BP Executives Rebuked in Hill Appearance

The former head of BP PLC's program to combat corrosion in its Alaska pipelines invoked the Fifth Amendment and refused to answer questions before a House subcommittee yesterday as lawmakers excoriated two other senior company executives for maintenance neglect that led to leaks and the closure of key oil pipelines last month.

The top executives of BP's North American and Alaskan operations faced grilling under oath about why they had failed to prevent a leak, found in March, that spilled 210,000 gallons of crude oil on the northern Alaska tundra. And they were pressed on how they could have failed until last month to detect corrosion so severe that BP was forced to shut down half the output of Prudhoe Bay, the largest U.S. oil field.

"If a company -- one of the world's most successful oil companies -- can't do the basic maintenance needed to keep Prudhoe Bay's oil field operating safely and without interruption, maybe it shouldn't be operating the pipeline," said House Energy and Commerce Committee Chairman Joe Barton (R-Tex.).

Although the pipeline is owned by BP and partners in the Prudhoe Bay field, company executives were eager to mollify Barton, whose committee deals with a broad variety of legislative issues important to BP from pipeline regulations to tax breaks. Robert A. Malone, the president of BP America, said the company had "stumbled," and he apologized to lawmakers. "We have fallen short of the high standards we hold for ourselves and the expectations that others have for us," he said.

The picture of BP executives, each with an attorney in tow, parrying questions about management failure erased millions of dollars of advertising that had sought to craft an image of an environmentally conscious company thinking "beyond petroleum." Rep. Edward J. Markey (D-Mass.) said BP stood for "bloated profits." Rep. Greg Walden (R-Ore.) said the company's name could stand for "broken pipelines."

Lawmakers on the oversight and investigations subcommittee of the House panel zeroed in on the company's failure to use a common pipeline diagnostic device known as a "smart pig" to detect problems. They also probed allegations that the company ignored or suppressed complaints from its workers about pipeline safety issues.

The subcommittee called Richard C. Woollam, the former manager for corrosion, inspection and chemicals for BP Exploration Alaska, to testify, but Woollam said, "Based upon the advice of counsel, I respectfully will not answer questions." Although it wasn't clear why Woollam invoked the Fifth Amendment, one possible reason is that a federal criminal investigation is underway about BP's oil spill and that he was involved in the design of the company's anti-corrosion program.

BP Alaska's president, Steve Marshall, said that Woollam had been transferred out of Alaska after a 2004 investigation by an outside law firm cited Woollam for intimidating workers who had raised safety issues. Marshall said the law firm, Vinson & Elkins LLP, "found evidence of intimidating behavior that had made some corrosion workers reluctant to raise health and safety concerns." Woollam, now based in BP's Houston office, no longer has a supervisory role, and Marshall said yesterday that Woollam was on paid leave.

But Barton asserted that "several individuals" the committee wanted to interview said "that they were reluctant to come forward to provide information due to concerns over possible retribution throughout the oil industry in Alaska." He warned that any company retaliating against such individuals would be prosecuted. "We are going to get to the bottom of this," he said.

Marshall also defended BP against allegations that it had disregarded other employee complaints. He said that in 2002, after receiving two anonymous calls alleging the falsification of corrosion inspection reports, BP hired an outside firm to audit records and found that "a small percentage of inspections had indeed been falsified." Marshall said the workers responsible were dismissed and the inspection firm's contract was not renewed.

He said that the company had also sent a senior engineer and several technical experts from outside Alaska to assess allegations that "cost-cutting and deficiencies in the corrosion program were going to lead to a major incident on the North Slope" of Alaska. He said that audit led to recommendations for improvements "that have been or which are still being implemented."

Marshall said BP's spending on maintenance at Prudhoe Bay would rise to $195 million in 2007, four times the 2004 level; $150 million will go toward replacing 16 miles of corroded oil transit lines.

Malone said that he has named an ombudsman for employees who have complaints -- Stanley Sporkin, former district court judge and former head of the Securities and Exchange Commission's enforcement division.

Barton leveled scorching criticism at the company, citing concerns about "BP's corporate culture of seeming indifference to safety and environmental issues." Noting that "this comes from a company that prides itself in their ads on protecting the environment," Barton said, "Shame, shame, shame."