BP’s failure to properly maintain its Prudhoe Bay pipelines could jeopardize efforts to open the 1002 area of the Arctic National Wildlife refuge to oil and gas exploration and development, U.S. Sen. Jim Bunning, R-Ky., said Sept. 12.
It’s a “giant step backwards,” Bunning told BP America Chairman and President Bob Malone, who was testifying on Prudhoe Bay before the Senate Energy and Natural Resources Committee.
We were “assured that nothing like this would happen,” Bunning said, noting that he visited Prudhoe Bay three years ago.
“You bragged … about how good you were doing,” he said. “Don’t tell us you didn’t have an inkling that the pipes were eroding,” Bunning said.
“Why in the world,” Bunning asked BP executives at the hearing, would the company allow a pipeline to deteriorate so much as to cause a spill “if, in fact, we want to explore and drill in other areas of Alaska. Why?”
“I believe that this type of situation completely sets back any hope that we had to get that bill (ANWR) passed in the Congress of the United States. … This is a major setback,” Bunning said.
Committee Chairman Sen. Pete Domenici, R-N.M., called the events that led to BP’s partially shutting down operations at Prudhoe “inexcusable.”
The company failed to conduct “the most basic of corrosion inspection techniques,” he said. “This is a black eye on BP.”
Domenici said, “We won’t get the votes we already have” to open ANWR if BP fails to live up to its commitment to improve its performance.
“ANWR could go backwards with this kind of event,” he said.
Malone, Marshall offer assurancesBP officials tried to assure lawmakers that the company had learned from its mistakes.
In addition to replacing much of the pipe, Malone said BP is increasing spending for major maintenance at Prudhoe to $197 million in 2007, nearly four times what the company spent in 2004.
“We will get this right,” Malone vowed.
Steve Marshall, president of BP Exploration (Alaska), told the committee the company has increased spending on general maintenance in Prudhoe Bay to $787 million this year, up from $430 million back in 2001.
Bunning said that “is chicken feed when you’re looking at $70 billion in profits,” which BP reported for 2005.
“Talk is cheap,” Sen. Lisa Murkowski, R-Alaska, told the Houston Chronicle after the hearing.
Other negative impactsAccording to a Sept. 13 article in the Houston Chronicle BP’s pipeline problems at Prudhoe also could complicate negotiations between House and Senate lawmakers over proposals to open up new offshore areas of the United States to oil and gas exploration.
Lawmakers are hoping to reach some kind of deal before the end of September, the newspaper said.
“Environmentalists and other drilling opponents have seized on BP’s troubles to argue the industry cannot be trusted to protect the nation’s environment,” the Chronicle reported. “At the same time, BP’s embarrassment has even prompted the industry’s friends on Capitol Hill to begin talking about new regulations, a harsh blow to an industry that has long complained about burdensome federal mandates.”
The Chronicle sited Sen. Mary Landrieu, D-La., as an example. A long-time industry supporter, the newspaper said she “wonders whether lawmakers should devise new requirements that would force energy companies to invest in their infrastructure.”