Prudhoe Bay oil spill
Encyclopedia
The Prudhoe Bay oil spill (2006 Alaskan oil spill) was an oil spill
that was discovered on March 2, 2006 at a pipeline
owned by BP Exploration, Alaska (BPXA)
in western Prudhoe Bay, Alaska
. Initial estimates said that up to 267000 gallons (6,357.1 bbl) were spilled over 1.9 acres (7,689 m²), making it the largest oil spill on Alaska's north slope to date. Alaska's unified command ratified the volume of crude oil spilled as 212252 gallons (5,053.6 bbl) in March 2008. The spill originated from a 0.25 inch (0.635 cm) hole in a 34 inches (86.4 cm) diameter pipeline. The pipeline was decommissioned and later replaced with a 20 inches (50.8 cm) diameter pipeline with its own pipeline inspection gauge (pig) launch and recovery sites for easier inspection. In November 2007, BP Exploration, Alaska (BPXA) pled guilty to negligent discharge of oil, a misdemeanor under the federal Clean Water Act
and was fined US$20 million.
is the region between Brooks Range
and the Arctic Ocean
. This region boasts not only rich wildlife, but also most of Alaska's petroleum
reserves.
In an email to the company's lawyer, a union leader had expressed concern over the lowering of the number of staff on the Corrosion Monitoring
team from eight to six. On March 6, 2006, Oil industry critic Chuck Hamel claimed the volume of leak was around 798000 gallons (19,000 bbl), but provided no documentation to support that claim. On March 10, 2006, Alaska's Unified Command Joint Information Center released its official estimate that 201,000 to 201000 to 267000 US gal (760.9 to 1,010.7 m3) were released. The unified command's officially ratified spill volume was not announced for another two years. On March 25, 2008, the unified command for spill response, consisting of several groups including Alaska Department of Environmental Conservation and the U.S. Environmental Protection Agency (EPA), announced that the volume of crude oil spilled was 212252 gallons (5,053.6 bbl).
and the loss of hundreds of millions of dollars.
The impact of the leak was so severe that BP shares slumped nearly 2 percent. BP estimated that it would cost US$100 million to replace the 16 miles (25.7 km) of corroded pipeline. The company had to face tough questions from the public and shareholers about why the US$200 million a year it spent in maintenance wasn't enough to keep the 400000 oilbbl/d field, the country's largest, running smoothly. BP also suffered a loss of more than a million dollars a day in profits from Prudhoe Bay. BP was investigated by Congress for their role in the spill.
in the line, but nothing was done about it. A company report in year 2005 said BP based its corrosion-fighting on a limited budget instead of needs.
Employees had raised their concerns before the actual incident, which were ignored by BP management. In an e-mail to a company lawyer in June 2004, Mr. Kovac, an official of the United Steelworkers
union representing workers at the BP facility, forwarded a collection of his earlier complaints to management. One of these, dated 28 February 2003, concerned "corrosion monitoring staffing levels". It began, "The corrosion monitoring crew will soon be reduced to six staff down from eight."
Initially BP denied that they took money-saving measures maintaining the pipeline. Robert Malone, the chairman of BP America, cited a report commissioned by BP which concluded that "budget increases alone would not have prevented the leak". He later admitted that there "was a concerted effort to manage the costs in response to the continuing decline in production at Prudhoe Bay".
One of the reasons for the pipeline failure was an insufficient level of corrosion inhibitor
, a liquid which resists corrosion of pipeline by the corroding liquid, which is water. John Dingell read from an internal BP email that said budgetary constraints would force the end of a programme to inject corrosion inhibitor directly into the pipeline system. The process of injecting corrosion inhibitor directly into a pipeline, though costly, is much more effective than injecting in a process plant.
Carolyn Merritt, chief executive officer of the U.S. Chemical Safety and Hazard Investigation Board
, told the committee that "virtually all" of the root causes of the problems at Prudhoe Bay had "strong echoes" of those that led to the 2005 explosion in Houston. These had included cost cutting and a failure to invest in the plant. The committee was also told that the spillage happened at a time when BP was making huge profits.
