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G-CPTN
8th Aug 2006, 05:45
Listening to radio reports, it sounds like it's the tip of an iceberg.
Further comment might be construed to be libellous.

con-pilot
8th Aug 2006, 17:00
It will decrease the oil supply into the US lower 48 states by 8%.:uhoh:

Depending on how long it takes to repair the pipeline we very well may see the Strategic Oil Reserves opened up until the repairs are completed. It is an election year.

airship
8th Aug 2006, 20:32
I'm no oil industry executive, but I guess that one could have chosen a worse moment to conduct essential maintenance... :rolleyes: :E

AntiCrash
8th Aug 2006, 20:39
I'm no oil industry executive, but I guess that one could have chosen a worse moment to conduct essential maintenance... :rolleyes: :E

Not if you are into windfall profits.

Since last year these BP guys have killed a crew at their refinery in Texas - Had an oilspill on the pipeline in the same area of over 100,000 gallons - Got caught cornering the US propane market , manipulating the price and now this. These guys are brilliant.:ugh:

airship
8th Aug 2006, 20:45
Perhaps one wasn't being clear (one is often accused of that)...with oil prices already high and "going higher" due to circumstances wholly beyond BP's control, could there be a better time than now in which to conduct essential maintenance, which by itself will be sufficient to send the oil price higher in order to offset the lower oil production...blah blah...?! :O

Spinflight
8th Aug 2006, 20:45
Sounds like a bad excuse to push the price of oil through the $100 barrier.

AntiCrash
8th Aug 2006, 21:08
EXACTLY wink, wink, nudge, etc..

pigboat
8th Aug 2006, 22:10
And BP means what exactly? Can't bame the French for this one. :E

con-pilot
8th Aug 2006, 22:13
Can't bame the French for this one.

Dang it all!:p

And on top of that we can't blame Texans.:(

G-CPTN
8th Aug 2006, 22:17
I heard (on the BBC Radio - so it MUST be true), that Canadian H&S were 'aware' of the state of the pipe, but took no action. Only when 'signs of leakage' could no longer be disguised . . .

AcroChik
8th Aug 2006, 22:49
Dang it all!:p
And on top of that we can't blame Texans.

Let's blame the French.

tilewood
8th Aug 2006, 22:50
I heard (on the BBC Radio - so it MUST be true), that Canadian H&S were 'aware' of the state of the pipe, but took no action. Only when 'signs of leakage' could no longer be disguised . . .


I'll get some jerrycans, you charter an aircraft!! ;)

Spinflight
8th Aug 2006, 23:00
One almost starts to feel sorry for the cheese eating surrender monkeys. :E

Noah Zark.
8th Aug 2006, 23:40
And BP means what exactly? Can't bame the French for this one. :E
Give us a minute, I'm sure we can think of something!

HowlingWind
9th Aug 2006, 02:00
And BP means what exactly?
BAD PIPELINE! :{

Brought to you by Billionaire Profiteers... :=

G-CPTN
9th Aug 2006, 02:04
BP given earlier warning of corrosion

By Sheila McNulty in Houston

Published: August 8 2006 22:03 | Last updated: August 8 2006 22:03

BP's board and London-based executives were informed of widespread corrosion at the UK oil giant's Alaska field two years before the company was forced to shut it this week, citing "unexpectedly severe corrosion".

On May 22 2004, Chuck Hamel, an advocate for BP workers in Alaska, took the charges directly to Dr Walter E. Massey, chairman of the environment committee of BP's non-executive board of directors.

Two's in
10th Aug 2006, 02:52
Well this guy certainly has a hard-on for BP:

http://www.gregpalast.com/british-petroleums-smart-pig

The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown
by Greg Palast
For The Guardian (UK)
Tuesday, August 9, 2006

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.

