Hunting Pinholes In the Pipeline
Along 22 Miles, Small Leaks Mean Big Problems for BP

By Steven Mufson
Washington Post Staff Writer
Saturday, August 12, 2006

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."

Some engineering experts said that the corrosion in the Prudhoe Bay field should prompt industry to check pipelines elsewhere. "Here was systemic corrosion that wasn't caught by some of the best experts in the world, and this isn't Joe's oil company," said Lois Epstein, senior engineer with Cook Inletkeeper, an Anchorage nonprofit group that monitors the oil industry. "What does this say about pipelines in other parts of the world?"

Environmental sensitivities have played a key role here ever since oil was discovered in Prudhoe Bay on Dec. 26, 1967. For hundreds of miles, the faintly green and brown tundra, soggy during the summer, stretches out along the treeless coast, dotted with small lakes and ponds. Until the oil industry arrived, the main inhabitants here were caribou and polar bears. After the oil shock of 1973, development moved ahead and oil was flowing through the Trans-Alaska Pipeline System (TAPS) by 1977. Ever since, Prudhoe Bay has been a centerpiece of U.S. production. It has produced 11.7 billion barrels of oil and it probably has another 2 billion left, BP says.

Now regulators and environmentalists are asking whether BP has been negligent about maintenance of the 30-year-old transit pipelines that snake their way through the flat landscape, connecting the gathering lines from the wells to the bigger TAPS line. Some petroleum engineers say that while BP says it has been "surprised" by the extent of corrosion it has discovered since a leak was found on March 2 this year, it should have come as no surprise.

Corrosion is a constant problem for oil pipelines. The combination of oil, gas, carbon dioxide and water can form carbonic acid that eats away steel pipe. In a field like Prudhoe Bay, corrosion is more likely because BP is pumping water from the Beaufort Sea into the wells to help push out the oil as pressure in the aging field declines. Now the wells are producing 1.3 million barrels per day of water, along with 400,000 barrels of oil.

BP had planned to spend $72 million this year to fight corrosion in Prudhoe Bay, up 80 percent from 2001. Copeland said, however, that the "vast majority" of the funds are spent on the 1,500 miles of smaller infield lines that carry oil from the well to processing plants. "That's where we expect to have the highest chance of corrosion," he said. Occasional leaks have occurred in those smaller lines, he said. The transit lines were thought to be lower risk because the oil passes first through processing plants to remove virtually all water and sediments.

But that is not enough to keep the lines clean. The eastern Prudhoe Bay transit line had collected so much sediment by 1992 that Atlantic Richfield Co., which was then operating the line, could not get a maintenance pig through to clean out the pipe. Even though BP bought Arco in 1999, it never ran a smart pig through to clean or collect data. This week, three of the pigs stood on a flatbed pickup truck, looking like overgrown bullets between knee and waist high. They had bright yellow plastic heads and bases and either steel brushes or magnetic sensors in between. True to their name, the pigs chew up sludge and the brushes make squealing noises as they work their way through the line.

It remains a mystery why BP did not run a pig through the pipelines. Even though the buildup of sludge was an obstacle, BP has cleared out the eastern line enough in just two weeks to run a smart pig through it. All company officials like Copeland could say as they stood looking out over the web of steel was that they wish they had.

In addition to the suspended output, strong world demand for steel has driven up the cost of pipe. And replacing large portions of the pipeline would take months. Prudhoe Bay on the Beaufort Sea lies 250 miles north of the Arctic Circle. The new pipe will be smaller because Prudhoe Bay production is declining. Deadhorse is more a collection of steel huts and warehouses than a town, more like northern New Jersey's industrial zone than the frontier. It's where people come to work hard enough to leave. Few tourists visit; there are vacancies at the Arctic Caribou Inn.

Just outside the BP operating base, a pickup truck that had been partly crushed in a collision is perched on a platform. In front of it is a sign that reads: "A moment of distraction can lead to an accident." In the case of the BP pipelines, it took many moments, but the result was the same.