexecutive chairman, Peter Sutherland, forcefully defended the company's global safety record. "We don't accept that this company has a problem of an endemic nature," he said.

 

In March 2005, an explosion at BP's Texas City plant killed 15 and led U.S. workplace-safety regulators to impose a $21.4 million fine on the British oil giant. The U.S. Labor Department referred the case to the Justice Department for possible criminal charges.

 

More recently, BP has been blasted in Alaska, where a BP pipeline ruptured, causing a large oil spill. State officials blamed corrosion for the incident; BP has said it is cooperating with authorities in both investigations.

 

Write to Chip Cummins at chip.cummins@wsj.com

 

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Anchorage Daily News

April 20, 2006

 

http://www.adn.com/money/story/7645755p-7557441c.html

 

Warnings sounded for days before Prudhoe leak was discovered, report says

By WESLEY LOY

Anchorage Daily News

Published: April 20, 2006

Last Modified: April 20, 2006 at 03:27 PM

 

A pipeline leak-detection system sounded warnings on four straight days in the week leading up to last month’s record North Slope oil spill, but field workers interpreted the signals as false alarms, a new investigative report says.

 

The report, prepared by a team of BP and state investigators, confirms that the leak from a major Prudhoe Bay oil field pipeline went undetected for at least five days “and probably much longer.”

 

It also suggests that the pipeline’s leak-detection system is ineffective except in the event of leaks that release large volumes of oil rapidly. The system doesn’t catch slow leaks that, over time, can still result in large spills.

 

The report says the 34-inch pipeline that leaked had circumstances that made leak detection difficult, including a relatively high level of sediment moving through the pipe along with the oil. Also, fluctuations in the volume of oil sent down the line from a processing plant can mask potential leaks, it says.

 

Prudhoe Bay field workers discovered the leak March 2 and later determined that 201,000 gallons of oil had spread over almost 2 acres of tundra. The leaky pipeline remains out of service while field workers check out corrosion problems.

 

Corrosion was blamed for causing an almond-sized hole through which the oil escaped.

 

BP this week presented the state Department of Environmental Conservation with its 125-page investigative report into the oil spill, the largest ever to hit the North Slope oil fields.

 

Federal and state pollution regulators are investigating the spill. A more extensive article on this report will be available Friday in the Daily News and at www.adn.com.

 

Contact reporter Wesley Loy at wloy@adn.com    or (907) 257-4590.

 

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Financial Times

April 18, 2006

 

http://news.ft.com/cms/s/1fe1d2c2-cf0e-11da-925d-0000779e2340.html

 

Two more corrosion leaks hit Alaska BP facility

By Sheila McNulty in Houston

Published: April 18 2006 20:10 |

Last updated: April 18 2006 20:10

 

Chuck Hamel, an advocate for BP workers in Alaska, wrote at the weekend to Stephen Johnson, administrator of the US Environmental Protection Agency (EPA), to report that BP had suffered two additional corrosion leaks last week, which it had not yet reported.

 

“They have yet to reveal the newly discovered existing leak from a hole in the same transit line at another recently excavated caribou crossing . . . barely a mile away,’’ he said in the letter, a copy of which was obtained by the FT.

 

“It is apparently indeterminate just how long this second internal corrosion leak has existed . . . so silence is the rule.’’

 

On top of that, Mr Hamel said, BP has not publicly revealed the “six-inch R-19 gas line ruptured with a loud roar. External corrosion created a 1.5-inch hole in the elevated line’’.

 

In response, Daren Beaudo, BP spokesman, admitted to the gas leak, but said it was too small to report.

 

He said BP had not yet completed its inspection of the transit line, “but, to date, we’ve detected no additional holes or leaks on the crude line”.

 

Related stories on the BP safety inquiry:

• Repair delays had BP staff fearing for safety

http://news.ft.com/cms/s/41ab9bee-cd75-11da-afcd-0000779e2340.html

 

• BP remains on the defensive over Alaska

http://www.ft.com/cms/s/742185ea-cd69-11da-afcd-0000779e2340.html

 

• BP refinery staff ‘feared going in to work’

http://news.ft.com/cms/s/6fc226f8-cd69-11da-afcd-0000779e2340.html

 

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Fairbanks News Miner

April 17, 2006

 

http://www.news-miner.com/Stories/0,1413,113~7244~3291941,00.html

 

Pipeline's value scrutinized

By CHRIS ESHLEMAN

Staff Writer

Monday, April 17, 2006 

 

A disagreement between oil companies and three local governments over the assessed value of the trans-Alaska pipeline system will likely be heard by a formal review board for the second year in a row.

 

The state of Alaska says the 800-mile pipeline system is worth $3.64 billion. The consortium of oil companies that own the pipeline have argued it is worth $1 billion, and municipalities that collect property tax from the system--the Fairbanks North Star and North Slope boroughs and the city of Valdez--say its assessed value should be closer to $5.6 billion.

 

The difference could lead the oil companies to ask a review board to take a closer look at the state of Alaska's 2006 pipeline assessment. Representatives for ConocoPhillips and BP, two of the companies with subsidiaries in the consortium Alyeska Pipeline Service Co., which operates the pipeline, said they will decide later this month whether to appeal.

 

Municipalities say they are certain to ask for the review.

 

Fairbanks borough Mayor Jim Whitaker said local governments want to ensure the state of Alaska gets a fair assessment on the pipeline, an annual assessment that takes into account the pipeline, the right of way below it and other pipeline-related infrastructure. He noted property assessments inside the borough--not counting oil and gas properties and infrastructure--have increased by 83 percent over the past decade. Meanwhile, the pipeline's assessed value has decreased over that time.

 

"There is no logical basis for that," Whitaker said in a recent interview. "I've worked very hard to reverse that trend. Alyeska has to be treated as any other citizen is."

 

The disagreement centers partly on what method the state uses to assess the pipeline property, approximately 9 percent of which lies within the borough.

 

Changes to the assessment, assigned every spring by the office of the state of Alaska's Petroleum Property Assessor, can have a big impact on the amount in property taxes collected by the state and local governments. The state collected close to $30 million last year in property taxes on the pipeline. The Fairbanks North Star Borough received more than $3.6 million--5 percent of all the property taxes it collected--from the consortium.

 

A major change in their tax bill can affect the amount of taxes paid by other property owners. An upward adjustment to the initial 2006 assessment of 8 percent earlier this month allowed the Borough Assembly to decrease the rate of property tax in the borough by around one-half of 1 percent.

 

If the state Assessment Review Board meets next month and increases the 2006 assessment significantly, the effect could be larger. Local governments would have to decide where to spend the extra money if the assessment rises, or where to cut services if it comes back lower.

 

The Fairbanks North Star Borough Assembly could reduce property taxes, said Assemblyman Luke Hopkins. It could also choose to give any extra revenue to the school district, said Assemblywoman Nadine Hargesheimer, who noted the borough's proposed 2007 budget falls $1.7 million short of the district's request.

 

If it collected less from pipeline owners, the borough would be faced with the difficult decision of whether to raise taxes or cut services, said Hopkins. He said he would, in that case, advocate for small cuts from a broad slice of borough services and press the Alaska Legislature harder to share money through a sustainable community dividend plan.

 

Any cuts, Hargesheimer said, would be difficult for assembly members to make. "It's a tight budget," she said.

 

Last year, state assessors began estimating how much money it would cost to replace the pipeline system, said Randy Hoffbeck, the state's petroleum-property assessor. The method replaced the previous approach of basing the estimate on income collected by the pipeline owners from the tariffs charged for transporting unrefined oil.

 

The pipelines' owners, including those that own major oil reserves, have in the past argued the state should have continued to use the tariff-income approach. Their subsidiaries in the ownership consortium make all their money off tariffs, noted BP spokesperson Daren Beaudo. Representatives from ConocoPhillips and BP said they have not committed to an appeal, where they theoretically could again ask the state to take a different approach to the assessment.

 

"We're still evaluating exactly what we're going to say," said Beaudo.

 

The three local municipalities, on the other hand, have challenged the state's estimates from a number of angles. They have considered asking the state to estimate how much money a firm would pay to buy the system, and, according to state documents, argued the state should take into consideration the market value of the oil companies' stocks, bonds and other securities.

 

Taken together, the differences in opinion amount to the gap of $4.6 billion between the two parties' estimates of how much the pipeline system is worth.

 

The state of Alaska also levies a property tax on the pipeline system, and collected approximately $30 million last year in property taxes on the pipeline, Hoffbeck said.

 

This is not the first time the municipalities, the state and the oil companies have disagreed over the value of the 800-mile pipeline system. In 2001, a disagreement led the state to agree to hold the assessed value at just over $3 billion until last year, when challenges arose again.

 

The state's assessments of the pipeline system began during its construction in 1975, according to Hoffbeck. The assessed value peaked in 1979, when the state assessed the system's worth at $8.4 billion.

 

Chris Eshleman can be reached at 459-7582 or ceshleman@newsminer.com   .

 

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Wall Street Journal

April 17, 2006

 

BP Finds New Pipeline Rupture

Caused by Corrosion in Alaska

By JIM CARLTON

April 17, 2006; Page A3

 

BP PLC said it has found another pipeline break caused by corrosion at a BP-operated facility on the Alaskan North Slope, at a time when the company faces a criminal investigation by federal environmental officials into its management of pipelines in the region.

 

The latest rupture took place April 6 on an elevated natural-gas line at a production building, BP officials said Friday. BP spokesman Daren Beaudo said corrosion appears to have caused the leak. Officials of the British energy giant, which operates the giant Prudhoe Bay oilfield, said they didn't report the leak to regulatory agencies because the resulting gas releases were small. Mr. Beaudo said the three-inch line has been taken out of service pending repairs.

 

BP critics said the company should have made the leak public because a rupture in 1998 that they say is similar resulted in a fire at another production building at Prudhoe Bay. Critics and some workers have charged that corrosion is a growing problem at Prudhoe Bay because BP won't spend enough money to prevent it.

 

"We are at the point where there is so much damage to the lines from corrosion, we don't know where another leak will occur," said Marc Kovac, a BP worker and steward of the United Steelworkers of America local at Prudhoe Bay.

 

BP has said its spending decisions have had no adverse effect on safety.

 

Mr. Kovac relayed news of the latest leak to Charles Hamel, who has long served as a conduit for safety-related complaints by Alaskan oil-industry workers. Mr. Hamel, of Alexandria, Va., on Friday notified the Environmental Protection Agency about the incident.

 

The rupture follows a large crude-oil spill in the same vicinity that state officials have blamed on pipeline corrosion. Criminal investigators with the EPA are looking at corrosion issues on the ruptured line, as well as others in the area, said a person familiar with the matter, and they have expanded the investigation to include the March oil spill. BP officials said they are cooperating with all regulatory agencies in their investigations.

 

An EPA spokesman wasn't available for comment, but in the past officials there have said they can't comment on pending criminal investigations. Alaska Department of Environmental Conservation officials say they are investigating both the March and April ruptures.

 

The big energy company is also under regulatory scrutiny following an explosion last year at the company's Texas City plant, which killed 15 and triggered a $21.3 million fine from workplace-safety regulators.

 

Meanwhile, BP officials said they are investigating a "dark material" that workers found several days ago underneath the pipeline near the March spill. Mr. Beaudo said BP has determined the material -- possibly residue from an old spill -- didn't come from any other breaks in the line.

 

Write to Jim Carlton at jim.carlton@wsj.com

 

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Financial Times

April 17, 2006

 

http://news.ft.com/cms/s/41ab9bee-cd75-11da-afcd-0000779e2340.html

 

BP staff feared for safety

By Sheila McNulty in Houston

Published: April 16 2006 22:02 |

Last updated: April 16 2006 22:02

 

A safety audit of BP’s biggest refinery, obtained by the Financial Times, reveals the UK oil giant deferred maintenance and delayed repairs to the extent that staffers concluded equipment was in a “dangerous condition”.

 

The views in that 2005 audit  conducted by an independent consultancy  echoed those of BP staffers as far away as Alaska, who have warned for four years that staff and the environment were at significant risk, as accidents continued unabated.

 

In the past year, both locations have experienced severe accidents. The audited refinery in Texas City exploded in 2005, killing 15 people and injuring an estimated 500 in the deadliest refinery accident for more than a decade. Last month, BP Alaska suffered the biggest-ever oil spill at Prudhoe Bay, North America’s largest oil field. There was at least one other leak last week.

 

That BP operations in Texas and Alaska have suffered such significant lapses, amid employee complaints about safety, supports the US Chemical Safety and Hazard Investigation Board, an independent federal agency charged with investigating industrial chemical accidents, in questioning BP’s safety culture.

 

 “We’re looking at BP’s global oversight of safety,’’ said Don Holmstrom, the Board’s lead investigator into the Texas City accident. Even as the Board began investigating, a similar accident took place at another BP facility in the US, in Indiana, although nobody was injured.

 

“We know that BP devoted a lot of attention to reducing occupational injuries. But did the company focus enough effort on process safety systems designed to avoid catastrophic accidents?’’ Mr Holmstrom asked.

 

 “Did the company encourage reporting of near-miss accidents and then try to identify and learn from those with catastrophic potential? The information we’ve uncovered in Texas City makes these questions relevant.”

 

Ronnie Chappell, a BP spokesman, said all BP-operated refineries had been assessed and initiatives imposed. “These initiatives address factors such as leadership, culture, control of work procedures and the repositioning of occupied temporary buildings,’’ Mr Chappell said. “The assessments found that no other BP-operated refinery presented safety and operational integrity concerns on the same level as those identified at Texas City.’’

 

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http://news.ft.com/cms/s/6fc226f8-cd69-11da-afcd-0000779e2340.html

 

BP refinery staff ‘feared going in to work’

By Sheila McNulty in Houston

Published: April 16 2006 22:02 |

Last updated: April 16 2006 22:02

 

In late 2004, Don Parus, site manager at BP’s biggest refinery, realised something was terribly wrong.

 

The site had suffered 22 fatalities over 30 years, its safety business plan for 2005 noted there was a key risk of the death of a worker in 12-18 months, and a BP safety presentation opened with the words: ”Texas City is not a safe place to work.”’

 

He commissioned a safety audit by the Telos Group, a Texas-based consultancy, which surveyed more than 1,100 employees, roughly 60 per cent of the current workforce, and interviewed over 100.

 

The 338-page report, a copy of which has been obtained by the Financial Times, reveals a safety culture that made many fear working in the facility.

 

“The history of investment neglect, coupled with the BP culture of lack of leadership accountability from frequent management changes, is setting BP Texas City up for a series of catastrophic events,’’ is just one comment in the audit. 

 

The report was finalised on January 21 2005. Two months later, the accident predicted by several in the audit arrived: an explosion killed 15 people and injured an estimated 500 in the deadliest refinery accident in more than a decade. Four months later, the site suffered another explosion.

 

It is unclear how much BP’s leadership knew about site safety. Several in the audit said they were bullied about accidents so much that many went unreported. A risk identified in BP’s 2005 safety business plan, seen by the FT, was that the site would not report all incidents for “fear of consequences”.

 

Ronnie Chappell, BP spokesman, said there had been a “comprehensive effort by Texas City refinery leadership to drive continued safety improvement, encourage the reporting of injuries and near misses and ensure the thorough and complete investigation of injuries and incidents at the refinery.’’

 

That said, an investigation of the accident by the US Chemical Safety and Hazard Investigation Board (CSB), an independent federal agency that investigates industrial chemical accidents, revealed BP decided against upgrading equipment that might have prevented the accident; operated with malfunctioning equipment; and had worked staff 30 days straight in 12-hour shifts, before the accident. It questioned the training and experience of key staff.

 

“In a corporation with a good safety culture, near-miss reporting is actively encouraged and corrective steps are put in place before disaster strikes,’’ said Carolyn W Merritt, chairwoman of the CSB. “The CSB was concerned enough about what we saw in Texas City to recommend an examination throughout BP North America.’’

 

BP has undertaken that examination and shut the refinery for a $1bn repair programme. The Department of Labor uncovered over 300 violations and settled with BP, which did not admit fault, but agreed to improve processes and pay a maximum $21m fine.

 

The Department of Labor has referred the case to the Department of Justice to review for “criminal action”.

 

“Even if the lapses at the Texas City refinery were an aberration, where was the corporate oversight to bring that facility into line?” Ms Merritt asked. “BP needs to make certain that it has effective safety systems, maintenance resources, staffing, and auditing in place to prevent major safety or environmental incidents.”

 

BP has settled all but two of the fatality cases but is embroiled in hundreds of lawsuits with those injured inside and outside the refinery.

 

“When they got the Telos report, BP had a choice: Embrace safety and do it the right way, or just keep profits and production going,’’ said John Eddie Williams Jr, managing partner at Williams Bailey, which is handling 145 cases. “They made the conscious decision to keep running this plant instead of doing a safety stand-down.’’

 

He is to take a deposition from John Browne, BP’s chief executive, next month to discover whether he knew the refinery had been so unsafe for so long.

 

“It’s a lot like Ken Lay,’’ he said, referring to Enron’s former chief executive, who is fighting criminal charges relating to the company’s bankruptcy. “If he says he did not know, then we want to know why he did not know.’’

 

Mr Chappell will not comment on the litigation, but says managers had been concerned about the continued safety issues, despite their best efforts, and, following three deaths in 2004, went forward with the Telos audit.

 

He said it “does not report the ‘objective’ truth about safety performance or conditions’’ but rather “is an accurate representation of the attitudes, perceptions and statements made by survey participants.”

 

And, despite those perceptions, he insisted BP encouraged reporting injuries and near misses, and investigated both.

 

But in the Telos audit, staff surveyed rated ”making money” BP’s number one priority and “people” its last, at nine.

 

“At the refinery, there’s a frame of mind like, ‘We are the ones that make the money’,” said a worker in the audit. “They take pride in running on thin air, but if they do it by killing someone every 18 months, then you don’t have bragging rights about production.’’

 

William Bradley Bessire, a contract worker, was so severely injured in the explosion he has metal plates in his back, can barely move his neck, and is in constant pain. He is suing for gross negligence. “I always worried about the safety of being in that refinery,” he told the FT. “Every time you drove up to the gate and badged in, you worried; there is not a person who works in that place that does not worry.”

 

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http://www.ft.com/cms/s/742185ea-cd69-11da-afcd-0000779e2340.html

 

BP remains on the defensive over Alaska

By Sheila McNulty in Houston

Published: April 16 2006 22:02 |

Last updated: April 16 2006 22:02

 

In 2003, Steve Marshall, president of BP Alaska, warned in an internal memo to staff: “Beginning now, we will focus on safety as we have never focused on it before, as if our lives and our future in Alaska depended on it. Because they do.”

 

The previous year, the site had more than 11 recordable injuries and one day-away-from-work case per month, a well explosion that severely injured an operator, the death of a contract worker, and an average of more than six vehicle incidents per month. It seemed things could only get better.

 

Yet, in the three years since Mr Marshall’s call to action, BP has continued to suffer accidents and regulatory violations.

 

The situation came to a head last month, when a BP pipeline spilled up to 270,000 gallons of crude  the biggest spill ever in Prudhoe Bay, North America’s largest oil field.

 

The Alaska Department of Environmental Conservation has blamed corrosion for the spill, something workers have for years complained had been neglected by management.

 

“BP management is focused on their own short-term profit and not on BP’s long-term impact to this country,” said Marc Kovac, a mechanic who has worked at the Alaska field for 28 years. “This breach is not an isolated case. BP has experienced ruptures in the recent past and more lines other than this one are in a similar condition.”

 

Indeed, Chuck Hamel, an advocate for BP workers in Alaska, alerted the Environmental Protection Agency’s criminal investigation division in July 2005 to problems in BP’s corrosion control operations, which are under investigation.

 

Yet Daren Beaudo, BP spokesman, says BP has increased its corrosion inspection and maintenance programme over the years, from $50m in 2004 to $58m last year and $71m this year, to maintain an inspection programme in line with regulatory requirements, and has “manageable corrosion rates”.

 

Workers in Alaska have long disputed that, complaining that BP cuts corners, putting workers and the environment at risk  charges BP adamantly denies. As far back as 1999, an e-mail obtained by the FT documents concerns being raised over staff ability to respond to critical events given the increase in workloads.

 

To keep day-away-from-work cases down, one worker said, BP sometimes ordered those injured back to work  a complaint also made in a safety audit on BP in Texas.

 

An internal union e-mail obtained by the FT says a worker helping with the March clean-up in Alaska slipped on the icy road, breaking a wrist and tearing two knee ligaments: “To hide the incident, BP management ordered this man back to work to keep this incident off the “time off work for a work-related injury” record, the union said.  Mr Beaudo insisted: “There was absolutely no attempt to hide a serious injury.” The man had doctor’s clearance for light work, which he voluntarily accepted. 

 

This is not the first time BP Alaska has found itself under heightened scrutiny. Last year the federal government released BP from a probation imposed in 2000, after it pleaded guilty to delaying notification of federal agencies when allegations of illegal disposal of hazardous waste in Alaska were raised.

 

Less than a year later, BP is once more on the defensive.

 

The latest spill was under a reindeer crossing and flowed into a nearby lake. Mr Beaudo expects “little if any environmental damage’’ once the clean-up is complete. Yet workers fear more accidents.

 

“Competent federal oversight is desperately called for before Prudhoe suffers a disaster such as BP’s deadly Texas City refinery explosion last year,” Mr Hamel said.

 

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Anchorage Daily News
April 16, 2006

http://www.adn.com/money/industries/oil/story/7633245p-7544946c.html

Oil patch probes North Slope
Energy industry in Alaska subject of several investigations
By WESLEY LOY
Anchorage Daily News
Published: April 16, 2006
Last Modified: April 16, 2006 at 03:22 AM

Times are splendid in the oil industry, with prices for North Slope crude hitting record highs of nearly $68 a barrel last week. Oil companies are spending some of that cash on numerous exploratory drilling and development plans.

But the enthusiasm is tempered by a pall of worry created by criminal and civil investigations in the oil patch. In recent weeks, details have emerged of probes by federal and state environmental regulators, federal prosecutors, pipeline regulators, members of Congress and the U.S. Coast Guard.

Authorities declined to comment on the nature of the investigations, whether they're connected, or where they'll go.

One thing is nearly certain: The probes are a distraction for oil company executives who otherwise are enjoying an unprecedented payoff on every barrel, and who hope to strike deals with the state this year to lock in oil taxes for the long haul and ink a fiscal contract that could someday help spur construction of a $20 billion natural gas pipeline.

The most acute problem for the oil industry is the March 2 spill in the giant Prudhoe Bay oil field, run by BP Exploration (Alaska) Inc. The leak from a hole in a corroded pipeline allowed an estimated 201,000 gallons, or 4,786 barrels, of oil to dirty nearly two acres of tundra.

The oil spill was the largest ever on the North Slope and has drawn the attention of state pollution regulators, as well as U.S. Department of Transportation officials who have ordered BP to fix numerous corroded spots in the pipeline and improve maintenance before placing it back in service.

Dealing with the spill continues to crimp daily oil flow worth millions of dollars, and BP and its partners in Prudhoe, the nation's largest oil field, have spent $6 million so far on the cleanup, BP spokesman Daren Beaudo said.

Beaudo on Friday confirmed that federal investigators are conducting a criminal probe into the spill. BP knows this, he said, because an industry contractor, Coffman Engineers, recently received a subpoena.

Coffman works for the state to monitor the corrosion-control programs inside BP and Conoco Phillips, the North Slope's two biggest oil producers.

Although BP has not been served directly with a subpoena, the company is ready to work with federal authorities, Beaudo said.

"We've informed our employees and have asked them to cooperate fully," he said.

The spill also drew the attention of two Democratic congressmen, Reps. John Dingell of Michigan and George Miller of California, who sent a letter to BP's Alaska chief, Steve Marshall, inquiring about the company's corrosion control and other issues. The congressmen sent a similar letter to Kevin Hostler, chief executive of Anchorage-based Alyeska Pipeline Service Co., which runs the 800-mile trans-Alaska oil pipeline on behalf of owners BP, Conoco Phillips, Exxon Mobil, Chevron and Koch Industries.

Last week, Chris Knauer, a staff investigator for the Democratic minority on the House Energy and Commerce Committee, came to Alaska to visit the spill site and the Alyeska pipeline. Tom Hassenboehler, a majority staffer on the committee, also made the trip.

U.S. Environmental Protection Agency investigators also have been involved since a BP oil field worker discovered the snow-covered spill with his nose shortly before dawn on March 2.

In recent weeks, indications have surfaced that the EPA, with the help of a federal grand jury, has been conducting a criminal inquiry into oil industry activities on the Slope since last summer.

An EPA spokesman said the agency can't acknowledge the existence of a criminal investigation.

Alyeska spokesman Mike Heatwole said his company also had received no direct inquiry from federal criminal investigators. As for the visit by congressional staffers, he said that wasn't anything unusual.

"Folks from D.C. come up here from time to time to look at a wide variety of things," Heatwole said. "We don't get very many takers in the wintertime, but we always offer."

He said Knauer has traveled here several times over the years, but it was the first visit for Hassenboehler, who works for Rep. Joe Barton, R-Texas, the Energy and Commerce Committee chairman.

Aside from the Prudhoe spill, an incident at a drilling rig working at a site called Oooguruk in the Beaufort Sea in March 2003 is drawing interest from federal investigators.

Drilling company Nabors Industries disclosed a criminal investigation in a recent filing with the U.S. Securities and Exchange Commission. Nabors said it received a grand jury subpoena from the U.S. Attorney's Office in Anchorage on Dec. 22 seeking documents and information related to a spill of drilling fluids from its rig.

Another firm, Pioneer Natural Resources Co., disclosed in its own recent SEC filing that the EPA was conducting a criminal investigation into the 2003 spill. Pioneer, an oil and gas company based in Irving, Texas, had hired the Alaska subsidiary of Nabors, based in Bermuda, to drill the Oooguruk well on a man-made ice island in the Beaufort Sea shallows, offshore the giant Kuparuk oil field.