G-CPTN
10th Aug 2006, 03:05
Thanks, Two's in, I've been biting my tongue waiting for the media to print the details. (A personal statement might be challenged as libellous.) This (and other 'news') has been circulating for some time now, together with allegations of collusion with the H&S executive.

con-pilot
10th Aug 2006, 03:43
Ah, so we still can't blame the French.:p

Good new grandpa!:ok:

under_exposed
10th Aug 2006, 13:02
So how does a 3% increase in crude prices help BP when they lose 5% of their production?

airship
10th Aug 2006, 17:06
Isn't it amazing how some Americans (con-pilot for one), appear to so quickly and easily "shrug off with a smile" any and all wrong-doing by a corporation in this day and age, so long as it has British in front of it...?! :confused: :E

So how does a 3% increase in crude prices help BP when they lose 5% of their production? Would you care to refine that question / statement...?! :rolleyes:

con-pilot
10th Aug 2006, 17:11
Isn't it amazing how some Americans (con-pilot for one), appear to so quickly and easily "shrug off with a smile" any and all wrong-doing by a corporation in this day and age, so long as it has British in front of it...?! :confused: :E
Would you care to refine that question / statement...?! :rolleyes:

What? What did I do?:(

I never brought up the fact that it was British Petroleum.:=

AcroChik
10th Aug 2006, 17:20
From the lengthy article previously posted...

"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."

Interestingly, British Petroleum was never implicated in or blamed for the Exxon Valdez oil spill in any way, as the writer would like readers to believe. BP was never party to any law suits concerning the spill, nor blamed for the environmental damage occuring as a result, nor fined for the spill.

In fact, the US Congress was so determined to punish Exxon for the gross negligence involved in the spill, that it passed legislation specifically targeting Exxon (the constitutionality of such actions by congress was challenged in court). In court actions (separate from laws enacted by congress), fines levied against Exxon for the spill were calculated to either meet or exceed one year's profits.

Simply put, at the time the spill took place, Captain Joseph Hazelwood, who was in command of the Valdez was drunk and the Valdez was wholly owned by Exxon.

AcroChik
10th Aug 2006, 17:34
The question of whether or not BP will reap "windfall" profits as a result of closing the Alaska Pipeline is a complex one. "Profits" are expressed in the price of shares. How share prices are determined is a complex business. Here's an attempt to explain a little ~ very very little ~ about how this works (any shortcomings here are mine alone):

A person will buy a stock if they believe that the value of today's cash flow will be higher tomorrow. Higher future cash flow is generally correlated with a higher future stock price.

A person will sell a stock if they believe that the value of today's cash flow will be lower tomorrow. Lower future cash flow is generally correlated with a lower future stock price.

As a result of closing the pipeline today, BP's cash flow from that operation is reduced, and costs will be incurred to repair the pipeline. These costs are sure to be a drag on profitability for an extended period. However, if my thinking is correct, closing the pipeline may well result in increasing the value of current inventory. That, however, may be a short term thing, as that inventory may soon be exhausted.

I think it's probable that when those supplies are exhausted, BP will have to turn to the market to buy inventory at prices driven higher by the closing of their own pipeline. It's hard, without being a true expert in energy markets, to even roughly guess what their margin above cost will be at that point.

The real complexity involved in thinking about this is, what will the price of oil be when the pipeline is eventually brought back on line at some unknown date in the future, and the cash flow derived from it is replaced? What will be the value of that cash flow? The answer to this is that no one truly knows ~ even though the gut instinct of intelligent people says it will be "high."

If one could reliably predict future windfall profits, there are fortunes waiting to be made by advetursome souls in the stock market.

airship
10th Aug 2006, 17:35
...fines levied against Exxon for the spill were calculated to either meet or exceed one year's profits. What a shame then, that it's mostly in the last year or so that oil compaines in general have been experiencing such bumper profits... :(

AcroChik
10th Aug 2006, 17:49
Airship...

This is a clear example of what I said regarding the "value of future cash flow." It seems that bringing new production on line in the oil business not only takes many years but also billions of dollars. In the case of Exxon, management followed a very smart strategy.

Back during the early 90s when the price of oil was a fraction of what it is today, Exxon invested many billions of dollars in exploration, proving new reserves, tapping them and building the infrastructure needed to bring them to market.

This was done during a time when the company's cash flow was relatively low and profits merely marginal. This can be seen both in historical stock prices and in the financial statements filed with the SEC. What we call windfall profits today translates to smart business strategy yesterday.

By comparison, Shell, did not follow this strategy, currently has declining proven reserves, lower cash flow and a lagging stock price.