The leak detection system measures the volumes of fluid entering each pipeline segment and the volumes of fluid leaving each segment. The system triggers an alarm if the volume measurements don't match up. The leak detection alarm sounded four times during the week before the spill was discovered, but BP interpreted the leak detection alarms as false alarms.
BP is now investigating the potential for developing a more sensitive leak detection system.
that an estimated volume of around 267000 gallons (1,010,705 l) of oil was spilled. Soon after the discovery of the leak, the US Department of Transportation ordered BP to test its pipelines using an internal probe called a smart pig. Some of these lines had not been smart-pigged since 1992. BP came up with an Action Plan which was outlined in a letter sent to Thomas Barrett, administrator for pipeline safety for Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). BP’s Steve Marshall detailed measures for pigging or removing oil residue from the pipeline and for various draining and dismantling procedures. Marshall also noted that a special 27 member task force was appointed to address the situation.
As a result of news of the shutdown, the price of crude oil on NYMEX jumped US$2.22 a barrel closing at US$76.98 per barrel. Following the Prudhoe Bay pipeline leak in March 2006, due to slow progress in stopping the oil spill, BP was forced to shut down its Prudhoe Bay oil facility, which produced about 2.6% of the United States demand for gasoline. The scenario was a contributing factor for pushing the price of oil to USD$77 per barrel in August 2006.
In July 2006, BP sent a smart pig through its eastern pipelines, detecting extensive corrosion at several places. Soon after that BP began temporary production shut down of the eastern side, citing the discovery of "unexpectedly severe corrosion". This reduced the per day production from 400000 barrels (63,594.9 m³) to 200000 barrels (31,797.5 m³). This amounted to reduction in domestic oil supply by 8% at that time. In October 2007, BP was fined US$20 million for the Prudhoe Bay oil spills. BP has paid a US$12 million federal criminal fine, US$4 million in criminal restitution to the state, and US$4 million for Arctic research. BP's local subsidiary, BP Exploration (Alaska) Inc., was placed on probation for three years.
Oil spill
An oil spill is the release of a liquid petroleum hydrocarbon into the environment, especially marine areas, due to human activity, and is a form of pollution. The term is mostly used to describe marine oil spills, where oil is released into the ocean or coastal waters...
that was discovered on March 2, 2006 at a pipeline
Pipeline transport
Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
owned by BP Exploration, Alaska (BPXA)
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
in western Prudhoe Bay, Alaska
Alaska
Alaska is the largest state in the United States by area. It is situated in the northwest extremity of the North American continent, with Canada to the east, the Arctic Ocean to the north, and the Pacific Ocean to the west and south, with Russia further west across the Bering Strait...
. Initial estimates said that up to 267000 gallons (6,357.1 bbl) were spilled over 1.9 acres (7,689 m²), making it the largest oil spill on Alaska's north slope to date. Alaska's unified command ratified the volume of crude oil spilled as 212252 gallons (5,053.6 bbl) in March 2008. The spill originated from a 0.25 inch (0.635 cm) hole in a 34 inches (86.4 cm) diameter pipeline. The pipeline was decommissioned and later replaced with a 20 inches (50.8 cm) diameter pipeline with its own pipeline inspection gauge (pig) launch and recovery sites for easier inspection. In November 2007, BP Exploration, Alaska (BPXA) pled guilty to negligent discharge of oil, a misdemeanor under the federal Clean Water Act
Clean Water Act
The Clean Water Act is the primary federal law in the United States governing water pollution. Commonly abbreviated as the CWA, the act established the goals of eliminating releases of high amounts of toxic substances into water, eliminating additional water pollution by 1985, and ensuring that...
and was fined US$20 million.
