Evans Liberal Politics
July 6, 2010
Dangerous Cost Cuts at Alyeska Pipeline:
“Yet Another Example of How BP Runs Things”
Dangerous Cost Cuts at Alyeska Pipeline: “Yet Another Example of How BP Runs Things”, Truthout, Investigative Report, July 6, 2010, by Jason Leopold, excerpt quoted verbatim:
Over the past several months, Alyeska Pipeline and the company’s Chief Executive Officer, Kevin Hostler, have been under intense scrutiny by a Congressional oversight committee and an independent investigator, who has been probing explosive allegations leveled by managers that severe cost-cutting efforts could put the integrity of the 800-mile Trans Alaska Pipeline System (TAPS) at risk.
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Allegations that major oil companies routinely cut corners in areas such as safety and maintenance have taken on new urgency following the catastrophic explosion aboard the BP-operated Deepwater Horizon drilling rig, which killed 11 employees and ruptured a newly drilled well 5,000 feet below the surface, spewing hundreds of millions of gallons of oil into the Gulf. Evidence has surfaced since then that showed BP scrimped on safety and maintenance spending, despite repeated warnings that such moves could prove disastrous.
It’s no coincidence that Alyeska has been accused of taking similar risks with TAPS and lashing out at employees who speak up. BP is the largest shareholder of Alyeska and Hostler is a BP executive “on loan” to the company. BP exerts significant control and influence over the way Alyeska is operated, senior BP and Alyeska officials said.
Prior to being named chief executive of Alyeska, Hostler spent 27 years with BP, most recently as senior vice president of BP’s global human resources organization. Before that, Hostler was head of BP’s subsidiary in Colombia.
A top BP Alaska official asked, in light of the Gulf disaster, whether it is a good idea to have Hostler, “a BP executive,” running TAPS, “where BP can exert cultural and economic influence through the president of [Alyeska] as well as its ownership share, in directions that are not good for the safety and the integrity of [the pipeline].”
The BP Alaska official said the fact that both companies are plagued by the same safety and management concerns is evidence of a “pervasiveness of a BP leadership culture that is focused on cost cutting that reduces operational integrity.”
“The pervasiveness is due to [Alyeska] being led by a BP executive [Kevin Hostler], and BP can wield enormous pressure on the other owners [of the pipeline] who to a large extent share a desire to operate the pipeline with as little cost as possible,” the BP executive said.
Hostler has come under fire for his management style. According to a copy of a confidential employee work survey obtained by Truthout, Hostler was described as “a narcissistic despot who will be remembered for his management style of intimidation and fear.”
“At the senior management level, [Hostler] has made a mockery of the [Open Work Environment] system by neutering our VPs and Directors who are openly afraid to disagree with his initiatives, even when it is detrimental to TAPS,” says a copy of the survey.
Other surveys provided to Truthout contained similar descriptions of Hostler.
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Last week, Hostler was called into Washington for the second time in a month to meet with staffers from Rep. Bart Stupak’s office. Stupak (D-Michigan) is the chairman of the House Energy Committee’s subcommittee on oversight and investigations.
The meeting focused on the circumstances behind several mishaps, including a recent oil spill that took place at one of Alyeska’s pump stations on the North Slope, which forced the company to shut down TAPS for more than three days in May, and the loss of communication connections used to control pumps and valves at the northern end of pipeline system that also forced its temporary closure.
Staffers also queried Hostler about the findings of an investigation, that recently concluded, conducted by Charles Thebaud, an attorney with the law firm Morgan Lewis. The probe was sparked in February after some Alyeska managers anonymously filed complaints with BP’s Office of the Ombudsman about a number of issues, including failures to address matters concerning safety and maintenance and a controversial decision Hostler made last year to relocate about 30 safety and integrity management engineers from Fairbanks to Anchorage, Alaska – hundreds of miles away from the pipeline.
TAPS transports crude oil from production fields in Prudhoe Bay to Valdez for deepwater tanker loading. It moves anywhere from 600,000 to 700,000 barrels of oil per day, which represents approximately15 percent of US crude oil production.
Internal Revolt
Hundreds of pages of internal Alyeska documents and emails obtained by Truthout and interviews with more than a dozen senior employees show Hostler and senior Alyeska executives ignored dozens of warnings from employees over the past year that deferring critical maintenance projects and implementing budget cuts could expose the aging pipeline to further vulnerability.
According to one of several emails sent to BP’s Office of the Ombudsman since last December, “the budget cuts over the last couple of years is creating a large ‘bow wave’ of deferred projects and program work … The oversight of the integrity of the system is at risk.”
