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Political anger flares as BP races to fix Alaska leak
AFP
NEW YORK
Petroleumworld.com 08 09 06
Accident-prone BP came under political attack Tuesday as the British energy giant scrambled to shut down America's biggest oil field following a leak from an ageing, corroded pipeline.
BP is racing to replace 16 miles (26 kilometres) of an 800 mile (1,287 kilometre) pipeline system in Alaska that supplies oil to much of the US West Coast.
The leak, first discovered Friday, forced BP to start shutting down the vast Prudhoe Bay field over the weekend.
BP America chairman Bob Malone, however, said the company was assessing if it might be possible to keep some "portions" of the field in operation.
"We have now taken the decision to replace the main oil transit lines at Prudhoe Bay," Malone added in a statement.
Energy Secretary Samuel Bodman played down the impact of the operation, which could affect 400,000 barrels of oil per day or 8.0 percent of total US daily production.
He said "we believe that there are crude oil inventories, as well as additional crude oil availability, that will help us alleviate disruption from Alaska".
The White House said that Saudi Arabia and Mexico had offered to provide extra supplies of oil to the United States if needed.
"The important thing is, there does not seem to be a significant supply disruption at this point," spokesman Tony Snow told reporters, speaking from President George W. Bush's Texas ranch.
The British company has set up a media "crisis centre" to manage its latest public relations disaster just months after it was reprimanded by the government for a major spill in the same region.
The March spill came a year after an enormous blast at BP's Texas City refinery killed 15 people.
Lawmakers demanded to know why a company that banked 6.1 billion dollars in second-quarter net profits had not upgraded a pipeline network dating to 1977.
"The United States Congress has an obligation to hold hearings to determine what broke down here and what laws and regulations need to be improved to ensure problem pipelines like these are found and fixed earlier," said Democratic Representative John Dingell, a senior member of the House energy committee.
Republican Pete Domenici, the chairman of the Senate's energy committee, said he was "troubled" and "concerned" about BP's actions.
"I urge BP's management to address swiftly this very serious infrastructure problem," he said.
Democratic congressman Ed Markey, who has said BP stands for "Bloated Profits", accused the company of "chronic mismanagement".
"While BP's negligence is deplorable, those charged with the oversight of these pipelines must also be given the full powers needed to do their job," Markey said.
The shutdown could not have occurred at a worse time with oil prices already flaring over geopolitical tensions.
New York's benchmark oil futures contract closed down Tuesday at 76.31 dollars a barrel, but continued to hover near a record high. Brent futures in London struck an all-time high on Monday.
Sky-high gasoline prices have stoked political discontent and contributed to the depressed poll ratings of President Bush's Republican administration.
Alaron Trading energy analyst Phil Flynn said Prudhoe Bay could be down for months.
"The West Coast will feel the brunt of the pain but with the oil market as tight as it is, we will all feel the pain of higher prices," he said.
The US government has signalled that it might allow refiners to draw on emergency oil stocks, but its strategic reserve is located thousands of miles away on the Texas and Louisiana coasts.
BP has blamed Friday's spill of four to five barrels of oil on "unexpectedly severe" corrosion.
AFP 08 2138 GMT 08 06
Copyright ©2006 AFP. All Rights Reserved.
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