WASHINGTON – BP executives received stern warnings Thursday from members of Congress outraged at the company's admittedly deficient maintenance of leak-prone Alaskan oil pipelines.
The executives apologized and pledged to fix operational lapses on the North Slope that led to the region's biggest ever oil spill in March and the partial shutdown last month 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 summer — were particularly unacceptable given the industry's record profits and the relatively inexpensive measures that might have prevented the oil spill.
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.
"We don't need prices suddenly kicked higher because the company responsible for bringing a vital part of this country's oil to market isn't taking care of the pipelines," Rep. Joe Barton, R-Texas, said in remarks prepared before the hearing.
"If a company — a very successful company — can't do the basic maintenance needed to keep Prudhoe Bay's oil field operating safely and without interruption," he added, "then maybe it shouldn't be operating the pipeline."
Robert A. Malone, the head of BP PLC's U.S. operations, acknowledged in prepared testimony that the company's reputation has suffered, and he vowed going forward to manage Prudhoe Bay in "a safe, efficient and environmentally sensitive way."
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 "significant" corrosion, according to BP, which briefly shut down the entire Prudhoe Bay field on Aug. 6.
"We have fallen short of the high standards we hold for ourselves, and the expectations that others have for us," said Malone, who was named chairman and president of BP America in July.
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.
Prudhoe Bay isn't BP's only problem.
The London-based company faces victims' lawsuits stemming 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 PLC 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 and has given no timetable for when it expects to be back to normal levels.
BP officials have 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.
Experts say the problem could have been mitigated, however, by better monitoring and routine removal of sludge that builds up on the inner walls of oil pipelines, providing shelter for the bacteria.
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