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The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown
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| dcougar99 |
The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown
Greg Palast | August 9 2006
BRITISH PETROLEUM'S "SMART PIG"
Is the Alaska Pipeline corroded? You bet it is. Has been for more than a decade. Did British Petroleum shut the pipe yesterday to turn a quick buck on its negligence, to profit off the disaster it created? Just ask the "smart pig."
Years ago, I had the unhappy job of leading an investigation of British Petroleum's management of the Alaska pipeline system. I was working for the Chugach villages, the Alaskan Natives who own the shoreline slimed by the 1989 Exxon Valdez tanker grounding.
Even then, courageous government inspectors and pipeline workers were screaming about corrosion all through the pipeline. I say "courageous" because BP, which owns 46% of the pipe and is supposed to manage the system, had a habit of hunting down and destroying the careers of those who warn of pipeline problems.
In one case, BP's CEO of Alaskan operations hired a former CIA expert to break into the home of a whistleblower, Chuck Hamel, who had complained of conditions at the pipe's tanker facility. BP tapped his phone calls with a US congressman and ran a surveillance and smear campaign against him. When caught, a US federal judge said BP's acts were "reminiscent of Nazi Germany."
This was not an isolated case. Captain James Woodle, once in charge of the pipe's Valdez terminus, was blackmailed into resigning the post when he complained of disastrous conditions there. The weapon used on Woodle was a file of faked evidence of marital infidelity. Nice guys, eh?
Now let's talk timing. BP's suddenly discovered corrosion necessitating an emergency shut-down of the line is the same corrosion Dan Lawn has been screaming about for 15 years. Lawn is a steel-eyed government inspector who has kept his job only because his union's lawyers have kept BP from having his head.
Indeed, it's pretty darn hard for BP to claim it is surprised to find corrosion this week when Lawn issued a damning report on corrosion right after a leak and spill were discovered on March 2 of this year.
Why shut the pipe now? The timing of a sudden inspection and fix of a decade-long problem has a suspicious smell. A precipitous shutdown in mid-summer, in the middle of Middle East war(s), is guaranteed to raise prices and reap monster profits for BP. The price of crude jumped $2.22 a barrel on the shutdown news to over $76. How lucky for BP which sells four million barrels of oil a day. Had BP completed its inspection and repairs a couple years back -- say, after Dan Lawn's tenth warning -- the oil market would have hardly noticed.
But $2 a barrel is just the beginning of BP's shut-down bonus. The Alaskan oil was destined for the California market which now faces a supply crisis at the very height of the summer travel season. The big winner is ARCO petroleum, the largest retailer in the Golden State. ARCO is a 100%-owned subsidiary of ... British Petroleum.
BP could have fixed the pipeline problem this past winter, after their latest corrosion-caused oil spill. But then ARCO would have lost the summertime supply-squeeze windfall.
Enron Corporation was infamous for deliberately timing repairs to maximize profit. Would BP also manipulate the market in such a crude manner? Some US prosecutors think they did so in the US propane market. The Commodity Futures Trading Commission (CFTC) just six weeks ago charged the company with approving an Enron-style scheme to crank up the price of propane sold in poor rural communities in the US. One former BP exec has pleaded guilty.
Lord Browne, the imperious CEO of BP, has apologized for that scam, for the Alaska spill, for this week's shutdown and for the deaths in 2005 of 15 workers at the company's mortally sloppy refinery operation at Texas City, Texas.
I don't want readers to think BP isn't civic-minded. The company's US CEO, Bob Malone, was Co-Chairman of the Bush re-election campaign in Alaska. Mr. Bush, in turn, was so impressed with BP's care of Alaska's environment that he pushed again to open the state's arctic wildlife refuge (ANWR) to drilling by the BP consortium.
Indeed, you can go to Alaska today and see for yourself the evidence of BP's care of the wilderness. You can smell it: the crude oil still on the beaches from the Exxon Valdez spill.
Exxon took all the blame for the spill because they were dumb enough to have the company's name on the ship. But it was BP's pipeline managers who filed reports that oil spill containment equipment was sitting right at the site of the grounding near Bligh Island. However, the reports were bogus, the equipment wasn't there and so the beaches were poisoned. At the time, our investigators uncovered four-volume's worth of faked safety reports and concluded that BP was at least as culpable as Exxon for the 1,200 miles of oil-destroyed coastline.
Nevertheless, m'Lord Browne preens himself with his corporation's environmental record. We know BP cares about nature because they have lots of photos of solar panels in their annual reports -- and they've painted every one of their gas stations green.
