Prudhoe Bay oil spill
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[edit] Oil Spill
The North Slope is the region between Brooks Range and Arctic Ocean. This region boosts not only of rich wildlife, but also most of Alaska's petroleum reserves. British Petroleum’s strong presence and adventurism in this region is supported by the state mainly because of the rich dividends in term of tax returns measuring to 80% of the unrestricted state revenues.[1]
On 2 March 2006, an oil field worker, while driving, felt an acrid smell egressing, typical of hydrocarbons. Immediately he raised a warning of an oil leak. It is said that the pipe which runs throughout Tundra, started breaching 36 hours earlier. The thick snow did only worse by concealing the leak.
Apparently the reason is rupturing of a badly corroded pipe section of about 5 kilometers long.[citation needed] This section of particular pipe was built in 1970s, making it 30 years old and easily susceptible to corrosion. Regular maintenance and daily monitoring could have made the difference.[original research?] However BP was working under severe pressures on cost cutting.[original research?] In an email to the company lawyer, a union leader had expressed concern over the lowering of the staff of corrosion monitoring team from the present 8 to 6[18]. More incidents which support this argument can be cited like an internal BP email that said budgetary constraints would force the end of a program to inject a corrosion inhibitor into the pipeline system. However complaints also followed with the pipe still leaking mainly because what BP did was just to depressurize the pipe and block the ends.[citation needed] But the oil in that section still remained, not being into a perfect seal.[citation needed] The volume of leak was around 798,000 gallons[2].
The leak happened in winter, when the wildlife is scarcer than in the summer and spring.[original research?] The requests to open additional fields for exploration were met with strong protests after the disaster.[citation needed] Cleaning the mess BP left was more difficult because of the freezing temperatures which were running 20 degrees below zero.[original research?] Frost bite could set with in 5 minutes, thus requiring special protective gear for the workers.[original research?] Also the radius of the spill which covered close to two acres bordered a lake. The sensitive areas near the lake edges had to be protected with a snow and ice ramp.[citation needed] Though the oil cleanup is officially said to be completed there is huge discrepancy between the oil spill volume and the recovered volume.[citation needed]
[edit] Oil spill’s impact on BP
The Alaska oil spill fiasco had a major impact on BP as it was a loss to its image as well as a financial loss. A dime-sized hole caused by corrosion sent nearly 5,000 barrels (790 m³) of crude spilling out across the snow. The oil had not just left behind a bare two-acre patch of ground, but the leak -and the subsequent discovery that six miles (10 km) of pipeline was badly corroded- led to the shutdown of much of Prudhoe Bay and the loss of hundreds of millions of dollars.
The impact of the leak was so severe that BP shares slumped nearly 2 percent. BP estimated that it would cost $100 million to replace the 16 miles (26 km) of corroding pipeline at its giant oilfield in Prudhoe Bay. Also the company had to face tough questions about why the $200 million a year it says it spent in maintenance wasn't enough to keep the 400,000-barrel-per-day (64,000 m³/d) field, the country's largest, running smoothly. [8] Not only this, BP suffered a loss of more than a million dollar a day from its profits from the Prudhoe Bay.
In 2005, BP was named the Financial Times "most respected energy company" and Fortune's "most admired company in Britain." BP's was investigated by Congress for their role in the spill and the findings were contrary to the image BP was trying to promote.[citation needed][original research?]
[edit] Initial response of BP
Soon after the discovery of the leak, the US Department of Transportation ordered BP to test its pipelines using an internal probe called “smart pig.”[1][2] Clearly BP had been negligent in the maintenance of its pipelines since some of these lines had not been smart-pigged since 1992. Additionally, BP came up with and Action Plan which was outlined in a letter sent to Thomas Barrett, administrator for pipeline safety for Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). BP’s Steve Marshall detailed measures for pigging or removing oil residue from the pipeline and for various draining and dismantling procedures. Marshall also noted that a special 27 member task force was swung into action to address the situation.[3]
In July of the same year BP sent a smart pig through its eastern pipelines detecting extensive corrosion at several places. Soon after that BP began temporary production shut down of the eastern side citing the discovery of "unexpectedly severe corrosion" as the reason. This reduced the per day production from 400,000 barrels (64,000 m³) to 200,000 barrels (32,000 m³). This amounted to reduction in domestic oil supply by 8% at that time.[1][4]
[edit] Warnings
Red flags and warning signs had been raised about corrosion on several occasions both from within and outside the organization but had been ignored.[5] In fact the 1992 tests on the eastern line had indicated the presence of calcium in the line, but nothing was done about it.[original research?] A company report in year 2005 said BP based its corrosion-fighting on a limited budget instead of needs.[1]