Two men, one a roughneck for Nabors and the other a retired planner for Alyeska, say they believe the federal investigators might be conducting a wider inquiry than just a look back at the Oooguruk matter. Mike Mason, the Nabors worker, can recite numerous current and former workers and managers whom he said have been interviewed by investigators.

Glen Plumlee, the former Alyeska planner, said that since December, he'd spoken with criminal investigators several times regarding what he believed were improper financial reports at Alyeska. Once, he said, he met with several agents -- he declined to identify exactly who they work for -- at the Hilton Anchorage hotel. Plumlee lodged a complaint with federal Labor Department officials, accusing Alyeska executives of denying him a post-retirement consulting job because he blew the whistle on the company by talking to the investigators.

Heatwole acknowledged that Plumlee, who retired this month, did file the Labor Department complaint, but said he couldn't say much more.

The oil industry has at least one other worry.

In its annual report filed with the SEC in late February, Conoco Phillips said the U.S. Attorney's Office in Anchorage as recently as June 29 of last year had hit the company with subpoenas for possible environmental violations including discharge of oily water on two of its tankers, the Polar Discovery and the Polar Alaska.

"We are fully cooperating with the governmental authorities in their investigation," the company wrote.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

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http://www.adn.com/money/industries/oil/story/7633245p-7544945c.html

Oil industry under scrutiny
Published: April 16, 2006
Last Modified: April 16, 2006 at 03:22 AM

Alaska oil industry investigations at a glance:

Oil spill: BP confirms federal officials launch criminal probe into March 2 Prudhoe spill.

Drilling: EPA, Anchorage federal grand jury look into 2003 spill from Beaufort Sea rig.

Congress: House Energy and Commerce Committee sends staffers to look at Prudhoe spill site, pipelines.

Tankers: U.S. Coast Guard probes possible pollution violations on Conoco Phillips oil tankers.

Alyeska Pipeline: Ex-employee files Labor Department whistle-blower complaint against company.

Anchorage Daily News

 

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Anchorage Daily News

April 15, 2006

 

http://www.adn.com/money/story/7628910p-7540517c.html

 

Corrosion blamed for 2nd recent leak on Slope

AT KUPARUK: Up to 500 gallons of water with a trace of crude oil spilled in March.

By WESLEY LOY

Anchorage Daily News

Published: April 15, 2006

Last Modified: April 15, 2006 at 02:39 AM

 

Corrosion is to blame for a pipeline leak that sent hundreds of gallons of oily water onto the tundra last month in the Kuparuk River oil field, concludes a report this week from the Alaska Department of Environmental Conservation.

 

The leak, discovered March 9, was overshadowed by

a much bigger spill of crude oil -- an estimated 201,000

gallons -- in the Prudhoe Bay field, which neighbors

Kuparuk. That spill was discovered March 2.

 

Though small, the Kuparuk spill of up to 500 gallons of water with a trace of crude oil caused significant disruption for Conoco Phillips Alaska Inc., which runs the state's second-largest oil field.

 

The spill forced the shutdown of the leaky pipeline and 15 wells, halting the flow of as much as 4,000 barrels a day of crude oil.

 

Conoco workers have restored that production by diverting the oil through a parallel pipeline, the DEC report says.

 

The spilled Kuparuk liquid is known as produced water. Typically, North Slope wells send up a mixture of hot crude oil and water, and this water is separated and moved through pipelines.

 

State pollution regulators say produced water, which is sometimes salty, can be as harmful to tundra plant life as oil.

 

DEC officials say a cleanup of about 2,000 square feet of snow-covered tundra is complete.

 

Corrosion eating away at the inside of the pipeline, 24 inches in diameter, caused the spill, officials said.

 

Internal pipeline corrosion also caused the March 2 spill at Prudhoe. It was the largest oil spill ever on the North Slope.

 

Oil company managers say they spend millions of dollars a year to control corrosion, particularly as the vast network of pipelines across the Slope age. Oil production began at Kuparuk 25 years ago.

 

Daily News reporter Wesley Loy can be reached at wloy@adn.com    or 257-4590.

 

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Anchorage Daily News
April 11, 2006

http://www.adn.com/money/industries/oil/story/7616738p-7528197c.html

No fine for BP in past spill
6,000 GALLONS: State filed no civil, criminal action in 2003 pipeline leak.
By WESLEY LOY
Anchorage Daily News
Published: April 11, 2006
Last Modified: April 11, 2006 at 01:54 AM

PHOTO:
http://www.adn.com/photo/2006/04/11/1931001-300-x-218.jpg
In May 2003, cleanup workers try to contain and recover a 6,000-gallon spill of crude oil and oily water in the Prudhoe Bay oil field. The spill from a corroded pipeline occurred about a mile from where another line, also weakened by corrosion, leaked an estimated 201,000 gallons of crude oil onto the tundra this winter. Alaska pollution regulators considered criminal charges or a fine against BP for the 2003 spill but ultimately took no action. Now the state is faced with the question of whether to punish BP for this year's spill, the largest ever on the Slope.

Last week, Alaska's top pollution regulator, Kurt Fredriksson, said the state might hit BP with a "sizable" fine for a pipeline leak last month that caused the largest oil spill ever on the North Slope.

A top Alaska manager for BP, Maureen Johnson, said in the days immediately following the March 2 discovery of the spill that the London-based company anticipated punishment.

"If you mess up, you expect to be penalized for that," she said.

But if the spill investigation plays out the same way a similar case did three years ago, when another pipeline in the heart of the giant Prudhoe Bay oil field sprang a leak, BP might escape with nary a dollar in state fines.

The May 2003 leak occurred little more than a mile from last month's spill and sparked a vigorous internal debate among state environmental officials and lawyers about how to punish BP for a delay in reporting a 6,000-gallon spill onto the tundra. They even considered charging BP with a crime, according to documents obtained by the Daily News.

In the end, BP got off with no criminal charges and no civil fine.

Now state officials are weighing how to handle a far larger spill in the BP-managed Prudhoe Bay field -- an estimated 201,000 gallons of crude oil, or 4,786 barrels.

Cleanup workers are still trying to scrub the spilled oil off nearly 2 acres of tundra and the edge of a frozen lake.

The spill has been a costly headache for BP, forcing creation of a small army of cleanup workers and halting production of up to 100,000 barrels of oil per day -- oil worth more than $6 million at today's prices.

Company investigators believe corrosion ate an almond-sized hole in the pipeline, a major artery in the web of pipes that drain the Prudhoe field. The leak happened at a point where the pipeline, 34 inches in diameter, passes through a caribou crossing -- a mound of gravel heaped on top of large, above-ground pipes to give the migratory animals a path to cross over.

State and federal officials are investigating to see whether BP violated any regulations in detecting or preventing the spill. BP managers acknowledge they knew the pipeline had corrosion problems and the corrosion was getting worse.

Corrosion likewise was to blame for the 2003 pipeline leak.

Documents from the Alaska Department of Environmental Conservation, which enforces pollution laws, show that regulators were primed in 2003 to take stern action against BP.

State regulators expect oil companies to report spills within 30 minutes of discovery, which BP did in March.

But in 2003, the company took 19 hours and 15 minutes to alert state officials of a 6,000- gallon leak of oil and oily water from a 24-inch pipe known as the Y-36 line.

As with last month's pipeline leak, the Y-36 line failed at a point where the pipe passed through a caribou crossing. Caribou crossings can heighten the risk of leaks because corrosive water tends to pool at the crossings, and the pipelines are harder to inspect where buried.

BP subsidiary BP Exploration (Alaska) Inc. already was well-acquainted with the sensitivity of oil-spill reporting, having pleaded guilty to a federal criminal pollution violation in 1999. A federal judge sentenced the company to five years on probation for failing to immediately report hazardous-materials dumping by a contractor at the company's Endicott field on the North Slope.

BP was fined $500,000 and ordered to spend $15 million to develop a new environmental management system for its U.S. oil fields.

As BP was seeking early release from its probation, Fredriksson's predecessor at DEC, Ernesta Ballard, wrote a toughly worded letter to federal environmental officials in December 2003. She used BP's tardiness in reporting the Y-36 spill as an example of why BP needed continued scrutiny by federal authorities. She said BP had failed to meet its "corporate accountability and environmental responsibility objectives."

That wasn't the only tough talk at DEC about what to do to BP because of the Y-36 spill. In the months leading up to Ballard's letter, rank-and-file DEC investigators and state attorneys mulled what punishment the state should dish out, according to state documents.

The starting point was criminal charges.

On Sept. 2, 2003, Walt Sandel, a DEC environmental specialist, wrote to Kevin Burke, a state environmental-crimes prosecutor, asking whether BP's failure to promptly report the Y-36 spill warranted criminal charges.

Seven days later, Burke replied that, no, criminal prosecution wasn't justified.

Burke noted that BP managers had explained that a succession of communication errors, starting with the contractor who discovered the spill, led to the long delay in reporting the spill to state officials.

"In short, there was a breakdown of communication, but no particular individual can be said to have acted criminally," Burke wrote.

He added, however, that "given the complete breakdown in spill reporting," it might be appropriate to seek civil penalties.

BP knew it was in trouble. Managers already had taken steps to show they respected the state's demand for quickly reporting oil spills. The steps included a "bed drop," in which BP placed a hard copy of a bulletin on every worker's bed reminding all to dial the Slope's "spill hotline" even before telling a supervisor of a spill, according to a BP e-mail to DEC officials.

By late November 2003, another lawyer for DEC had developed some options, according to the internal agency documents. One involved filing suit against BP seeking a $100,000 civil fine.

"The mere filing of the complaint would cause BP considerable discomfiture," the state assistant attorney general wrote in a Nov. 28 memo to DEC officials.

State officials could "meet with BP privately," he wrote, lay out the lawsuit as a "potential scenario," and "offer them an immediate, take-it-or-leave-it cash settlement of $100,000." And if BP didn't pay up, the state could seek internal BP documents about its oil field costs and possibly cost-cutting in its environmental management -- a potential embarrassment to the company.

According to DEC documents, state regulators and attorneys had ongoing talks and meetings with BP attorneys and executives, including Bob Batch, BP's environmental manager in Alaska. Jeanne Pascal, an official with the U.S. Environmental Protection Agency involved in supervising BP during its probation, also was in the mix.

By Jan. 22, 2004, Ballard had made her decision. That day she e-mail her staff:

"Bob Batch and I had a very cordial meeting. I, too have had several lengthy conversations with Jeanne. I have also talked to Gregg Renkes, who does not want us to take civil action against BP."

Renkes at the time was Alaska's attorney general. He resigned under fire in February 2005 after public reports that he used his state position to promote a coal technology company whose stock he owned.

Renkes, who now lives out of state, could not be reached for comment.

Ballard, now a vice president with timber giant Weyerhaeuser Co. of Federal Way, Wash., said in an interview last week that "BP was very responsive to our concerns."

The company determined the cause of the spill, figured out why it wasn't reported sooner and changed procedures to avoid future lapses, she said.

Fredriksson, the current DEC commissioner, said the outcome of a prior spill case doesn't mean the March spill will get the same treatment.

"Each case really does have to be taken separately, in its own context," he said.

Ultimately, the state took no criminal or civil action against BP for the Y-36 affair.

BP did, however, send the state a check for $31,709 on April 2, 2004, to cover DEC's costs in responding to the spill.

Daily News reporter Wesley Loy can be reached at wloy@adn.com  or 257-4590.

 

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Wall Street Journal

April 9, 2006

 

Emotional Hearing Held On Exxon Valdez Oil Spill Claims

DOW JONES NEWSWIRES

April 9, 2006 2:24 a.m.

 

ANCHORAGE, Alaska (AP)--Oil from the 1989 Exxon Valdez tanker grounding still lingers on and just below Alaska's surface. So does the resentment.

 

Like ripping open a thin scab from a wound that never healed, a recent series of state hearings on the continued effects of the 11-million-gallon spill has brought the pain and anger of those affected by the spill bubbling back to the surface.

 

In sometimes emotional testimony on Saturday, Alaska fishermen, Native leaders, conservationists and academics told a panel of state and federal officials that new damages of up to $100 million should be claimed against Exxon Mobil Corp. (XOM) for the unexpected effects of the tanker grounding.

 

"What Exxon did to us is not fair, what has been done to us is a travesty," said Robert Wolfe, a fisherman who lives in Girdwood.

 

Dozens of people have spoken at hearings in the cities of Anchorage, Cordova and Kodiak that state officials are holding to decide whether to file a claim for additional damages. Additional hearings are scheduled in Valdez and Seward.

 

Some who testified raged against Exxon Mobil. Some offered ideas about research and restoration projects that could be done with the money. Others talked about specific species that haven't recovered in Prince William Sound, such as Pacific herring.

 

"We're just fishermen, but it's a way of life and it's been destroyed," said Evan Beedle of Cordova.

 

Bill Hall, a former mayor of Cordova said the state and federal governments should be able to figure out for themselves the lingering effects of the oil spill. These hearings have sharpened the pain of the memories, he said.

 

"This for me is an experience of a lingering effect of the oil spill. It's dragging and making it more painful and sustained over time," Hall said.

 

Alaska Attorney General David Marquez, who is holding the hearings, said he was struck by the emotion of the hearings.

 

"One of the things, of course, we have been reminded about is the great passion that surrounds the aftermath of this horrible tragedy, and that's important for us to hear," Marquez said.

 

In a 1991 civil settlement, Exxon agreed to pay $900 million over a 10-year period ending in 2001. A "reopener" provision created a window from 2002 to 2006 in which the state and federal governments could claim up to an additional $100 million.

 

That is separate from an unresolved punitive damage judgment of $4.5 billion against the company, which has not been paid.

 

Exxon Mobil spokesman Mark Boudreaux has said the company has paid the compensation it owes and the company's studies show that Prince William Sound is "healthy, robust and thriving."

 

But an assessment of the lingering oil presented by consultant Lucinda Jacobs for the Exxon Valdez Oil Spill Trustee Council estimated that as much as six miles of shoreline in Prince William Sound are still affected by the spill, and as much as 100 tons of Exxon Valdez oil remains in the sound.

 

An undetermined amount lingers beyond the sound, she said.

 

Besides herring, killer whales, sea otters, harbor seals, some species of sea birds and other animals still have populations less than before the spill.

 

There is a great deal of uncertainty, particularly with the herring population, of whether the continued declined populations is due to the lingering effects of the oil.

 

The reopener provision in the settlement with Exxon expires Sept. 1, and the state and federal governments must file a claim 90 days before that date.

 

To claim the money, the governments would have to prove that a population, habitat or species had suffered loss or decline in the area of the spill, and that loss can be linked to the spill. Plus, the state and federal governments would have to prove the loss was not known or anticipated when the settlement was signed.

 

 

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Townhall.com

April 8, 2006

 

Http://www.townhall.com/opinion/columns/TomBorelli/2006/04/08/192800.html

 

BP: Beyond pathetic

By Thomas Borelli

Apr 8, 2006

 

““Beyond Pathetic” seems a more appropriate name for BP”

 

What’s your “carbon footprint”? That’s the question asked by the latest version of BP’s high profile advertisements saturating both newspapers and TV. I don’t know mine, but part of BP’s current carbon footprint is about 200,000 gallons of crude oil  resulting from a leak in a corroded pipeline causing the largest oil accident ever in the North Slope of Alaska.

 

But that’s only a start  let’s not forget about the tragic explosion last year at the BP refinery in Texas City, Texas that claimed 15 lives and injured 170 people. With that disastrous track record measured in terms in human and environmental damage you would imagine BP would rethink its empty-headed advertising strategy before it ends up putting its own “footprint” in its mouth. Don’t bet on it though.

 

BP’s record is a classic business case study of the real world consequences of a corporate social responsibility-driven public relations campaign. BP is proving that a company can’t serve two masters at once.

 

While BP tries to score well in public opinion polls and please the anti-oil mob by positioning the company as an “environmentally conscious” company, it apparently has neglected the basics like facility safety. As the company highlights its investment in questionable renewable energy programs, it distances itself from its oil and gas foundation, and gleefully advertises that the manmade global warming hoax is real.

 

As some in the company literally appear to believe their own advertising that they are beyond petroleum and they are acting accordingly, ignoring the fundamental basics and complexity of operating running its oil and gas business.

 

Last year’s the tragic accident occurred when an explosive vapour was improperly ventilated and seeped from an octane-enhancing unit in the refinery during plant start up. The vapour was ignited by an idling truck resulting in the tragic explosion that was felt miles away.

 

BP took full responsibility for the accident  whatever good that does  and the U.S Occupational Health and Safety Administration fined the company over $20 million for hundreds of violations of health and safety regulations. Due to the number and seriousness of the violations, OSHA referred the case to the FBI for possible criminal charges against the company.

 

BP paid millions of dollars in settlement claims from the some of the victims and their survivors, and it faces more legal challenges from the hundreds of other plaintiffs that will make full use of the company’s negligence as evidenced in its own documents and records.

 

In the North Slope episode of operational failure and negligence, once again the company’s maintenance and safety record raises questions. According to an article in the New York Times, maintenance concerns were raised by onsite pipeline workers. “The company had been warned about cutting back on maintenance” and the spill “could have been prevented,” according to the workers.

 

It’s no wonder BP has become the darling of the environmental special interest groups  the company’s incompetence makes the environmentalists’ argument that oil companies can’t be trusted to exercise due care.

 

Moreover, BP spends $100 million annually on global warming advertising campaigns that try to manipulate the public into believing that human activity is responsible for global warming and that renewable energy is economically feasible. With oil friends like that, Greenpeace and NRDC really don’t need any corporate enemies.

 

You can bet the next time drilling in the Arctic National Wildlife Refuse (AWNR) comes up for a vote, BP’s operational failures will be trumpeted by anti-oil activists who think higher energy prices are the way to go.

 

“Beyond Pathetic” seems a more appropriate name for BP  something you may want to keep in mind the next time you pass by one of those green-and-yellow flowered gas stations.

 

Thomas J. Borelli, Ph.D. is the editor of FreeEnterpriser.com and a senior fellow at The National Center for Public Policy Research, a Townhall.com Gold partner. The opinions expressed are his own.

 

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Anchorage Daily News

April 8, 2006

 

http://www.adn.com/news/alaska/story/7607502p-7518499c.html

 

Alyeska lab tech falsified water test data

SENTENCED: Pressures of work blamed; man lost job, receives probation.

By WESLEY LOY

Anchorage Daily News

Published: April 8, 2006

Last Modified: April 8, 2006 at 02:06 AM

 

A federal judge Friday sentenced a former laboratory technician for Alyeska Pipeline Service Co. to three years on probation for falsifying wastewater test data filed with environmental regulators.

 

Thomas R. Austin, who worked from April 2001 to August 2003 in the lab at Alyeska's oil tanker terminal at Valdez, had pleaded guilty Jan. 25 to making false statements under the federal Clean Water Act.

 

In addition to probation, U.S. District Judge Ralph Beistline ordered Austin to pay a $1,000 fine.

 

Austin in 2002 "manually modified the analysis performed on a laboratory sample," making it look like the sample had passed quality-control criteria when, in fact, it failed, according to a Friday news release from the U.S. Attorney's Office in Anchorage. The falsified data ultimately reached the Environmental Protection Agency, which regulates Alyeska wastewater discharges at Valdez.

 

Austin, 44, of Valdez, lost his job as a result of his actions, prosecutors said.

 

Neither Austin nor his attorney, Herbert Viergutz, could be reached for comment Friday evening.

 

However, in a written statement filed with the court prior to sentencing, Austin admitted he unlawfully manipulated data. Austin wrote that he did it not to deceive the EPA, but "to avoid conflicts and problems with management" at Alyeska.

 

"The expectations of the laboratory manager ... were that no mistakes were allowed," Austin wrote.

 

Austin added that he'd tried to do what is right and ethical in his life, but he let concerns about a large salary, a new wife, his declining health due to cerebral palsy, and a desire not to have to move again "overcome my common sense."

 

Federal court documents available late Friday make no suggestion that Alyeska as a company or its managers did anything wrong.

 

Alyeska is an Anchorage-based consortium that runs the 800-mile trans-Alaska oil pipeline and the Valdez tanker dock on behalf of five owner energy companies including BP, Exxon Mobil, Conoco Phillips, Chevron and Koch.

 

Alyeska spokesman Mike Heatwole said Friday that company management suspected something was wrong in the lab and conducted an internal investigation that turned up the falsified data.

 

He said Alyeska took its findings to the EPA and "cooperated fully" with federal officials.

 

Meantime, Austin was fired, Heatwole said.

 

The news release from the U.S. Attorney's Office said the investigation found that Austin has falsified and changed 102 data samples.

 

The release added that Alyeska changed lab procedures, and "there was no evidence that the manipulations by Austin impacted the operation of the wastewater plant or resulted in environmental damage."

 

Heatwole said Austin worked in a complex system in which ballast water drained off tankers arriving in Valdez is cleaned up in a treatment plant, tested and then discharged into the sea. Alyeska has a federal permit for the discharges.

 

After reading Austin's court statement Friday night, Heatwole said he was unable to provide an immediate response.

 

However, he said he was unaware of any other disciplinary measures within the company associated with the Austin case.

 

According the prosecutors, the maximum sentence Austin could have received was two years in prison and a $250,000 fine.

 

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

 

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Financial Times
April 7, 2006

http://news.ft.com/cms/s/80fcee6a-c5d2-11da-b675-0000779e2340.html

BP faces probe on Alaska spill
By Stephanie Kirchgaessnerin Washington
Published: April 7 2006 03:00 |
Last updated: April 7 2006 03:00


BP is under investigation by US regulators in connection with an Alaska oil spill last month when up to 267,000 gallons of crude leaked out of a BP-operated pipeline.

A person familiar with the investigation said the Environmental Protection Agency and the Department of Transportation, which oversees the safety of US pipelines, were investigating BP's ruptured line and whether the company violated safety regulations.

Officials at Alaska's Department of Environmental Conservation have separately said they would take action against BP because of the spill, including issuing "sizeable" fines.

The incident, which was discovered on March 2, occurred over an estimated five days on a transit line on the North Slope in an area that contains the largest oil field in the US.

BP said yesterday that it had not received inquiries from the EPA or Alaska state regulators since the days after the spill but that regulators were "pleased" with the company's clean-up efforts to date.

The company said it had completed its investigation of the spill with the help of state regulators and members of a steel union, and that its report was being vetted by the Alaska agency.

News of the investigation undermines efforts by BP to portray the UK oil group as an environmentally friendly company.

The spill has raised broader questions about BP's maintenance of its aging oil facilities in Alaska and whether the company ignored warnings from workers about maintenance standards.

The investigation and potential fines against BP come just months after US regulators questioned the oil group's safety culture in the wake of a Texas oil refinery explosion in 2005 that killed 15 people and injured more than 170.

 

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Anchorage Daily News

April 7, 2006

 

http://www.adn.com/news/alaska/story/7604262p-7515273c.html

 

Congressmen, EPA probe Prudhoe spill

QUESTIONS: Legislators want to know if trans-Alaska pipeline could have similar corrosion.

By MATT VOLZ

The Associated Press

(Published: April 7, 2006)

 

Last month's Prudhoe Bay oil spill, the largest ever on the North Slope, is drawing attention from a growing stable of investigators.

 

U.S. Environmental Protection Agency investigators who are conducting a criminal probe into a Beaufort Sea drilling spill in 2003 have reportedly added the Prudhoe spill to their inquiry list.

 

Last week, two congressmen started their own investigation into the spill, and they are questioning whether the 800-mile trans-Alaska pipeline is susceptible to the same type of corrosion that ate a hole in a major Prudhoe feeder pipeline, allowing the oil to spill.

 

Democratic Reps. John Dingell of Michigan and George Miller of California are dispatching to Alaska next week Christopher Knauer, the minority investigator of the U.S. House Committee on Energy and Commerce.

 

They asked the head of Alyeska Pipeline Service Co., the Anchorage-based oil company consortium that runs the trans-Alaska pipeline, whether the chemical additives suspected to have caused the corrosion in the Prudhoe feeder line could have reached the main pipeline.

 

The spill was discovered March 2 in a pipeline connecting two processing plants in the Prudhoe Bay oil field. As much as 270,000 gallons of crude spilled onto about two acres of tundra over a period of five days or more.

 

Last week, Dingell and Miller sent Steve Marshall, president of BP subsidiary BP Exploration (Alaska) Inc., a list of questions on the leak's cause and corrosion testing the company had conducted on its pipes. BP runs Prudhoe on behalf of itself and other owners.

 

Marshall sent the congressmen an 18-page response Monday. In it, Marshall writes the investigation is not complete, but "recent and aggressive internal corrosion is the likely cause of the leak."

 

State environmental regulators and Marshall say a possible contributor to the corrosion was an emulsion-breaking additive in the line.

 

The additive is used to reduce water and silt in the oil.

 

In their query to Alyeska president Kevin Hostler, Dingell and Miller asked whether the chemical additives used by BP have hurt the trans-Alaska pipeline, which carries North Slope oil south to the tanker port at Valdez.

 

"Assuming the theory that the rapid onset of corrosion was caused by the emulsion-breaking additive proves true, it would suggest that (the trans-Alaska pipeline) itself may be vulnerable to the same corrosion caused by the additive," the letter reads.

 

Dingell and Miller also asked Alyeska whether the pipeline company uses the same additives as BP. The congressmen further asked about Alyeska's methods and frequency of testing for corrosion.

 

Alyeska spokesman Mike Heatwole said company managers are preparing to meet with the committee investigator next week.

 

Dingell and Miller's inquiry is one of a growing number of investigations into the spill.

 

State environmental regulators said this week that

fines as high as $2.1 million could result from their investigation, which is being conducted jointly with BP.

 

Additionally, the EPA has launched its own investigation into the spill, according to The Wall Street Journal. A Washington-based spokesman for the EPA, Dale Kemery, would neither confirm nor deny any probe, citing agency policy.

