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The Wall Street Journal: BP’s Top U.S. Pipeline Inspector Refuses to Testify

September 8, 2006

WASHINGTON — The chief pipeline-inspection expert for the U.S. subsidiary of BP PLC took the Fifth Amendment under oath before a House Energy and Commerce panel rather than explain what he knew about corrosion in the oil company’s Prudhoe Bay pipelines in 2002.

Richard Woollam, who managed corrosion-control and inspection teams, also refused to respond, on the advice of his lawyer, to the committee’s allegations that he reduced inspection personnel responsible for monitoring 22 miles of pipelines leading from the giant oil field by 25%, after an outside contractor suggested that accumulating sediment in the lines might be corroding them. A BP spokesman said Mr. Woollam remains with the company but no longer runs its Alaska inspection efforts and has been placed on leave.

Steve Marshall, president of BP Exploration Alaska Inc., which manages Prudhoe Bay, said neither he nor other BP officials knew about serious corrosion problems until March 2, when 250,000 gallons of crude oil spilled onto the tundra. He acknowledged the Department of Justice has ordered BP to preserve a cross section of the pipeline for inspection.

These responses provoked bipartisan agreement among members of the committee, in a year when Congress has been scrambling to find some way to respond to high gasoline prices and voter frustration with flush profits among oil companies. Oil prices rose further after BP last month partially shut down Alaska’s Prudhoe Bay oil field, which it runs on behalf of a consortium of oil companies, following the discovery of more corrosion and a second leak.

After reviewing documents gathered during his panel’s investigation of the London oil giant, Chairman Joe Barton, Republican of Texas, said: “It seems to me that BP was betting the company and their field that this field would be depleted before major parts of the pipeline failed and needed to be replaced.” He added: “Maybe [BP] shouldn’t operate the pipeline,” suggesting that Congress might help arrange a private sale of the oil-field system.

Democrats piled on, with several paraphrasing BP’s environmentally friendly slogan, “Beyond Petroleum,” calling it “Broken Pipelines.”

Mr. Marshall, the BP Exploration Alaska executive, yielded a little ground. He said BP officials suspected in 2005 that sediment in the pipelines might be exacerbating corrosion problems and planned a test of a robot called a “smart pig” to inspect the lines to take place this year. “In retrospect, I wish we’d done it sooner,” he said.

Under questioning, Mr. Marshall also said he began hearing reports in early 2003 that lower-level BP officials were responding to complaints from work crews about safety and pipeline problems by intimidating them and threatening job losses. According to BP, Mr. Woollam was removed from his supervisory role in 2004 after an internal investigation turned up evidence of employee intimidation. Mr. Woollam’s name wasn’t mentioned in the report stemming from the investigation.

Mr. Marshall said such intimidation is against company policy. A BP spokesman said the company urged Mr. Woollam to cooperate with the committee, but that it respected his decision to exercise his right not to testify.

Mr. Marshall said he investigated other allegations raised by the committee that BP may have pressured an outside contractor to change a 2002 report that had originally concluded there could be serious corrosion problems in the pipelines, which were built in 1977 to feed oil from wells into the main pipeline system.

While he said BP officials disagreed with the conclusion — which disappeared from later versions of the report — Mr. Marshall said an internal investigation “found no evidence of pressure” to change the report. Rep. Barton warned Mr. Marshall and other BP witnesses at one point that his investigators found lower-level BP employees reluctant to talk because of “possible retribution” from BP or other large oil-industry employers in Alaska.

Robert A. Malone, chairman and president of BP America Inc., the U.S. subsidiary, said the company had hired outside advisers to counsel employees on safety and ethical problems. “We have fallen short of the high standards we hold for ourselves,” he told the committee, “and the expectations that others have for us.”

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