Alaska’s Crude Threat

World Reports

Oil spills on the North Slope are routine, and so are oil executives’ lies about them.

Thousands of caribou and other types of wildlife will be displaced if DC lawmakers pass a measure to allow drilling in the Arctic National Wildlife Refuge (ANWR).

But there’s an even bigger issue: the very real possibility of an environmental tragedy as catastrophic as the 1989 oil spill caused by the Exxon Valdez oil tanker. Swift measures are needed to address the severe safety and maintenance issues plaguing drilling operations in nearby Prudhoe Bay – North America’s biggest oil field, 60 miles west of ANWR – and other areas on Alaska’s North Slope.

Photo: photos.com

That’s just one of many alarming claims that employees working for British Petroleum (BP), the parent company of BP Exploration (Alaska) Inc., have made over the years. BP Exploration (Alaska), an Anchorage-based company, manages the 24-year-old Prudhoe Bay on behalf of Phillips Alaska Inc., ExxonMobil, and other oil companies. The BP employees issued the claims as a way of drawing attention to the dozens of oil spills – three of them in March and April alone – that occurred in Prudhoe Bay. They warn this could happen at ANWR if BP continues to neglect safety issues and the area is opened up to further oil and gas exploration.

Now, as President Bush renews his calls to open ANWR to development, some of those very same BP employees are blowing the whistle on their company yet again. They are turning to the one person who helped them expose the oil companies’ cover-ups on Alaska’s North Slope.

Chuck Hamel, an Alexandria, Virginia oil industry watchdog, has been leading the fight for the past 15 years against shoddy crude oil operations in Alaska by BP, ConocoPhillips, and ExxonMobil. Back in the 1980s, Hamel was the first person to expose electrical and maintenance problems with the trans-Alaska oil pipeline and weak pollution laws at the Valdez tanker port. Four years ago, Hamel and the BP whistleblowers brought safety and maintenance issues unaddressed by the oil companies to the attention of Congress and the public.

Hamel, who is protecting the identities of the current whistleblowers, says not only do oil spills continue on the North Slope, but the oil behemoth’s executives routinely lie to Alaskan state representatives and members of the US Congress about the steps they’re taking to correct problems. At the same time, the company denies its employees’ claims of safety issues at its crude oil production facilities on the North Slope.

Hamel, however, has gotten some damning evidence on BP: photographs shot on two separate occasions showing oil wells spewing a brown substance known as drilling mud, which contains traces of crude oil. Hamel says he’s determined to expose BP’s shoddy operations and hinder President Bush’s plans to open up ANWR to drilling.

“Until these oil companies clean up their act,” said Hamel, “they can’t drill in ANWR because they are spilling oil in the North Slope.” If oil companies continue to fail to address safety problems at the North Slope, “they’ll have another Exxon Valdez” type of oil spill on their hands, Hamel said.

photo: photos.com

On April 15, Hamel sent a letter to Senator Pete Domenici (R-NM), chairman of the Senate energy and natural resources committee, saying there have been three spills between late March and early April. This comes at a time when BP and two of its drilling contractors are under investigation on charges of failing to report other oil spills in late 2004 and January 2005.

“You obviously are unaware of the cheating by some producers and drilling companies,” Hamel said in the letter to Domenici, an arch proponent of drilling in ANWR. “Your official Senate tour [of Alaska, in March] was masked by the orchestrated ‘dog and pony show’ provided you at the new Alpine Field, away from the real world of the Slope’s dangerously unregulated operations.”

Also in the letter, Hamel claimed that whistleblowers had told of another cover-up, dating back to 2003. Pioneer Natural Resources and its drilling contractor, Nabors Alaska Drilling, had allegedly disposed of more than 2,000 gallons of toxic drilling mud and fluids through the ice “to save the cost of proper disposal on shore.”

Domenici’s office said the senator is reviewing Hamel’s letter.

Hamel has had his share of detractors, notably BP, several Alaskan State officials, and the federal Environmental Protection Agency, who said he’s a conspiracy theorist.

But Hamel was vindicated in March when Alaska’s Department of Environmental Conservation confirmed Hamel’s claims of major spills in July 2003 and December 2004 that the company never reported as required by state law. The spills occurred on the North Slope at the oil well owned by BP and operated by its drilling contractor, Nabors.

In his formal complaint filed in January with the EPA, Hamel had pictures showing a gusher spewing a brown substance. An investigation by Alaska’s Department of Environmental Conservation determined that as much as 294 gallons of drilling mud was spilled when gas was sucked into wells, resulting in sprays of drilling mud and oil as high as 85 feet .

Because both spills exceeded 55 gallons, BP and Nabors were obligated under a 2003 compliance agreement with Alaska to immediately report the spills. According to Leslie Pearson, the agency’s spill prevention and emergency response manager, that didn’t happen.