 

Glen Plumlee, an Anchorage resident and strategic planning coordinator for Alyeska, said he has spoken with federal criminal investigators multiple times in recent months about corrosion spending and other matters. Plumlee said he also has filed a Labor Department complaint accusing Alyeska executives of retaliating against him, after he disclosed he talked with investigators, by reneging on the promise of a consulting job after he retires this Sunday.

 

The congressional committee does not have the power to prosecute. If the investigator finds evidence of criminal wrongdoing, Dingell and Miller plan to turn over that evidence to the Justice Department, said spokeswoman Jodi Seth.

 

In his response to the congressmen, BP's Marshall said the leaking line will not be brought back into service until its integrity is confirmed.

 

Ultrasonic tests showed increasing corrosion in the pipeline last fall, but the amount was manageable, Marshall said. Additional inspections were added as a result, he said.

 

The leak was at a point where the pipeline was buried for a caribou crossing, and it was not accessible to direct visual inspection. Ultrasonic testing of that area was not done, Marshall wrote.

 

Daily News reporter Wesley Loy contributed to this article. He can be reached at wloy@adn.com   or 257-4590.

 

 

 

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Bellingham Herald

April 6, 2006

 

http://news.bellinghamherald.com/apps/pbcs.dll/article?AID=/20060407/BUSINESS/604070346/1001/NEWS

 

Paper: BP focus of criminal investigation

No charges filed in North Slope pipeline probe

ASSOCIATED PRESS

 

LONDON - U.S. environmental regulators are conducting a criminal investigation into the management of pipelines in Alaska's North Slope by British energy group BP PLC, a newspaper reported Thursday.

 

An investigation has been under way for several months by officials at the Environmental Protection Agency and was expanded to include a March 2 spill of an estimated 134,000 to 267,000 gallons of crude from a BP-operated pipeline at Prudhoe Bay, The Wall Street Journal reported.

 

London-based BP spokesman Robert Wine said that the company has not been served with any papers or informed of any charges.

 

Wine said that BP cooperated fully with the EPA in the days after the Prudhoe Bay spill, including providing access to the site. There had been no communication between investigators and the company since then, he added.

 

Alaska environmental regulators said Wednesday that an investigation into the spill could result in fines against BP subsidiary BP Exploration (Alaska) Inc. of more than $2 million.

 

CASE MAY INVOLVE CLEAN WATER ACT

 

The Wall Street Journal quoted people familiar with the matter that it did not identify by name as saying that federal investigators are looking at corrosion issues on the ruptured line, as well as others in the area, to determine if BP has committed any violations of the federal Clean Water Act.

 

A Washington, D.C.-based spokesman for the EPA, Dale Kemery, would neither confirm nor deny the existence of any probe, citing agency policy.

 

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Wall Street Journal

April 6, 2006

 

BP's Pipeline Problems Spur U.S. Criminal Probe

Big Alaska Oil Spill Gives Company Fresh Black Eye After '05 Texas Explosion

By JIM CARLTON

April 6, 2006; Page A3

 

U.S. environmental regulators are conducting a criminal investigation into BP PLC's management of pipelines in Alaska's North Slope, according to people familiar with the matter, adding to mounting regulatory scrutiny of the British energy titan's U.S. operations.

 

These people said the investigation, which has been under way for several months by officials at the Environmental Protection Agency, was expanded to include an early March spill of an estimated 134,000 to 267,000 gallons of crude from a BP-operated pipeline at Prudhoe Bay. Alaska state conservation officials say the pipeline ruptured from internal corrosion, causing what is considered the largest oil spill ever in the energy-rich North Slope.

 

One person familiar with the matter said the federal investigators are looking at corrosion issues on the ruptured line, as well as others in the area, to determine if BP has committed any violations of the federal Clean Water Act. The act carries criminal and civil penalties for violations, such as allowing oil to spill into a federal waterway.

 

A BP spokesman, Daren Beaudo, said that EPA investigators were on site during the first several days of the spill and that BP hadn't heard from the agency since. "If they do contact us again, we will cooperate fully with their requests," he said in a written response to questions.

 

The EPA probe is just the latest embarrassment for BP -- the world's second-largest publicly traded oil company, after Exxon Mobil Corp. -- and Chief Executive John Browne, who has aggressively promoted the company as environmentally friendly and socially responsible.

 

The North Slope allegations come as U.S. investigators continue to pore over details of an explosion last year at the company's Texas City plant, which killed 15 and triggered a $21.3 million fine from workplace-safety regulators. The Labor Department referred the case to the Justice Department for possible criminal charges. Current and former plant workers accused BP of skimping on staff and maintenance; BP has said its spending decisions have had no effect on safety.

 

The allegations also come amid record profits for BP from rising crude-oil and gasoline prices, as well as amid rising political scrutiny. BP posted net profit of $22.63 billion last year.

 

Also yesterday, Alaska's Department of Environmental Conservation said it will seek fines that could amount to between $900,000 and $2 million against BP as restitution for much of the spilled oil. BP's Mr. Beaudo told Dow Jones Newswires that BP expected the action.

 

The North Slope spill covered a two-acre area of tundra and ice, as well as part of a lake. It prompted BP to curtail production by 95,000 barrels of oil a day, or about 10% of the normal amount that flows down the Trans-Alaska Pipeline to tanker ships in the port of Valdez. Crews are still attempting to clean up the crude. State officials say the line is expected to resume full production in about a week.

 

The investigation is being conducted by the EPA's criminal-investigation division. If investigators find any violations of the Clean Water Act, they will likely discuss the case with the U.S. attorney's office, which could forward the matter to a federal grand jury for possible prosecution, said a person familiar with the matter.

 

Charles Hamel, who for years has served as a conduit for safety-related complaints by oil-industry workers, said he alerted the EPA last year to the complaints from several past and current employees that BP has allegedly ignored their concerns regarding corrosion since at least 1999.

 

The 75-year-old Mr. Hamel, who lives in Alexandria, Va., said he went to EPA investigators for help after BP officials declined to act on warnings from some employees that cost-cutting had significantly reduced the company's program to monitor and repair corrosion at the network of aging pipes at Prudhoe Bay.

 

Mr. Beaudo, the BP spokesman, said the company has devoted more resources to its anticorrosion program, with spending rising to $71 million for inspection and chemical treatment this year, up from $58 million last year and $50 million in 2004.

 

--Chip Cummins contributed to this article.

 

Write to Jim Carlton at jim.carlton@wsj.com

 

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KTUU

April 5, 2006

 

http://www.ktuu.com/cms/anmviewer.asp?a=4330&z=1

 

Financial analyst claims he inflated Alyeska report

Wednesday, April 5, 2006 - by John Tracy

Anchorage, Alaska 

 

A financial analyst at Alyeska Pipeline Service Co. claims the company asked him to inflate a report on the amount of money that it spends on corrosion.

 

Fifty-one-year-old Glen Plumlee, the planning coordinator at Alyeska, says last fall the company asked him to indicate in a report that it spent $48 million on corrosion efforts in 2004. Plumlee says he refused to do it, and he says he told federal investigators about the incident, along with other safety concerns he has regarding Alyeska’s downsizing efforts.

 

Plumlee says when he told his bosses, including Alyeska president Kevin Hostler about the investigation; he was isolated by his supervisors. He says previous offers of a consulting contract after his retirement disappeared.

 

“I had quite a few contacts in Europe, U.S. and obviously Kevin Hostler was very interested. Offered me, three times in the same breakfast meeting, work. So that’s come to an end. I’m not sure,” said Plumlee.

 

“You’re feeling at this point you’ll be blackballed?”

 

“Yes,” said Plumlee (left).

 

Alyeska spokesman Mike Heatwole says it’s against company policy to offer consulting contracts to current employees and says Hostler never made the offer. Heatwole also says Plumlee has provided no evidence that any corrosion report was doctored, and Alyeska says it has no knowledge of a federal investigation.

 

Plumlee has written a complaint to the U.S. Department of Labor under a whistleblower act claiming retaliation. Heatwole says the company welcomes a Department of Labor probe.

 

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Fairbanks News Miner

April 5, 2006

 

http://www.news-miner.com/Stories/0,1413,113~7244~3283423,00.html

 

Analyst: Alyeska falsified reports

By SAM BISHOP News-Miner Washington Bureau

Wednesday, April 05, 2006 

 

WASHINGTON--A senior financial analyst at Alyeska Pipeline Service Co. has filed a complaint with federal labor officials alleging that he was asked to leave the company in retaliation for cooperating with criminal investigators from the Environmental Protection Agency in December.

 

Glen Plumlee of Anchorage, who will take an early retirement from Alyeska next week, said he told the federal investigators about his concerns with Alyeska's effort to build new pump stations and automate operations. He also said he was pressured to boost estimates of how much Alyeska was spending to fight corrosion on the trans-Alaska oil pipeline, which the company operates.

 

Plumlee, a senior analyst in the chief financial officer's department at Alyeska, said the investigators came to him.

 

"I did not seek them out, and they made it very plain to me that lying to them was a felony," he said in an interview Monday.

 

His bosses learned of his cooperation because shortly after the first interview with investigators he refused to write up a report on corrosion spending. His bosses wanted to him to inflate the numbers, he said.

 

"I'm not going to be Alyeska's designated felon on this," he said of his decision.

 

Alyeska spokesman Mike Heatwole said it was difficult to comment on the allegations because many of the details aren't in Plumlee's letter to the Labor Department. However, the company already has looked into some of the issues and feels it acted properly, he said.

 

"We have been aware of a lot of internal discussions around the issues that are in that letter," he said. "We've had a couple internal investigations. ... So far we don't see anything that concerns us."

 

Heatwole said the company was not aware of any criminal investigation.

 

Plumlee said he most recently met with an investigator at his home for two hours about two weeks ago.

 

Plumlee, 51, said he has "received regular commendations, bonuses and salary increases" in his job.

 

Alyeska President Kevin Hostler had even offered him a post-retirement consulting contract in December, he said, before he met with investigators the first time. The two haven't spoken since Hostler learned of the meeting with investigators.

 

"On March 11, 2006, another senior Alyeska executive, Vice President Lee Monthei, advised me that I should contact an employment agency and just 'move on,'" Plumlee wrote in his letter to the Labor Department.

 

Plumlee said the request to change the corrosion spending numbers in December wasn't the first time he had encountered such pressure. On Sept. 19, 2005, an Alyeska executive asked him to pull together the numbers on corrosion spending for Steve Marshall, BP Exploration (Alaska) Inc.'s president.

 

It was the Monday after The Wall Street Journal published a Saturday article about a list of 101 risks to the pipeline's integrity that Alyeska's soon-to-resign Chief Operating Officer Dan Hisey had written in August. One of the risks was corrosion.

 

Marshall was flying to London to talk with BP's CEO John Browne about the issues, Plumlee said.

 

Plumlee said his Alyeska bosses wanted him to inflate the amount spent on corrosion in 2004. He believes the proper number should be about $28 million. Instead, Marshall was given a figure of $46 million, citing an e-mail in his possession.

 

"They were false," he said of the numbers Marshall received. "I didn't falsify them. That's what they wanted me to do and they got someone else to do it."

 

BP Alaska spokesman Daren Beaudo said Monday he was not aware of the exchange and had no comment.

 

Plumlee said Alyeska increases or decreases its corrosion spending number depending on the expected audience by including more or fewer categories of work.

 

"I think we should use the number in our financial statements," which is closer to $28 million, Plumlee said.

 

Heatwole said he wasn't aware of the Sept. 19 exchange, either. However, he said, it is reasonable to expect that corrosion spending estimates could change based on what work is included. The effort to combat corrosion could include programs across the company--not only specific integrity investigations, but also maintenance and engineering work.

 

"It's a very, very comprehensive approach," he said.

 

Heatwole said he didn't have a total spending figure immediately available. In at least one place on Alyeska's Web site, an employee estimates anti-corrosion spending at "between $20 million to $40 million a year."

 

This isn't Plumlee's first run-in with Alyeska. He first went to work there in 1989. A few years later, he was working as an inspector and identified some "technical problems" on the pipeline in a report. He said he was fired, which led to testimony before a congressional committee in 1993.

 

Plumlee subsequently settled a complaint against Alyeska out of court and moved to the Lower 48 to attend law school. Alyeska called him in the mid-1990s and asked him to return, which he did. The company paid for his master's degree in business administration.

 

Until recently, he said, he believed the company was working hard to correct past troubles.

 

"I was a pretty loyal employee. I really did believe they were trying to do the right thing," he said.

 

That changed last spring when he said he thought top company officials ignored troubles with "strategic reconfiguration," the company's effort to simplify pipeline operations. That includes a plan to run four pipeline pump stations on electricity and use smaller, automated modular units at the others.

 

Plumlee's complaint letter to the Labor Department was given to the News-Miner by Chuck Hamel, a Virginia resident and former oil shipping broker with a long history of conflict with Alaska's petroleum industry.

 

Hamel also wrote a letter Monday to Rep. John Dingell, D-Mich., to make him aware of Plumlee's complaint.

 

Dingell led the hearing at which Plumlee testified in 1993, Hamel said.

 

Washington, D.C., reporter Sam Bishop can be reached at (202) 662-8721 or sbishop@newsminer.com  .

 

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http://www.news-miner.com/Stories/0,1413,113~7244~3283426,00.html

 

BP official: State in danger of losing oil industry

By STEFAN MILKOWSKI , Staff Writer

 

Alaska could lose its oil industry as Detroit lost its automobile makers and Pittsburgh lost its steel, a BP representative said Tuesday during a Greater Fairbanks Chamber of Commerce speech.

 

The state could either attract additional billions of dollars in the coming years by approving the oil production tax system Gov. Frank Murkowski proposed or demand hundreds of millions of dollars in taxes now and jeopardize future revenue, said Al Bolea, who oversees pipelines and shipping for BP Alaska.

 

Bolea drew links between Alaska and some of the nation's most depressed cities. He described the boom and crash of the steel industry in Pittsburgh and suggested that Michigan and the Motor City could have been caught off guard by recent cuts in the auto industry.

 

"Did they ever really think the auto industry would move out?" he said.

 

Bolea warned that too much taxation could cause the oil industry to move elsewhere. 

 

"You can't trap capital," he said after the talk, claiming that a company's ability to move its capital freely wherever it chooses sits at the base of our economic system.

 

Becky Hultberg, the governor's spokeswoman, said Murkowski has expressed concerns about the effects of tax rates above what he proposed.

 

"There is a tipping point that could jeopardize the gas pipeline and limit future investment," she said.

 

In February, Murkowski proposed a production tax on oil that would tax companies 20 percent on statewide profits and offer a 20 percent investment credit.

 

The proposal, Bolea said, was "right at the edge of what we could handle." He said BP had sought a 12.5 percent tax and only agreed to pay 20 percent because the tax would provide a stepping stone toward a gas pipeline by providing certainty on oil taxation.

 

"We didn't expect to get certainty for free," he said.

 

Bolea disputed the "myth" he said had sprung up: Since the companies had agreed to a 20 percent tax rate without too much protest, the state was not getting all it could from them.

 

"It's not a bunch of giveaways," he said of the governor's proposal.

 

Since the governor introduced his oil tax legislation, the state House and Senate have both proposed changes to the tax legislation that would significantly increase the amount companies paid to the state.

 

With the changes proposed by the Senate, including a 25 percent tax on production, the state would have the highest tax structure in the United States as well as the highest cost of production in the United States, if not worldwide, Bolea said.

 

The result would be a decrease in investment in the state that would allow production decline to continue.

 

In his talk, Bolea also placed responsibility on the governor for keeping the gas line contract confidential.

 

BP's preference was to release the contract along with the proposed oil tax legislation so legislators could review them together, he said.

 

When he was asked if that would help legislators decide about the oil tax, he said, "It would absolutely eliminate the uncertainty that they are experiencing."

 

He said the secrecy around the contract has enabled the mistaken belief in a conspiracy between the companies and the government and has frustrated legislators.

 

"It's frustrating for us, too," he said. "BP has absolutely nothing to hide.

 

"The governor is running this thing the way he wants to run it," he said, adding that BP has no ability to override the governor.

 

Hultberg said the governor is looking forward to the time he can release the contract and has always indicated he will when it is complete.

 

A number of pieces still need to be worked through, she said.

 

In an e-mailed response to News-Miner questions, Mark Morones, spokesman for the attorney general's office, replied last month, "The Governor wants the legislature to deal with the PPT before we address the proposed contract."

 

Bolea said the oil production tax legislation being developed in Juneau will have a significant effect on every Alaskan now and in the future and encouraged chamber members to get involved.

 

Staff writer Stefan Milkowski can be reached at smilkowski@newsminer.com   or 459-7577.

 

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Oh My News.com

AP Newswire

April 5, 2006

 

http://english.ohmynews.com/ArticleView/article_view.asp?no=284065&rel_no=1

 

 

Alaska state regulators to fine BP for pipeline spill

MATT VOLZ

JUNEAU, Alaska

 

The investigation into a March pipeline spill in the Prudhoe Bay oil field could result in fines against BP Exploration (Alaska) Inc. of more than $2 million (euro1.63 million), Alaska environmental regulators said.

 

Gov. Frank Murkowski also announced Wednesday that as a result of the spill, an interagency group will be formed to share information about pipeline integrity in arctic climates.

 

A pipeline between two gathering centers leaked between 130,000 gallons (492,000 liters) and 270,000 gallons (102,000 liters) of crude over an estimated five-day period before it was discovered March 2. Gathering centers separate oil from water and other materials that come out of the ground during drilling before shipping the oil down the main trans-Alaska pipeline.

 

An investigationby BP and Alaska Department of Environmental Conservation officials is not yet finished, but ADEC Commissioner Kurt Fredriksson said the state will be pursuing penalties and fines against BP, the company that operates the Prudhoe Bay field.

 

The amount will depend on how much crude spilled, he said.

 

''They could be sizable,'' Fredriksson said.

 

The potential fine is $8 (euro6.52) per gallon (3.8 liters) spilled, but there are other factors that could change that amount, said Larry Dietrick, ADEC director of spill prevention and response.

 

Given the estimates of the size of the spill, the fine against BP could be between $1 million (euro820,000) and $2.1 million (euro1.71 million) without those unnamed factors.

 

Fredriksson said regulators believe the corrosion that caused the leak was an isolated incident.

 

''Our investigation leads us to explore in greater depth where we see common occurrences or factors that may have contributed to the failure,'' Fredriksson said. ''We have not stumbled across those at this point to lead us into a more in-depth investigation beyond this particular segment.'' A contributing factor to the corrosion is believed to be a chemical put into that section of the line by an emulsion breaker.

 

Fredriksson said he was assured the chemical was not used in any other line but that one.

 

Lori Epstein, senior engineer for the pollution watchdog group Cook Inlet Keeper, said the chemical reaction caused by the emulsion breaker should have been anticipated beforehand by BP.

 

''Not having done that, I think the state has to look at whether they were in compliance with all the corrosion prevention protocol they needed to be,'' Epstein said. ''If this mistake in this one line caused increased corrosion, what about the downstream line?'' Epstein said she believed ADEC has done a good job as a regulator, but she questioned whether the department could be an effective enforcer, since Murkowski is in negotiations with BP and two other producers to build a $25 billion (euro20.39 billion) natural-gas pipeline.

 

''I am, frankly, skeptical that they will announce or collect a significant penalty from BP while they are undergoing negotiations,'' Epstein said. ''That's the DEC's job, to be a regulator. But they are a creature of state government.'' Murkowski spokeswoman Becky Hultberg called that a ridiculous contention and said the governor takes seriously his duties of environmental stewardship.

 

The interagency group the governor proposes forming would be made up of people from the ADEC, the state Department of Environmental Conservation, the state Department of Natural Resources, the Alaska Oil and Gas Conservation Commission and the federal Office of Pipeline Safety.

 

It will not be a regulatory body, and details of the group's functions are sketchy, but it is meant to share information and expertise between agencies, Fredriksson said.

 

He said he did not know whether lack of information sharing was a problem thatcontributed to the March spill.

 

The department also will soon be issuing new regulations for corrosion monitoring and prevention for flow gathering pipelines, Fredriksson said. Those regulations have been in the works for 18 months, he said.

 

However, the new regulations would not apply to the line that leaked, as the pressure of that line was low enough to receive a federal exemption from regulation.

 

BP spokesman Daren Beaudo said the company is still inspecting the line that leaked, and is digging up other portions of the line that were buried as caribou crossings to see if corrosion escaped detection there, too.

 

A bypass line has started operating and is now producing about 45,000 barrels per day. The usual daily production from the line had been about 100,000 barrels per day, Beaudo said.

 

He said the cleanup of the spill has progressed well.

 

''We'll be out there as long as it takes to clean it up as thoroughly as we can,'' Beaudo said.

 

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Wall Street Journal
April 5, 2006

UPDATE:
Alaska To Take Action Against BP Over Oil Spill
DOW JONES NEWSWIRES
April 5, 2006 5:56 p.m.
(Updates with comments from BP and Alaskan Governor)

CALGARY -- Alaska will take action against BP PLC (BP) over a crude oil leak in March at a transit line on the North Slope, the state's Department of Environmental Conservation said Wednesday.

"We will take action against BP within state laws," DEC Commissioner Kurt Fredriksson told a conference call. "There are penalties and fines available and we will be pursuing those. They could be sizable, depending on the results of our investigation."

The spill took place on March 2 at a transit line on the North Slope, an area that's home to Prudhoe Bay, the largest oil field in the U.S. BP's Prudhoe Bay operations normally produce 470,000 b/d of crude, which eventually is shipped through the Trans-Alaska Pipeline. BP shut in about 100,000 b/d of output because of the spill.

Company and state officials said in March that between 201,000 and 267,000 gallons of crude oil was spilled in the leak. That makes the spill, which is equivalent to 4,786-6,357 barrels, the largest ever seen on the North Slope, surpassing a 38,850-gallon spill in 1989.

The oil spill had come as a "surprise" to authorities, Fredriksson said, because it had occurred at a crude oil transit line rather than at a flow gathering line, which is perceived to be higher risk.

He added that Alaska would now create a new information-sharing body, called the Arctic Pipeline Technology Team, which would look to bring together information without worrying about jurisdictional borders.

"We want to see that this incident doesn't happen again," Fredriksson said. "We want to reinforce systems in place and share expertise and information."

Fredriksson declined to say whether inadequate information sharing had been a factor in the BP leak. He said investigations had indicated that a chemical used as an emulsion breaker in the pipeline could have been a factor in causing the spill.

"We need to take a good hard look at our North Slope pipelines and the programs to protect them," Alaska Gov. Frank Murkowski said.

"The oil companies have complied with leak detection standards, they have extensive corrosion monitoring programs, yet we still had a very substantial leak," he added.

Alaska is in the final stages of adopting regulations on corrosion monitoring and protection in its crude gathering and flow lines. These regulations have been in development for 18 months, Fredriksson said. At present, there's no corrosion regulations in place for those types of pipelines.

BP spokesman Daren Beaudo told Dow Jones Newswires that while the company hadn't been in contact with the DEC specifically with regard to potential fines, it did understand that action was likely. He added that any fines likely wouldn't be determined until the clean-up was completed.

He added that BP approved of the decision to create an Arctic Pipeline Technology Team.

"We are supportive of that notion and are looking forward to participation," he said.

Beaudo was unable to say when the afflicted pipeline might fully return to service. However, the use of a byline would allow production and throughflow to return to around 75,000 b/d in approximately two weeks' time, he said.

-By Norval Scott, Dow Jones Newswires; 403-531-2912; norval.scott@dowjones.com

 

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Anchorage Daily News
April 4, 2006

http://www.adn.com/money/story/7595109p-7506321c.html

Oil flow partially restored
PRUDHOE BAY: Fifth of production
shut down since last month is back.
By WESLEY LOY
Anchorage Daily News
Published: April 4, 2006
Last Modified: April 4, 2006 at 02:18 AM

BP has restored 20 percent of the Prudhoe Bay oil production idled since March 2 due to a pipeline leak, but it will be weeks longer before the flow returns to normal, a company spokesman said Monday.

The oil company Sunday night began pumping about 20,000 barrels of crude per day through a 24-inch pipeline, which is being used to bypass a larger pipe that sprang a leak, causing the largest oil spill ever on the North Slope. Investigators believe corrosion ate a small hole into the line, allowing the oil to escape slowly over time.

The faulty line, which remains shut down, is a major 34-inch feeder pipe within Prudhoe that normally carries 100,000 barrels of oil per day, or 12 percent of total North Slope production.

Inspectors continue to search for more corroded or weak spots along the pipeline, which can't be restarted until it is fully repaired and government regulators approve, said BP spokesman Daren Beaudo.

The federal Pipeline and Hazardous Materials Safety Administration last month issued BP an order to prevent more leaks from the pipe, which spilled an estimated 201,000 gallons of oil over nearly 2 acres of tundra. The order revealed that the pipeline had at least six more trouble spots.

The pipeline was installed in 1976, a year before production began at Prudhoe, the nation's largest oil field.

The pipe leaked at a place where it passes through a caribou crossing -- a mound of gravel placed over pipelines to allow the migratory animals to walk over.

BP inspectors have unearthed other caribou crossings to better examine the pipeline, Beaudo said.

He didn't rule out a replacement.

"Our objective is to fully understand the mechanical integrity of that pipeline," he said. "It's our intent to put it back into service."

Using the 24-inch bypass line, BP believes it can gradually reactivate idled wells and restore as much as 75 percent of the lost oil production within two weeks, Beaudo said. Normally, North Slope production exceeds 850,000 barrels per day.

The state Department of Environmental Conservation said Monday that cleanup of the oiled tundra is nearly complete.

Two Democratic congressmen, Reps. John Dingell of Michigan and George Miller of California, have asked BP to answer questions about the spill and are sending staff members to Prudhoe to look at the spill site.

Beaudo said BP is nearly done preparing answers to the congressmen's questions.

