Hosed again: More than coincidence to BP’s Alaska closure?

by George Ochenski
Missoula News
Aug. 12, 2006

Some might think it’s just serendipitous that British Petroleum (BP), owners of the Alaska Pipeline, happened to “discover severe corrosion” and shut the pipeline down precisely as the nation writhes under record high prices for gasoline and diesel. Then again, given the blind eyes the Bush administration and the Republican-dominated Congress have turned toward any regulation of energy corporations—and the record profits those companies are greedily reaping as energy prices soar—one might wonder if there’s more than just blind coincidence at work here.

For those who weren’t yet born then—or for whom time has dimmed the details—a brief review of the history of the Trans-Alaska Pipeline may prove useful. Massive oil deposits were discovered on Alaska’s North Slope in 1968 and by 1970 a consortium of energy corporations had settled on building a huge pipeline to move the black gold to market. Getting the oil from the wells in ice-locked Prudhoe Bay to the southern Alaska port of Valdez, however, presented one of the greatest engineering and construction challenges in the nation’s history.

Since the 800-mile pipeline would transect the Alaskan wilderness, cross 34 major rivers, 800 streams and three mountain ranges, environmental damage was a hot issue. But then, as now, the populace was bluffed by politicians and their corporate cronies into believing an energy crisis had been caused by the Arab oil embargo, and that increasing domestic oil supplies by building the controversial pipeline was “in the national interest.”

In November 1973, Vice President Spiro Agnew broke a deadlocked Senate with his vote to pass the Trans-Alaska Pipeline Authorization Act, which sought to ensure the pipeline would be “constructed promptly without further administrative or judicial delay or impediment.” The federal grant of right-of-way, however, required the energy consortium to “employ all practicable means and measures to preserve and protect the environment” during construction, operation and maintenance of the pipeline and to “balance environmental amenities and values with economic practicalities and technical capabilities.” Construction began in April 1974 and continued at a frenzied pace to the 1977 completion of the pipeline.

As a young mountaineer in the mid-’70s, I had the opportunity to spend two summers in Alaska on major climbing expeditions and got a firsthand look at the pipeline being built—and oh what a look it was! One day I watched a string of D-9 Cats march blade-to-blade into a large river and literally move it across the flood plain to a new channel. Maybe they were balancing the impacts to environmental amenities and values—or maybe they weren’t. It really didn’t matter because nothing was standing in the way of the pipeline construction. Helicopters buzzed overhead continuously while trucks moved 3 million tons of materials into the state to build 29 construction camps and 14 temporary airfields. Money flowed like water and when all was said and done, some $8 billion dollars had been spent to employ 70,000 construction workers to build the line across the frozen north. As one friend commented, he hadn’t seen anything like it since being in a war zone in Vietnam.

Finally, in 1977, the consortium sent its first oil to Valdez. Not coincidentally, engineers also developed a device called a “pipeline pig” to travel down the pipeline using ultrasonic transducers to measure and record the thickness of the pipeline’s walls to identify any areas of corrosion before they became significant problems.

Now, nearly 30 years later, BP has just discovered corrosion so severe that it requires shutting the pipeline down. According to the latest news reports, the company hopes it can have the line back up and running by January of next year. In the meantime, 400,000 barrels of oil a day—8 percent of U.S. daily consumption—will stay in the ground as oil prices skyrocket higher and consumers get hosed at the pump.

All this raises the question: What happened to the ultrasonic pipeline pigs? Did they suddenly fail to do their job after having performed well for nearly 30 years? Or are there other factors at work—like declining volumes of oil that make expensive pipeline maintenance or replacement considerably less attractive?

Consider that in 1988 pipeline throughput averaged more than 2 million barrels of oil per day. By 1997, however, pump stations 2, 6, 8 and 10 had been taken off-line due to reductions in flow-through. A year later, the volume was down to 1 million barrels a day; now, in 2006, it’s less than half that.

Whatever happened to the pipeline pigs may be a mystery, but there’s no mystery concerning the declining condition of the pipeline itself. In 1989, the oil tanker Exxon Valdez ran aground and spilled 257,000 barrels of crude oil into Prince William Sound in one of the nation’s worst environmental disasters. Earlier this year, BP spilled more than 200,000 barrels on the North Slope from leaking pipelines that took five days for the company to discover.

In May, National Public Radio reported that BP had known about corrosion at the site of the leak since 1998, but had not invested in necessary maintenance to correct the problems. Meanwhile, oil industry analysts interviewed for the report suggested the company was cutting maintenance to “maximize returns.” Astoundingly, there are no regulations on how often pipeline companies must do inspection and maintenance on their facilities.

Last month, BP announced its profits rose 22 percent to $6.118 billion in the second quarter. As Congressman Ed Markey, D-Mass., said following BP’s profit statement: “BP used to stand for British Petroleum, now it just stands for Bloated Profits. While American families get tipped upside down and have their savings shaken out of their pockets at the gas pump, the Bush-Cheney team devises even more ways to line Big Oil’s pockets.” And that, fellow Montanans, pretty much says all there is to say about why we’re getting hosed again.

When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at [email protected]