Greedy BP (NYSE: [1]BP) skimped on maintenance to make even more money, charged liberal critics of the oil industry on the August 8 “World News with Charles Gibson” and “Nightly News.” Yet NBC’s Lisa Myers and ABC’s Betsy Stark focused on the complaints of those liberal critics without airing out BP’s defense, even though the company explained its pipeline maintenance program the day before in a news conference.
“In the last five years,” complained Stark, BP earned $63 billion in profits, sending back $51 billion to shareholders “through buybacks and dividend payouts, but just $1.5 billion” to maintain the Prudhoe Bay oil field.
Yet Stark didn’t bring out an expert to explain just how much BP should spend on maintenance. Instead the ABC reporter aired a sound bite from Tyson Slocum of the liberal advocacy group Public Citizen to repeat the charge that BP “may be skimping on investing in preventative maintenance.”
Stark left out that the Ralph Nader-founded organization supports “ [2]windfall” taxes on oil profits and opposes new oil drilling in ANWR.
Over on NBC, reporter Lisa Myers included “Chuck Hamel, a longtime nemesis of the oil companies and advocate for oil workers,” to charge that BP was “playing Russian roulette” with pipeline maintenance.
Hamel, like Slocum, opposes drilling in ANWR. But Hamel’s anti-industry allegations have not always borne out under investigation.
“The Alaska Oil and Gas Conservation Commission has concluded an evaluation of allegations by Chuck Hamel that unreported North Slope well blowouts occurred in December 2004 and July 2003, and has concluded that there were no unreported blowouts,” reported [3]PetroleumNews.com on Feb. 11, 2005.
Absent from both NBC and ABC coverage were any spokesmen from BP to explain or defend the company’s policies. Yet the day before, the company had held a news conference where officials explained their pipeline maintenance policies.
At an [4]August 7 news conference in Anchorage, Alaska, BP Alaskan exploration management team leader Bill Hedges told reporters that the corroded pipeline had not been checked since 1992 because the company believed the low-pressure pipes were at minimal risk.
“The logic at the time will have been along the lines of that the fluids going into the line are notionally very clean,” said Hedges, adding that water, sediments and gas were already removed from the oil before it was put in the pipeline. “It is clean, sales spec crude that goes into the line. We normally would regard those as low risk. Clearly, that was a false assumption that we need to reinvestigate,” admitted Hedges.
In the same press conference, BP’s president of Alaskan oil exploration, Steve Marshall, argued that the company was not derelict in surveying the pipeline for corrosion. “In the early 90s as Bill [Hedges] described it, pigging was found to be difficult because of the amount of scale and solids,” said Marshall, referring to sending a probe called a ‘pig’ down pipelines to detect corrosion.
“What we did have was a regular program of ultra sonic surveys to determine the condition of the lines. We believe that would have been an acceptable and adequate replacement. Particularly given that most of these lines are above ground,” Marshall noted, quickly adding that “in hindsight, our program was insufficient and will be rectified going forward.”
Hedges also told reporters $72 million was budgeted in 2006 alone for BP’s corrosion treatment program, a figure left out of both news reports.
On the August 8 “Good Morning America,” ABC finance expert Mellody Hobson did share with viewers BP’s side of the story. “To BP’s credit, earlier this year they pledged to spend $7 billion on shoring up their infrastructure and looking at maintenance and safety,” Hobson noted. She explained that the oil company didn’t have money to put into infrastructure until recently, and even then “didn’t want to risk any slowdown in production.”