Hunting Pinholes In the Pipeline

Along 22 Miles, Small Leaks Mean Big Problems for BP

DEADHORSE, Alaska

Where workers had stripped away the insulation on a section of pipeline, John White squatted in the soggy soil with headphones as an ultrasound device he had attached at the 9,992-foot mark sent signals to computers on a truck that was idling nearby.

"This pipe looks really good," said White, as he moved the device down another foot or so. Over one and a half days, White had been able to test segments of the 22 miles of pipeline that link Prudhoe Bay, the biggest oil field in the United States, with the rest of the world.

Not all of it looked so good. A few miles away, workers were skimming oil off the surface of the tundra where a leak discovered Sunday spilled 15 barrels over an area about 2,600 square feet. An acrid smell filled the air, and the black gooey ground contrasted sharply with the surrounding tundra, which during this time of year is brown and marshy, with white flowers known as tundra cotton grass.

This is where workers with the BP PLC oil company found a small leak Sunday through multiple holes, one of 16 places in its easternmost transit pipeline where the company had discovered severe corrosion after running a diagnostic device known as a "smart pig" through the line. In two places the steel was so thin, less than seven-hundredths of an inch thick, that it felt soft to the touch. Since Sunday, BP has found four more pinhole leaks in the eastern line. Another 197 barrels of oil had spilled into containment tanks by Thursday, said Amanda Stark, the on-scene coordinator for the Alaska Department of Environmental Conservation, as she watched over the cleanup.

The discovery of the leaks there, a straight elevated piece of pipe within view of the company's operating base, prompted BP to announce that it would close down all of Prudhoe Bay's 400,000 barrels per day of production and replace 16 of the 22 miles of transit pipelines.

This week, BP has been scrambling to determine if it can keep some Prudhoe Bay oil flowing through its western transit line while it makes the repairs. That will depend on what is found by workers like White, who was flown to the site Monday. BP officials said they hoped to decide early next week. An order issued by the Transportation Department's Pipeline and Hazardous Materials Safety Administration gave BP the option of keeping open the western line, which previously carried half of Prudhoe Bay's output and is now running at 120,000 barrels a day.

Keeping some of the oil flowing would be desirable: With oil prices at about $75 per barrel, BP and its partners Conoco Phillips and Exxon Mobil Corp. are losing a lot of money. BP has had to buy 4.5 million barrels of crude oil in spot markets to cover its refinery needs. The production loss has also rattled anxious oil markets, bringing attention to BP's maintenance lapse.

Political pressures are building, too. The state of Alaska could lose $6.2 million a day, or more than 80 percent of its revenue. Standing here Thursday in a parking lot with metal warehouses, telephone lines and dusty dirt roads in the background, Gov. Frank H. Murkowski (R), who is generally an ally of the oil industry, called the site "the best oil field in the world." But the governor, who is fighting an uphill bid for reelection and who has suspended state hiring, added, "We're going to hold BP accountable." In Washington, House Energy and Commerce Committee Chairman Joe Barton (R-Tex.) released a letter to BP chief executive John Browne saying, "this latest incident once again calls into question BP's commitment to safety, reliability, and responsible stewardship of America's energy resources."

Whether BP will feel confident in keeping even part of its western transit line open is uncertain. It cannot get equipment needed to run a smart pig through the line until late November.

Until Sunday, BP had told regulators that using exterior ultrasonic devices to examine the spots where corrosion was most likely to occur -- dips and dead legs -- was a good enough method of assuring the pipeline's integrity. But the broader smart pig results it received a week ago on its eastern line "shattered that confidence," said Kemp Copeland, BP's Greater Prudhoe Bay field manager. "In hindsight, we weren't looking in the right spots."