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Title: The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown
Source:
Common Dreams
URL Source: http://www.commondreams.org/views06/0808-34.htm
Published: Aug 8, 2006
Author: Greg Palast
Post Date: 2006-08-08 18:24:08 by angle
Keywords: oil, pipeline, alaska
Views: 2379
Comments: 14
The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown Is the Alaska Pipeline corroded? You bet it is. Has been for more than a decade. Did British Petroleum shut the pipe yesterday to turn a quick buck on its negligence, to profit off the disaster it created? Just ask the "smart pig." Years ago, I had the unhappy job of leading an investigation of British Petroleum's management of the Alaska pipeline system. I was working for the Chugach villages, the Alaskan Natives who own the shoreline slimed by the 1989 Exxon Valdez tanker grounding. Even then, courageous government inspectors and pipeline workers were screaming about corrosion all through the pipeline. I say "courageous" because BP, which owns 46% of the pipe and is supposed to manage the system, had a habit of hunting down and destroying the careers of those who warn of pipeline problems. In one case, BP's CEO of Alaskan operations hired a former CIA expert to break into the home of a whistleblower, Chuck Hamel, who had complained of conditions at the pipe's tanker facility. BP tapped his phone calls with a US congressman and ran a surveillance and smear campaign against him. When caught, a US federal judge said BP's acts were "reminiscent of Nazi Germany." This was not an isolated case. Captain James Woodle, once in charge of the pipe's Valdez terminus, was blackmailed into resigning the post when he complained of disastrous conditions there. The weapon used on Woodle was a file of faked evidence of marital infidelity. Nice guys, eh? Now let's talk timing. BP's suddenly discovered corrosion necessitating an emergency shut-down of the line is the same corrosion Dan Lawn has been screaming about for 15 years. Lawn is a steel-eyed government inspector who has kept his job only because his union's lawyers have kept BP from having his head. Indeed, it's pretty darn hard for BP to claim it is surprised to find corrosion this week when Lawn issued a damning report on corrosion right after a leak and spill were discovered on March 2 of this year. Why shut the pipe now? The timing of a sudden inspection and fix of a decade-long problem has a suspicious smell. A precipitous shutdown in mid-summer, in the middle of Middle East war(s), is guaranteed to raise prices and reap monster profits for BP. The price of crude jumped $2.22 a barrel on the shutdown news to over $76. How lucky for BP which sells four million barrels of oil a day. Had BP completed its inspection and repairs a couple years back -- say, after Dan Lawn's tenth warning -- the oil market would have hardly noticed. But $2 a barrel is just the beginning of BP's shut-down bonus. The Alaskan oil was destined for the California market which now faces a supply crisis at the very height of the summer travel season. The big winner is ARCO petroleum, the largest retailer in the Golden State. ARCO is a 100%-owned subsidiary of 70; British Petroleum. BP could have fixed the pipeline problem this past winter, after their latest corrosion-caused oil spill. But then ARCO would have lost the summertime supply-squeeze windfall. Enron Corporation was infamous for deliberately timing repairs to maximize profit. Would BP also manipulate the market in such a crude manner? Some US prosecutors think they did so in the US propane market. The Commodity Futures Trading Commission (CFTC) just six weeks ago charged the company with approving an Enron-style scheme to crank up the price of propane sold in poor rural communities in the US. One former BP exec has pleaded guilty. Lord Browne, the imperious CEO of BP, has apologized for that scam, for the Alaska spill, for this week's shutdown and for the deaths in 2005 of 15 workers at the company's mortally sloppy refinery operation at Texas City, Texas. I don't want readers to think BP isn't civic-minded. The company's US CEO, Bob Malone, was Co-Chairman of the Bush re-election campaign in Alaska. Mr. Bush, in turn, was so impressed with BP's care of Alaska's environment that he pushed again to open the state's arctic wildlife refuge (ANWR) to drilling by the BP consortium. Indeed, you can go to Alaska today and see for yourself the evidence of BP's care of the wilderness. You can smell it: the crude oil still on the beaches from the Exxon Valdez spill. Exxon took all the blame for the spill because they were dumb enough to have the company's name on the ship. But it was BP's pipeline managers who filed reports that oil spill containment equipment was sitting right at the site of the grounding near Bligh Island. However, the reports were bogus, the equipment wasn't there and so the beaches were poisoned. At the time, our investigators uncovered four-volume's worth of faked safety reports and concluded that BP was at least as culpable as Exxon for the 1,200 miles of oil-destroyed coastline. Nevertheless, m'Lord Browne preens himself with his corporation's environmental record. We know BP cares about nature because they have lots of photos of solar panels in their annual reports -- and they've painted every one of their gas stations green. The green paint-job is supposed to represent the oil giant's love of Mother Nature. But the good Lord, Mr. Browne, knows it stands for the color of the Yankee dollar. BP claims the profitable timing of its Alaska pipe shutdown can be explained because they've only now run a "smart pig" through the pipes to locate the corrosion. The "pig" is an electronic drone that BP should have been using continuously, though they had not done so for 14 years. The fact that, in the middle of an oil crisis, they've run it through now, forcing the shutdown, reminds me, when I consider Lord Browne's closeness to George Bush, that the company's pig is indeed, very, very smart. Greg Palast, an energy economist and investigative reporter, is the author of "Exxon Valdez: A Well-Designed Disaster." His reports can be seen on BBC Television's Newsnight, Democracy Now! and in Harper's Magazine.