“Reductions in the budgets for the Aboveground [pipeline] program; fuel gas line; and mainline pipe can place the integrity of the system at risk,” the email says. “There is a risk ranking exercise that is used and the concern that the risk ranking is being used primarily for budget reductions and although work is shown as lower risk it still should be done to protect the environment.”
The employee who wrote the email alleged that Alyeska’s 2010 budget was cut from $680 million to $600 million on orders from BP.
But the move that led several Alyeska managers to reach out to BP’s Office of the Ombudsman was a controversial plan Hostler initiated last November, now close to being fully implemented, to relocate 30 integrity management, safety and environmental employees to Anchorage from Fairbanks, despite the findings of a 39-page internal analysis prepared by Alyeska managers that said, “the best location for the Integrity Management teams from a business efficiency, regulatory compliance, and Integrity/Safety risk standpoint is the Fairbanks location.”
Essentially, what Hostler has done is reverse a decision made in 1997 by then-Alyeska President Bob Malone to move employees from Anchorage to Fairbanks to be closer to the pipeline so they could easily access it in the event of a spill or to perform monitoring and maintenance functions.
“You put your employees on the pipeline and in Valdez, it will improve safety because you’re right there,” Malone said at the time. “It’s clear communication; it’s clear lines of authority; it’s clear accountability, which is most important to me.”
The relocation affects about 30 engineers, scientists and technicians who are directly responsible for the monitoring and maintenance of the integrity, safety and environmental compliance of TAPS. About 10 contractors are also included in the plan. …
Read the full article here.
See EXCLUSIVE: New Documents, Employees Reveal BP’s Alaska Oilfield Plagued by Major Safety Issues, Truthout, June 15, 2010, by Jason Leopold.
See Ex-EPA Officials: Why Isn’t BP Under Criminal Investigation?, Truthout, May 28, 2010, by Jason Leopold, excerpt quoted verbatim:
Why hasn’t the government launched a criminal investigation into BP?
That’s the question several former Environmental Protection Agency (EPA) officials have been asking in the aftermath of the catastrophic explosion aboard the Deepwater Horizon drilling rig last month that killed 11 employees and ruptured a newly drilled well 5,000 feet below the surface and has spewed tens of millions of gallons of oil into the Gulf if Mexico, which now stands as the largest spill in US history.
Like previous BP-related disasters in Alaska and Texas, evidence has emerged that appears to show BP knowingly cut corners on maintenance and safety on Deepwater Horizon’s operations, which, according to blogger bmaz, who writes about legal issues at Emptywheel, could amount to criminal violations of the Clean Water Act. Additionally, because people were killed, BP and company officials could also face prosecution for negligent and reckless homicide.
Scott West, the former special agent-in-charge at the EPA’s Criminal Investigation Division, who spent more than a year probing allegations that BP committed crimes in connection with a massive oil spill on Alaska’s North Slope in 2006, said the company’s prior felony and misdemeanor convictions should have immediately “raised red flags” and resulted in a federal criminal investigation.
See How Bush’s DOJ Killed a Criminal Probe Into BP That Threatened to Net Top Officials, Truthout, May 19, 2010, by Jason Leopold.
FLASH: TSA to Block “Controversial Opinion” on the Web
CBS News, Updated July 6, 2010, by Pia Malbran, excerpt quoted verbatim:
**Updated 7/6/10 with TSA response. Read the blog here.
The Transportation Security Administration (TSA) is blocking certain websites from the federal agency’s computers, including halting access by staffers to any Internet pages that contain a “controversial opinion,” according to an internal email obtained by CBS News.
The email was sent to all TSA employees from the Office of Information Technology on Friday afternoon.
It states that as of July 1, TSA employees will no longer be allowed to access five categories of websites that have been deemed “inappropriate for government access.”
The categories include:
? Chat/Messaging
? Controversial opinion
? Criminal activity
? Extreme violence (including cartoon violence) and gruesome content
? Gaming
The email does not specify how the TSA will determine if a website expresses a “controversial opinion.”
See Also (CLG News Headline): Department of Homeland Security to take control of spill response website, The Associated Press on Bloomberg Businessweek, July 4, 2010, by Harry R. Weber.
Watch Obama says Netanyahu prepared to take risks for peace, AFP video on YouTube — 1:16
Just the Facts, Maam:
• Total number of people unemployed, underemployed, or involuntarily working part-time: 26.2 million
• True unemployment rate, including underemployed and those no longer seeking employment: 16.8% — or 1 in 6 workers
• Average number of weeks spent searching for a new job once unemployed: 29.1
• Unemployment rate (official) for those making less than $20,000 a year: 31.2 percent
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