Daily News reporter Wesley Loy can be reached at wloy@adn.com  or 257-4590.

 

 

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Fairbanks News Miner

April 2, 2006

 

http://www.news-miner.com/Stories/0,1413,113~7244~3281364,00.html

 

BP quizzed on Slope oil spill

By SAM BISHOP News-Miner Washington Bureau

 

Sunday, April 02, 2006 - WASHINGTON--Two Democratic congressmen have written to BP's Alaska president with several questions focused on the company's past inspections of a recently discovered leaky pipeline on the North Slope and the amount of solid material found in that line.

 

Reps. John Dingell of Michigan and George Miller of California thanked BP's president, Steve Marshall, for meeting with their staffs in mid-March.

 

In their March 24 letter, though, the congressmen presented what they said were several unanswered questions about the line's history and the cause of the spill. The line lost more than 200,000 gallons of oil and it was the largest spill ever on the North Slope, the congressmen said.

 

The "leading explanation appears to be corrosion," Dingell and Miller said.

 

Darin Beaudo, BP spokesman in Alaska, said Friday afternoon that the company was drafting a response to the congressmen. The investigation is not finished, he said.

 

"We haven't come to a conclusion yet as to whether there was a cause or multiple contributing causes," he said.

 

The congressmen said BP's Marshall and his staff told them the line had been tested with ultrasound within the past six months and the pipe thickness was "within tolerance."

 

"While we applaud such testing, we still remain unclear where such tests were taken and whether such tests were made on the section that ultimately failed," they said.

 

BP reported that the pipe was last tested with a "smart pig" in 1998, the congressmen said.

 

Beaudo explained that a smart pig, which runs inside the pipe, maps the condition of the entire section through which it moves. Using that information, the company then looks at specific locations with an ultrasound machine.

 

"We go back and go over spots that may have some corrosion tendencies," he said.

 

BP has an extensive corrosion management plan, with about 100,000 inspection points a year, he said. The company has replaced lines because of corrosion in the past.

 

The line that leaked carries about 15 percent viscous oil, Beaudo said. Viscous oil holds more solids than standard light oil, he said. That makes the line unique on the North Slope, he said.

 

"We haven't had the same kind of issue with other crude transfer lines," he said.

 

Dingell and Miller asked why the line hadn't been smart-pigged since 1998.

 

They also asked detailed questions about solids in the line.

 

"It has been reported to us that the line in question, while having a low water cut, also has a very low flow rate and that this essentially makes the (oil transit line) a giant 'oil-water separator,'" the congressmen said. "We are advised that this results in the settlement of solids in the underlying layer of stagnant water. Is this the case? If so, what are the implications of this?"

 

The congressmen noted that the leak occurred near a caribou crossing where the line dips underground. They asked if solids collect in such locations. If so, they asked, could a maintenance pig have removed them.

 

The congressmen asked for a response by Monday.

 

Washington, D.C., reporter Sam Bishop can be reached at sbishop@newsminer.com  or (202) 662-8721

 

 

 

US Fed News
March 24, 2006

REP. DINGELL WRITES TO BP EXPLORATION (ALASKA) PRESIDENT REGARDING NORTH SLOPE OIL SPILL, OIL SUPPLY PIPELINE INSPECTION METHODS
24 March 2006
US Fed News

WASHINGTON, March 24 -- Rep. John D. Dingell, D-Mich., ranking Democrat on the House Energy & Commerce Committee, issued the text of the following letter:

Mr. Steve Marshall President BP Exploration (Alaska) Inc. 900 East Benson Blvd. Anchorage, Alaska 99508

Dear Mr. Marshall:
Thank you for meeting with our staffs last week to discuss the North Slope oil spill currently being addressed by cleanup crews. It is our understanding that at least 200,000 gallons of crude have leaked so far from a major supply line, which ultimately delivers product to the Trans Alaskan Pipeline. This is now, unfortunately, the largest spill ever to occur on the North Slope, and one of the largest in Alaskan history. We understand that the failed line is currently being operated by BP Exploration (Alaska) Inc. (BP).

We are informed that, although company officials are still examining the root causes of the spill, the existing leak detection system failed to discover the leak. We also understand that the leading explanation appears to be corrosion and that this occurred in an area where the line dips underground at what is commonly called a "caribou crossing." While it is still unclear what caused the corrosion, we do understand that BP believes its onset was quite rapid and may have developed in as little as six months. Further, we are informed - through our staff's discussion with you and your staff - that this particular line had been tested using ultrasonic methods within the past six months, and that BP believes that the last period of testing found that the thickness of the areas of the pipe's walls that were tested were found to be within tolerance.

While we applaud such testing, we still remain unclear where such tests were taken and whether such tests were made on the section that ultimately failed. Moreover, we are unclear whether any of the spot testing associated with ultrasonic testing can or should be seen as representative of the entire line's condition. This is particularly important as we understand that this line had not been examined with a "smart pig" since 1998 - a process in which corrosion or other anomalies can be more thoroughly detected. In fact, we are still trying to understand the frequency at which this line was pigged (either via "maintenance pig" or "smart pig") and we look forward to receiving information that details both the frequency and method(s) used to examine this line. It is our understanding that such information will be made available to us soon.

We recently received correspondence that raised some concerns about BP inspection methods, particularly those relating to corrosion matters. We therefore have several questions that we would ask you to respond to in order for us to better understand what specifically failed and what lessons have been learned to avoid future spills. As some of our questions may pertain to the upcoming reauthorization of the Pipeline Safety Improvement Act of 2002, we ask that you respond to the attached questions by no later than Monday, April 3, 2006.

We appreciate your cooperation and assistance in these matters of energy transport, security, and safety. If you need further information regarding this request, please contact us or our staff, Mr. Christopher Knauer with the Committee on Energy and Commerce Democratic staff at (202) 226-3400, or Mr. Jeff Petrich with the Committee on Resources Democratic staff at (202) 225-6065.

Sincerely,
JOHN D. DINGELL RANKING MEMBER, COMMITTEE ON ENERGY AND COMMERCE GEORGE MILLER MEMBER, COMMITTEE ON RESOURCES
Attachment
cc: The Honorable Joe Barton, Chairman Committee on Energy and CommerceMr. Brigham McCown, Acting Administrator Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation


Questions for Steve Marshall, President BP Exploration (Alaska) Inc.

1. Please provide a detailed schedule of all corrosion testing for the entire Oil Transit Line (OTL). For this effort, please delineate the type of testing used (e.g. visual, smart pigging, ultrasonic spot, etc.). Please also indicate where specifically any testing occurred.

2. Please indicate whether BP had any specific warning(s) that the OTL faced significant corrosion issues from within the company or through outside engineers or consultants. If so, did any reports or consultations predict problems in the low-lying caribou crossings? If so, please describe those reports or consultations.

3. If the OTL had not been smart pigged since 1998 (as reports claim), please indicate why it was not deemed prudent by BP to apply technology with greater frequency to such a strategic line.

4. Please specify where ultrasonic tests were taken on the failed line prior to the leak, and where those tests were taken relative to the failed section. In particular, was the failed section tested prior to the leak? If not, why not? Also, does BP believe that a test measuring tolerances in one section of the OTL to be representative of tolerances for the entire line? Please explain.

5. It has been reported to us that the line in question, while having a low water cut, also has a very low flow rate and that this essentially makes the OTL a giant "oil-water separator." We are advised that results in the settlement of solids in the underlying layer of stagnant water. Is this the case? If so, what are or were the implications of this?

6. Were significant amounts of solids known to be present in the bottom of the line prior to the leak, particularly at the caribou crossings where the pipeline dips? Have significant amounts of sludge been found at the caribou crossings since examining the pipeline post leak? If solids were known, what concern(s) would this pose to the line? Also, if solids were deemed a concern, would a maintenance pig have been able to remove them and by removing them, would this in any way have made the line less likely to fail?

7. Please explain why the leak detection system on the OTL line failed to detect the leak and what changes will be made to leak detection systems on this and all of the BP North Slope lines.


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Anchorage Daily News
March 24, 2006

Governor to visit Prudhoe spill site
FUTURE RISKS: Corrosion in the pipeline will be focus of discussions.
By MATT VOLZ
The Associated Press
Published: March 24, 2006
Last Modified: March 24, 2006 at 03:08 AM

JUNEAU -- Gov. Frank Murkowski will travel to the North Slope today to meet with state, federal and oil industry officials for an overview on this month's spill in Prudhoe Bay.

For five days or more, a transit line operated by BP Exploration (Alaska) Inc. located upstream of the 800-mile-long main pipeline leaked up to 267,000 gallons of crude from a small hole onto the tundra.

BP officials say the leak was due to corrosion in the transit line.

Murkowski said Thursday he will speak with federal, state and oil industry officials about corrosion risks throughout the aging trans-Alaska pipeline, particularly as heavy oil production is increasing.

"We're going to delve into the issue of what's the potential risk for any big future, I guess, exposure to corrosion and other potential situations associated with aging," Murkowski said.

The trans-Alaska pipeline will be 30 years old next year.

Viscous, or heavy oil, carries more sediments and water than does traditional North Slope crude, which may have been the cause of corrosion in the transit line, BP spokesman Daren Beaudo said.

One way BP plans to counter the corrosive effects is to install a different emulsion breaker to better separate the water from the oil, but Beaudo acknowledges there are challenges with the new technology in producing viscous oil.

Beaudo also said not enough corrosion inhibitor was carrying over with the heavy oil and the company will start injecting that inhibitor at a different point.

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San Diego Union
March 22, 2006

http://www.signonsandiego.com/news/nation/20060321-1902-wst-prudhoespill.html

BP mulls options following federal spill response order
By Rachel D'oro
ASSOCIATED PRESS
7:02 p.m. March 21, 2006

ANCHORAGE, Alaska - BP Exploration (Alaska) Inc. is reviewing a federal order that calls for sweeping changes in response to the record crude oil spill on Alaska's North Slope, a company spokesman said Tuesday.

Among problems noted in the corrective order from the Pipeline and Hazardous Materials Safety Administration was the "ineffectiveness of the leak detection system to identify the leak" in the Prudhoe Bay transit line.

The five-page document also noted that a post-spill inspection of the 30-year-old pipeline found several flaws, including an area of the 0.375-inch wall worn ultra thin by internal corrosion.

Officials believe crude was leaking for at least five days from a small corrosion hole in the line before the spill was discovered March 2 by a worker who smelled the oil.

Crews are cleaning up the two-acre spill, which is estimated at up to 267,000 gallons. Slowed by bitter cold weather, they have recovered 63,546 gallons - or 1,513 barrels - of crude.

The pipeline safety agency, part of the U.S. Department of Transportation, said BP must review the leak detection system on the affected line as well as two other crude transit pipelines in Prudhoe, 250 miles north of the Arctic Circle.

The company must make necessary modifications within three months.

BP officials are studying their options on how to proceed, according to company spokesman Daren Beaudo.

"We haven't decided on what action, if any, to take," he said.

The company has until the end of the week to request a hearing on the matter, said James Wiggins, a spokesman for the federal agency.

"It's part of the process available to them," he said. "We've got good reasons for requiring certain things. The pipeline failed."

The order also calls for repairs of six anomalies found in the line after the spill was discovered. The worst flaw was a spot where the wall thickness had worn down to 0.04 of an inch.

Among other measures, BP must run maintenance pigs - electronic equipment put through a pipe to check wall conditions - on the three lines. Since the spill, critics have slammed BP for last running a pig through the ruptured line in 1998.

Officials with the Alaska Department of Conservation said the spill will lead to fines against BP and possibly stricter regulations for such transit lines, which have been subject to little government scrutiny in the past.

The federal agency did not address what BP suspects as a significant factor in the rapid corrosion first found last fall inside the thick arctic-grade carbon-steel pipe, which leads eventually to the trans-Alaska oil pipeline.

Beaudo said the corrosion may be related to the fact the pipeline is increasingly carrying viscous oil, a hard-to-pump heavy crude being tapped as the oil field is drawn down. Separation chemicals used on viscous oil may interfere with corrosion-inhibiting additives that are put in the pipeline, Beaudo said.

"What we believed happened to this line is unique," he said, adding that corrosion inhibitors will now be injected directly into the line once it resumes production.

Under the federal order, BP must submit a corrosion management plan for this line and two other transit lines, which only carry crude and not viscous.

The company already runs an unparalleled job of staying on top of corrosion, said Larry Dietrick, director of spill prevention and response for the state environmental conservation department. This year, BP's corrosion inspection budget for the North Slope is $71 million, up from $50 million spent in 2004.

But any input from the federal pipeline agency is welcome, he said, if it leads to a better system following the largest crude spill ever on the North Slope.

The real issue is to properly identify the cause and properly get a fix on this so it doesn't happen again," he said.

 

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San Diego Union
March 22, 2006

http://www.signonsandiego.com/news/nation/20060321-1858-wst-exxonvaldezanniversary.html

Pipe corrosion biggest threat as Alaska marks Exxon Valdez spill
By Matt Volz
ASSOCIATED PRESS
6:58 p.m. March 21, 2006

JUNEAU, Alaska  Friday marks 17 years since the Exxon Valdez tanker ran aground in Alaska's Prince William Sound and caused the worst oil spill in the nation's history.

The 11 million gallons of crude oil that oozed from the grounded tanker created a destructive slick that moved across 470 miles of shoreline to the Alaska Peninsula, killing unknown quantities of flora and fauna and causing damage that is still felt today by fishermen and the Alaska Natives who live off the land.

“You can still go and pick up a rock and find what looks like fresh oil,” said John Devens, executive director of the Prince William Sound Regional Citizens' Advisory Council.

Many of the lessons of 1989 have been applied. The oil tankers that ship Alaska's crude to the West Coast have become stronger, most with double hulls and redundant operating systems for safety. Two escort vessels now guide the tankers out of Prince William Sound. More equipment, such as containment boom, are housed nearby to respond if a spill happens again.

“In general, the changes that have occurred in Prince William Sound in terms of oil transport since 1989 have been phenomenal,” said Nancy Bird, president and chief executive of the Prince William Sound Science Center. “I feel much more confident that we would be able respond to an oil spill today.”

But 17 years after the disaster, the potential for danger appears to have shifted onshore. Corrosion in the aging oil supply system is seen by some as a growing threat, as evidenced by this month's North Slope leak, the second-largest spill in the state's history.

A transit line upstream of the main pipeline and operated by BP Exploration (Alaska) Inc. for five days or more leaked up to 267,000 gallons of crude from a small hole onto the frozen tundra of Alaska's North Slope.

Transit lines generally have not been subjected to regulations as rigorous as the 800-mile line, though state regulatory officials say that could change because of the spill. State environmental regulators say the spill will lead to fines and possibly stricter pipeline regulations in Alaska, a state that has grown rich on oil since crude began flowing from the North Slope via the pipeline in the 1970s.

The leak in the transit line has caused some observers to worry about the condition of the entire pipeline system.

“I think many of us are seriously concerned about the aging and the deterioration of the pipeline and the facilities” Devens said. “We know that corrosion is becoming a factor.”

The main pipeline, which stretches from Prudhoe Bay in the North Slope to Valdez in Prince William Sound, will be 30 years old in 2007. Less than half the oil is flowing now than at peak production, but the oil industry and state officials figure on at least another 30 years of life out of the pipeline.

Devens said with that kind of expectation, the amount spent on maintaining the pipeline should be increased.

Mike Heatwole, spokesman for Alyeska Pipeline Service Co., which operates and maintains the Trans-Alaska Pipeline System, said his company has all the funding necessary to keep the pipeline running safely. Alyeska has an annual budget of $350,000 for operations and maintenance and another $100,000 for capital projects, he said.

“We are ready to handle oil flow for the next 30 years,” Heatwole said. “We're making the necessary investments to do that.”

Heatwole said he does not know specifically whether the age of the pipeline was causing corrosion.

“Probably the best way to describe it is that we've never had a leak in the main pipe due to corrosion,” he said.

But as the oil fields of the North Slope decline, the quality of oil is also declining, meaning coarser and heavier crude is flowing down the pipe.

This month's North Slope oil spill was caused by corrosion in the transit line, according BP PLC officials.

The corrosion may have been due to the water and sediments that are carried with the viscous oil, said company spokesman Daren Beaudo.

“There are technical challenges with viscous oil and these facilities were created to handle light oil,” Beaudo said. “It's not necessarily the characteristics of the crude oil, it's water. Water is the source of corrosion. You've got to have water in the line to have corrosion.”

BP and other oil producers are asking state lawmakers for tax incentives to develop viscous oil, which is more expensive to develop, is thick as molasses and carries more sediments than typical North Slope crude.

The industry has estimated that in five years, heavy oil could account for 100,000 barrels per day flowing down the pipeline, or about one of every eight barrels of oil in the pipe.

The spill was localized and no damage was seen closer to the pipeline, Beaudo said. But what BP learns from this leak will be applied systemwide, he said.

“We're looking at a 50-year future here,” Beaudo said. “We'll take what we learned about the potential impacts of viscous oil and share it across the field.”

Heatwole said Alyeska was waiting for a detailed report on the cause of the North Slope leak and could not comment on heavy oil being the cause of corrosion.

But as the quality of crude oil changes, it is monitored and periodic analyses are conducted. A scraper called a “cleaning pig” is sent weekly down the length of the pipe, he said.

“We don't have a current concern about the crude oil coming down the line,” Heatwole said.

On the Net:
Prince William Sound Regional Citizens' Advisory Council:
www.pwsrcac.org
Prince William Sound Science Center:
www.pwssc.gen.ak.us
Alyeska Pipeline Co.:
www.alyeska-pipe.com
Exxon Valdez Oil Spill Trustee Council:
www.evostc.state.ak.us

 

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Time Magazine
March 20, 2006

http://www.time.com/time/magazine/article/0,9171,1174706,00.html

Monday, Mar. 20, 2006
A Crude Warning
The largest oil spill in Alaska's North Slope raises sticky questions about future drilling in the Arctic
By NATHAN THORNBURGH

PHOTO:
http://img.timeinc.net/time/daily/2006/0603/mopping.jpg

At 5:45 on a searingly cold March morning, still 2 1/2 hours before sunrise, a BP worker driving along an empty access road at Alaska's Prudhoe Bay oil field suddenly smelled oil.

On the side of the road, hidden below a field of snow, a massive slick of crude oil had spread over nearly two acres of tundra. An aging pipe, installed during the Ford Administration, had corroded from the inside and oozed oil out of an almond-size hole--a leak that went undetected for at least five days. None of the pipeline's alarms were tripped. In all, 201,000 gal. of crude escaped, making the spill the largest ever to hit Alaska's North Slope.

The accident raises sticky questions about the oil industry in Alaska at an awkward time for the Bush Administration and its supporters in Congress. While the Senate was busy last week passing a largely symbolic budget amendment in support of opening the Arctic National Wildlife Refuge (ANWR) to new drilling, Prudhoe Bay was facing the harsh realities of operating the state's existing wells.

The great petroleum reserves of Alaska are slowly but inexorably drying up, along with the profits of the oil companies that operate there. Meanwhile, 30-year-old pipelines that stretch like a giant cobweb over the oil fields of the North Slope, a flat expanse between the majestic Brooks Range mountains and the Arctic shore, need more and costlier maintenance than ever. The new spill puts into sharp relief the same question that has stalemated the ANWR debate since the 1980s: Can oil companies focused on their bottom line be trusted to protect Alaska's fragile environment?

There is no question that Prudhoe Bay, the nation's largest oil field, is in decline. Production has slumped from a daily average of 1.6 million bbl. in 1988 to just 425,000 bbl. in 2005. To extract whatever oil remains, BP, which operates the field for a consortium of petroleum companies that includes ConocoPhillips and Exxon Mobil, has been taking measures that may have unintentionally raised the risks. Drilling more wells to further develop Prudhoe just adds to the more than 1,700 miles of pipeline that already crisscross the North Slope, increasing the chance of leaks. And other techniques, such as injecting water into old wells to flush out remaining pockets of oil, can be hard on the pipes. The corrosion behind this month's leak, for example, is thought to have been started by water that got into the pipeline, eating away at the steel.

Even measures taken to protect wildlife can cause problems. The hole that created the new spill was located at one of dozens of caribou-crossing sites, where the pipeline is tucked in a culvert that helped shield the leak from view.

BP says that it increased corrosion-management spending 16% from 2004 to 2005 to meet these challenges. But an alarming Department of Transportation document obtained by the Anchorage Daily News raises questions about BP's diligence in inspecting its pipelines, pointing to no fewer than six other anomalies found on the same 10-mile stretch of pipeline, including a spot where the pipe had corroded so badly it was less than 0.04 in. thick.

Local political leaders are concerned about the oil companies' priorities. "I'd like to see them use the best available technology to prevent major spills like [this one]," says North Slope Borough Mayor Edward Itta. "That's not happening right now."

In Congress, supporters of the Administration's policies say the country needs ANWR oil to be energy independent and to fight the pinch at the pump, while opponents call it a land grab for Big Oil. Most observers agree, however, that with House Republicans deeply divided on the topic, the Senate's ANWR amendment will probably die the same death it did last year. One Republican staff member called it the Groundhog Day amendment.

Back in Prudhoe Bay, the battle lines are clearer. Braving temperatures as low as 40°F below zero, cleanup crews have contained the spill and are trucking in fresh snow to absorb whatever oil can't be vacuumed up. BP hopes to recover 90% of the lost crude, which it will funnel back into the pipeline and pump to the port of Valdez for sale on the open market.

With reporting by Reported by Wesley Loy/Anchorage

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Time Magazine
March 19, 2006

http://www.time.com/time/nation/article/0,8599,1174717,00.html

An Oil Pipeline in Peril?
After a leak in Prudoe Bay, an oil giant gets a
tough fix-it order from the federal government
By WESLEY LOY/ANCHORAGE

London-based oil giant BP, scrambling to clean up one of the largest oil spills in Alaska history and stay out of further trouble with state pollution regulators, now has federal authorities to satisfy as well.

The U.S. Department of Transportation has issued a "corrective action order" to BP to repair a leaky pipeline and improve corrosion inspections in its Prudhoe Bay oil field, the nation's largest. The order, first obtained by the Anchorage Daily News, reveals alarming details about the deteriorated condition of the pipeline, a major oilfield artery that leaked more than 200,000 gallons of oil onto the fragile tundra on Alaska's North Slope.

The pipeline came very close to springing a second leak and maybe more, the federal document says. It says a BP inspection turned up at least six additional corroded spots or other "anomalies" along the 10-mile line, part of a vast web of pipes that drains Prudhoe, funneling crude into the 800-mile trans-Alaska pipeline to the port of Valdez. At one spot, the steel pipeline wall was eaten down to only .04 of an inch, very nearly unleashing more oil onto the tundra. The pipe is 30 years old, installed a year before Prudhoe oil production began in 1977.

The leak, discovered by a passing BP field worker who smelled the snow-covered oil early on the morning of March 2, has triggered a massive cleanup in dangerous, subzero weather, and has cut North Slope oil production by 12%, or nearly 100,000 barrels a day, because the leaky pipeline and more than 200 wells were shut down. The reduced production could last weeks longer.

Stacey Gerard, the Transportation Department's associate administrator for pipeline safety, said the unusual order was issued to BP because continued operation of the pipeline without corrective measures "will be hazardous to life, property and the environment." The order comes in the midst of renewed Congressional fighting over oil exploration in the Arctic National Wildlife Refuge, with supporters insisting that oil companies will be able to drill for oil without damaging the sensitive arctic ecosystem.
The order requires BP to:

- Repair corrosion damage to the satisfaction of Transportation Department officials before restarting the pipeline.

- Develop a better plan to reduce internal corrosion inside the failed pipe, as well as other major oilfield lines.

- Review and improve the pipeline's leak detection system, which failed to warn of the leak.

BP faces potentially millions of dollars in pollution fines from the state. The company also faces a federal civil penalty of up to $100,000 daily if it fails to follow the federal order.

The company had previously expressed surprise at the pipe's leak, but in the wake of the Department of Transportation fix-it order, BP admitted that an earlier inspection of the pipe had revealed numerous weaknesses that were, for unknown reasons, rapidly worsening. The federal order was also noteworthy because BP had previously tried to argue that the federal government had no jurisdiction to oversee the pipe in question.

Company spokesman Daren Beaudo said BP already had planned to take many of the steps the Transportation Department ordered. He added that the company spends aggressively to combat corrosion, a major threat to the aging pipelines of Prudhoe Bay.

 

 

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Anchorage Daily News
March 21, 2006

http://www.adn.com/opinion/story/7551686p-7463271c.html

BP and DEC North Slope oversight:

Not good enough
Oil pipeline spill detection fails to protect North Slope
Published: March 21, 2006
Last Modified: March 21, 2006 at 01:47 AM

Editorial Cartoon
http://www.adn.com/photo/2006/03/21/1883668-300-x-196.jpg

Yes, government and BP officials are investigating the pipeline leak that spilled more than 200,000 gallons of crude oil on the North Slope earlier this month. And yes, we expect they will find not only the exact cause, but also will impose new operating and inspection procedures to help prevent such a leak from fouling the tundra again.

As well-meaning as those responses are, they miss the point that BP did not do a good enough job in leak detection and the state failed to impose tough enough standards to guard against such leaks.

The spill was not detected until a worker happened to smell oil while driving on an access road alongside the pipeline March 2. Good thing the worker didn't have a cold that day, clogging up his sense of smell, or the spill could have been much worse. Bluntly, that is not a level of risk the state should tolerate.

The 34-inch line has a leak detection system that is supposed to sound an alarm if the pipeline flow drops by 1 percent. The line carried 4.2 million gallons a day. That means a leak of anything less than 42,000 gallons a day, or 1,750 gallons an hour, would escape electronic detection. In this accident the alarm never sounded, meaning it either failed to work or the pipe had been leaking at just below 1 percent for at least five days.