The green paint-job is supposed to represent the oil giant's love of Mother Nature. But the good Lord, Mr. Browne, knows it stands for the color of the Yankee dollar.
BP claims the profitable timing of its Alaska pipe shutdown can be explained because they've only now run a "smart pig" through the pipes to locate the corrosion. The "pig" is an electronic drone that BP should have been using continuously, though they had not done so for 14 years. The fact that, in the middle of an oil crisis, they've run it through now, forcing the shutdown, reminds me, when I consider Lord Browne's closeness to George Bush, that the company's pig is indeed, very, very smart.
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| kid nyce |
If I recall correctly, post 9/11 pre war in Iraq - was it me or did the market suggest that investing in pipelines would prove to be one of the most beneficial investments over a long period of time...
Talk about scam! |
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| Groundhog Boy |
From the PDD forum 2 days ago
| quote: | Originally posted by Groundhog Boy
| quote: | Originally posted by MisterOpus1
And it does make one wonder - with all those ing profits BP was receiving, would it not have been a bit more prudent to check your ing product or transportation security of your product with that money earned rather than go into the ing executives' collective pockets? Just a random thought on the matter........ |
This parallels my thoughts on the topic when I first heard this on CNN this morning. When the Senate hearings were going on regarding the oil companies' record profits, all that we heard was how much money they've been sinking into research & development, equipment, etc. So how the hell do they suddenly have such major equipment problems that necessitate cutting off 8% of the US crude production?
Their failure to maintain their facilities and machinery is going to cost us tons of money, and in the long run, will make them more, as the price of oil will skyrocket now, never fall back down to current levels (or even levels equal to now when adjusted for other factors like inflation, etc.), and they'll make a killing when they get supplies back up again. |
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| Inconspicuous |
| quote: | Originally posted by Groundhog Boy
From the PDD forum 2 days ago |
That's why this belongs there.
Anyways, you should consider better sources for news. Among other things, it represents 2.6% of the national supply--not 8%. I don't feel like ranting, so I'll stop before I start. |
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| Groundhog Boy |
| quote: | Originally posted by Inconspicuous
That's why this belongs there.
Anyways, you should consider better sources for news. Among other things, it represents 2.6% of the national supply--not 8%. I don't feel like ranting, so I'll stop before I start. |
First, I didn't start the post, I just responded.
Second, learn to read. I said 8% of the US PRODUCTION, not SUPPLY, of which this is only 2.6% - http://www.msnbc.msn.com/id/14219844/
| quote: | | Once the field is shut down, BP said oil production will be reduced by 400,000 barrels a day. That’s close to 8 percent of U.S. oil production or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration. |
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| Boomer187 |
| wtf is alaska oil pipeline |
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| kid nyce |
Whatever the percentage is, it's still being felt by America's pockets. Earlier on the news reported up to $10/barrell, now it's a steadying at $2/barrel. The way I see it after cutting out the rest of the deliberation..
9/11 + Iraq War = Gas may be scarce - bump up gas prices
Investment opportunities flood the pipeline market
Crude Oil and Gas levels out around $2-$3/gl
Labor Day last year - Gas warning $3-4/gl
Crude Oil and Gas levels out around $2-3/gl
Pipeline Bust - Oil/Gas up, pipeline stocks suffer = surplus of money fed into these companies
It's sad... |
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| Inconspicuous |
| quote: | Originally posted by Groundhog Boy
First, I didn't start the post, I just responded.
Second, learn to read. I said 8% of the US PRODUCTION, not SUPPLY, of which this is only 2.6% - http://www.msnbc.msn.com/id/14219844/ |
I didn't make it clear--I was responding to the initial post, using your response to start it...not meant to be directed at you. As for the percentage, I mixed things up in my head. I thought the 8% was in the first post amidst the descriptions of the effect it would have. |
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| Temperate |
Anthony works in the grocery store
Savin his pennies for some day
Mama Leone left a note on the door
She said "Sonny move out to the country"
Ah but working too hard can give you
A heart attack, ack, ack, ack, ack, ack
You ought-a know by now
Who needs a house out in Hackensack?
Is that all you get for your money?
And it seems such a waste of time
If that's what it's all about
Mama if that's movin up then I'm movin out
Mm I' movin out, mm oo oo uh huh mm hm |
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| Subey |
Sometimes I get nervous when its getting close to a week without something bumping the price of oil up.
It's like being on a ride at disney world where you think you are going to crash into a wall, then at the last second the ride veers away...
Thank you BP for releasing the tension this week. |
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| DjConfessions |
| needs more lawsuits |
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