by Jerome a Paris
Wed Aug 9th, 2006 at 04:23:32 AM EST
(I had written a longer version of this, but it was eaten by the computer. See Benito's earlier diary on the topic as well:http://www.dailykos.com/...)
After armed insurgencies (Iraq, Nigeria), evil-regimes-bent-on-destroying-the-US (Venezuela, Iran) and hurricane-prone weather (Gulf of Mexico), another cause can be added to the various items in the long list that have the power to influence(upwards) oil prices: the sheer incompetence of US oil majors.
Aug. 7 (Bloomberg) -- BP Plc said it's shutting Alaska's Prudhoe Bay oil field, the largest in the U.S., because of pipeline corrosion, cutting supplies to West Coast refineries and raising new criticisms of the company's safety record.
From the front page
You'd think that oil majors, currently shut out of many countries (Saudi Arabia, Kuwait, Mexico), kicked (Equador) or taxed (Venezuela, Russia) out of others, or having major trouble developing new fields without major cost overruns all over the place (Sakhalin, Kashagan, oil sands) would at least make sure that existing fields in stable countries work properly...
BP's decision to close down the Prudhoe Bay field follows the analysis of data from inspections along the pipeline system in late July, which revealed 16 anomalies in 12 locations in an oil line on the eastern side of the field, BP said. BP operates 22 miles of oil transit lines at Prudhoe Bay and has inspected about 40 percent of the system.
The pipeline leak and the discovery of corrosion ``have called into question the condition of the oil transit lines at Prudhoe Bay,'' Bob Malone, BP America President, said in the statement. ``We will not resume operation of the field until we and government regulators are satisfied that they can be operated safely and pose no threat to the environment.''
But it seems to be part of a trend:
the spill is the second to hit BP's Prudhoe Bay field this year. In March it discovered a large spill and has already commited to replace a three-mile section of pipeline as a result.
Last month BP raised the amount it is to spend on overhauling safety procedures at the American subsidiary by $1 billion to $7 billion. Its US credibility has suffered a buffeting over the past 18 months.
Last year, a fatal fire forced BP to shut down its Texas refinery, the knock-on effect of which is ongoing with full production there yet to resume.
Hurricanes off the West Coast of America last summer also caused extensive damage. The combined effect of hurricanes Rita, Wilma and Katrina has presented BP with a repair bill seen at $900 million at the last count.
Most recently BP has had to contend with claims that some of its traders were involved in alleged price fixing in the market for propane trading. BP has strenuously denied any wrongdoing and called in a team of external auditors to examine compliance procedures.
But it's not just BP: Exxon and Conoco are shareholders of Prudhoe Bay, the largest US field, and they either said nothing or knew nothing.
Let's add them to the axis of evil, and Alaska to that of unreliable oil provinces, along Nigeria, Iraq and the Gulf of Mexico, pronto.
Earlier Countdown diaries here: http://www.eurotrib.com/story/2006/7/14/103439/905