But maybe it was leaking 20,000 gallons a day for 10 days? Or 10,000 gallons for 20 days? No one saw the spilled oil because the line is covered -- it's above ground level but covered in gravel so caribou can cross. And the pipe, the gravel berm and ground were all covered in snow, with the oil hiding beneath the snow cover. As the hot oil melted the snow, it sank farther out of sight.

The state four years ago fined BP and ordered the company -- which operates the Prudhoe Bay field -- to install the 1 percent leak-detection system on some of its oil lines. The company had fallen behind schedule installing the system, and the state issued an order in May 2002 to hurry up the work. The state Department of Environmental Conservation the next year recommended BP also regularly patrol the lines to look for leaks. As part of its spill-detection drive-bys and fly-bys, the company reports it sometimes uses infrared equipment to look for the heat of leaking oil.

Too bad but none of that worked quick enough in this month's spill.

The Department of Environmental Conservation has been working the past 18 months to update its spill-prevention regulations, and officials say this latest accident could lead to additional requirements for pipe inspections. That's good, but the proposed regulations still are not in place.

Meanwhile, BP knew the line in this case suffered from corrosion -- in several spots -- and that the corrosion was getting worse. The company this year plans to spend $71 million on corrosion control, up from $50 million in 2004, but this month's accident is more than enough proof that the budget is inadequate.

So what's next? The state could decide to lower the 1 percent threshold for automatic leak-detection systems but BP has already objected to such a change, saying the technology doesn't exist. North Slope Borough officials say otherwise.

The state's message to BP and other North Slope oil companies should be: Find better technology to meet tighter leak-detection standards. Spend more time flying and driving the line with infrared devices. Run a corrosion-detecting module through the line more often. And, if all else fails, get out of the truck and take a whiff.

BOTTOM LINE: Accidents happen, but weeklong pipeline leaks should not happen.

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National Geographic
March 20, 2006

http://news.nationalgeographic.com/news/2006/03/0320_060320_alaska_oil.html

Alaska Oil Spill Fuels Concerns Over
Arctic Wildlife, Future Drilling
John Roach
for National Geographic News
March 20, 2006

A recent spill of about 267,000 gallons (1 million liters) of oil in the tundra of Alaska's North Slope is raising a new round of questions from environmental groups about proposed plans to open more land in the region to oil drilling.

The North Slope region of Alaska (map) borders the Arctic Ocean and contains most of the state's petroleum reserves. It is also home to thousands of migratory birds, caribou, and other creatures.

RELATED
Geographic Magazine: "Oil Field or Sanctuary?" ( See Below )
http://www7.nationalgeographic.com/ngm/data/2001/08/01/html/ft_20010801.3.html

Exxon Valdez Spill, 15 Years Later: Damage Lingers ( See Below )
http://news.nationalgeographic.com/news/2004/03/0318_040318_exxonvaldez.html

Oil Spills Pollute Indefinitely and Invisibly, Study Says
http://news.nationalgeographic.com/news/2002/11/1122_021122_OilSpill.html

The oil spill happened in the Prudhoe Bay oil field in late February, but it was not discovered for five days. The spill is the largest in the region's history.

"Thank God this happened in the winter," said Noah Matson, director of the federal lands program for the nonprofit Defenders of Wildlife in Washington, D.C.

Wildlife is scarce in the region this time of year but will return when the snow melts this spring and summer.

Environmental groups have fought attempts by the Bush administration to open more lands on the North Slope, including the Arctic National Wildlife Refuge, to oil and gas development on the grounds that it would harm the environment.

The Bush administration believes the oil can be removed safely and that doing so will reduce U.S. dependence on foreign oil and natural gas.

Congress has repeatedly blocked initiatives to open the refuge, though the battle is not over. Last Thursday the U.S. Senate passed a budget resolution that contains instructions to open the refuge to oil drilling. This sets the stage for a battle in the House of Representatives later this year.

Natalie Brandon, policy director for the Alaska Wilderness League in Washington, D.C., said the Prudhoe Bay spill raises questions about the push to open up more areas of the North Slope to oil and gas development.

"The bottom line is these kinds of risks are inherent when you have oil production … Do you want to put that risk somewhere like a wildlife refuge?" she said.

Undetected Spill

The Prudhoe Bay oil spill went undetected for five days before a field worker smelled the crude oil while driving through the area on March 2, an official with oil company BP said at a news conference in Anchorage on March 14.

Preliminary analysis suggests the oil leaked from a quarter-inch (two-thirds of a centimeter) hole corroded in a pipeline, according to Ed Meggert, a spill prevention and response coordinator for the Alaska Department of Environmental Protection in Juneau.

"Both BP and the state are real concerned about that," he said.

The leaky pipe is part of the oil field infrastructure built in the late 1970s. Officials are concerned that other sections of the aging system may be susceptible to leaks in the future.

"That's being examined very closely," Meggert added.

The spill, which covers about 2 acres (0.8 hectares), occurred in one of several caribou-crossing areas where pipes are laid underground and covered with gravel to allow passage by animals.

Brandon said the crossing areas attract water and the pipes underneath are particularly susceptible to corrosion.

While caribou, a migratory species, are currently absent from the North Slope, they'll return to the region this summer.

"Can we get this cleaned up in time for when the caribou get there?" Defenders of Wildlife's Matson asked.

Cleaning Up

Meggert expects the spill to be nearly 100-percent cleaned up before summer.

The liquid pools of oil have almost all been vacuumed, he said. Snow mixed with oil is being melted and the oil recovered. Crews will also scrape oil residue from the tundra.

He expects the spring melt to wash most of the remaining oil into an adjacent lake where floating booms will prevent further spread and allow for recovery.

"We have a pretty good track record cleaning these things up," he said. "I'm pretty confident we can do it, and if [the tundra] doesn't totally recover this year, in time it will, next year or the year after."

But the cleanup is a slow, cold process. The wind chill at Prudhoe Bay was less than -40ºF (-40ºC) Thursday.

"Right now, they are collecting a few hundred gallons a day basically, because it's so cold," said Brandon of the Alaska Wilderness League. "So that's just longer and longer the oil will be sitting out there."

Prior to this spill, the largest in the North Slope was a 38,850-gallon (147,063-liter) spill in 1989.

By contrast, the oil tanker Exxon Valdez spilled 11 million gallons (41.6 million liters) into Prince William Sound on Alaska's southern coast that same year.


 

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Bellona
Norway edition
March 20, 2006

http://www.bellona.no/en/energy/42428.html

Alaska experiences worst oil pipeline leak in its history--
final damage still not tallied

MURMANSKA rusty and corroded oil pipeline along Alaska’s northern coast near Prudhoe Bay sprung a leak earlier this month, constituting Alaska’s largest oil pipeline accident on record, and dumping some million litres of crude oil into the north Arctic Ocean.

Anna Kireeva, 2006-03-20 12:32
Translated by Charles Digges

Oily spots where noticed in early March, but the scale of the accident is only recently being ascertained and could grow considerable by the time the final figures are in.

”There have been two spills recently due to corrosion of the feeder pipelines on Alaska's North Slope. The larger spill was more than 200,000 gallons [760,000 litres]. We still don't know the size of the smaller spill,” said John Devens, executive director the Prince William Sound Regional Citizens’ Advisory Council.

Devens was previously the mayor of Valdez, in southern Alaska when the infamous Exxon Valdez set sail from the Valdez oil terminal and collided with a reef in 1989, leading to the most serious oil spill and ecological catastrophe at sea on record.

According to researchers, the consequences of the Exxon Valdez spill sharply reduced the population of native fish life, including humpback salmon, and the restoration of a range of sensitive ecosystem will take at least 30 years. A court decision forced Exxon to pay $4.5 billion in compensation.

 
Devens noted that, at the time, the foot-dragging response to the accident by Exxon led Valdez residents to think they had been cheated by the oil-giant. But literate societal action and pressure on the city administration force the oil company to make a number of concessions. Directly following the Valdez accident, the Citizens’ Advisory Council was created, which directed the actions of the oil companies. The Council is financed by money earmarked for the purpose by oil companies operating in Alaska.

Devins said that the pipeline on which this most recent accident occurred is already 30 years old.

“The lines are 30 years old and cause us concern about what else is going wrong with the system,” he said.

The Prince William Sound Regional Citizens’ Advisory Council 
The Prince William Sound Regional Citizens’ Advisory Council has 18 members consisting of groups impacted by the 1989 Exxon Valdez catastrophe, and includes among its number environmentalists, cultural organisations, as well as fishermen and tourist agencies.
 Go to web page » 
http://www.pwsrcac.org/
 
 Many observers say that the pipeline spill and the Exxon Valdez crisis, the two worst oil accidents to happen in the Arctic Region, cast a very poor light on the Bush Administration’s plans to expand pipelines in Alaska and to drill the Alaskan National Wildlife Preservation.

The reasons behind the accident
According to local officials, the source of the current pipeline leak was a tear caused by internal corrosion in the pipeline, which is operated by the Alaskan office of British Petroleum (BP).

The pipeline has a series of special leak detectors. But despite the elaborate system, no one can as yet pin-point the time that the spill began. It was only discovered on March 2nd, after which the pipeline was shut down and the leak repaired.

BP will carry out an investigation during which it will determine if the leak detection system was working properly when the leak arose.

“We still have a lot of work ahead of us,” said Dan Larson of BP to American news agencies.

The scale of the leak
According to environmentalists’ calculations, crude oil is covering a hectare of snowy tundra.

“I can confirm that this is the largest spill of crude oil on the northern slope [of Alaska] of all that we have recorded,” Linda Giguere of Alaska’s Environmental Department told the associated press.

Her calculations on the scale of the spill are based on measurements taken only a few days after the accident around the spot of the rupture on the pipeline, she said.

As the region where the spill took place is thinly populated, there is little risk to residents. The accident took place along the Northern coast of Alaska, some 1,040 kilometres north of Anchorage, Alaska’s most populous city.

The main problem caused by the accident is the damage done to an enormous feeding territory for birds and other animals that will now have to migrate from the accident site.

Cleaning up the accident
Accident liquidators are currently working on the site of the spill, but the clean-up is dependent on weather conditions. Strong chills and ice make the oil thicker, which spreads its diffusion over an even larger area.

The liquidators have a set goal of gathering at least 90 percent of the spilled crude, according to BP’s Larson.

 

 

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New York Times

March 20, 2006

 

http://www.nytimes.com/2006/03/20/national/20spill.html?pagewanted=2&ei=5094&en=0b10e40fb9671e9f&hp&ex=1142830800&partner=homepage

 

Oil Spill Raises Concerns on Pipeline Maintenance

By FELICITY BARRINGER

 

WASHINGTON, March 18 — An oil spill this month in Alaska, the largest ever on the North Slope, has raised new concerns among state and federal regulators about whether BP has been properly maintaining its aging network of wells, pumps and pipelines that crisscross the tundra.

 

BP Exploration Alaska, the subsidiary of the international oil giant that operates the corroded transmission line from which more than 200,000 gallons of crude oil leaked, has been criticized and fined in several different cases, most recently in 2004 when state regulators fined the company more than $1.2 million.

 

Now the division of the federal Department of Transportation responsible for pipeline safety is looking into the company's maintenance practices.

 

James Wiggins, a spokesman for the office, said Friday that BP had been informed that it could not restart the pipeline until the company had thoroughly inspected the line, internally and externally, repaired it, and given the agency a corrosion monitoring plan.

 

In addition, one of the company's longtime employees, a mechanic and local union official who has participated in the spill cleanup, said in a telephone interview that he and his colleagues had repeatedly warned their superiors that cutbacks in routine maintenance and inspection had increased the chances of accidents or spills.

 

In the interview, Marc Kovac, who is an official of the United Steelworkers union, which represents workers at the BP facility, said he had seen little change in BP's approach despite the warnings.

 

"For years we've been warning the company about cutting back on maintenance," Mr. Kovac said, adding that he was speaking for himself, not the union. "We know that this could have been prevented."

 

Asked about Mr. Kovac's account, Daren Beaudo, a company spokesman, said in an e-mail message, "Whenever employees raise concerns about our operations we look into them and address them." He did not specifically address Mr. Kovac's account of his complaints to his bosses.

 

In November 2004, the Alaska Oil and Gas Conservation Commission fined the company more than $1.2 million after an explosion and fire at one of its wells. The accident, in 2002, left an operator badly burned.

 

BP has cultivated a worldwide image as a company concerned about the environment, recognizing global warming and making conspicuous efforts at aggressive environmental protection in many places.

 

But the most recent spill, which spurted from an elevated transmission pipeline at a spot where it dips to ground level to allow caribou to cross, has prompted critics inside the industry and among environmental groups to revisit questions raised four years ago. They question whether the company is skimping on maintenance and inspections to save money — a complaint the company strenuously denies.

 

But it remains unclear whether the company had warning that corrosion in this line had worsened to the point of a breach, and whether the warning signals company officials say they picked up in September should have prompted them to shut down this section of pipe and route oil around it.

 

"When we inspected the line in September 2005, points of manageable corrosion were evident and all were within standards of operations integrity," Mr. Beaudo said in an e-mail message. "Something happened to the corrosion rates in that line between September 2005 and the time of the spill that we don't yet fully understand."

 

Gary Evans, an environmental program specialist with the Alaska Department of Environmental Conservation, defended the company in a telephone interview. Referring to the September inspections with ultrasound imaging, he said, "I believe in my heart if they would have found a spot on that pipeline that set off a bell or a whistle they would have shut it off" and built the kind of detour pipeline now under construction.

 

"I can't believe for a second that they would chance it," he added. "This is a worst-case scenario."

 

Another question is whether the company postponed for too long a rigorous but disruptive internal inspection of the pipeline, known in industry jargon as smart pigging.

 

In the procedure, electronic monitors called smart pigs — successors to an earlier generation of cleaning devices that squealed as they ran through the pipe — are used to measure the thickness of a pipe's walls and detect defects. Mr. Beaudo and Mr. Kovac agreed that since 1998 no such inspection had been performed on the line that leaked.

 

Setting up the device is cumbersome, and its data are hard to analyze. The process also slows the movement of oil to the Trans-Alaska Pipeline.

 

BP's own 2003 plan for safe maintenance and management of its facilities, on file with the Alaska Department of Environmental Protection, says that "the interval between smart-pig runs is typically five years."

 

Mr. Beaudo, the BP spokesman, said that since 1999, 85 external corrosion inspections had been conducted on that line. Further, he said, 139 internal inspections were performed with ultrasound devices applied to the outside of the insulated pipe, providing a picture of the inside.

 

In a news conference on Tuesday, Maureen Johnson, the senior vice president and manager of the Greater Prudhoe Bay unit of BP Exploration Alaska, said, "We believe the leak was caused by internal corrosion and internal corrosion caused relatively recently" — in the last six to nine months.

 

In September, she said, inspections revealed advancing corrosion and showed "we needed to do something." She said an internal "smart pig" inspection was scheduled for this month.

 

In an e-mail message to a company lawyer in June 2004, Mr. Kovac, the union official, assembled a collection of his earlier complaints to management. One of these, dated Feb. 28, 2003, concerned "corrosion monitoring staffing levels." It began, "The corrosion monitoring crew will soon be reduced to six staff down from eight."

 

Later, it noted, "With the present staff, the crew is currently one month behind. The backlog is expected to increase with a further reduction in manpower."

 

Mr. Kovac and other workers have reported their concerns for several years to Chuck Hamel, a onetime oil broker who has made himself a conduit for getting press attention for worker complaints and whom Mr. Kovac called "our ombudsman."

 

Asked about Mr. Kovac's account, Mr. Hamel said: "Whatever I've been able to help the technicians publicize, they've fixed. Whatever we're not publicizing, we don't fix. They delay, and they schedule for next year. Everything's scheduled for next year. That way, if something goes, like in this case, they say, 'We scheduled that.' "

 

Mr. Beaudo, asked about staffing levels, said by e-mail, "We've significantly increased the number of external inspections since 2000," adding "and therefore have increased our staffing."

 

He pointed to the company's 2004 report to the state on corrosion monitoring. It shows that external and internal inspections on lines from the wellheads — usually smaller than the transmission lines like the one that leaked — rose from 39,001 in 2001 to 69,666 in 2002, before falling back slightly, to 60,666 in 2003 and 62,637 in 2004.

 

In a separate message he noted that staffing and scheduling decisions for the BP division that handles corrosion inspections "are carefully considered and managed according to the scope of the work being done."

 

In a news release Friday, Kurt Fredriksson, a commissioner of the state Department of Environmental Conservation, praised BP's efforts. "The oil spill response has been well managed," he said. "The spill occurred at a time when impacts to the environment are minimal."

 

The release also quoted him as saying, "We will be considering the investigation team's findings over the next several weeks in deciding whether to propose additional corrective actions or regulatory changes for leak detection, corrosion control and integrity management."

 

The line that leaked was in the last leg of a network that carries oil from the wellhead through processing facilities and on to the main pipeline that ends in Valdez.

 

The smaller lines nearer the wells are regulated by the state; lines like the 34-inch one that leaked are under the Pipeline and Hazardous Materials Safety Administration of the federal Transportation Department.

 

But that office exempts from its regulations pipelines, like the one that leaked, that are in rural areas and are run at low pressures. At a House subcommittee hearing on Thursday, Lois N. Epstein, a petroleum engineer and an environmental advocate in Alaska, called for the department to scrap that exemption.

 

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The Free Press
March 18, 2006

http://www.freepress.org/departments/display/3/2006/1868

GOP bids to take ANWR while region
was ravaged by major oil spill

by Jason Leopold
March 18, 2006

The Senate passed approved a measure in a budget bill Thursday that included a provision to open up the Arctic National Wildlife Refuge to drilling - just as the region suffers through one of the worst oil spills in history.

The provision to permit drilling in ANWR was included in a resolution passed last week by the Senate Budget Committee. The full Senate is expected to vote on the issue as early as Thursday.

The measure was prepared by the Republican-controlled Senate in such a way that it would be protected from a filibuster by Senate Democrats opposed to the issue. Drilling in ANWR has been debated at least half a dozen times over the past five years.

The issue is one of the cornerstones of President Bush's National Energy Policy. Bush has said that drilling in ANWR is crucial in order for the United States to cut its dependence on foreign oil.

Environmentalists and numerous lawmakers have derided the plan, saying it would lead to the destruction of caribou and other wildlife that live in the refuge. Moreover, severe safety and technological issues have plagued the big oil companies that drill in nearby Prudhoe Bay and who would be responsible for breaking ground in ANWR should the Senate measure pass.

Because the companies have yet to take measures to address the safety issues at their Prudhoe Bay operations and make much-needed technological upgrades, there have been dozens of oil spills in the area. The situation would likely become even worse if ANWR were to be opened up to exploration, according to environmental officials and activist groups.

Just two weeks ago, the worst spill in the history of oil development in Alaska's North Slope forced the closure of five oil processing centers in the region. Alaskan state officials said that as much as 260,000 gallons of crude oil leaking out of a pipeline in an oil field jointly owned by Exxon Mobil, BP Plc and ConocoPhillips blanketed two acres of frozen tundra near Prudhoe Bay - just a short distance from where President Bush has proposed opening up ANWR to drilling.

The oil spill went undetected for about five days before an oilfield worker detected the scent of hydrocarbons during a drive through the area on March 2 that led him to believe there was a spill from one of the facilities.

It's expected that last week's spill will take a crew of 60 at least two weeks to clean up and to restore crude production to pre-spill levels. The petroleum processing centers will remain closed until then.

The spill underscores the hazards of drilling in the Arctic, despite the fact that oil company executives have downplayed the severity of the technological problems likely to be associated with it.

Last year, unbeknownst to the federal lawmakers who debated the merits of drilling in ANWR, the Alaska Department of Environmental Conservation started laying the groundwork to pursue civil charges against BP and the corporation's drilling contractor for failing to report massive oil spills at its Prudhoe Bay operation, located just 60 miles west of ANWR.

Despite those dire warnings, neither Congress nor the Senate has shown interest in investigating the whistleblowers' claims or held hearings about the potential problems that could result from drilling in ANWR.

But BP employees have warned lawmakers that oil spills like the one that took place a couple of weeks ago could happen in ANWR if upgrades aren't made to the oil companies' drilling equipment.

In March of 2002, a BP whistleblower went public with his claims of maintenance backlogs and employee shortages at BP's Prudhoe Bay operations that he said could become even worse if ANWR is opened up to exploration.

The whistleblower, Robert Brian, who worked as an instrument technician at Prudhoe Bay for 22 years, had a lengthy meeting with aides to Senators Joseph Lieberman and Bob Graham, both Democrats, to discuss his claims. But the senators have never followed up on his claims.

At the time, Brian said he supported opening up ANWR to oil exploration but said BP has imperiled that goal because it is "putting Prudhoe workers and the environment at risk."

"We are trying to change that so we don't have a catastrophe that ends up on CNN and stops us from getting into ANWR," he said, according to a March 13, 2002, report in the Anchorage Daily News.

BP has long been criticized for poorly managing the North Slope's aging pipelines, safety valves and other critical components of its oil production infrastructure.

The company has in the past made minor improvements to its valves and fire detection systems and hired additional employees but has dropped the ball and neglected to maintain a level of safety at its facilities on the North Slope.

Chuck Hamel, a highly regarded activist who is credited with exposing dozens of oil spills and the subsequent cover-ups related to BP's shoddy operations at Prudhoe Bay, sent a letter to Senator Pete Domenici (R-NM) on April 15, 2005, saying the senator was duped by oil executives and state officials during a recent visit to Alaska's North Slope.

"You obviously are unaware of the cheating by some producers and drilling companies," Hamel said in the letter to Domenici, an arch proponent of drilling in ANWR. "Your official Senate tour" of Alaska last March "was masked by the orchestrated 'dog and pony show' provided you at the new Alpine Field, away from the real world of the Slope's dangerously unregulated operations."

Back in the 1980s, Hamel was the first person to expose weak pollution laws at the Valdez tanker port as well as electrical and maintenance problems with the trans-Alaska oil pipeline.

Hamel has said that not only do oil spills continue on the North Slope because BP neglects to address maintenance issues, but the oil behemoth's executives have routinely lied to Alaskan state representatives and members of the United States Senate and Congress about the steps they're taking to correct the problems.

Hamel has obtained some damning evidence on BP to back up his claims. He has photographs showing oil wells spewing a brown substance known as drilling mud, which contain traces of crude oil, on two separate occasions.

Hamel says he's determined to expose BP's shoddy operations and throw a wrench in President Bush's plans to open up ANWR to drilling.

"Contrary to what President Bush has been saying, the current BP Prudhoe Bay operations - particularly the dysfunctional safety valves - are deeply flawed and place the environment, the safety of the operations staff and the integrity of the facility at risk. The president should delay legislation calling for drilling at the Arctic National Wildlife Refuge," Hamel told the Wall Street Journal last year.

In April of 2001, whistleblowers informed Hamel and former Interior Secretary Gale Norton, who at the time was touring the Prudhoe Bay oil fields, that the safety valves at Prudhoe Bay, which kick in in the event of a pipeline rupture, failed to close. Secondary valves that connect the oil platforms with processing plants also failed to close. And, because the technology at Prudhoe Bay would be duplicated at ANWR, the potential for a massive explosion and huge spills are very real.

"A major spill or fire at one of our [processing centers] will exit the piping at high pressure, and leave a half-mile-wide oil slick on the white snow all the way," Hamel said at the time in an interview with the Wall Street Journal.

That year, the Alaska Oil and Gas Conservation Commission found high failure rates on some Prudhoe wellhead safety valves. The company was put on federal criminal probation after one of its contractors dumped thousands of gallons of toxic material underground at BP's Endicott oil field in the 1990s. BP pleaded guilty to the charges in 2000 and paid a $6.5 million fine, and agreed to set up a nationwide environmental management program that has cost more than $20 million.

Hamel also claimed that whistleblowers had told of another cover-up, dating back to 2003, in which Pioneer Natural Resources and its drilling contractor, Nabors Alaska Drilling, allegedly disposed of more than 2,000 gallons of toxic drilling mud and fluids through the ice "to save the cost of proper disposal on shore."

Hamel has had his share of detractors, notably BP executives and several Alaskan state officials, as well as the federal EPA, who have branded him a conspiracy theorist.

But last March, Hamel was vindicated when Alaska's Department of Environmental Conservation confirmed his claims of major spills in December 2004 and July 2003 at the oil well owned by BP and operated by its drilling contractor, Nabors, on the North Slope, which the company had never reported as required by state law.

Hamel filed a formal complaint in January 2005 with the EPA, claiming he had pictures showing a gusher spewing a brown substance. An investigation by Alaska's Department of Environmental Conservation determined that as much as 294 gallons of drilling mud was spilled when gas was sucked into wells, causing sprays of drilling mud and oil that shot up as high as 85 feet into the air.

Because both spills exceeded 55 gallons, BP and Nabors were obligated under a 2003 compliance agreement that BP signed with Alaska to immediately report the spills. That didn't occur, said Leslie Pearson, the agency's spill prevention and emergency response manager.

President Bush has said that the oil and gas industry can open up ANWR without damaging the environment or displacing wildlife. But the native Gwich'in Nation, whose 7,000 members have lived in Alaska for more than 20,000 years, say President Bush is wrong.

"Existing oil development has displaced caribou, polluted the air and water and created havoc with the traditional lifestyles of the people," said Jonathan Solomon, chairman of the Gwich'in Steering Committee, in a May 7, 2005, interview with the Financial Times. "No one can tell us that opening the Arctic Refuge to development can be done in an environmentally sensitive way with a small footprint. It cannot be done."