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#1. To: angle, Diana, Axenolith (#0)
Ha! But it's suddenly an emergency!
"If there’s another 9/11 or a major war in the Middle-East involving a U.S. attack on Iran, I have no doubt that there will be, the day after or within days an equivalent of a Reichstag fire decree that will involve massive detentions in this country." - Daniel Ellsberg Author, Pentagon Papers Every office manager, and CEO of every oil company should be stripped of their wealth, TODAY. Then they should be arrested, tried and convicted of treason. The reason? They know how important it is that oil flow into this country, and that our nation and infrastructure be able to flow as well. They are directly affecting not only our nation's ability to compete, they are also hamstringing our military in its duty to protect this country. Every CEO, Every Manager, EVERY SINGLE member of their corporate boards should be stripped of all their worldly wealth, and incarcerated. Perhaps then we'll see a change.
Is the Alaska Pipeline corroded? You bet it is. Has been for more than a decade.
#2. To: angle (#0)
 | What's that Mr. Nipples? You want me to ask the nice lady about her rack?. |
#3. To: angle (#0)
The local news claims gas at the pump will reach $4/gal in CA. It effects the West Coast more than other states.
"If there’s another 9/11 or a major war in the Middle-East involving a U.S. attack on Iran, I have no doubt that there will be, the day after or within days an equivalent of a Reichstag fire decree that will involve massive detentions in this country." - Daniel Ellsberg Author, Pentagon Papers
#4. To: robin, angle, Diana, Axenolith (#1)
I heard the funniest comment today with respect to this, BP allegedly commented that "we thought the crude going through the line was nice clean non-corrosive crude and that's why we hadn't pigged it out in ages"... WTF over!?!? Don't they pay petroleum and pipeline engineers shitaceous amounts of money to figure this out??? At this moment, courtesy of a friend who works at a local refinery, I have a sample of Alaska North Slope sitting in front of me. It's about the second or third thickest sample I have (did I mention geologists collect odd things?), and commensurately is chock full of all of the nasty crap that has a propensity to corrode pipelines. Did BP think they were blessed by the petroleum fairy in their neck of the North Slope? I think not... Prediction: I place a significant (greater than 30% and rising) probablility on the idea that this is a supply "shock" the remove supply domestically in order to prepare the consumer/nation for the potential shortfalls that may occur in an Iran conflict. At this time, the price spike will move a measurable percentage of consumers toward stuff like car pools and mass transit. It will be fixed right about the time there's been several days of no insurance for crude carriers who attempt to pass the straight of Hormuz. The next 4-6 weeks are prime for this conflict. Look to also see some type of temporary roll back or suspension of fares for mass transit at that time. Between that, and gas rising to $6+ a gallon, the strategerists will be able to engage Iran without caving the economy in completely. We just had several "spare the air" days out here where BART was free to ride and tons of people took advantage, the freeways were noticably lighter in volume and the remaining drivers probably used 20% less fuel from the higher average speeds. Notice rates stopped rising and now there's talk of reduction? Hmmm... Fits right in. We wouldn't want the consumer to go without gas, but he might have to put it on his charge card until he sells the Tahoe for a Prius or 1978 Volkswagon Rabbit diesel... Remember, that is 8% of domestic production. Most here comes from Venezuela, and Chavez will fall right in line with selling to us if he's getting $100 barrel and shippers are saving the difference between going through the gulf to Texas or carting it to China. The insurance rates alone will probably make that trip 10% than going anywhere else off the bat. The rest of the world will have to deal with the Russian and Caspian suppliers for their supply and probably will be SOL for the duration.