Employees had raised their concerns before actual incidence happened which were ignored by BP management. In an e-mail to a company lawyer in June 2004, Mr. Kovac[11], an official of the United Steelworkers union which represents workers at the BP facility, forwarded a collection of his earlier complaints to management. One of these, dated 28 February 2003 [11], concerned "corrosion monitoring staffing levels". It began, "The corrosion monitoring crew will soon be reduced to six staff down from eight."[citation needed] Initially BP firmly denied that they took money saving measures on maintaining pipeline. Robert Malone, the chairman of BP America, cited a report commissioned by BP which concluded that "budget increases alone would not have prevented the leak"[12]. However, later he admitted that there "was a concerted effort to manage the costs in response to the continuing decline in production at Prudhoe Bay"[12]. One of the reasons of pipeline failures was insufficient level droppage of corrosion inhibitor, a liquid which resists corrosion of pipeline by process liquid, water[13]. John Dingell read from an internal BP email that said budgetary constraints would force the end of a programme to inject corrosion inhibitor directly into the pipeline system[12]. The process of injecting corrosion inhibitor directly into pipeline, though costly, is much more effective then injecting in process plant. Carolyn Merritt, chief executive officer of the US Chemical Safety Board, told the committee that "virtually all" of the root causes of the problems at Prudhoe Bay had "strong echoes" of those that led to the 2005 explosion in Houston. These had included cost- cutting, and a failure to invest in the plant. The committee was also told that the causes of the spillage - which happened at a time when BP was making huge profits[12]
The leak detection system measures the volumes of fluid entering each pipeline segment and the volumes of fluid leaving each segment. The system triggers an alarm if the volume measurements don’t match up. The leak detection alarm did sound four times during the week before the spill was discovered, but BP interpreted the leak detection alarms as false alarms[14] BP is now investigating the potential for developing a more sensitive leak detection system.[14]
The price of crude oil jumped $2.22 a barrel on the shutdown news to over $76.[citation needed]
[edit] The penalty
In October 2007, BP was fined $20 million for last year's Prudhoe Bay oil spills. BP will pay a $12 million federal criminal fine, $4 million in criminal restitution to the state, and $4 million for Arctic research. BP's local subsidiary, BP Exploration (Alaska) Inc., also will go on probation for three years. The $20 million penalty is likely the largest dollar punishment ever for an environmental misdemeanor in Alaska.[5]
[edit] Discrepancy in spill amount
Immediate after the oil spill news, BP responded to media that estimated volume of around 267,000 gallons[7] oil was spilled.[citation needed]
[edit] August 2006 Prudhoe Bay shutdown
Following the Prudhoe Bay pipeline leak in March 2006, BP was forced to shut down its Prudhoe Bay oil facility, producing about 2.6% of the United States demand for gasoline due to slow progress in stopping oil spillage. The scenario was a contributing factor for pushing the price of oil to 77 US $ per barrel in August 2006[8]
[edit] References
- ^ FAQ. British Petroleum. Retrieved on 2007-11-12.
- ^ Alaska pipeline spill amount debated. The Associated Press (2006-03-06). Retrieved on 2007-12-13.
1.http://www.usatoday.com/money/industries/energy/2006-09-07-bp-hearing_x.htm “BP Hearing”, USA Today, September 7, 2006. Retrieved on November 10, 2007. 2.http://www.msnbc.msn.com/id/11696601/ “Alaska pipeline spill amount debated”, MSNBC, March 6, 2006. Retrieved on November 11, 2007. 3.http://www.bp.com/genericarticle.do?categoryId=9006198&contentId=7020308 “BP’s response to Alaska oil spill outlined”, BP.com, August 1, 2006. Retrieved on November 11, 2007. 4.http://www.democracynow.org/article.pl?sid=06/08/10/1339232 “Did BP Purposefully Allow its Alaska Pipeline to Corrode in Order to Shut it Down and Boost Oil Prices?”, Democracy Now, August 10, 2006. Retrieved on November 11, 2007. 5.http://www.adn.com/money/industries/oil/story/9407566p-9320306c.html “BP fined $20 million for pipeline corrosion”, ADN.com, October 26, 2007. Retrieved on November 11, 2007. 6.http://www.gregpalast.com/british-petroleums-smart-pig “British Petroleum’s ‘Smart Pig’”, GregPalast.com, August 8, 2006. Retrieved on November 11, 2007. 7.http://news.nationalgeographic.com/news/2006/03/0320_060320_alaska_oil.html “Alaska Oil Spill Fuels Concerns Over Arctic Wildlife, Future Drilling”, news.nationalgeographic.com, August 8, 2006. Retrieved on November 10, 2007 8.http://www.cnn.com/2006/US/08/07/oilfield.shutdown/index.html?id=271801&selected=Analyses “Alaska oil shutdown hikes prices”, http://www.cnn.com, August 7, 2006. Retrieved on November 10, 2007 10.http://www.msnbc.msn.com, March 6, 2006. Retrieved on November 10, 2007 11.http://www.commondreams.org/headlines06/0321-06.htm, “Oil Gushes into Arctic Ocean from BP Pipeline”, http://www.commondreams.org, March 21, 2006. Retrieved on November 10, 2007 12.http://news.independent.co.uk/world/americas/article2553957.ece, “BP's oil spill in Alaska blamed on cost-cutting”, http://news.independent.co.uk, May 17, 2006. Retrieved on November 10, 2007 13.http://www.reuters.com/article/latestCrisis/idUSN06370463, “INTERVIEW-BP faulty in Alaska's biggest oil spill -gov't”, http://www.reuters.com, March 6, 2006. Retrieved on November 10, 2007 14.http://www.petroleumnews.com/pntruncate/573947058.shtml, “BP: Learning from oil spill lessons http://www.petroleumnews.com, May 14, 2006. Retrieved on November 10, 2007 15.http://money.cnn.com/2006/08/11/magazines/fortune/pluggedin_murphy.fortune/index.htm, “Beyond Prudhoe: Why BP should go back to being an oil company”, http:// money.cnn.com, August 11,2006. Retrieved on November 11, 2007 16.http://archive.greenpeace.org/climate/arctic99/html/content/response3.html, “ARCHIVES” , http://archive.greenpeace.org, Retrieved on November 11,2007 18.http://www.commondreams.org/headlines06/0321-06.htm, “Oil Gushes into Arctic Ocean from BP Pipeline”, http://www.commondreams.org, March 21, 2006. Retrieved on November 11, 2007