---
Jason Leopold is the author of the forthcoming memoir, NEWS JUNKIE, to be published in April on Process/Feral House Books. Visit www.newsjunkiebook.com for a preview and to read an excerpt

 

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Anchorage Daily News
March 18, 2006

http://www.adn.com/news/alaska/story/7542795p-7454269c.html

Pipeline has been poorly monitored
By WESLEY LOY
Anchorage Daily News
Published: March 18, 2006
Last Modified: March 18, 2006 at 02:15 AM

AP Photo
http://www.adn.com/photo/2006/03/18/1876714-144-x-250.jpg
The Prudhoe Bay oil field spill on Alaska's North Slope is seen, Mar. 12, 2006. Cleaning up the spill, estimated at 201,000 gallons, has been slow going because workers need frequent breaks to protect themselves against extreme conditions

A major pipeline that unleashed the largest oil spill ever on the North Slope came within a whisker of springing a second ruinous leak, and maybe more, according to a federal order for BP to fix the problems.

The order, issued this week by the U.S. Department of Transportation pipeline safety regulators, reveals new details about the weakened condition of the pipeline. It also intensifies the question of how thoroughly BP was monitoring the aging pipe's known corrosion problems.

Over several days, an estimated 201,000 gallons of oil squirted undetected out of a hole smaller than an almond, coating almost two acres of tundra and the edge of a frozen lake with crude. A BP field worker found the spill near the heart of the Prudhoe Bay oil field March 2 after smelling oil as he drove down a road along the pipeline.

BP and state investigators believe corrosion ate through the steel pipe from the inside out. The pipe, 34 inches in diameter, was installed in 1976, a year before production began at Prudhoe, the nation's largest oil field.

The company's leak investigation turned up at least six additional "anomalies" along a 3-mile segment of the pipeline, with the same internal corrosion seen in several places, the federal order says.

At the worst of the trouble spots, the pipeline's carbon steel wall, normally more than a third of an inch thick, was down to 0.04 of an inch, a razor-thin barrier between the oil and the tundra.

Spokesmen for BP Exploration (Alaska) Inc., which runs Prudhoe on behalf of itself and other field owners, did not return phone calls seeking comment late Friday.

BP managers have previously said they were surprised the pipe sprang a leak. However, they acknowledged checking the line in recent months and finding corrosion that, for reasons not yet fully understand, was rapidly growing worse.

The company says it has an aggressive corrosion control program with a budget that's increased from $50 million in 2004 to $71 million planned for this year.

Stacey Gerard, associate administrator for pipeline safety, said the DOT issued BP the unusual order outlining steps to fix and better monitor the pipeline because its continued operation without corrective measures "will be hazardous to life, property and the environment."

Gerard said DOT pipeline safety officials investigated the leak and preliminarily concluded the pipeline's leak-detection system "was not effective in recognizing and identifying the failure."

They also noted that BP last tested the line with a smart pig -- a bullet-shaped electronic device that slides through a pipe looking for corroded or weak spots -- in 1998, and that the company had no regular pigging schedule. Pigging is one of the most important ways to find flaws in pipeline walls.

Gerard ordered BP to meet 10 conditions for returning the idled pipeline to service. The order applies not only to the leaky pipeline, which drains the western side of the sprawling Prudhoe Bay field, but to two similar pipelines, the eastern Prudhoe and Lisburne lines.

Under the federal order, BP must:

• Repair corrosion damage to the satisfaction of federal officials before restarting the pipeline that leaked.

• Develop plans to reduce internal corrosion on all three major pipelines within three months.

• Review and improve leak-detection systems on the pipelines within three months.

Kurt Fredriksson, commissioner of the Alaska Department of Environmental Conservation, said Friday he welcomed the federal intervention in the spill, a high-profile incident that's figuring in the current congressional debate over whether to open the Arctic National Wildlife Refuge to oil drilling.

He said BP has "a robust monitoring system" to try to prevent and control corrosion in the North Slope's hundreds of miles of pipelines but that the leak was disappointing.

Fredriksson added that the state was already in the process of expanding regulation of pipelines, and the spill might result in stricter rules.

BP could be subject to millions of dollars in fines for the spill, but another DEC official, Larry Dietrick, said the amount can't be calculated until the cleanup is complete.

A massive cleanup continues in subzero weather. Responders so far have recovered about 64,000 gallons of spilled oil, and DEC officials believe tundra damage might be light because the oil can't seep into the frozen ground.

Because the pipeline is shut down, North Slope oil production remains down by nearly 100,000 barrels per day, or 12 percent of normal output.

Daily News reporter Wesley Loy can be reached at wloy@adn.com or 257-4590.

 

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Seattle Post Intelligencer
March 18, 2006

http://seattlepi.nwsource.com/national/263468_alaska-oilspill18.html

Saturday, March 18, 2006
BP faces fines for not detecting oil spill in Alaska
By RACHEL D'ORO
THE ASSOCIATED PRESS

ANCHORAGE, Alaska -- For five days or more, crude oil oozed from a pipeline through a corrosion hole about the size of a pencil eraser, silently spreading underneath the snow in what would become the biggest spill ever on Alaska's North Slope.

AP PHOTO
http://seattlepi.nwsource.com/dayart/20060318/226PRUDHOE_SPILL_AKRB102.jpg
A worker braves merciless cold as he vacuums up some of the 267,000 gallons of oil that spilled at Alaska's Prudhoe Bay oil field.

Ultimately it wasn't the pipeline's leak-detection systems that discovered the spill.

It was an oilfield worker who caught a whiff of the petroleum.

Industry watchdogs say the spill was absolutely preventable and should have been detected more promptly, and they blame cost-pinching practices at BP, which runs the Prudhoe Bay operation. BP has defended its maintenance spending and inspection practices.

Nevertheless, state environmental regulators say the spill will lead to fines and possibly stricter pipeline regulations in Alaska.

The federal Pipeline and Hazardous Materials Safety Administration is investigating and this week ordered BP to inspect the affected pipeline and two other transit lines and make any necessary repairs.

Up to 267,000 gallons are believed to have spilled onto the frozen ground from a 34-inch pipeline situated in the tundra about 250 miles above the Arctic Circle. The arctic-grade carbon-steel pipe, which leads eventually to the trans-Alaska pipeline, lies above ground but is covered by a layer of gravel, as well as the snow.

Former state oil analyst Richard Fineberg, author of a report issued Thursday on the spill by the Alaska Forum for Environmental Responsibility, said BP knew there was a corrosion problem with the 30-year-old pipeline but was not conducting frequent enough inspections. BP also steadfastly refused to install a more accurate leak-detection system, he charged.

"How can you possibly not have the best available technology in the largest oil field in the U.S., in view of the fact that aging pipes have been a problem for years and years and years?" he said. "If you had a state-of-the-art leak detection system, you probably would have known about a spill on the first day."

BP officials said they have an aggressive maintenance program, with a corrosion inspection budget for the North Slope this year of $71 million, up from $50 million spent in 2004.

"Our intention is to be operating in Alaska for another 50 years," said company spokesman Daren Beaudo. "Part of that requires renewed investments in our facilities and pipelines."

Also, company officials said that after an inspection last fall revealed corrosion, they stepped up their inspection schedule.

As for why the leak was not discovered sooner, BP said the leak may have simply been too small to register. The pipeline's leak-monitoring equipment, installed in 2002, is designed to detect a 1 percent drop in the oil flow over a 24-hour period, BP said.
The spill -- which eventually was discovered March 2 by an oilfield worker who smelled the acrid fumes -- covers an area smaller than two football fields in a vast industrial hub traversed by pipelines, oil gathering stations and power plants.

Given the size of the spill, officials believe the crude was pushing out of the quarter-inch hole for at least five days. About 63,500 gallons of crude have been recovered.

Ed Meggert of the state Department of Environmental Conservation said he expects little permanent damage. "There could be a spot here and there that doesn't recover," he said. "But with revegetation, it should look quite a bit like it used to by the end of summer."


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Seattle Times
March 18, 2006

http://seattletimes.nwsource.com/html/nationworld/2002873044_prudhoe18.html

Critic blames oil spill on cost-pinching
By RACHEL D'ORO
The Associated Press

PHOTOs:
http://seattletimes.nwsource.com/ABPub/2006/03/17/2002872803.jpg
The trans-Alaska pipeline as seen Monday near the site of the Prudhoe Bay oil field spill. Cleanup has been slowed by extreme weather conditions, which force workers to take frequent breaks.

Animal Crossing Diagram:
http://seattletimes.nwsource.com/ABPub/2006/03/17/2002872854.gif


ANCHORAGE  For five days or more, crude oil oozed from a pipeline through a corrosion hole about the size of a pencil eraser, silently spreading underneath the snow in what would become the biggest spill on Alaska's North Slope.

It wasn't the pipeline's leak-detection systems that discovered the spill.

It was an oil-field worker who caught a whiff of the petroleum March 2.

Although the spill is much less than the 11 million gallons spilled in Prince William Sound when the Exxon Valdez ran aground in March 1989, industry watchdogs said the spill was preventable and should have been detected more promptly. They blame cost-pinching practices at BP, which runs the Prudhoe Bay operation. BP has defended its maintenance spending and inspection practices.

Nevertheless, state environmental regulators said the spill will lead to fines and possibly stricter pipeline regulations in Alaska, which has grown rich on oil since crude began flowing from the North Slope via the 800-mile trans-Alaska pipeline in the 1970s.

The federal Pipeline and Hazardous Materials Safety Administration is investigating and this week ordered BP to inspect the affected pipeline and two other transit lines and make necessary repairs.

Up to 267,000 gallons are believed to have spilled onto the frozen ground from a 34-inch-diameter pipeline in the tundra about 250 miles above the Arctic Circle before it was plugged. The arctic-grade carbon-steel pipe, which leads to the trans-Alaska pipeline, lies above ground but is covered by a layer of gravel and snow.

Former state oil analyst Richard Fineberg, author of a report issued Thursday on the spill by the Alaska Forum for Environmental Responsibility, said BP knew there was a corrosion problem with the 30-year-old pipeline but was not conducting frequent enough inspections. BP also refused to install a more accurate leak-detection system, he said.

"How can you possibly not have the best available technology in the largest oil field in the U.S., in view of the fact that aging pipes have been a problem for years and years and years?" he said. "If you had a state-of-the-art leak-detection system, you probably would have known about a spill on the first day."

BP officials said they have an aggressive maintenance program, with a corrosion-inspection budget for the North Slope this year of $71 million, up from $50 million in 2004.

"Our intention is to be operating in Alaska for another 50 years," said company spokesman Daren Beaudo. "Part of that requires renewed investments in our facilities and pipelines."

Also, company officials said that after an inspection last fall revealed corrosion, they stepped up their inspection schedule and had planned a follow-up look this month. They said they were stunned the corrosion ate through the line so quickly.

As for why the leak was not discovered sooner, BP said the leak may have been too small to register. The pipeline's leak-monitoring equipment, installed in 2002, is designed to detect a 1 percent drop in the oil flow over 24 hours, BP said.

Beaudo said the age of the pipe is not believed to be a factor. Instead, he said, the accident may be related to the fact the pipeline is increasingly carrying viscous oil, a hard-to-pump heavy crude being tapped as the oil field is drawn down.

Viscous oil carries more sediments and water, and the separation chemicals used on viscous oil may interfere with corrosion-inhibiting additives put in the pipeline, Beaudo said.

The spill covers an area smaller than two football fields in a vast industrial hub traversed by pipelines, oil-gathering stations and power plants.

Given the size of the spill, officials think the crude was pushing out of the quarter-inch hole for at least five days. About 63,500 gallons  or 1,513 barrels  of crude have been recovered, with work slowed in the past week by temperatures that plunged to 70 degrees below zero with the wind chill.

At the same time, the extreme cold thickens the crude, making it easier to scoop up and less capable of seeping into the ground.

Ed Meggert of the state Department of Environmental Conservation said he expects little permanent damage. "There could be a spot here and there that doesn't recover," he said. "But with revegetation it should look quite a bit like it used to by the end of summer."

Material from Seattle Times archives is included in this report.

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Wall Street Journal
March 18, 2006

Oil spill on BP-Operated Pipeline
In Alaska Went Undetected for Days

Associated Press
March 18, 2006 1:33 a.m.

ANCHORAGE, Alaska -- For five days or more, crude oil oozed from a pipeline through a corrosion hole about the size of a pencil eraser, silently spreading underneath the snow in what would become the biggest spill ever on Alaska's North Slope.

Ultimately it wasn't the pipeline's leak-detection systems that discovered the spill.

It was an oilfield worker who caught a whiff of the petroleum.

Industry watchdogs say the spill was absolutely preventable and should have been detected more promptly, and they blame cost-pinching practices at BP Plc, which runs the Prudhoe Bay operation. BP has defended its maintenance spending and inspection practices.

Nevertheless, state environmental regulators say the spill will lead to fines and possibly stricter pipeline regulations in Alaska, a state that has grown rich on oil since crude began flowing from the North Slope via the 800-mile trans-Alaska pipeline in the 1970s.

The federal Pipeline and Hazardous Materials Safety Administration is investigating and this week ordered BP to inspect the affected pipeline and two other transit lines and make and any necessary repairs.

Up to 267,000 gallons are believed to have spilled onto the frozen ground from a 34-inch diameter pipeline situated in the tundra about 250 miles above the Arctic Circle. The arctic-grade carbon-steel pipe, which leads eventually to the trans-Alaska pipeline, lies above ground but is covered by a layer of gravel, as well as the snow.

Former state oil analyst Richard Fineberg, author of a report issued Thursday on the spill by the Alaska Forum for Environmental Responsibility, said BP knew there was a corrosion problem with the 30-year-old pipeline but was not conducting frequent enough inspections. BP also steadfastly refused to install a more accurate leak-detection system, he charged.

"How can you possibly not have the best available technology in the largest oil field in the U.S., in view of the fact that aging pipes have been a problem for years and years and years?" he said. "If you had a state-of-the-art leak detection system, you probably would have known about a spill on first day."

BP officials said they have an aggressive maintenance program, with a corrosion inspection budget for the North Slope this year of $71 million, up from $50 million spent in 2004.

"Our intention is to be operating in Alaska for another 50 years," said company spokesman Daren Beaudo. "Part of that requires renewed investments in our facilities and pipelines."

Also, company officials said that after an inspection last fall revealed corrosion, they stepped up their inspection schedule, and had been planning a follow-up look this month. They said they were stunned that the corrosion ate all the way through the line so quickly.

As for why the leak was not discovered sooner, BP said the leak may have simply been too small to register. The pipeline's leak-monitoring equipment, installed in 2002, is designed to detect a 1% drop in the oil flow over a 24-hour period, BP said.

Mr. Beaudo said the age of the pipe is not believed to be a factor. Instead, he said, the accident may be related to the fact the pipeline is increasingly carrying viscous oil, a hard-to-pump heavy crude being tapped as the oil field is drawn down.

Viscous oil carries more sediments and water, and the separation chemicals used on viscous oil may interfere with corrosion-inhibiting additives that are put in the pipeline, Mr. Beaudo said.

"Viscous is a challenge to get out of the ground and it's harder to separate. That's presented new challenges," he said.

The spill -- which was eventually discovered March 2 by an oilfield worker who smelled the acrid fumes -- covers an area smaller than two football fields in a vast industrial hub traversed by pipelines, oil gathering stations and power plants.

Given the size of the spill, officials believe the crude was pushing out of the quarter-inch hole for at least five days. About 63,500 gallons -- or 1,513 barrels -- of crude have been recovered, with work slowed in the past week by punishing arctic conditions that plunged temperatures to 70 degrees below zero with the wind chill.

At the same time, the extreme cold thickens the crude, making it easier to scoop up and less capable of seeping into the ground.

Ed Meggert of the state Department of Environmental Conservation said he expects little permanent damage. "There could be a spot here and there that doesn't recover," he said. "But with revegetation it should look quite a bit like it used to by the end of summer."

Among the crews responding to the spill are Eskimos from North Slope villages who live off the land and consider themselves caretakers of the wilderness. North Slope Borough Mayor Edward Itta, an Eskimo hunter and whaling captain, is urging state regulators to require better leak-detection equipment.

"It's fortunate this did not happen in a river or fish-producing lake and fortunate it happened where it did," Mr. Itta said.

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Anchorage Daily News
March 17, 2006

http://www.adn.com/news/alaska/story/7540469p-7451963c.html

BP ordered to ensure pipe safety
Wall Street Journal
March 18, 2006

NORTH SLOPE: Letter from federal agency
follows record oil spill.
By WESLEY LOY
Anchorage Daily News
Published: March 17, 2006
Last Modified: March 17, 2006 at 03:21 AM

Federal pipeline safety officials have intervened in the Prudhoe Bay oil spill, ordering BP to take aggressive steps to ensure a major pipe that leaked more than 200,000 gallons of crude won't break down again.

Daren Beaudo, a spokesman for BP Exploration (Alaska) Inc., acknowledged the company received a letter from the Office of Pipeline Safety, an agency within the U.S. Department of Transportation.

The letter orders BP to take a series of actions, such as running an electronic device called a pig through the 3-mile pipeline to test for corrosion or other problems.

Beaudo said late Thursday that he was not at liberty to provide a copy of the letter.

"We're still reviewing it," he said.

The federal intervention is somewhat unexpected because BP has long maintained that the pipeline that leaked is not subject to federal regulation.

The Office of Pipeline Safety, however, has been studying whether to expand its oversight to cover more of the thousands of miles of steel pipes lacing Prudhoe and other North Slope oil fields.

The leaky pipeline, 34 inches in diameter, carries crude oil from a Prudhoe processing plant called Gathering Center 2 to the starting point of the 800-mile trans-Alaska pipeline.

A worker for BP, which operates the nation's largest oil field, discovered a leak March 2 after smelling oil as he drove an access road running alongside the pipeline.

Cleanup workers subsequently determined that the spill amounts to the largest crude oil spill by far on the North Slope. The spilled oil covers close to two acres, including the edge of a frozen lake.

Pollution officials with the state Department of Environmental Conservation say they're confident that cleanup workers will be able to recover most of the oil without much damage to the tundra.

But the spill has caused major disruption for BP, shutting down a pipeline that carries about 100,000 barrels of oil per day, or 12 percent of total North Slope production. Because of the size of the spill, BP could be fined millions of dollars.

BP managers have said the leaky pipeline could remain out of service for weeks. Meantime, they hope to restore some of the idled production by routing oil through a nearby but smaller pipeline.

Top state officials this morning are scheduled to hold a Juneau briefing on the spill investigation and the "regulatory implications to pipelines."

The officials include DEC Commissioner Kurt Fredriksson, Natural Resources Commissioner Mike Menge, Attorney General David Marquez and John Norman, chairman of the Alaska Oil and Gas Conservation Commission.

The Office of Pipeline Safety regulates 2.3 million miles of natural gas and hazardous liquid pipelines, according to the agency's Web site.

But many of the pipelines on the North Slope -- predominantly smaller pipes known as gathering or flow lines -- do not come under federal regulation.

BP believes the leaky Prudhoe pipeline is a gathering line not subject to such regulation, spokesman Beaudo said.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

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http://www.adn.com/money/story/7540491p-7451985c.html

North SlopeFebruary production down slightly
1.3 PERCENT: Repairs at BP's Milne Point
field lowered totals for the month.
By KRISTEN NELSON
Petroleum News
Published: March 17, 2006
Last Modified: March 17, 2006 at 04:56 AM

North Slope production was down 1.3 percent in February, driven by a 13 percent drop at BP Exploration (Alaska) Inc.'s Milne Point field. The company did planned repairs on a gas compressor there Feb. 19-26, causing the fall in production.

North Slope production averaged 846,127 barrels per day in February, the state said. Production in March will be off significantly due to the March 2 shutdown of a corroded main pipeline at the huge Prudhoe Bay field, idling about 95,000 barrels a day of production.

In February, BP-operated Prudhoe Bay averaged 400,383 barrels a day, down 1.5 percent from January. Prudhoe production includes oil from the small Midnight Sun, Aurora, Polaris, Borealis and Orion nearby.

At the Slope's No. 2 field, Kuparuk River, production averaged 171,804 barrels a day, up 1 percent. The Kuparuk totals include oil from the nearby West Sak, Tabasco, Tarn, Meltwater and Palm fields.

The No. 3 field is Alpine, run by Conoco Phillips Alaska Inc. Production there averaged 126,141 barrels a day, down 1.4 percent.

BP's Northstar field had the largest increase, 4.5 percent, averaging 51,662 barrels a day in February.

Lisburne production -- including oil from the Lisburne, Point McIntyre and Niakuk fields -- averaged 39,231 barrels a day, down 2 percent.

Milne Point, where the gas compressor was repaired, averaged 36,684 barrels a day.

Production at the Endicott field averaged 20,222 barrels a day, down 2 percent. Endicott's numbers include oil from the small Sag Delta, Eider and Badami fields.

In Cook Inlet, February production averaged 17,394 barrels a day, down 2 percent from January.

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Anchorage Daily News
March 16, 2006

http://www.adn.com/money/story/7537497p-7449118c.html

Spill may boost pipeline monitoring
PREVENTION: Corrosion, leak changes were proposed before recent Slope incident.
By WESLEY LOY
Anchorage Daily News
Published: March 16, 2006
Last Modified: March 16, 2006 at 01:48 AM

State pollution officials are planning an overhaul of oil spill prevention regulations that would expand corrosion and leak-detection requirements for pipelines.

Work on the proposed regulatory changes began about 18 months ago, long before a pipeline leak discovered this month caused the largest crude oil spill on the North Slope since production began 29 years ago.

Larry Dietrick, spill prevention and response director for the Department of Environmental Conservation, said it's possible the investigation into the spill will lead to further regulatory changes.

Spill prevention is "an incredibly technical arena," but state officials felt it was time to review and update regulations imposed in the wake of the 1989 Exxon Valdez oil spill, Dietrick said.

Under DEC's proposed regulations, more of the state's extensive network of oil field pipelines would come under rules requiring corrosion monitoring, and in some cases equipment to detect leaks.

In particular, smaller pipes known as "gathering" or "flow" lines would be regulated. Such pipes haven't been regulated by either state or federal authorities, Dietrick said.

Corrosion is suspected as causing a small hole in a major Prudhoe Bay pipeline, causing an estimated 201,000 gallons, or 4,790 barrels, of oil to spill over an area of tundra nearly the size of two football fields. Unlike most gathering and flow lines, the leaky 34-inch pipeline has leak-detection equipment and carries only crude oil, as opposed to a mixture of oil, natural gas and water.

The damaged pipeline's leak detector is under scrutiny by investigators because the system didn't lead field workers to the leak. Rather, a worker driving by the pipeline smelled oil early on the morning of March 2, and a search turned up a snow-covered pool of crude more than a foot deep in spots, DEC officials said.

The leak detector is supposed to sound an alarm if the daily flow through the pipeline drops by 1 percent or more. Managers with BP, the company that runs the giant Prudhoe Bay field, believe no alarm sounded because the oil leaked out in too small an amount over a period of five days or more.

As part of revising the spill prevention regulations, the state considered lowering the 1 percent leak-detection threshold to half a percentage point but decided against it, said Craig Wilson, a DEC environmental program specialist. Lowering the threshold would create more false alarms, and while smaller leaks might be detected, they wouldn't be detected as fast, he said.

BP, in comments to the state last June, opposed lowering the 1 percent standard, saying no technological breakthroughs had been made in recent years to improve pipeline leak detection. Officials with the North Slope Borough, however, argued better technology does exist and BP should use it.

Dietrick said results of the investigation into the Prudhoe pipeline leak could result in further regulation changes beyond those DEC already is proposing.

The agency finished taking public comments on its proposed regulations on March 3, the day after the spill was found. New regulations could take effect by July 1, Wilson said.

For more information, go to www.dec. state.ak.us/spar/ipp/cpr.htm.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

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New York Times
March 15, 2006

http://www.nytimes.com/aponline/national/AP-Prudhoe-Spill.html?_r=1&oref=slogin

Oil Company Knew of Corrosion in Pipeline
By THE ASSOCIATED PRESS
Filed at 12:43 a.m. ET

JUNEAU, Alaska (AP) -- The oil company blamed for the North Slope's largest oil spill said Tuesday its inspectors were aware of corrosion in a pipeline months before it burst, but believed the threat to be ''manageable.''

An inspection last fall revealed corrosion in the line and led officials to step up their schedule of inspections, said Maureen Johnson, BP Exploration Alaska's senior vice president of the Greater Prudhoe Bay Unit.

Johnson said corrosion was seen in the 34-inch oil transit line in a September inspection but it appeared to be occurring at a ''low manageable corrosion rate.''

A leak was discovered March 2 and now covers two acres of remote and frozen tundra on Alaska's north coast near the Beaufort Sea. As of Monday, crews had recovered about 60,000 gallons of an estimated 201,000 to 267,000 gallons of spilled crude.

Spill investigators also found significant damage -- especially in low spots of the pipe -- that likely occurred within the last six to nine months.

Similar problems have not been found in other lines downstream and elsewhere in Prudhoe Bay, and Johnson said it appears the highly corrosive conditions were unique to that line.

''We can assure you we are taking action on all the possible causes out there,'' Johnson said.

On the Net:

BP Exploration (Alaska) Inc.:
http://alaska.bp.com/

Unified Command information site:
http://www.dec.state.ak.us

 

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Anchorage Daily News
March 15, 2006

http://www.adn.com/news/alaska/story/7534712p-7446415c.html

Slope slowdown costing state $1 million per day
OIL SPILL: BP managers say they think pipeline leaked unnoticed for five or more days.
By WESLEY LOY
Anchorage Daily News
(Published: March 15, 2006)

PHOTO:
Cleaning up the oil in Prudhoe Bay has been slow as workers take frequent breaks to protect against extreme conditions. (Photo by RICK BOWMER / The Associated Press)
http://www.adn.com/photo/2006/03/15/1868078-300-x-241.jpg

PHOTO, Diagram Caribou Crossings:
http://www.adn.com/ips_rich_content/915-15PrudhoeBaySpill.gif

PHOTO Gallery:
http://www.adn.com/photos/oil_spill/v-photo_gallery_0/

North Slope crude oil production could remain significantly below normal for two more weeks or longer due to the Prudhoe Bay pipeline leak that caused the Slope's largest oil spill, BP managers said Tuesday.