"To wield onself -- to use oneself as a tool in one's own hand -- and so to make or break that which no one else can build or ruin -- THAT is the greatest pleasure known to man! To one who has felt the chisel in his hand and set free the angel prisoned in the marble block, or to one who has felt sword in hand and set homeless the soul that a moment before lived in the body of his mortal enemy -- to those both come alike the taste of that rare food spread only for demons or for gods." -- Gordon R. Dickson, "Soldier Ask Not"
#5. To: Axenolith, christine, Red Jones, BTP Holdings, SKYDRIFTER, Brian S, aristeides, Arete, Jethro Tull, innieway, Eoghan, Kamala, Uncle Bill, Stephen Lendman (#4)
Very interesting! Prediction: I place a significant (greater than 30% and rising) probablility on the idea that this is a supply "shock" the remove supply domestically in order to prepare the consumer/nation for the potential shortfalls that may occur in an Iran conflict. At this time, the price spike will move a measurable percentage of consumers toward stuff like car pools and mass transit. It will be fixed right about the time there's been several days of no insurance for crude carriers who attempt to pass the straight of Hormuz. The next 4-6 weeks are prime for this conflict. Thanks for sharing!
At this moment, courtesy of a friend who works at a local refinery, I have a sample of Alaska North Slope sitting in front of me. It's about the second or third thickest sample I have (did I mention geologists collect odd things?), and commensurately is chock full of all of the nasty crap that has a propensity to corrode pipelines.
"If there’s another 9/11 or a major war in the Middle-East involving a U.S. attack on Iran, I have no doubt that there will be, the day after or within days an equivalent of a Reichstag fire decree that will involve massive detentions in this country." - Daniel Ellsberg Author, Pentagon Papers
#6. To: angle (#0)
Sounds like criminal negligence to me.
#7. To: angle (#0)
What else would you expect from a bunch of fascists? We need more rope!
When caught, a US federal judge said BP's acts were "reminiscent of Nazi Germany."
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain
#8. To: Axenolith (#4)
I agree, that's ridiculous. I don't even know how they can keep a straight face when they put out such obvious nonsense. You are right - the timing of this points to this "pipeline problem" as being part of a much bigger plan. My guess is that higher oil prices are needed to soak up all the excess dollars and assure that they get recycled into treasury bonds. I see it more as a dollar support exercise to replace the need to immediately raise interest rates now that the FED has inflation "contained" and taken a pause. Chaos in the ME, the BP pipeline problem, and interests rates are all tied directly to the economy and inflation. There is going to be no shortage of scapegoats for the politicians to blame for the coming economic pain. Just as long as no one holds them accountable for their out of control spending which is the real source of the problems. This is turning out to be an exact replay of the political and economic conditions from the 70's. Richard W.
"we thought the crude going through the line was nice clean non-corrosive crude and that's why we hadn't pigged it out in ages"...
#9. To: angle, All (#0)
The underlying agenda is a new pipeline, across the ANWR, through the Canadian Makenzie River Delta oil fields - down to the Chicago area - with Halliburton sucking huge profits out of the construction.
#10. To: BUZZARD, Indrid Cold (#4)
ping to Axenolith's comments.
"If there’s another 9/11 or a major war in the Middle-East involving a U.S. attack on Iran, I have no doubt that there will be, the day after or within days an equivalent of a Reichstag fire decree that will involve massive detentions in this country." - Daniel Ellsberg Author, Pentagon Papers
#11. To: Axenolith (#4)
Thanks for this. I've used it on my blog with this story and my own comments. http://btpholdings.blogspot.com/2006/08/british-petroleums-smart- pig.html
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain
#12. To: robin (#5)
Yes it is.... It all ties in nicely with the thread started some days ago by BTP on the Israel and oil situation.
Very interesting!
Surgeon General's Warning: Society's problems must be solved. We have the solutions and you must buy them from us. No unauthorized solutions will be permitted.
#13. To: BTP Holdings (#11)
Translation: By Friday we'll know whether or not this action in the ME is going to expand to encompass Syria and Iran within the next month or so. :-)
From today...
"To wield onself -- to use oneself as a tool in one's own hand -- and so to make or break that which no one else can build or ruin -- THAT is the greatest pleasure known to man! To one who has felt the chisel in his hand and set free the angel prisoned in the marble block, or to one who has felt sword in hand and set homeless the soul that a moment before lived in the body of his mortal enemy -- to those both come alike the taste of that rare food spread only for demons or for gods." -- Gordon R. Dickson, "Soldier Ask Not"
#14. To: Axenolith (#13)
From the looks of that article, BP seems to be sinking deeper into a troubling morass of criminal negligence. Perhaps the Congresscowards will find enough gumption to address this issue in one or more of their regulatory subcommittees. BTW, you do know about the oil field under Gull Island? It is supposed to be the largest known reserve in the world, even if Chavez has come out and said Venezuela has the largest. The trouble is the USG is keeping Gull Island under wraps and capped. It all sounds like a kids game to me. Mine is bigger than yours. LOL
"Never has so much military and economic and diplomatic power been used so ineffectively, and if after all of this time, and all of this sacrifice, and all of this support, there is still no end in sight, then I say the time has come for the American people to turn to new leadership not tied to the mistakes and policies of the past." Richard M. Nixon
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