Agency issues warning letter to BP Alaska

Posted: Monday, May 24, 2010

A federal pipeline agency last month issued a warning letter to BP Exploration Alaska, finding "probable violations" in the company's handling of certain corrosion issues affecting its Endicott Pipeline.

The letter from Dennis Hinnah, a deputy regional director with the federal Pipeline and Hazardous Materials Safety Administration, said BP failed as part of an inspection to provide records showing it was guarding against corrosion. It also said the inspection uncovered signs of atmospheric corrosion and that BP didn't provide records to show they'd monitored for such problems.

The letter, which references a June 2009 inspection, was dated April 20, the day an oil rig leased by BP PLC exploded in the Gulf of Mexico, killing 11 workers and unleashing a massive spill. The letter was first reported by the Alaska Dispatch.

Oil carried through the Endicott line, and from what BP has called the "first arctic offshore production facility in the world," eventually gets to the Trans-Alaska Pipeline System.

Steve Rinehart, a spokesman for BP Alaska, said the company has a large program and a lot of pipe in the state. He said it's not uncommon for an inspection to turn up an issue, question or challenge: "It's not alarming, unprecedented or really out of the ordinary," he said in a phone interview from Louisiana.

But he said all warning letters, or issues raised, are taken seriously. He said BP doesn't operate facilities if they don't meet company and regulatory standards, and in response to the corrosion issues raised in the letter, he said BP believes its current programs meet those obligations.

It has taken additional steps, though, he said, including adding a corrosion "coupon," or test strip, to the line and seeking to further discuss with the agency the atmospheric corrosion concerns.

Damon Hill, who's with the pipeline agency's public affairs office, said the agency received a written response to the letter from BP on Friday. He said the inspection was routine, and that there would be follow-up to see if the issues raised have been addressed in a way the agency considers adequate. If they aren't, he said, there could be "additional enforcement actions."

BP's work in Alaska has drawn attention since 2006 when 200,000 gallons of oil spilled at Prudhoe Bay. It was the largest oil spill on the prodigious North Slope, and investigators blamed it on corrosion. BP was eventually ordered to pay $20 million in fines and restitution.

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