The slowdown in production is costing the state nearly $1 million a day in revenue.

The BP managers also said they figure the pipeline leaked for at least five days before the snow-covered spill was discovered.

And they said corrosion that ate a small hole in the steel pipe might have been caused by peculiar chemical factors in the pipeline.

BP managers said the shutdown of the leaky pipeline since March 2 has cut production by 95,000 barrels per day, or 12 percent of overall North Slope output. They said it will be two weeks before some or all of the production can be restored.

The 95,000 barrels, plus an additional 4,000 barrels of idled production because of another pipeline leak in the neighboring Kuparuk field, is trimming state oil revenue by about $960,000 a day at current oil prices of around $60 a barrel, said Michael Williams, chief economist with the Alaska Department of Revenue.

If the production cut lasts two more weeks, it'll mean some $26 million less into state coffers this budget year.

Kemp Copeland, BP's Prudhoe Bay field manager, said company engineers are working to restore at least some Prudhoe production by diverting oil that normally flows through the damaged 34-inch pipeline into a nearby 24-inch line. To do that, workers must link the two pipelines by laying a 10-inch "jumper" pipeline about the length of a football field.

The bypass could start up in two weeks but would restore only 50 percent to 75 percent of the idled production, said Maureen Johnson, a BP senior vice president.

Meanwhile, the 34-inch pipeline will be out of service for up to six weeks while it is repaired and tested to make sure it doesn't have any other serious corrosion problems, she said.

A massive cleanup of spilled oil continues in harsh winter conditions.

Pollution control officials with the state Department of Environmental Conservation say about 60,000 gallons of oil has been recovered from a spill estimated at 201,000 gallons, or 4,790 barrels. The oil has covered almost 2 acres of tundra, including the edge of a frozen lake.

The spilled oil was enough to fill 25 tractor-trailer tank trucks but a tiny amount compared with Prudhoe's normal daily production of 490,000 barrels a day. The average well in Prudhoe, the nation's largest oil field, averages 500 barrels per day, Copeland said.

BP managers and DEC officials said the pipeline's leak-detection system was working, but no alarm sounded for field workers, most likely because the oil leaked too slowly over time to trigger it.

By regulation, the system must detect leaks involving 1 percent or more of a pipeline's daily oil flow. In this case, 1 percent would equal about 1,000 barrels, leading Johnson to figure the leak must have persisted for at least five days given the spill's estimated size of nearly 5,000 barrels. Otherwise, the leak volume would have been large enough to set off an alert.

"We believe the leak probably started as a pinhole and grew over time and was too small to be detected by our system," Johnson said.

Johnson said BP and DEC investigators are looking into whether too little anti-corrosion chemicals were flowing down the pipeline from Gathering Center 2, a plant that separates water from oil. That or other chemical factors might have caused the increased corrosion seen in the pipe over the last six months, eventually leading to a hole about a quarter-inch wide and a half-inch long, she said.

A different section of the same pipeline didn't show the same corrosion problem, Johnson said.

BP plans to work with DEC on ways to detect smaller spills that might evade leak detectors, Johnson said. One idea might be to increase the use of aerial infrared surveys, which can spot warm oil obscured by snow.

Snow hid most of the Prudhoe spill, which a BP field worker reported after smelling oil as he drove by early on the morning of March 2.

On Monday, the mayor of the North Slope Borough accused BP of failing to use the best available technology to detect leaks in Prudhoe's vast and aging pipeline network. Lydia Miner, a DEC official, said Tuesday that the state had started a comprehensive review of spill-prevention regulations, including leak detection, long before the Prudhoe spill occurred.

BP runs Prudhoe and owns 26 percent of the production. The biggest Prudhoe owners are Exxon Mobil and Conoco Phillips, each with about 36 percent.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

 

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Anchorage Daily News
March 14, 2006

http://www.adn.com/money/story/7531594p-7443552c.html

Slope mayor questions leak detection
OIL SPILL: Clean-up complimented as crews pick up 60,000 gallons.
By WESLEY LOY
Anchorage Daily News
Published: March 14, 2006
Last Modified: March 14, 2006 at 01:47 AM

The ongoing effort to clean up the North Slope's largest oil spill ever is "first-rate," but pipeline leak-detection equipment to prevent such spills is lacking, the region's mayor said Monday.

A major pipeline carrying crude oil away from a processing plant known as Gathering Center 2 sprang a leak, sending an estimated 201,000 gallons, or 4,790 barrels, of crude oozing over nearly 2 acres of tundra. That's enough oil to fill 25 tractor-trailer tank trucks.

Officials with the state Department of Environmental Conservation said clean-up workers have recovered about 60,000 gallons of the spilled oil using vacuum trucks and other methods while working in subzero temperatures.

The spill is near the heart of pipeline-laced Prudhoe Bay, the nation's largest oil field. BP Exploration (Alaska) Inc. runs the field on behalf of itself and other owners, including Exxon Mobil and Conoco Phillips.

"BP's response to this spill has been first-rate," North Slope Mayor Edward Itta said Monday. "I'm very pleased with the speed of their response, the amount of resources they have mobilized, and the degree of communication they have maintained."

Itta added: "The industry uses state-of-the-art equipment to find the oil and get it out of the ground, and I'd like to see them use the best available technology to prevent major spills like the one at GC-2. That's not happening right now."

Itta sent a letter to DEC Commissioner Kurt Fredriksson, the state's top pollution control official, endorsing a joint BP-state investigation into the leak-detection system on the 34-inch pipeline. The borough also wants "an audit of other pipelines with similar leak-detection systems."

The North Slope Borough is the local government for the Minnesota-sized territory across the top of Alaska, including the Slope's many oil fields.

Over the past year, the borough twice urged DEC to require better leak-detection equipment than that used on the failed Prudhoe Bay pipeline, Itta's letter adds. The borough said currently available leak detectors are capable of performing more than twice as well as those the state now requires.

Fredriksson could not be reached for comment Monday. DEC spokeswoman Lynda Giguere said the agency had not yet seen Itta's letter.

Corrosion is suspected of causing a quarter-inch hole in steel pipeline.

Now patched and no longer leaking, the line remains shut down and North Slope oil production is down by 95,000 barrels a day, or 12 percent of total Slope production. A BP spokesman has said it could be weeks before the pipeline is fixed or engineers figure out a way to reroute oil to bring production back to normal.

BP and DEC officials who are investigating the spill have said they're not yet sure whether the leak-detection system failed to work as designed.

It's possible, they said, that the leak was small and slow enough to escape detection. Under state regulations, the system is required to sound an alarm only if the flow through the pipeline drops by 1 percent or more over a 24-hour period. A DEC official said last week that the agency recently considered tightening that standard but decided not to.

Company spokesman Daren Beaudo said the leak-detection system was tested and "it complies with regulations."

A BP worker who was driving along a gravel road beside the pipeline early on the morning of March 2 discovered the spill after smelling oil.

Beaudo said investigators looked into a "rumor" that workers had first smelled oil many hours before that time.

"We have not been able to substantiate it as a fact," he said. "If someone knows something differently we would welcome that input, but we have not confirmed it to date. Everything we've found suggests it was discovered the morning of March 2."

The spill, though the largest on the North Slope, ranks fourth in terms of all spills involving Slope crude. The biggest came in 1989, when nearly 11 million gallons of oil spilled into Prince William Sound after the tanker Exxon Valdez ran aground. In 1978 nearly 672,000 gallons spilled near Fairbanks after saboteurs damaged the 800-mile trans-Alaska oil pipeline, which carries oil from Prudhoe Bay to the tanker port at Valdez.

Five years ago 286,000 gallons sprayed out of a bullet hole in the trans-Alaska pipeline.

Clean-up workers continued work Monday on a second but far smaller spill in the Conoco-run Kuparuk oil field west of Prudhoe Bay. An inspection has turned up three breaches in a 24-inch line that carries water mixed with a trace of oil, DEC officials reported. Cleanup workers are still calculating the leak size, but DEC officials believe it's likely less than 500 gallons

 

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The Independent
March 14, 2006

http://news.independent.co.uk/environment/article351121.ece

Burst oil pipeline causes 'catastrophe' in Alaska
By Andrew Gumbel in Los Angeles
Published:14 March 2006

A burst pipeline in Alaska's North Slope has caused the Arctic region's worst oil spill, spreading more than 250,000 gallons of crude oil over an area used by caribou herds and prompting environmentalists again to question the Bush administration's drive for more oil exploration there.

The leak was first spotted by a British Petroleum worker 11 days ago, and was reported to have been plugged a few days later. Initial hopes expressed by BP that the spill was limited to a few tens of thousands of gallons proved to be over-optimistic. Alaska's Department of Environmental Conservation has steadily increased its estimate of the size of the spill, the latest estimate putting it at around 265,000 gallons.

The leak, whose cause is unknown, occurred in a remote part of the most sparsely populated state in the United States, and it remains to be seen what damage, if any, it has done to ecosystems. It does, however, give grist to groups who have challenged Washington's assertion that oil can be prospected and shipped while leaving only the gentlest of "footprints" on the landscape.

"This historic oil spill is a catastrophe for the environment," Natalie Brandon, of the Alaska Wilderness League, said in a statement. "Tone-deaf politicians in Congress should now stop trying to push for more drilling through sneaky manoeuvres ... The fact that the oil spill occurred in a caribou crossing area in Prudhoe Bay is a painful reminder of the reality of unchecked oil and gas development across Alaska's North Slope."

The biggest battle has been over the fate of the Arctic National Wildlife Refuge, also on the North Slope, which the White House wants to open up. The initiative, championed from the moment the Bush administration took office in 2001, has been consistently blocked by Congress but is periodically revived.

A second battle, meanwhile, is taking place in a previously untouched corner of the National Petroleum Reserve on the North Slope. The Bush administration has allowed oil companies to prospect for oil and gas in an area covering 389,000 acres. Environmental groups have responded with a federal lawsuit, filed last Friday, in which they contend that the Department of the Interior has violated the Endangered Species Act and other laws in an area noted for its flocks of migratory geese.

It is not just environmentalists who oppose the administration's plans. Several prominent energy analysts, as well as Washington politicians, argue that the likely yield in unexplored areas of the North Slope is not large enough to justify the intrusion.

Alaskan politicians and industry lobby groups are heavily in favour of expanding exploration as it would bring jobs and other benefits to the state economy. The Bush administration, meanwhile, argues that further domestic exploration is essential if the United States wants to decrease its dependence on oil and gas from the Middle East.

Accidents and leaks have periodically occurred on the North Slope, and along the trans-Alaska pipeline that takes crude from Prudhoe Bay across two mountain ranges to the port of Valdez on the shores of the North Pacific. Saboteurs blew up a section of pipeline shortly after it opened in the 1970s, starting a major spillage. A hunter accidentally fired into the pipeline five years ago, causing $7m (£3.6m) worth of damage.

 

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Houston Chronicle
March 14, 2006

http://www.chron.com/disp/story.mpl/ap/nation/3721760.html

Cold Slows Alaska Oil Spill Cleanup
By RACHEL D'ORO Associated Press Writer
© 2006 The Associated Press

PRUDHOE BAY, Alaska  Heavily bundled crews are braving merciless cold to continue cleaning up the largest oil spill ever on Alaska's North Slope.

In recent days, the wind chill factor dipped to more than 70 degrees below zero at Prudhoe Bay, barely warming to 44 below on Monday as workers attacked the estimated spill of 267,000 gallons that seeped into almost two acres of snow-covered tundra.

About 60,000 gallons of crude have been recovered since the leak from a ruptured transit line was discovered March 2 at a site operated by BP Exploration (Alaska) Inc.

"There's still a lot of work to be done under very trying conditions," said Dan Larson, a BP spokesman who visited the site.

Crews used a vacuum truck to recover oil that pooled in some places and carried fresh snow to other spots to absorb the crude. After transferring the contaminated snow to a concrete pad, the mixture will be melted and separated.

The crude will ultimately be treated and sold, according to BP officials. The goal is to collect at least 90 percent of it.

"Hopefully, the tundra will recover," said Ed Meggert with the Alaska Department of Environmental Conservation. "It's never going to be perfect."

Officials emphasize the spill bears a small imprint, taking up a size smaller than two football fields in a vast industrial hub traversed by a network of pipelines, oil gathering stations and power plants. And despite the numbing conditions, the weather is actually helping recovery, turning oil thick as honey, so it doesn't spread as quickly as it would in warmer temperatures.

The Prudhoe incident surpasses the 38,000 gallons spilled on the North Slope in 2001, but is much less than the 11 million gallons spilled in Prince William Sound when the Exxon Valdez ran aground in 1989.

The source of the spill was a quarter-inch hole apparently caused by corrosion inside the three-mile line that leads to the trans-Alaska oil pipeline.

Workers on Saturday repaired the rupture, welding a metal sleeve on a six-foot section of the line. Crews are inspecting the line to determine if it can withstand resuming production.

The plant, 650 miles north of Anchorage, usually processes 100,000 barrels of oil daily. Full production is not expected to resume for a week or more, said BP incident commander James Fausett.

For now, a six-inch pipeline is being used for production of 5,000 barrels daily. BP also is looking at a plan to reroute the crude through another pipeline.

Critics say the spill is the latest result of the oil industry's failure to properly maintain the North Slope's aging infrastructure. The North Slope is the region between the Brooks Range and the Arctic Ocean and contains most of Alaska's petroleum reserves.

The pipeline is equipped with a leak detection system, but officials do not know when the crude began trickling out of the line. BP will investigate whether the system was working at the time, Fausett said.

The extent of regulatory penalties BP faces is unknown. Officials with the state DEC said the company could be fined close to $2 million.

 

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Anchorage Daily News
March 11, 2006

http://www.adn.com/news/alaska/story/7521431p-7433569c.html

Spill the largest in Slope's history
INVESTIGATION: Pipeline's leak detection system is under scrutiny after 200,000 gallons were lost.
By WESLEY LOY
Anchorage Daily News
Published: March 11, 2006
Last Modified: March 11, 2006 at 02:30 AM

State pollution regulators are focusing on a pipeline leak-detection system as they investigate what led to a 201,000-gallon oil spill, the largest by far in the 29-year history of oil production on Alaska's North Slope.

The regulators and field operator BP on Friday said the spill, discovered last week along a major, 34-inch pipeline near the heart of the country's largest oil field, was more than five times the size of the next largest oil spill.

The discharge, however, is small compared to the nearly 11 million gallons spilled from the tanker Exxon Valdez in 1989.

The pipeline and wells capable of producing about 95,000 barrels of crude oil, or 12 percent of total North Slope output, remained shut down Friday as BP workers tried to clean up the spill and figure out a way to restore oil production. The stalled oil flow is worth close to $6 million a day.

Vicious cold, with wind chill as low as 64 below, hampered all efforts.

Bill Hutmacher, a state Department of Environmental Conservation official who enforces industry spill-prevention regulations, said a joint government-industry team will investigate whether the pipeline's leak-detection system performed as required.

Under state law, the system must sound an alarm for field workers if the pipeline's oil flow dips by 1 percent or more in a 24-hour period.

If oil leaked over a period of days or weeks at a rate too low to trigger the alarm, BP and its leak-detection system might have met the legal standard, Hutmacher said, even though oil reached the tundra. Determining the rate of the leak is key, he said.

"That's part of what we have to determine," said Hutmacher. "Were they in compliance with the regulations? Was the system functioning?"

Beyond that, state officials will consider whether spill-prevention regulations are stringent enough, he said.

Daren Beaudo, spokesman for BP Exploration (Alaska) Inc., which runs Prudhoe, said his company remains unsure how it could have missed 201,000 gallons of oil, or 4,790 barrels, that leaked from the pipeline.

That's enough oil to fill 25 tractor-trailer tank trucks commonly seen on U.S. highways.

"We hope to have some preliminary results by early next week," Beaudo said of the investigation.

Asked whether the pipeline's leak-detection system sounded an alarm, he said: "I don't know."

A BP field worker who happened to be driving on a gravel road alongside the pipeline discovered the leak early on the morning of March 2. The smell tipped him off.

"Even when we went looking for the source of the oil smell, responders had trouble finding the oil due to snow," Beaudo said.

Workers this week pinpointed the source of the leak: a quarter-inch hole, likely caused by internal corrosion, at a point where the steel pipe crosses under a gravel caribou crossing. A caribou crossing is a mound of gravel placed over elevated, above-ground North Slope pipelines to allow the animals to walk over.

The spill size estimate DEC and BP announced jointly Friday is subject to change. The spilled oil, which covered just shy of 2 acres including the edge of a frozen lake, could range from 135,000 to 268,000 gallons, they said. Cleanup workers had recovered 53,000 gallons as of Friday morning.

BP is studying alternatives for restoring oil production, Beaudo said. One is restarting the pipeline once the now-patched 3-mile line is permanently fixed. Another is rerouting oil production through another, smaller pipeline.

Either way, it "will be a couple of weeks before we have a solution," he said.

The frozen ground will make the cleanup easier and more effective, BP and state officials said.

Hutmacher added: "This is the last thing that any oil company wants to have happen. Just think of the extreme costs involved in dealing with the incident."

BP runs Prudhoe and owns 26 percent of the production. The biggest Prudhoe owners are Exxon Mobil and Conoco Phillips, each with about 36 percent.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

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http://www.adn.com/news/alaska/story/7521430p-7433568c.html

Small Kuparuk River spill halts oil flow at 15 wells
NORTH SLOPE: Trace of crude mixed with water leaks onto tundra.
By WESLEY LOY
Anchorage Daily News
Published: March 11, 2006
Last Modified: March 11, 2006 at 02:26 AM

State pollution regulators on Friday reported another North Slope pipeline leak, this time in the Kuparuk River oil field west of Prudhoe Bay.

The spill involved mainly water with only a trace of crude oil mixed in, they said. It leaked from a 24-inch pipeline near a drilling pad on the western edge of Kuparuk, the state's second-largest oil field.

Leslie Pearson, spill response coordinator for the state Department of Environmental Conservation, said the spill most likely involves less than 500 gallons of liquid, she said.

"It's kind of a minor spill," Pearson said.

Still, the leak forced a shutdown of the pipeline and 15 wells, halting the flow of as much as 4,000 barrels a day of crude oil.

Conoco Phillips Alaska Inc. runs Kuparuk. Spokeswoman Dawn Patience said a drill-site operator Thursday afternoon saw an icicle hanging off the pipeline, indicating a leak.

Conoco had about 12 spill responders on the scene Friday, working in temperatures down to 35 below. They placed a portable tank under the pipe to catch leaking water. The DEC reported the spill had affected a bedroom-sized area of snow-covered tundra.

The spilled liquid is known as produced water. Typically, North Slope wells send up a mixture of hot crude oil and water, and this water is separated and moved through pipelines.

Pollution officials say produced water, which is sometimes salty, can be as harmful to tundra plant life as oil.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

 

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Anchorage Daily News
March 10, 2006

http://www.adn.com/news/environment/story/7519250p-7431265c.html

Oil spill is the North Slope's biggest ever
By RACHEL D’ORO
Associated Press Writer
Published: March 10, 2006
Last Modified: March 10, 2006 at 11:11 AM

More than 200,000 gallons of crude leaked from a ruptured transit line onto the tundra in Alaska’s Prudhoe Bay, making the spill discovered earlier this month the largest ever on the North Slope, according to an official estimate released Friday.

The estimated spill size of 202,000 to 267,000 gallons far surpasses the 38,000 gallons spilled in 2001, officials said. By comparison, the Exxon Valdez spilled 11 million gallons when it ran aground in Prince William Sound in 1989.

“I can confirm it’s the largest spill of crude oil on the North Slope that we have record of,” said Linda Giguere with the state Department of Environmental Conservation. She did not immediately know when the state began record keeping on spills, but said it was not in place when the trans-Alaska oil pipeline was built in the 1970s.

Meanwhile, officials on Friday reported another leak on the North Slope, this time in a 24-inch diameter pipeline carrying crude and water from wells to a processing plant operated by ConocoPhillips.

The spill in the Kuparuk field was discovered by a ConocoPhillips operator Thursday afternoon. Neither the cause nor volume of crude spilled in this leak was immediately known, but it was not expected to be as large as the BP spill, said DEC spokesman John Dixon.

“I’d be surprised if it even exceeds 500 gallons,” he said.

The estimate on the largest spill was based on a survey conducted this week at the site operated by BP Exploration (Alaska) Inc. where the leak was discovered March 2. Workers took measurements by probing the snow covering much of the crude that leaked from the 34-inch line.

The source of the spill was a quarter-inch hole apparently caused by internal corrosion in the three-mile line that leads to the trans-Alaska oil pipeline.

To date, workers have recovered 52,920 gallons ˜ or 1,260 barrels ˜ of crude. The effort has been slowed in recent days by wind-chilled temperatures that dipped to more than 70 degrees below zero.

The plant, 650 miles north of Anchorage, usually processes 100,000 barrels of oil daily ˜ slightly less than 10 percent of the daily flow through the 800-mile trans-Alaska pipeline. For now, a six-inch pipeline is being used for production of 5,000 barrels daily.

Production is not expected to resume for at least two weeks, BP spokesman Daren Beaudo said earlier this week.

The plant usually processes 100,000 barrels of oil daily ˜ slightly less than 10 percent of the daily flow through the 800-mile trans-Alaska pipeline. For now, a six-inch pipeline is being used for production of 5,000 barrels daily.

˜
On the Net:

BP Exploration (Alaska) Inc.:
http://alaska.bp.com/

Unified Command information site:
http://www.dec.state.ak.us

 

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Los Angeles Times
March 9, 2006

http://www.latimes.com/news/printedition/asection/la-na-spill9mar09,1,6038878.story?coll=la-news-a_section

Crude Leak Plugged in Alaska Pipeline
Fiercely cold conditions are hampering efforts
to clean up the oil spill from a corroded pipe.
By Sam Howe Verhovek
Times Staff Writer
March 9, 2006

SEATTLE  At least 20,000 gallons of crude oil have spilled from a corroded pipeline near Prudhoe Bay in northern Alaska, state officials said Wednesday, adding that cleanup crews were hampered by severe conditions such as wind-chill temperatures of 50 degrees below zero.

The leak has been plugged, and cleanup crews with giant vacuum trucks known as "super suckers" have been deployed to gather the spilled oil, said Lynda S. Giguere, a spokeswoman for Alaska's Department of Environmental Conservation.

The quarter-inch hole in the 34-inch-wide pipeline, about 650 miles north of Anchorage, was detected last Thursday.

It is at a point in the line covered by a mound of gravel designed to let caribou cross the pipeline.

An official estimate of the size of the spill is not expected until today, Giguere said. Cleanup crews have recovered about 58,000 gallons (or approximately 1,380 barrels) of crude oil mixed with snow from the frozen tundra, she said, adding that no determination had been made on how much of it was crude or how severe the environmental impact would be.

The largest spill on record along the 800-mile Trans-Alaska Pipeline occurred shortly after it opened in 1978, when vandals blew up a section, causing about 700,000 gallons to escape. The Exxon Valdez spilled 11 million gallons when it ran aground in Alaska's Prince William Sound in 1989.

In 2001, a man fired his hunting rifle into the pipeline, creating a leak that spilled about 285,000 gallons onto the tundra and led to a $7-million cleanup. Authorities arrested the 37-year-old hunter and he was convicted on federal weapons charges; it was not considered a terrorist incident. Pipeline operators say that it has been shot at through the years at least 50 times, but that the incident was the first time a bullet had punctured the double-steel-walled pipeline.

The spill on the North Slope occurred in a "feeder line" to the main pipeline, causing a shutdown of that line and a temporary drop in overall production.

Alaska is a major source of oil for West Coast refineries.

The pipeline is supposed to be monitored for any evidence of a drop-off that could signal a leak in the system; and when a leak is detected, the pipeline is shut off to limit the fallout.

Some industry watchdogs say the aging pipeline will become increasingly vulnerable to corrosion. "It's like a garden hose going bad on you," said Chuck Hamel, a former oil and tanker broker who runs a website that monitors Alaska oil development. "You patch one leak but then you'll get another."

But a spokesman for BP Exploration (Alaska) Inc., which runs the section of the pipeline that leaked, disputed that characterization.

"We have a very aggressive, robust corrosion monitoring program," said the spokesman, Daren Beaudo.

He said the company thought it had a "very effective cleanup" going on.

Pipeline operators say that spills have amounted to less than a teaspoon in a swimming pool when compared to the overall volume of oil delivered.

In 1999, six pipeline employees wrote anonymously to federal officials arguing that neglect and maintenance cuts on the pipeline could lead to disaster.

"It won't be a single gasket, or valve, or wire, or procedure, or person that will cause the catastrophe," the employees wrote. "It will be a combination of small, perhaps seemingly inconsequential events and conditions that will lead to the accident that we're all dreading and powerless to prevent."

 

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Anchorage Daily News
March 9, 2006

http://www.adn.com/money/story/7515935p-7427777c.html

Brutal cold challenges spill cleanup
PRUDHOE BAY: 58,590 GALLONS OF CRUDE, SNOW HAVE BEEN RECOVERED.
By RACHEL D'ORO
The Associ
Published: March 9, 2006
Last Modified: March 9, 2006 at 03:58 AM

Crews continued to clean up a massive oil spill in Alaska's North Slope despite wind-chilled temperatures Wednesday that plunged to 54 degrees below zero.

Workers wore arctic gear and took frequent breaks to guard against frostbite, slowing the recovery of crude that leaked onto the snowy tundra from a ruptured transit line, spill responders said. With temperatures expected to approach 60 degrees below zero in coming days, the effort could be further challenged.

"If it's too cold to work, we won't work," said Daren Beaudo, a spokesman for BP Exploration (Alaska) Inc. "We're not going to jeopardize people's safety and health. We won't put them in harm's way."

