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BP Exec Leaves Alaska Pipeline Job Under Cloud


Friday, July 9, 2010   

TALLAHASSEE, Fla. - As the Gulf oil spill reaches its 79th day today, a BP executive in charge of the Trans Alaska Pipeline is stepping down. Kevin Hostler, CEO of Alyeska Pipeline Service Company, announced his early retirement one day after published an exposé highly critical of his leadership of the company, which operates the 800-mile Trans Alaska Pipeline. Based on hundreds of pages of internal documents and interviews with more than a dozen senior employees, the report showed how Hostler's cost-cutting measures could lead to more spills like one that shut down the pipeline for three days in May.

The article's author, Jason Leopold, says Hostler was a BP executive for 27 years before being assigned to run Aleyska.

"BP is a majority owner in Aleyska Pipeline and, while all of the oil companies do implement these severe cost-cutting measures, BP really does stand apart."

Senior BP and Alyeska officials told Leopold that BP exerts significant control and influence over the way Alyeska is operated.

Last November, Leopold says, Hostler ignored the advice of his managers and - to cut costs - relocated some 30 safety and environmental employees from Fairbanks, near the pipeline, to Anchorage.

"That means that in the event of a spill or an emergency, these individuals now will have to get onto an airplane in Anchorage, fly to Fairbanks, then drive to the pipeline."

The Trans Alaska Pipeline moves between 600,000 to 700,000 barrels of oil per day, which represents approximately 15 percent of U.S. crude oil production.

Over the past several months, Alyeska Pipeline and Hostler have been under scrutiny by a Congressional oversight committee and an independent investigator. Leopold says another risky money-saving measure discovered was the replacement of manned pump stations with electronic monitoring systems.

"Back in May, there was a 45-hundred-barrel spill when oil spilled into a containment area, but nobody was around to address it because these were unmanned pump stations. So, that was another issue that raised red flags for congressional investigators."

Aleyska's website points out that, in April, The American Petroleum Institute gave its 2009 Environmental Performance Award to the company.

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