Seattle Times
March 18, 2006

Critic blames oil spill on cost-pinching
The Associated Press






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.






New York Times
March 20, 2006

Oil Spill Raises Concerns on Pipeline Maintenance

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

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.