Ex-BP manager invokes Fifth in hearing on spill

Exec suspected of intimidating workers from speaking up

Posted: Friday, September 08, 2006

WASHINGTON - A former BP executive in Alaska who may have intimidated workers from speaking up about pipeline corrosion at the nation's largest oil field could not bring himself to answer questions from lawmakers about how BP's neglect led to a massive oil spill.

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"Based upon the advice of counsel, I respectfully will not answer questions," Richard C. Woollam said Thursday as he invoked the Fifth Amendment of the Constitution in refusing to testify under oath before a House subcommittee.

Woollam's refusal to speak stood in contrast to other BP executives. They responded to harsh criticism from lawmakers with pledges to stiffen the company's admittedly lax monitoring of pipeline corrosion, which they blamed for the North Slope's biggest-ever oil spill earlier this year and the subsequent partial shutdown 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.

Thomas Barrett, head of the federal Pipeline and Hazardous Materials Safety Administration, said he found BP's shoddy maintenance procedures to be "very puzzling," adding that the Prudhoe Bay fiasco is "not a bellwether for the health of the majority of the energy pipeline infrastructure."

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.

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."

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 widespread corrosion that led BP on Aug. 6 to briefly shut down the entire Prudhoe Bay field.

"It is critical that no further leaks occur on these lines," Rep. Joe Barton, R-Texas, said. But, he added, "I'm even more concerned about BP's corporate culture."

Lawmakers repeatedly hammered BP executives about allegations that the company failed to adequately address concerns raised by its own pipeline workers over the past five years, in part because of an atmosphere of fear and intimidation under the supervision of Woollam. Woollam is the former head of pipeline-corrosion monitoring for BP in Alaska.

Steve Marshall, the president of BP Exploration Alaska, conceded that Woollam's "abrasive nature" and "intimidation" may have silenced workers.

In 2004, BP hired the Houston-based law firm Vinson & Elkins to conduct an internal investigation of alleged workplace harassment and pipeline-corrosion data falsification. The law firm concluded that some pipeline inspectors experienced "fear of retaliation" for reporting safety concerns and other issues, but said there was no evidence that BP employees or contractors were explicitly told not to raise red flags.

Woollam, who has worked for BP for 20 years, agreed to undergo counseling while in Alaska and was transferred in 2005 to a non-supervisory job in Houston. He is now on paid leave.

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.

BP announced Thursday that the company has hired three outside corrosion experts to independently review the Alaska pipeline problems and to make recommendations for improving BP's corrosion prevention policies.

Robert A. Malone, the head of BP's U.S. operations, conceded that the company's reputation has suffered, but he vowed that Prudhoe Bay would be managed in "a safe, efficient and environmentally sensitive way."

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, though Marshall said output could be fully restored as early as the end of October.

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.

Marshall 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.

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