Friday, September 08, 2006

More Hearings Possible for BP

BP is back in the news this week, after an executive questioned about corrosion in its Alaskan pipeline invoked the Fifth Amendment before a House subcommittee Thursday. The subcommittee is investigating whether neglect led to the leak of 200,000 gallons of crude oil last March.

BP has repeatedly made headlines for maintenance and safety issues. Last May, the company reported that the Texas City refinery emissions in 2004 tripled over the previous year, raising questions about the accuracy of its past self-reports. This month's revelation that the corrosion problems in Alaska may have been due to the company's failure to use a "pig," a basic tool to clean and detect problems in a pipeline.

The picture of BP executives, each with a lawyer in tow, parrying questions about management failure may have erased millions of dollars worth of BP advertising that had sought to craft an image of an environmentally conscious company thinking "beyond petroleum." [See previous post "BP: It's Not Easy Being Green."]

Rep. Edward Markey, D-Mass., said BP stood for "bloated profits." Rep. Greg Walden, R-Ore., said the company's name could stand for "broken pipelines."

[House Energy and Commerce Committee Chairman Joe] Barton leveled scorching criticism at the company, citing concerns about "BP's corporate culture of seeming indifference to safety and environmental issues." Noting that "this comes from a company that prides itself in their ads on protecting the environment," Barton said, "Shame, shame, shame."

The BP manager, Richard Woollam, who invoked the Fifth Amendment on advice of counsel in Thurday's hearings was involved in the design of BP's anti-corrosion program and served as head of the Corrosion, Inspection and Chemicals Group.
BP Alaska President Steve Marshall said that Woollam had been transferred out of Alaska after a 2004 investigation by an outside law firm cited Woollam for intimidating workers who had raised safety issues. Marshall said the Vinson & Elkins law firm "found evidence of intimidating behavior that had made some corrosion workers reluctant to raise health and safety concerns."
Although Mr. Woollam stepped down in January of 2005, his position was not filled until six months later, in July of 2005.

I can't believe they didn't know about these problems," Barton said. "I believe senior members chose to do less than needed for economic reasons."

While the prospect of additional Prudhoe Bay hearings guarantees more scrutiny for BP, Thursday's hearing focused almost entirely on Alaska. Some lawmakers mentioned in passing BP's 2005 fatal refinery accident in Texas and ongoing criminal probes into BP's energy trading operations.

BP has sought to define each of its problems as separate and consistently fought characterizations that the company suffers from systemic cultural flaws.

It's hard to believe that a company that last quarter posted profits of $7.27 billion would choose to squeeze the bottom line so hard that it would forgo the most basic maintenance on its infrastructure. The outrage against BP's record appears to be bi-partisan, but last week's hearing raised more questions than it answered. In light of Republican pressure to open ever more of our sensitive natural resources to drilling, including those offshore in the Gulf, it's past time we started holding our energy companies accountable for the damage they've done. In BP's case, more hearings are not only justified, they should be mandatory.

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