BP spokesman Daren Beaudo said the company did report the spills after learning about them, and claimed the spill wasn’t that big of a deal.

“In this case, the drilling rig operators did not feel this type of event qualified for reporting,” Beaudo told the Anchorage Daily News in March.

The EPA called Hamel a conspiracy theorist. Then the state of Alaska vindicated his claims.

“Obviously the Alaska Department of Environmental Conservation felt otherwise and that’s what they’re saying as a result of their investigation. It’s a matter of interpretation.”

Beaudo said the agency’s findings are in line with BP’s own investigation that the spills did not cause any harm to the environment aside from some speckles on the snow.

But what’s troubling to Hamel is that Alaska’s Department of Environmental Conservation has let BP off with little more than a slap on the wrist. The agency is not penalizing BP; rather, it said that it will make sure the company reports other spills in a timely manner.

That plays into Hamel’s other theory – that the state of Alaska is in cahoots with the oil industry and routinely fails to enforce laws that would hold those companies liable for violating environmental regulations.

Slippery North Slope

In April 2001, whistleblowers informed Hamel and Interior Secretary Gale Norton – who was touring the Prudhoe Bay oil fields at the time – that the safety valves at Prudhoe Bay that open in the event of a pipeline rupture had failed to close. Secondary valves that connect the oil platforms with processing plants also failed to close. And because the technology at Prudhoe Bay would be duplicated at ANWR, the potential for a massive explosion and huge spills are very real.

“A major spill or fire at one of our [processing centers] will exit the piping at high pressure, and leave a half-mile-wide oil slick on the white snow all the way,” Hamel said in an interview with the Wall Street Journal at the time of the controversy.

That catastrophic scenario was wiped out of everyone’s minds after 9/11.

Photo: photos.com

But then in March 2002, a BP whistleblower brought up the very same issues and went public. He claimed maintenance backlogs and employee shortages at Prudhoe Bay could worsen spills on the North Slope, particularly if ANWR is open to exploration.

The whistleblower, Robert Brian, who worked as an instrument technician at Prudhoe Bay for 22 years, had a lengthy meeting with aides to Senators Joseph Lieberman (D-CT) and Bob Graham (D-FL) to discuss his claims.

At the time, Brian said he supported opening ANWR to oil exploration but said BP has imperiled that goal because it is “putting Prudhoe workers and the environment at risk.”

“We are trying to change that so we don’t have a catastrophe that ends up on CNN and stops us from getting into ANWR,” he said in the Anchorage Daily News.

In 2001, the Alaska Oil and Gas Conservation Commission found high failure rates on some Prudhoe wellhead safety valves. The company was put on federal criminal probation after one of its contractors dumped thousands of gallons of toxic material underground at BP’s Endicott oil field in the 1990s. BP pleaded guilty to the charges in 2000 and paid a $6.5 million fine, and agreed to set up a nationwide environmental management program that has cost more than $20 million.

But Hamel and the whistleblowers, including Brian, said BP continued to violate environmental rules and then attempted to cover up the violations. A BP spokesman said those claims “are an outright lie.”

In 2001. the Alaska Oil and Gas Conservation Commission found high failure rates on Proudhoe wellhead saftey valves

Still, despite the charges leveled against BP, aired as early as April 2001, the Senate never held hearings on the safety issues that have caused dozens of oil spills at oil production facilities on the North Slope. Drilling in ANWR and President Bush’s energy bill took a backseat following 9/11 and the ensuing war in Iraq. Now, with gasoline prices soaring and Bush’s claims that drilling in ANWR would reduce this country’s dependence on foreign oil, lawmakers are being urged to once again investigate the issue and hold hearings before approving any legislation that would open ANWR to development.

BP has long been criticized for poorly managing the North Slope’s aging pipelines, safety valves and other critical components of its oil production infrastructure. In the past, the company has made minor improvements to its valves and fire detection systems and hired additional employees, but it has dropped the ball and neglected to maintain adequate safety levels at its facilities on the North Slope, Hamel said.

“Contrary to what President Bush has been saying, the current BP Prudhoe Bay operations – particularly the dysfunctional safety valves – are deeply flawed and place the environment, the safety of the operations staff and the integrity of the facility at risk. The President should delay legislation calling for drilling at the Arctic National Wildlife Refuge,” Hamel told the Wall Street Journal in May 2001.

Jason Leopold’s controversial memoir, Off the Record, was days away from being printed when his publisher, Rowman & Littlefield, abruptly canceled the book in February after political pressure from Steve Maviglio, the former press secretary to California Gov. Gray Davis. Visit Leopold’s Web site at www.jasonleopold.com