Oil spill
The North SlopeAlaska North Slope
The Alaska North Slope is the region of the U.S. state of Alaska located on the northern slope of the Brooks Range along the coast of two marginal seas of the Arctic Ocean, the Chukchi Sea being on the western side of Point Barrow, and the Beaufort Sea on the eastern.The region contains the...
is the region between Brooks Range
Brooks Range
The Brooks Range is a mountain range in far northern North America. It stretches from west to east across northern Alaska and into Canada's Yukon Territory, a total distance of about 1100 km . The mountains top out at over 2,700 m . The range is believed to be approximately 126 million years old...
and the Arctic Ocean
Arctic Ocean
The Arctic Ocean, located in the Northern Hemisphere and mostly in the Arctic north polar region, is the smallest and shallowest of the world's five major oceanic divisions...
. This region boasts not only rich wildlife, but also most of Alaska's petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
reserves.
In an email to the company's lawyer, a union leader had expressed concern over the lowering of the number of staff on the Corrosion Monitoring
Corrosion Monitoring
A corrosion monitoring program provides comprehensive monitoring of all critical components of industrial objects, assets, facilities and plants for signs of corrosion. For reliable operation it is important to identify the location, rate, and underlying causes of corrosion...
team from eight to six. On March 6, 2006, Oil industry critic Chuck Hamel claimed the volume of leak was around 798000 gallons (19,000 bbl), but provided no documentation to support that claim. On March 10, 2006, Alaska's Unified Command Joint Information Center released its official estimate that 201,000 to 201000 to 267000 US gal (760.9 to 1,010.7 m3) were released. The unified command's officially ratified spill volume was not announced for another two years. On March 25, 2008, the unified command for spill response, consisting of several groups including Alaska Department of Environmental Conservation and the U.S. Environmental Protection Agency (EPA), announced that the volume of crude oil spilled was 212252 gallons (5,053.6 bbl).
Immediate Impact
The Alaska oil spill had a major impact on BP as it was a loss to its image as well as a financial loss. A dime-sized hole caused by corrosion let over 5000 barrels (794.9 m³) of crude oil spill out of the pipeline. The oil had not just left behind a bare 2 acres (8,093.7 m²) patch of ground, but the leak, and the subsequent discovery that six miles (10 km) of pipeline was badly corroded, led to the shutdown of much of Prudhoe Bay oil fieldPrudhoe Bay oil field
Prudhoe Bay Oil Field is a large oil field on Alaska's North Slope. It is the largest oil field in both the United States and in North America, covering and originally containing approximately of oil.. BP. August 2006...
and the loss of hundreds of millions of dollars.
The impact of the leak was so severe that BP shares slumped nearly 2 percent. BP estimated that it would cost US$100 million to replace the 16 miles (25.7 km) of corroded pipeline. The company had to face tough questions from the public and shareholers about why the US$200 million a year it spent in maintenance wasn't enough to keep the 400000 oilbbl/d field, the country's largest, running smoothly. BP also suffered a loss of more than a million dollars a day in profits from Prudhoe Bay. BP was investigated by Congress for their role in the spill.
Warnings
Red flags and warning signs had been raised about corrosion on several occasions both from within and outside the organization but had been ignored. The 1992 tests on the eastern line had indicated the presence of calciumCalcium
Calcium is the chemical element with the symbol Ca and atomic number 20. It has an atomic mass of 40.078 amu. Calcium is a soft gray alkaline earth metal, and is the fifth-most-abundant element by mass in the Earth's crust...
in the line, but nothing was done about it. A company report in year 2005 said BP based its corrosion-fighting on a limited budget instead of needs.
Employees had raised their concerns before the actual incident, which were ignored by BP management. In an e-mail to a company lawyer in June 2004, Mr. Kovac, an official of the United Steelworkers
United Steelworkers
The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union is the largest industrial labor union in North America, with 705,000 members. Headquartered in Pittsburgh, U.S., the United Steelworkers represents workers in the United...
union representing workers at the BP facility, forwarded a collection of his earlier complaints to management. One of these, dated 28 February 2003, concerned "corrosion monitoring staffing levels". It began, "The corrosion monitoring crew will soon be reduced to six staff down from eight."
