ETERNAL VIGILANCE

British Petroleum's 'Smart Pig'
The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown

by Greg Palast
August 8, 2006 | Common Dreams

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.

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Editor's comment: Greg Palast has turned in a top notch article here which pin points the fascist machinations of the Bush cabal and its ex-Trotskyite, PNAC neocon cohorts.

Why shouldn't BP act in the manner portrayed? Why not, indeed. BP has shown itself to be a ruthless part of the money power as they decide the fate of the little people while sitting in their corporate boardroom. Wielding that power with all of the alacrity of the most adept of CIA hit squads, BP has shown its propensity time and again to worship mammon and the condition of the corporate bottom line.

And George W. Bush himself has rewarded them for their misdeeds while the evidence mounts to show BP has betrayed its responsibility to the laws of the United States and contributed to environmental disaster, all for the sake of corporate profits.

There is a goeologist friend of ours who happens to have a sample of Alaska oil and he told us it is the second or third thickest he has seen. This means it is chock full of all of the nasty crud which corrodes pipelines.

Did BP know? Hell, yes they knew!

Was BP negligent to the point of criminal culpability? We believe they are crimanally negligent, and have now arranged it so that they may reap more windfall profits while the people are sheared of their hard earned dollars.

Back to our geologist friend who has made this prediction which we will now pass along. [Edited for clarity.]

Prediction: I place a significant (greater than 30% and rising) probablility on the idea that this is a supply "shock" [to] remove supply domestically in order to prepare the consumer/nation for the potential shortfalls that may occur in an Iran conflict. At this time, the price spike will move a measurable percentage of consumers toward stuff like car pools and mass transit. It [the pipeline] will be fixed right about the time there's been several days of no insurance for crude carriers who attempt to pass the Strait of Hormuz. The next 4-6 weeks are prime for this conflict.

Look to also see some type of temporary roll back or suspension of fares for mass transit at that time. Between that, and gas rising to $6+ a gallon, the strategerists will be able to engage Iran without caving the economy in completely. We just had several "spare the air" days out here where BART [San Francisco - Bay Area Rapid Transit] was free to ride and tons of people took advantage, the freeways were noticably lighter in volume and the remaining drivers probably used 20% less fuel from the higher average speeds.

Notice [Federal Reserve] rates stopped rising and now there's talk of reduction? Hmmm... Fits right in. We wouldn't want the consumer to go without gas, but he might have to put it on his charge card until he sells the Tahoe for a Prius or 1978 Volkswagon Rabbit diesel...

Remember, that [loss] is 8% of domestic production. Most here comes from Venezuela, and Chavez will fall right in line with selling to us if he's getting $100 barrel and shippers are saving the difference between going through the gulf to Texas or carting it to China. The insurance rates alone will probably make that trip 10% [more costly] than going anywhere else off the bat. The rest of the world will have to deal with the Russian and Caspian [BP owns 36% of Baku-Tblisi-Ceyhan pipeline] suppliers for their supply and probably will be SOL for the duration.

On this note, we shall say that no amount of insanity goes too far for the neocons. It is entirely possible that these events may still take place.

Before anything of this nature takes place, however, Syria must be isolated even further. There is still a chance that Syria may be drawn into the conflict as a means provoke Iran to attack and thus open the door for a strike on them as well. Thus far Syria has shown a great deal of fortitude and restraint.

The war on Lebanon will only stop when there is a complete withdrawal of the IDF and Lebanese troops (who are mostly Shi'a) are inserted at the border. A UN (or NATO) force will not suffice and will eventually become targets of Hezbollah, just as the multinational forces are in Afghanistan and Iraq.

And just when we they thought no one would notice, Turkey has launched an artillery barrage on a PKK camp in northern Iraq.

One thing is certain, all of this activity is tied into the excess amounts of inflated dollars injected into the US economy by the Bush administration and a profligate Congress.

We don't wish to be redundant, but we are back again to the influence of the money power. This is the source of all the evil.

Meanwhile, the ZioNazis have approved a wider offensive in Lebanon which will surely mean one or more additional divisions added to the melee. Olmert has run out of options and a new strategy is now forming.

An intelligence update from Stratfor has confirmed "at its meeting Aug. 7, the Israeli Cabinet appeared to have given up on a diplomatic solution -- if it ever actually believed diplomacy would work -- and made it clear that Israeli forces were going to be given a much freer hand in Lebanon. Today, Israeli Chief of Staff Lt. Gen. Dan Halutz announced that Deputy Chief of Staff Maj. Gen. Moshe Kaplinsky was to become Halutz's representative at Northern Command -- which owns the Lebanese operation -- for the duration of the war."

The political ramifications of this move is that Halutz, highly criticized for the seeminly unproductive air war in Lebanon, has ceded authority over the war to Kaplinsky who was the commander of the elite Golani Brigade.

We suspect that a push to the Litani River may well occur as the link above suggests. But it is also likely that the IDF may push into the Bekaa Valley in an attempt to dislodge Hezbollah from the area and try to draw a Syrian response to provocations along the border as Hezbollah fighters may seek refuge in Syria as the fighting there intensifies.

Time will tell, and with the oil intrigue developing as it is currently, it looks more likely to play out as a last ditch effort by the neocons to implement their failing geopolitical strategy in the Middle East and the Caspian basin.