House panel chief: BP hedged pipeline problem

In weeks leading up to BP's decision to begin shutting down its giant Prudhoe Bay field in Alaska, the London-based oil company told U.S. lawmakers it had a handle on pipeline corrosion found in March, the head of the U.S. House Energy Committee said Friday.

Rep. Joe Barton, Texas Republican, said BP's move on Sunday to shut down the largest oil field in the United States after finding more corrosion "contradicts everything the Committee has been told" by BP.

"The fact that BP's consistent assurances were not well grounded is troubling and requires further examination," Barton said in a heated letter sent Friday to BP Group Chief Executive John Browne.

Barton told Browne there is "substantial evidence that BP's chronic neglect directly contributed to the shutdown," and has called a Sept. 7 hearing.

Barton has not named witnesses but BP executives are nearly certain to be called to testify.

BP spokesman Neil Chapman said the company "will cooperate with the committee and assist them with their questions."

Barton said among his questions are "Why does BP not operate and maintain its U.S.-based facilities up to U.S. industrial standards?"

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The 400,000 barrel per day Prudhoe Bay production is stable at 155,000 barrels per day and BP said it will announce later whether it will keep the western half of the field pumping oil.

In June, Browne told Reuters in an interview that BP has "a world-class corrosion monitoring and spill detection system, much better than required by regulation."

BP "has tried to demonstrate what we thought was a good program" for controlling pipeline corrosion," Chapman said.

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"What we learned last weekend was that it wasn't good enough. Now we will spare no expense to fix it," he said.

Congress has recessed until September. But lawmakers concerned about U.S. gasoline pump prices above $3 a gallon were voicing concerns about Prudhoe Bay, where pipeline corrosion threatens to shut about 8 percent of U.S. crude oil production.

Broken promises
The latest problems come five months after a corroded transit line ruptured and spilled at least 200,000 gallons of crude onto the Arctic tundra, prompting tighter regulatory scrutiny of BP's operations and a criminal investigation.

"From then until this week, BP has repeatedly assured the Committee that the condition of the pipeline that failed in March was an anomaly, and that BP's corrosion control program was an effective means to monitor and maintain pipelines and infrastructure on Alaska's North Slope," Barton wrote.

Barton referred to a raft of other incidents that have spurred regulatory scrutiny of BP — including a fire at a Texas refinery that killed 15 people and recent allegations by the Commodity Futures Trading Commission that BP improperly cornered the U.S. market for propane in 2004.

"This latest incident once again calls into question BP's commitment to safety, reliability, and responsible stewardship of America's energy resources," Barton said.

In light of the CFTC allegation that BP tried to manipulate propane prices, Barton asked Browne if "there was a market strategy component to BP's decisions that led up to the oil shutdown" in Alaska.

BP has denied the CFTC's allegations and said it will contest the charges in court.