Initially BP denied that they took money-saving measures maintaining the pipeline. Robert Malone, the chairman of BP America, cited a report commissioned by BP which concluded that "budget increases alone would not have prevented the leak". He later admitted that there "was a concerted effort to manage the costs in response to the continuing decline in production at Prudhoe Bay".
One of the reasons for the pipeline failure was an insufficient level of corrosion inhibitor
Corrosion inhibitor
A corrosion inhibitor is a chemical compound that, when added to a liquid or gas, decreases the corrosion rate of a material, typically a metal or an alloy. The effectiveness of a corrosion inhibitor depends on fluid composition, quantity of water, and flow regime...
, a liquid which resists corrosion of pipeline by the corroding liquid, which is water. John Dingell read from an internal BP email that said budgetary constraints would force the end of a programme to inject corrosion inhibitor directly into the pipeline system. The process of injecting corrosion inhibitor directly into a pipeline, though costly, is much more effective than injecting in a process plant.
Carolyn Merritt, chief executive officer of the U.S. Chemical Safety and Hazard Investigation Board
U.S. Chemical Safety and Hazard Investigation Board
The U.S. Chemical Safety and Hazard Investigation Board, also known as the Chemical Safety Board or CSB, is an independent U.S. federal agency charged with investigating industrial chemical accidents. Headquartered in Washington, D.C., the agency's board members are appointed by the president and...
, told the committee that "virtually all" of the root causes of the problems at Prudhoe Bay had "strong echoes" of those that led to the 2005 explosion in Houston. These had included cost cutting and a failure to invest in the plant. The committee was also told that the spillage happened at a time when BP was making huge profits.
The leak detection system measures the volumes of fluid entering each pipeline segment and the volumes of fluid leaving each segment. The system triggers an alarm if the volume measurements don't match up. The leak detection alarm sounded four times during the week before the spill was discovered, but BP interpreted the leak detection alarms as false alarms.
BP is now investigating the potential for developing a more sensitive leak detection system.
Consequences
BP reported to the mediaNews media
The news media are those elements of the mass media that focus on delivering news to the general public or a target public.These include print media , broadcast news , and more recently the Internet .-Etymology:A medium is a carrier of something...
that an estimated volume of around 267000 gallons (1,010,705 l) of oil was spilled. Soon after the discovery of the leak, the US Department of Transportation ordered BP to test its pipelines using an internal probe called a smart pig. Some of these lines had not been smart-pigged since 1992. BP came up with an Action Plan which was outlined in a letter sent to Thomas Barrett, administrator for pipeline safety for Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). BP’s Steve Marshall detailed measures for pigging or removing oil residue from the pipeline and for various draining and dismantling procedures. Marshall also noted that a special 27 member task force was appointed to address the situation.
As a result of news of the shutdown, the price of crude oil on NYMEX jumped US$2.22 a barrel closing at US$76.98 per barrel. Following the Prudhoe Bay pipeline leak in March 2006, due to slow progress in stopping the oil spill, BP was forced to shut down its Prudhoe Bay oil facility, which produced about 2.6% of the United States demand for gasoline. The scenario was a contributing factor for pushing the price of oil to USD$77 per barrel in August 2006.
In July 2006, BP sent a smart pig through its eastern pipelines, detecting extensive corrosion at several places. Soon after that BP began temporary production shut down of the eastern side, citing the discovery of "unexpectedly severe corrosion". This reduced the per day production from 400000 barrels (63,594.9 m³) to 200000 barrels (31,797.5 m³). This amounted to reduction in domestic oil supply by 8% at that time. In October 2007, BP was fined US$20 million for the Prudhoe Bay oil spills. BP has paid a US$12 million federal criminal fine, US$4 million in criminal restitution to the state, and US$4 million for Arctic research. BP's local subsidiary, BP Exploration (Alaska) Inc., was placed on probation for three years.
See also
External links
- GC-2 Oil Transit line release - Unified Command Joint Information Center
- US DOJ - BPXA plea agreement, October 25, 2007