French: BP 'Withholds Evidence' On Pipeline Longevity

January 06, 2012|By Todd Walker | Channel 2 News

ANCHORAGE, Alaska — An Anchorage lawmaker is crying foul after a recent court decision exposed two different figures BP has used in determining how long the pipeline can operate.

Sen. Hollis French says BP has told the public and lawmakers the pipeline would not be able to operate below 300,000 barrels per day, and that was part of their pitch for lowering oil taxes to spur development.

French has been against recent efforts to lower taxes on North Slope producers.

A ruling by Judge Sharon Gleason over a property tax dispute between the Trans-Alaska Pipeline System and municipalities it runs through brought to light at 2004 study commissioned by BP that says the pipeline could actually operate down to only 135,000 barrels per day. According to French it’s a figure BP only shared with the Securities and Exchange Commission.

According to Gleason’s ruling the pipeline could actually operate with as low as only 70,000 barrels per day.

With dwindling throughput - Alyeska’s Twitter feed reported 624,189 barrels went through the pipeline Thursday - French is not happy the company gave two different answers to the same question: How long can the pipeline actually operate?

“On the one hand they are saying 300,000 for property taxes,” French said. “On the other hand they're saying 135,000 for their stock price.”

BP Alaska spokesman Steve Rinehart declined to comment, but did say they had received Gleason’s ruling. He said the company is studying it carefully and “deciding how to go forward.” That way forward could include appealing the ruling.

Alyeska Pipeline spokeswoman Michelle Egan says Alyeska has only studied how to functionally operate the pipeline between 600,000 and 300,000 barrels per day.

“We have not said that there is a threshold or a lower limit at 300,000,” Egan said. “We've simply looked at ‘What do we need to do to be reliable in that area?’ We have issues now. We are recirculating crude oil at three pump stations because we need to add heat to the crude oil that's in the pipeline now. Those issues will continue to compound. Whether or not we can overcome that is something we continue to study and look for technical fixes.”

The Fairbanks Daily News Miner reports the other owners, besides BP, did not know about the study.

To read the full ruling by Judge Sharon Gleason, click here.

Contact Todd Walker at twalker@ktuu.com

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