The metaphor has been widened today with British Petroleum's announcement that it has shut down for an indefinite period of time its huge Prudhoe Bay oil field in northern Alaska "after finding 'unexpectedly severe corrosion' in a pipeline." The shutdown reduces the American oil supply by 8%.
So how did workers provide a warning to this action that has already raised oil prices by $2 a barrel? In March 2005 a catastrophic explosion ripped through BP's Texas City refinery, killing 15 workers and injuring 170. That incident revealed to the world BP's systemic neglegence of basic precautions needed to protect workers, the community and the environment.
The Texas City incident resulted in a record $21.4 million OSHA fine and possible civil and criminal prosecution. And the Chemical Safety Boards findings that BP's problems go way beyond the screw-ups at the Texas City plant which resulted in an unprecedented "urgent" recommendation that the company establish an independent panel to look into the safety "culture" at all of its North American plants. And let's not forget the $2.4 million OSHA fine against BP's Ohio plant for unsafe conditions. In June, BP announced a little 267,000 gallon oil spill at BP's Prudhoe Bay field, the largest ever on Alaska's North Slope region. That spill may also bring criminal charges against BP.
Financial analyists were alarmed:
“It is difficult to say if this is a BP-wide issue,” said Craig Pennington, the director of the global energy group at Schroders in London. “But they appear to cut corners for the sake of short-term profit maximization. If you are a serial underspender in a refinery, it will come back to haunt you.”And the short-term profit chickens continue to come home to roost:
BP said that inspections of its facilities at Prudhoe Bay over the weekend had found pipeline walls in more than one location that had been made too thin by corrosion to meet the company’s safety standards. In one area, it said, the equivalent of four to five barrels of oil had already leaked out of the pipeline and spilled on the tundra.And, as might be imagined, BP's problems are raising further questions about the advisability of drilling in the Alaska National Wildlife Refuge.
BP said that spill had been contained, and that workers were in the process of cleaning it up.
The company is still inspecting other pipelines and production facilities at the field. So far, BP said this morning, 40 percent of the company’s 22 miles of pipeline in Prudhoe Bay had been completely inspected.
In March, pipeline corrosion caused a leak of more than 200,000 gallons of oil, the worst spill since production began on Alaska’s North Slope. The incident raised questions about whether BP, based in Britain, had been properly maintaining its aging oil production network there, which it acquired when it merged with Amoco in 1998.
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The latest corrosion problem was detected during an inspection that the government required BP to perform after the March oil spill. A “smart pig” examination, using a machine that travels through the inside of a pipeline to measure wall thickness, revealed that the steel had corroded in 16 places to thicknesses less than BP considers safe.
Daren Beaudo, a BP spokesman, said that for the pipeline in question, safety standards require that at least 70 percent of the steel in a 3/8-inch-thick wall must be intact.