Crews have recovered 58,590 gallons -- or 1,395 barrels -- of crude and snow since the spill was discovered March 2 in the Prudhoe Bay oil field, about 650 miles north of Anchorage. Most of the recovered material will likely turn out to be crude once the water is separated out, officials said.

It that prediction comes true, the spill could be the largest ever in the North Slope, surpassing the 38,850 gallons spilled in 1989.

Lynda Giguere with the Alaska Department of Conservation said officials should have an estimate today of how much crude spilled onto a two-acre area from the three-mile line, which leads to the trans-Alaska oil pipeline.

Earlier this week, oil industry critic Chuck Hamel said on-site personnel told him that about 798,000 gallons had spilled. But Hamel, of Alexandria, Va., said Wednesday he misinterpreted the information.

Beaudo said that number is a "rough estimate" of the volume the 34-inch line could hold.

The bulk of the oil remains inside the pipeline, which was shut down, depressurized and blocked off at both ends after the spill was discovered by a BP operator. Workers have temporarily patched a quarter-inch hole apparently caused by internal corrosion. They've also tented the affected section to allow heating for testing the integrity of pipeline.

In this week's extreme temperatures, the oil remaining in the line has the consistency of 50-weight motor oil. But company officials don't foresee any problems from the cold even though production is not expected to resume for at least two weeks, according to Beaudo.

The plant usually processes 100,000 barrels of oil daily -- slightly less than 10 percent of the daily flow through the 800-mile trans-Alaska pipeline. For now, a six-inch pipeline is being used for production of 5,000 barrels daily.

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Anchorage Daily News
March 8, 2006

http://www.adn.com/money/story/7512346p-7424002c.html

Oil leak escaped monitor
PRUDHOE BAY: Spill estimate due by Thursday; output down $6 million a day.
By WESLEY LOY
Anchorage Daily News
Published: March 8, 2006
Last Modified: March 8, 2006 at 04:14 AM

The state four years ago fined BP $300,000 and ordered it to install an accurate leak-detection system on major Prudhoe Bay crude oil pipelines, including one that recently sent more than 21,000 gallons of oil oozing onto the tundra.

But the system didn't alert oil-field workers to that leak along the pipeline. Rather, it was a worker who happened to be driving down a gravel road next to the line and smelled oil who sounded the alarm early last Thursday.

The spill is one of the largest in the 29-year history of production at Prudhoe Bay, the nation's largest oil field, and a massive cleanup effort continues in subzero weather.

State pollution regulators found BP was behind schedule on installing leak-detection systems required by law and issued the company an order in May 2002 to hurry up the work.

BP complied, adding equipment designed to alert field workers whenever the daily flow of oil through a pipeline dips by 1 percent or more, suggesting a possible leak. Company tests showed the systems worked at that time.

Maureen Johnson, BP's senior vice president for Prudhoe Bay, said the company will investigate whether the leak-detection system failed, or if field workers didn't respond correctly to indications the pipeline was leaking. Responses might have included driving or flying along the 3-mile pipeline to check, she said.

Johnson added she expects the state to fine or otherwise punish BP for the spill.

"If you mess up, you expect to be penalized for that," she said.

BP and pollution regulators with the state Department of Environmental Conservation jointly announced Tuesday that they had pinpointed the source of the leak -- a quarter-inch hole at the bottom of the steel pipe inside a culvert underneath a caribou crossing.

A caribou crossing is a gravel mound placed over pipelines to allow the migratory animals to walk over.

Internal corrosion is suspected of causing the hole, BP and DEC officials said.

Daren Beaudo, a BP spokesman, said the 34-inch pipeline -- which carried oil from a processing plant known as Gathering Center 2 to the 800-mile trans-Alaska pipeline -- has corroded spots that are regularly inspected and chemically treated to prevent the pipeline wall from thinning further or rupturing.

However, he said the section of pipe in the culvert was not a known trouble spot.

"Our people were genuinely surprised and did not anticipate a problem in this area," Beaudo said.

But the many caribou crossings in the vast Prudhoe Bay field have caused worry.

In 2003, BP promised the state it would check all caribou crossings in search of standing water in the culverts or other problems. Water is a mortal enemy of pipelines, triggering corrosion that can quickly eat through steel. BP made the promise after three small holes developed in a 24-inch pipeline, allowing 1,500 gallons of crude oil and 4,500 gallons of oily water to leak, covering nearly an acre.

The spill discovered last week is much more serious.

At 21,000 gallons, the spill is the sixth-largest ever on the North Slope. The largest was 38,850 gallons in the Milne Point field in 1989.

DEC officials say spilled oil from the Gathering Center 2 pipeline has affected close to 2 acres, reaching the edge of a frozen tundra lake. The volume of spilled oil is likely to grow larger as cleanup workers -- 60 of them working day and night -- continue to recover oil using vacuum trucks.

The agency said it expects to have a full estimate of the spill size by Thursday.

BP workers glued a temporary rubber patch over the hole.

The line remains shut down indefinitely, pinching oil production by about 95,000 barrels per day or 12 percent of total North Slope output. The interrupted oil is worth close to $6 million a day at Tuesday's closing price.

The leak-detection system relies on meters at either end of the pipeline to measure the amount of oil going in and coming out. The system is supposed to sound an alarm in a Prudhoe control room if the daily oil flow unexpectedly dips by 1 percent or more.
The Gathering Center 2 pipeline was among a handful of important "transit" or "sales" pipelines -- lines that carry processed oil ready for market -- covered under the state's 2002 leak-detection order.

Less than a year after receiving the order, BP asked the state to lift it. The company provided test results showing the leak-detection systems worked, including that on the Gathering Center 2 pipeline.

BP testers had diverted some oil going through the line to simulate a leak, and an alarm sounded 13 hours later, according to a BP letter to DEC.

Sam Saengsudham, a DEC environmental engineer, reviewed the test results and concurred the leak-detection systems worked, according to an internal DEC e-mail the agency provided Tuesday. However, he also recommended that the pipelines be patrolled regularly "as an integral part" of detecting leaks.

Although Prudhoe is a sprawling and highly productive field, the smell of oil like that noticed by the field worker last Thursday is uncommon, Beaudo said. He said he didn't know how often workers travel the road along the leaky pipeline.

It's possible the pipeline's leak-detection system wouldn't notice a very small, low-volume leak that persisted for perhaps weeks from a tiny hole, slowly sending oil across the tundra where it could be concealed by heavy snow, Beaudo said.

Johnson also noted that the leak-detection systems are not fail-safe and can be affected by "noise" such as sediment accumulation in pipelines.

Many Prudhoe pipelines have no leak-detection system, but workers check all of them regularly by driving by or flying over with infrared equipment that can spot escaped oil, which comes out of the ground hot, Beaudo said.


Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

 

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Anchorage Daily News
March 7, 2006

http://www.adn.com/money/story/7510267p-7421918c.html

Slope oil spill likely to keep growing
21,000 GALLONS: Prudhoe Bay's
sixth-largest cleanup has crews busy.
By WESLEY LOY
Anchorage Daily News
Published: March 7, 2006
Last Modified: March 7, 2006 at 04:43 AM

Large Spill Table:
http://www.adn.com/ips_rich_content/844-07NorthSlopeSpills-150-x-138.gif

At least 21,000 gallons of crude oil spilled from a leaky pipeline in the Prudhoe Bay field, according to an estimate from BP and the state.

That's the amount of oil cleanup workers recovered by 5:45 p.m. Friday, 36 hours after discovery of the leak.

The spill ranks as the sixth-largest oil spill ever on the North Slope, and the size is likely to increase once cleanup workers fully assess the extent of the spill. The largest was 38,850 gallons at the Milne Point field in 1989, according to the state Department of Environmental Conservation.

State officials said Monday they were implementing a three-pronged plan to determine the full size of the spill.

"We will determine volume estimates in a scientific and systematic fashion," said Leslie Pearson, a DEC on-scene coordinator.

Officials said Monday that about 1,260 barrels -- or nearly 53,000 gallons -- of oil and snowmelt had been recovered in cleanup operations.

A BP Exploration (Alaska) Inc. operator found the leaking oil and the line was blocked off and depressurized, but the source of the leak eluded investigative teams for nearly three days.

The exact location of the leak was discovered at 1:40 a.m. Sunday inside a low-lying section of the 34-inch transit line, which leads to the trans-Alaska oil pipeline. The section where the leak occurred, about 650 miles north of Anchorage, is covered by gravel to let caribou pass.

State officials Monday said three methods will be used to come up with an accurate estimate of the size of the spill:

• Site sampling, which includes probing the spill area and determining oil thickness;

• Volume accounting of recovered material, which includes calculating the amount of oil that remains after water removal;

• Engineering calculations based on oil flow rate, hole size and length of time of the spill.

The Unified Command, comprising representatives from BP Alaska, the U.S. Environmental Protection Agency, the North Slope Borough and DEC, said Monday it continues to focus efforts on oil recovery and cleanup.

An investigation team member from BP's Houston office was traveling Monday to Prudhoe Bay to work with regulatory agencies to begin collecting data and help determine the cause of the release.

FOR MORE about the spill, go to

www.alaska.bp.com
 
www.dec.state.ak.us
 

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Anchorage Daily News
March 6, 2006

http://www.adn.com/news/alaska/story/7506920p-7418059c.html

Source of Prudhoe Bay oil spill found
GURGLING: Worker heard leak; critic says
spill is 798,000 gallons.
By RACHEL D'ORO
The Associated Press
Published: March 6, 2006
Last Modified: March 6, 2006 at 02:35 AM

A bubbling sound early Sunday helped workers pinpoint a leak in a pipeline that allowed a sizeable amount of crude oil to spill onto the frozen tundra at Prudhoe Bay.

State, federal and oil company officials said the total amount of oil spilled is still not known, but they discounted claims by an oil industry critic that the spill was much larger than BP Exploration (Alaska) Inc. is saying.

The breach was discovered at 1:40 a.m Sunday inside a low-lying section of the 34-inch transit line, which leads to the trans-Alaska oil pipeline. The section where the leak occurred is covered by gravel to let caribou pass.

"All kinds of technology has been brought to the North Slope, and the way it was actually found was that someone heard a gurgling noise, put some lights on it, and saw it," Maureen Johnson, BP manager of the Prudhoe Bay unit, said during a briefing with reporters.

The source of the leak was found after enough snow had been removed from the site. The spill, discovered Thursday by a BP operator, prompted the company to shut down the processing plant, depressurize the line and block off both ends, but workers Sunday found oil still dripping from the breach.

"It's like putting a straw in a soft drink and a finger on the straw. The fluid stays in the straw," said Matt Carr, onsite coordinator for federal Environmental Protection Agency.

"Of course it's not a perfect seal. There's a little bit of dripping, but it's not a huge active leak."

With the location of the leak known, officials will focus on determining a cause, repairing the line and continuing the cleanup of spilled oil. Johnson said the spill, about 650 miles north of Anchorage, has affected an area of slightly less than two acres.

As of Sunday afternoon, crews had recovered 1,097 barrels -- or more than 46,074 gallons -- of crude and snowmelt.

The amount spilled is far greater than BP and government officials are saying, according to oil industry critic Chuck Hamel.

Hamel, of Alexandria, Va., said he learned from onsite personnel that the spill volume is closer to 798,000 gallons, which would make it the second largest oil spill in Alaska, second only to the 1989 Exxon Valdez spill of 11 million gallons in Prince William Sound.

Hamel said meters record the volume flowing into the pipe as well as the amount leaving it.

"There's a 798,000-gallon discrepancy," he said in a phone interview. He declined to provide documentation of the difference.

Hamel also said operators knew there was a leak at least 36 hours before the spill was found, because the smell of crude vapors was noted.

"They knew they had a problem," he said. "They could smell it, but they couldn't find it."

Johnson said the spill was discovered almost immediately after a worker smelled it. She said the spill size given by Hamel was news to her.

"I don't have any information about a spill that large," she said, adding the actual volume will eventually be determined. "We are going to find out. ... I don't think anyone could hide a fact like that."

The focus now is on recovering the oil, controlling and repairing the leak, and resuming full production as soon as possible, said Leslie Pearson, an on-scene coordinator with the Alaska Department of Environmental Conservation.

"We'll deal with rumors, but we're dealing with priorities here," she said.

BP and regulatory officials investigating the leak said much progress has been made in responding to the spill.

Crews have worked under considerable challenges, including temperatures dipping to 20 degrees below zero and deep snow hiding much of the spill. The leak was difficult to detect because oil can seep into insulation and the sheath surrounding the line, exiting at a distance.

"The progress has been just stunning," Johnson said.

 

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Seattle Post Intelligencer
March 5, 2006

http://seattlepi.nwsource.com/local/6420AP_AK_Prudhoe_Spill.html

Location of Prudhoe Bay pipeline leak found
By RACHEL D'ORO
ASSOCIATED PRESS WRITER
Sunday, March 5, 2006 · Last updated 7:37 p.m. PT

ANCHORAGE, Alaska -- A bubbling sound early Sunday helped workers pinpoint a leak in a pipeline that allowed thousands of gallons of crude oil to spill onto the frozen tundra in Alaska's Prudhoe Bay.

State, federal and oil company officials said the total amount of oil spilled is still not known, but they discounted claims by an oil industry critic that the spill was much larger than BP Exploration (Alaska) Inc. is saying.

The breach was discovered at 1:40 a.m Sunday inside a low-lying section of the 34-inch transit line, which leads to the trans-Alaska oil pipeline. The section where the leak occurred is covered by gravel to let caribou pass.

"All kinds of technology has been brought to the North Slope, and the way it was actually found was that someone heard a gurgling noise, put some lights on it, and saw it," Maureen Johnson, BP manager of the Prudhoe Bay unit, said during a briefing with reporters.

The source of the leak was found after enough snow had been removed from the site. The spill, discovered Thursday by a BP operator, prompted the company to shut down the processing plant, depressurize the line and block off both ends, but workers Sunday found that oil is still dripping from the breach.

"It's like putting a straw in soft drink and a finger on the straw. The fluid stays in the straw," said Matt Carr, onsite coordinator for federal Environmental Protection Agency. "Of course it's not a perfect seal. There's a little bit of dripping, but it's not a huge active leak."

With the location of the leak known, officials will focus on determining a cause, repairing the line and continuing the cleanup of spilled oil. Johnson said the spill, located about 650 miles north of Anchorage, has affected an area slightly less than two acres.

As of Sunday afternoon, crews had recovered 1,097 barrels - or more than 46,074 gallons - of crude and snowmelt.

The amount spilled is far greater than BP and government officials are saying, according to oil industry critic Chuck Hamel. Hamel, of Alexandria, Va., said he learned from onsite personnel that the spill volume is closer to 798,000 gallons, which would make it the second largest oil spill in Alaska, second only to the 1989 Exxon Valdez spill of 11 million gallons in Prince William Sound.

Hamel said meters record the volume flowing into the pipe as well as the amount leaving it.

"There's a 798,000 gallon discrepancy," he said in a phone interview. He declined to provide documentation of the discrepancy, however.

Hamel also said operators knew there was a leak at least 36 hours before the spill was found, because the smell of crude vapors was noted.

"They knew they had a problem," he said. "They could smell it, but they couldn't find it."

Johnson said the spill was discovered almost immediately after a worker smelled it. She said the spill size given by Hamel was news to her.

"I don't have any information about a spill that large," she said, adding the actual volume will eventually be determined. "We are going to find out ... I don't think anyone could hide a fact like that."

The focus now is on recovering the fuel, controlling and repairing the leak, and resuming full production as soon as possible, said Leslie Pearson, an on-scene coordinator with the Alaska Department of Environmental Conservation.

"We'll deal with rumors, but we're dealing with priorities here," she said.

BP and regulatory officials investigating the leak said much progress has been made in responding to the spill.

Crews have worked under considerable challenges, including temperatures dipping to 20 degrees below zero and deep snow hiding much of the spill. The leak was difficult to detect because oil can seep into insulation and the sheath surrounding the line, exiting at a distance.

"The progress has been just stunning," Johnson said.

On the Net:

BP Exploration (Alaska) Inc.: http://alaska.bp.com/

Unified Command information site: http://www.dec.state.ak.us
 

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Anchorage Daily News
March 5, 2006

http://www.adn.com/news/alaska/story/7504030p-7415247c.html

Workers yet to find breach in oil pipeline
PRUDHOE BAY: Crews have recovered 625 barrels of crude and snowmelt.
By RACHEL D'ORO
The Associated Press
Published: March 5, 2006
Last Modified: March 5, 2006 at 04:27 AM

Crews are slowly making progress cleaning up crude oil that spilled from a leaking pipeline in Alaska's Prudhoe Bay field, industry and regulatory officials said Saturday.

Crews working in 12-hours shifts have recovered 26,250 gallons -- or 625 barrels -- of crude and snowmelt. But they still have not found the breach in the 34-inch line leading from a processing plant toward the trans-Alaska oil pipeline, said an official with BP Exploration (Alaska) Inc.

"We know where it isn't, not where it is," Maureen Johnson, BP manager of the Prudhoe Bay unit, said during a teleconference briefing with reporters.

The leaked oil, discovered Thursday morning by a BP operator, has affected slightly less than two acres, Johnson said.

After the spill was found, the company shut down the processing plant, depressurized the line and blocked off both ends. Existing and man-made snow berms contained the spread, according to state environmental regulators.

The origin of the leak is difficult to detect because oil can seep into insulation and the sheath surrounding the line, exiting at a distance from where it started, according to officials.

Until workers can pinpoint the breach, repairs can't begin. Finding it also will help point to a cause.

Crews have stripped insulation from possible areas and have narrowed the search to sections at a vertical support and a low-lying area that's covered by gravel to let caribou pass.

"We haven't ruled either of those locations out," Johnson said.

Meanwhile, minimal production was initiated, she said. A six-inch pipeline was pressed into service to begin production of 5,000 barrels daily. The plant usually processes 100,000 barrels of oil daily -- slightly less than 10 percent of the daily flow through the 800-mile trans-Alaska pipeline.

Johnson said it's too early to say when full production will resume at the plant, located more than 200 miles east of Barrow.

Also unknown is the volume of oil released, said Leslie Pearson, an on-scene coordinator with the Alaska Department of Environmental Conservation.

Much of the spill is not visible in the area, which is covered with snow. Hot oil under a leak melts snow but then spreads horizontally when it reaches frozen ground beneath the snow.

The cleanup work is continuing and involves using equipment and crews to vacuum and scoop the oil.

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Anchorage Daily News
March 4, 2006

http://www.adn.com/money/story/7499673p-7410669c.html

Workers respond to Prudhoe spill
NORTH SLOPE: Leak may be one of largest in 29 years of production.
By WESLEY LOY
Anchorage Daily News
Published: March 4, 2006
Last Modified: March 4, 2006 at 06:04 AM

Crews of up to 70 people are working 12-hour shifts around the clock to clean up a crude oil spill in the giant Prudhoe Bay field, state pollution regulators and a BP spokesman said Friday.

Officials still had no estimate of how much crude leaked out of a large pipeline before a BP worker discovered the leak Thursday morning.

But by early Friday afternoon, the Department of Environmental Conservation reported that vacuum trucks working the site had sucked up nearly 21,000 gallons of oil and water.

North Slope oil production remained down by 100,000 barrels a day, or 12 percent, because the leak forced the shutdown of some wells and a major oil-processing plant. The oil is worth about $6 million per day at current prices.

Oil production will be reduced indefinitely, said Daren Beaudo, spokesman for BP Exploration (Alaska) Inc., which runs the nation's largest oil field.

Beaudo said it wasn't clear how many gallons of the recovered liquid were oil and how many were melted snow. Cleanup workers will know after the liquid, being held in a storage tank, settles out and separates, he said.

Judging by the scale of the state and industry response, the spill potentially could rank among the largest crude oil spills in 29 years of Prudhoe oil production.

Cleanup workers rallied a fleet of trucks, heavy equipment and even shovels to clear away snow from 3 to 5 acres of tundra to try to assess the spread of the oil.

A small army of workers reaching from Prudhoe to Deadhorse to Fairbanks to Anchorage tackled a range of tasks: clearing snow, applying for permits to work on the delicate tundra, building an ice road and work pad around the contaminated site, peeling back insulation on the pipeline to try to find the source of the leak, testing the air for fumes that could harm workers, and taking steps to prevent as many as 245 idled Prudhoe Bay wells from freezing up.

Temperatures down to 20 degrees below zero, plus a stiff breeze, made the whole operation tougher.

Fluids were freezing in the hoses leading into the vacuum trucks, and workers were swapping out frequently to avoid frostbite, according to a DEC status report.

The pipeline was plugged to prevent any more oil from leaking, Beaudo said.

Although workers Friday had peeled back much insulation off the pipeline, which is 34 inches in diameter, they still hadn't found any obvious holes through which the oil could have escaped, Beaudo said.

Cleanup workers say a trail of oil had reached a lake just north of the pipeline, but tests showed the lake was frozen to the bottom, he said. The fact that the tundra and lake are frozen will aid in the cleanup.

"You never want to have an oil spill," Beaudo said. "But if it happens, these are good conditions. Snow and ice work as an ally to protect the tundra underneath, and the water."

Beaudo revealed that the big pipeline, which carried oil from two processing plants known as gathering centers to the 800-mile trans-Alaska pipeline, had known interior and exterior corrosion damage.

Because of this, BP had downgraded the maximum pressure allowed within the line to help guard against rupturing its steel walls, he said. The pipeline was operating well within the reduced pressure limit when the leak was discovered, he said.

BP can test the integrity of pipelines by sending a bullet-shaped sensor known as a smart pig through the pipe. The last time a smart pig slid through the 34-inch pipe was 1998, Beaudo said. It was scheduled for pigging this summer, he said.

The DEC, which enforces state pollution laws, had numerous staffers on the scene Friday.

BP runs Prudhoe Bay on behalf of itself, Exxon Mobil, Conoco Phillips and other oil companies.

Daily News reporter Wesley Loy can be reached at wloy@adn.com   or 257-4590.

 

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Anchorage Daily News
March 3, 2006

http://www.adn.com/front/story/7496267p-7406770c.html

Crude spill shuts down Slope plant
OIL: Leak discovered by BP worker may have covered five acres.
By WESLEY LOY
Anchorage Daily News
Published: March 3, 2006
Last Modified: March 3, 2006 at 03:17 AM

Crude oil leaking from a major North Slope pipeline might have oozed over 3 to 5 acres of frozen, snow-clad tundra, prompting a major cleanup effort Thursday, an oil company spokesman said.

The leak forced the shutdown of an oil-processing plant and about 245 wells in the giant Prudhoe Bay field, cutting Slope production by about 12 percent, or 100,000 barrels per day. At Thursday's closing oil price of $60.81, the interrupted oil flow is worth more than $6 million daily.

State pollution regulators and cleanup crews from BP Exploration (Alaska) Inc., which runs Prudhoe, rushed to the spill site after a BP worker driving along a gravel road parallel to the pipeline at 5:45 a.m. Thursday saw and smelled crude oil on the tundra.

Aerial photos released jointly by BP and the state Department of Environmental Conservation showed a squiggly trail of oil running north from the large, above-ground pipeline, which is 34 inches in diameter.

Neither state officials nor BP spokesman Daren Beaudo could say how much oil was spilled.

But Beaudo said two trucks sent to vacuum up the oil had recovered 62 barrels of liquid as of Thursday afternoon. The company had to apply for a special permit from the state to allow the trucks to drive on the delicate tundra.

Corrosion is a constant threat to the Slope's spaghetti network of steel pipelines, causing many leaks in the past, and it's possible the pipeline developed a hole some time ago and was slowly leaking oil.

Beaudo said he didn't want to speculate on a cause, however, until workers peel back insulation and snowdrifts that partially cover the pipe and take a closer look. He did say, however, that the leak was not the result of, for example, a vehicle smashing into the line.

BP sent up an airplane equipped with an infrared camera to try to measure how widely the oil had spread. The oil is hot when it comes out of the pipeline, 180 degrees on average, but it cools and thickens when it hits the tundra, Beaudo said.

The pipeline carries crude oil from a processing plant called Gathering Center 2, on the western side of the Prudhoe field, about six miles to Pump Station 1, the starting point of the 800-mile trans-Alaska oil pipeline.

Prudhoe Bay is the country's largest oil field.

After the leak was discovered, BP shut down the gathering center, which separates the raw mixture of crude oil, natural gas and water piped in from the wells. From the center, the crude oil flows away in the 34-inch line.

The leak occurred just east of the gathering center, at a point where the pipe rests on a bracket that holds it a few feet off the ground.

BP workers plugged the line on either side of the leak to prevent more oil from spilling.

Ed Meggert, a DEC official in Fairbanks, said snow might be concealing the full size of the spill, which had reached a frozen lake north of the pipeline. Scores of lakes dot the North Slope tundra.

"We just know there's a fairly large pool out there," he said.

Weather was both friend and enemy to cleanup workers.

On one hand, the snow cover and frozen ground should help prevent oil from seeping into the tundra, killing plant life. But with temperatures reaching to 25 below zero Thursday night, plus a stiff breeze, BP wants to make sure workers have the right equipment and aren't exposed, Beaudo said.

Early on Thursday, spill responders stayed away from the pipeline because of dangerous fumes in the air.

Beaudo couldn't say how long the wells and gathering center will be out of service and the oil flow reduced. He also said it's hard to say how long the cleanup might take.

Workers plan to strip away snow from 3 to 5 acres to get at the spill, Beaudo said.

The frozen ground increases the chances of a full cleanup, he added.

"We can't say for certain, but it's our experience that we can get 100 percent of the oil cleaned up and that the tundra may not be impacted at all," he said. "That's our goal."

Because of its size, the leaky pipeline can accommodate a pig, which is a bullet-shaped device that slides down pipes to sense for weak spots in the steel wall or other problems.

The line had been pigged, but Beaudo could not provide details on whether any problems had been found.

The DEC sent two people to the oil field Thursday and planned to send four more today.

Daily News reporter Wesley Loy can be reached at wloy@adn.com or 257-4590.