The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown
sliverstain
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BRITISH PETROLEUM'S "SMART PIG"
The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown
by Greg Palast
For The Guardian (UK)
Tuesday, August 9, 2006
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.
The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown
by Greg Palast
For The Guardian (UK)
Tuesday, August 9, 2006
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.
The world's greatest empires progress through this sequence:From bondage to spiritual faith; spiritual faith to great courage; courage to liberty;liberty to abundance;abundance to selfishness; selfishness to complacency;complacency to apathy;apathy to dependence;dependency back again into bondage
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Comments
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Huh? Do you understand the principles of business?
Oh dear. Here goes. You take a large demand for a product, and that product is limited in supply, then the price of that product increases. The more oil there is said to be available, the price drops. The more secure the supply is (no war), the price drops. Demand isn't going to drop, is it?
Alaska is not BPs only Oil field. They have most of the middle east, in fcat the worlds fields in their pocket.
And the oil business is not competitve. The big companies set the price between them. Its called a monopoly.
You had to explain capitalism at its finest to a fellow american. Wow!
I find that not many fellow American understand the concept of Capital cities, never mind Capitalism.
(ps, did I do a good job?)
Hmm...I understand all that. I said that I understood that the price would increase.
What I do not understand is how BP will specifically benefit from it if they are cutting their production. If they drive up the price by reducing the supply and don't have as much to supply, then their competitors who are still supplying at full capacity will reap the benefits.
Furthermore, since it's one company that's doing this, they are automatically going to look like the bad guy and so they are going to reduce demand for their particular gas just due to negative feelings.
In other words, it's hard for me to accept that it's some conspiracy by BP when they will have trouble benefitting from it.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
One company doing this and they all raise their price, worst than the Mafia. Supply and demand is a joke, oil barrel price is establish by pure speculation "ok there's a tornado, we'll get the price up one quarter of a cent" ; "Ok, Iran President said something about is nuclear power plan, we'll raise the price up one half of a cent". So yeah, it is like a conspiracy but it's being done by all the share holders and CEO, not only one company. Plus the price never go back down, there will be no oil shortage soon, that is a myth.
-Jean-Jacques Rousseau
Again, its simple. The Oil business is not run like any other business. THere is no competition, no economic rivalry as such as you know from the real world of business.
Most of the time, you don't know even know where your gas is coming from. Subsidiaries, consolidations, al that malarkey, has narrowed the game so much that yeah, there is no competition!
Its all owned by 3 companies. BP, Shell, Exxon-Mobil.
Look it up.