The former head of pipeline-corrosion monitoring for BP in Alaska refused to testify under oath Thursday as outraged lawmakers grilled company officials over the causes of a massive oil spill earlier this year.
Richard C. Woollam, who was transferred to BP’s Houston offices amid concerns that he intimidated potential whistleblowers, invoked the Fifth Amendment of the Constitution in refusing to answer all questions from a House subcommittee. “Based upon the advice of counsel, I respectfully will not answer questions,” said Woollam, who was placed on paid leave.
Other BP executives apologized and pledged to fix operational lapses on the North Slope that led to the region’s biggest ever oil spill in March and the partial shutdown last month of the country’s largest oil field.
Lawmakers said BP’s mistakes in Alaska — as well as its responsibility for a deadly refinery fire last spring — were particularly unacceptable given the industry’s record profits and the relatively inexpensive measures that might have prevented the oil spill.
With Congress aiming to wrap up its current session by the end of the month, Thursday’s House hearing was not expected to result in any specific legislative action; it did, however, offer lawmakers an opportunity to talk tough to Big Oil at a time of soaring prices and ahead of November elections.
“If a company — one of the world’s most successful oil companies — can’t do the basic maintenance needed to keep Prudhoe Bay’s oil field operating safely and without interruption, maybe it shouldn’t be operating the pipeline,” Rep. Joe Barton, R-Texas, said.
Rep. Diana DeGette, D-Colo., said she was especially disappointed in BP, since it professes in advertising to pride itself on protecting the environment. “I applaud BP for trying to move beyond petroleum, but maybe it should start by sticking to the basics and begin to focus on rudimentary pipe maintenance.”
'Not Monday-morning quarterbacking'
Rep. Bart Stupak, D-Mich., said the spill-related shutdown raises questions about why there weren’t redundancies built into the pipeline system that carries Prudhoe Bay oil to market so that the shutdown wouldn’t have been necessary.
“It is not Monday morning quarterbacking to suggest BP should have had a plan,” Stupak said.
Robert A. Malone, the head of BP PLC’s U.S. operations, conceded the company’s reputation has suffered, and he vowed to manage Prudhoe Bay in “a safe, efficient and environmentally sensitive way.”
In March, more than 200,000 gallons of oil leaked from a 34-inch pipeline that crosses the Alaska tundra. Follow-up inspections mandated by federal investigators led to the discovery of another much smaller leak, as well as “significant” corrosion, according to BP, which briefly shut down the entire Prudhoe Bay field on Aug. 6.
“We have fallen short of the high standards we hold for ourselves, and the expectations that others have for us,” said Malone, who has been the chairman and president of BP America since July.
Shortly before the hearing, BP announced in a press release that the company has hired three outside corrosion experts to independently review the incident and make recommendations for improving BP’s corrosion prevention policies.
In an effort to address criticism that the company for years has willfully ignored employee concerns about pipeline safety and other environmental issues, BP on Tuesday asked a former federal judge to serve as its ombudsman and hear complaints from workers in Alaska and elsewhere about the company’s operations.
“The problem has not been in workers raising concerns — sometimes it’s been our responsiveness,” Malone testified.
Lawmakers hammer BP executives
Lawmakers on Thursday hammered BP executives about allegations that the company failed to adequately address concerns raised by its own pipeline workers, in part because of an atmosphere of fear and intimidation under the supervision of Woollam.
Marshall conceded that Woollam’s “abrasive nature” and “intimidation” may have silenced workers. Woollam took counseling and was later transferred to a non-supervisory job in Houston.
Prudhoe Bay isn’t BP’s only problem.
The London-based company faces victims’ lawsuits from a deadly explosion last year at its Texas City, Texas-based refinery. And in June federal investigators said BP energy traders cornered the U.S. propane market in the winter of 2004 and illegally manipulated prices. Investigators are also reportedly looking into whether BP manipulated crude-oil and gasoline markets.
Thursday’s hearing by the House Energy and Commerce Subcommittee on Oversight and Investigations was the first of several that will focus on BP in coming weeks.
Until last month’s partial shutdown, Prudhoe Bay had been producing roughly 400,000 barrels per day, or 8 percent of total U.S. output. BP is currently pumping 220,000 barrels a day and has given no timetable for when it expects to be back to normal levels.
BP officials said early tests show that oil-eating bacteria may have contributed to the Alaska pipeline corrosion. Excrement from the bacteria inside the pipes produces an acid that eats through carbon steel.
Steve Marshall, the president of BP Exploration Alaska Inc., acknowledged that the corrosion problem could have been mitigated by more consistent inspection and removal — or “pigging” — of sludge that builds up on the inner walls of oil pipelines, providing shelter for the bacteria.
“Clearly, in retrospect, pigging would have been a positive step we could have taken,” Marshall said.
Marshall said BP’s spending on major maintenance at Prudhoe Bay would rise to $195 million in 2007, a fourfold increase from 2004; $150 million will go toward replacing 16 miles of corroded oil transit lines.