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Wed

06

Aug

2008

Reasons to Oppose Drilling in ANWR Found in Alaska's North Slope
Wednesday, 06 August 2008 14:40
by Jason Leopold

Last November, the oil company British Petroleum (BP) plead guilty to a misdemeanor and paid a $20 million fine for violating the Clean Water Act related to a massive oil spill that occurred at BP’s Prudhoe Bay operations in Alaska’s North Slope two years earlier.

A federal judge also placed the company on probation for three years and said the 201,000 gallon oil spill was a “serious crime” that could have been prevented if BP had spent more time and funds investing in pipeline upgrades and a “little less emphasis on profit.”

The oil spill—the worst in the history of oil development in Alaska's North Slope— resulted from a severely corroded transit pipeline that forced BP to close five oil processing centers in the region.

Alaskan state officials said that as much as 260,000 gallons of crude oil leaked out of a pipeline in an oil field operated by BP and jointly owned by Exxon Mobil, and ConocoPhillips and blanketed two acres of frozen tundra near Prudhoe Bay - just 60 miles from where President George W. Bush has proposed opening up the Arctic National Wildlife Refuge to exploration.

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

Profits from drilling in Alaska’s North Slope have declined over the past seven years as the volume of oil extracted from the North Slope fell from 800,000 barrels in 1980 to half that amount, which is part of the reason BP and other companies have been so eager to drill in ANWR.

As the volume of oil in Prudhoe Bay decreased, BP began to institute cost-cutting measures, laying off hundreds of employees and cutting back on safety and maintenance of pipelines and other infrastructure at Prudhoe Bay.

In a March 16, 2006 interview with the New York Times, longtime BP employee Marc Kovac said he and his co-workers warned the company numerous times that cost-cutting measures affecting routine maintenance and inspection would increase the likelihood of accidents, pipeline ruptures and spills.

"For years we've been warning the company about cutting back on maintenance," Kovac told the New York Times. "We know that this could have been prevented."

Kovac made those comments immediately following the oil spill for which BP pleaded guilty to last November.

Drilling in ANWR has been a cornerstone of President Bush's National Energy Policy since it was first unveiled in May 2001.

With oil prices reaching record levels on a near daily basis and consumers paying more than $4 for gasoline President Bush has once again called on Democrats in Congress to lift the ban President Bill Clinton put into place against drilling in ANWR. There are currently 17 different bills in Congress calling for drilling in ANWR.

The issue has become such a centerpiece of the presidential debate that Arctic Power, an ANWR lobbying group that has received tens of millions of dollars from Alaskan state officials, has reopened its Washington, D.C. office in hopes of winning support from lawmakers to back the issue. BP, ConocoPhillips, Chevron, and Exxon were members of the lobbying group paying as much as $50,000 annually to lobby lawmakers. As support for drilling in ANWR waned the companies pulled out of the lobbying group. But Exxon is still a member.

Some of the lobbying appears to have paid off.

"With a drilling footprint that covers just a tiny fraction of this vast terrain, America could produce an estimated 10 billion barrels of oil," President Bush said in a weekly radio address June 21.

But it could take as long as 10 years before oil makes its way to the marketplace, according to a study by the Government Accountability Office.

But in arguing against drilling in the pristine wildlife refuge, opponents of the issue point to the routine oil spills at BP's Prudhoe Bay facilities and the company’s continued neglect of its vast network of pipelines in the region as a primary reason to set aside debate on the issue.

The Prudhoe Bay field, the country’s largest, accounts for 8 percent - or 400,000 barrels per day - of the country's domestic crude supply. Production at Prudhoe Bay began in 1977, and during its peak in the 1980s the field produced more than 1 million barrels of oil per day. BP operates Prudhoe Bay and shares the costs with owners Conoco Phillips, Exxon Mobil and Chevron. BP’s decades long presence in the North Slope would put the company in the lead position to drill in ANWR if the refuge were opened to exploration, Alaskan lawmakers have said.

US Attorney Nelson Cohen agreed that BP’s Alaska operations were shoddily run, stating in federal court in November that for more than eight years BP failed to run a cleaning device through its pipelines and allowed corrosion to build up.

In October, a month before BP entered a guilty plea, another oil spill emanated from the Prudhoe Bay pipeline and covered nearly five acres of frozen tundra. The company closed down 245 wells that resulted in a 100,000 barrel per day decrease—12 percent—in oil production. The shortfall boosted world oil prices to what now seems like a bargain: $60.81 at the close of business on October 26, 2007. The company also pleaded guilty that month to a felony and paid $50 million in fines related to an explosion at a Texas refinery that killed 15 employees and injured nearly 200 people. Furthermore, BP paid a $303 million fine to settle charges that the company manipulated prices in the propane market. On top of that, BP has a prior felony conviction for improperly disposing of hazardous waste.

That track record rubs environmentalists and opponents of drilling in ANWR the wrong way.

They say that BP’s emphasis on profit at the expense of its Prudhoe Bay pipelines could very well lead to an environmental disaster if a ban on drilling in ANWR was lifted because the company continues to neglect its own infrastructure.

Hundreds of pages of documents detailing BP's decade-long neglect of its Prudhoe Bay pipelines, its internal safety regulations, and the company's alleged cover-up of past oil spills that resulted from severely corroded pipelines support those assertions.

The BP documents, which include emails, photographs, videos, and letters sent to BP executives and Democratic and Republican lawmakers, and even President Bush, as well as internal reports, all of which were early warnings about problems plaguing BP's Prudhoe Bay operations, were written by more than 100 company whistleblowers and date back as far as 1999.

The documents provide a detailed picture of how BP seemingly ignored dozens of early warnings from employees that its drilling operations on Alaska's North Slope would be doomed if the company did not take immediate steps to upgrade its pipelines and other infrastructure.

Moreover, these records show how that over the course of five years federal and state lawmakers and other officials routinely failed to follow up on the warnings and take direct action to ensure that BP did not jeopardize a critical part of the country's oil production and that it maintained the safety of its workforce.

Chuck Hamel, an activist and former oil broker based in Alexandria, Virginia, launched the now defunct web site that housed the documents ANWRnews.com. Hamel was contacted seven years ago by a group of BP employees who were concerned that the company's cost-cutting measures at its Prudhoe Bay operations would have an adverse impact on safety and operations.

"We were concerned about BP's cost cutting-efforts undermining our ability to respond to emergencies, and reducing the reliability of critical safety systems," states a letter sent to Hamel signed by dozens of BP's Prudhoe Bay employees on April 13, 2001. "We were concerned about the lack of preventative maintenance on our equipment. We had suffered a major fire, which burned a well pad module to the ground, and nearly cost one of our operators his life."

Hamel is credited with exposing weak pollution laws at the Valdez tanker port in the 1980s and electrical and maintenance problems with the trans-Alaska oil pipeline, immediately took up the BP whistleblowers' cause and in mid-2001 wrote a letter to BP President Lord John Browne raising the issue of safety and maintenance problems at the Prudhoe Bay facilities.

"Courageous 'Concerned Individuals' contacted me for assistance in reaching you," Hamel's April 11, 2001, letter to Browne said. “They have not succeeded in being heard in the past two years in London, Juneau or Washington. I am again a reluctant conduit. They hope that you will take whatever action appropriate to effect corrective action which would protect the environment, the facilities, and their safety."

Hamel sent a copy of the letter to President Bush. While Browne promised to look into the issues plaguing Prudhoe Bay, the situation there worsened as oil spills became routine, and pipelines continued to rupture.

Additional whistleblowers came forward to expose the flaws at BP's North Slope operations, in some cases warning company executives and lawmakers that an Exxon Valdez-type disaster was bound to happen if BP did not invest additional funds in upgrading its corroded pipelines and non-operational safety valves.

“The situation will continue to deteriorate for the workers' safety and the environment until one of two things happen: Either there will be a major environmental catastrophe at Prudhoe Bay, similar to the Exxon Valdez, or there will be a change in environmental and employee safety oversight in Alaska before that disaster occurs," according to a March 4, 2002, copy of BP employee William Burkett's testimony before a Senate Committee chaired by Sen. Joseph Lieberman, D-Conn. and Sen. Bob Graham, D-Fla.

BP refused to budge, and on several occasions, Hamel alleged, company executives lied to Congress and Alaska state regulators about the condition of its Prudhoe Bay facilities and the amount of money the company was spending on maintenance and pipeline upgrades.

Glen Plumlee, a senior financial analyst with Alyeska Pipeline Service Co., operator of the trans-Alaska pipeline system of which BP is a majority owner, filed a complaint with federal labor officials in 2006 alleging that company executives retaliated against him because he cooperated with the Environmental Protection Agency's criminal investigation into the company.

Plumlee, 51, of Anchorage, told federal investigators he was pressured to boost estimates of how much Alyeska was spending to fight corrosion on the trans-Alaska oil pipeline. Severe corrosion in one of BP's transit pipelines at Prudhoe Bay, which connects directly to the trans-Alaska pipeline, is the reason the company shut down its North Slope operations this week.

Plumlee claimed that company executives pressured him in December 2005 to alter the amount of money BP-controlled Alyeska spent on pipeline corrosion - from $28 million to $46 million - for the previous year, which he refused to do.

Plumlee added that it wasn't the first time he had been asked to cook the books. "On September 19, 2005, an Alyeska executive asked him to pull together the numbers on corrosion spending for Steve Marshall, BP Exploration (Alaska) Inc.'s president," according to an April 5 report in the Fairbanks News-Miner.

Another high-level executive of BP-controlled Alyeska also tried to warn company executives about numerous safety and maintenance problems associated with the 800-mile trans-Alaska pipeline system that, if unanswered, would have had a direct impact on BP's Prudhoe Bay operations.

In August 2005, Dan Hisey, the former chief operating officer of Alyeska, created a comprehensive list for Alyeska's top executives of the 101 current and potential problems plaguing the pipeline system, one of which was severe corrosion. A week after the list was circulated Hisey's position was abolished.
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