BP on hot seat next week

WASHINGTON (Reuters) - The U.S. Congress comes back to town next week to sift through the pieces of the latest oil patch disaster -- pipeline corrosion that threatened to shut down the giant Prudhoe Bay oil field in Alaska.


With hearings planned in both the Senate and the House of Representatives, officials with BP Plc. -- the London-based oil giant that operates the field -- will be taking heat from irate lawmakers, already suspicious of the industry's spotty environmental record.


Perhaps chief among those will be Rep. Joe Barton (news, bio, voting record) of Texas, chairman of the House Energy and Commerce Committee, who has already concluded that BP is guilty of "chronic neglect" for allowing pipeline corrosion at Prudhoe Bay to get so bad that half the field had to be shut.



"Joe Barton is a very pro-energy kind of guy but he's also a feisty populist," said James Lucier, an analyst at Prudential Equity Group. "If you cross him you are in big trouble."



Prudhoe Bay normally pumps around 400,000 bpd of oil, or 8 percent of U.S. domestic supply, but BP shut down half of the field in early August after government-ordered pipeline inspections turned up severe corrosion inside a segment of the eastern oil transit line at the field.



Barton last month sent a fiery letter to BP Group Chief Executive John Browne citing "substantial evidence that BP's chronic neglect directly contributed to the shutdown," and has called a September 7 hearing.



At least two additional hearings in the Senate Energy and House Transportation and Infrastructure committees will follow next week's events.



Browne -- BP's top global executive -- will not appear at the first hearing and has been largely silent on the Alaska incident.



Appearing on behalf of BP will be Robert Malone, chairman and president of BP America, who so far has been the public face of BP's Alaska damage-control efforts.



The Prudhoe Bay trouble comes in a string of other damaging incidents including a fire at a Texas refinery last year that killed 15 people and word that U.S. regulators are probing whether BP manipulated U.S. propane and gasoline prices.



Thomas Barrett -- the top U.S. pipeline regulator at the U.S. Transportation Department who recently proposed new safety standards for pipelines like the ones BP operates in Alaska -- will also attend, according to the committee.



Committee investigators have been on the North Slope in recent weeks, but they have not revealed any findings.



The committee's investigations arm has wide powers to probe corporate America, and has wielded them in high-profile inquiries into shenanigans at the likes of Enron Corp. and others.



The BP incident in some ways is a case of deja vu for Barton and fellow lawmakers, who just a year ago returned from their summer recess to face an irate electorate after hurricanes Katrina and Rita smashed into the Gulf Coast, home to more than 25 percent of U.S. oil output.



This time around, the spotlight will fall not only on BP and its corporate practices but also on the viability of producing oil in Alaska and shipping it via the Trans Alaska Pipeline System to hungry U.S. refiners.



"It's an important piece of infrastructure, and it's in the spotlight now," Lucier said of the 800-mile pipeline, stretching from Prudhoe Bay on the North Slope to the port at Valdez.



Kevin Hostler, president and chief executive of TAPS operator Alyeska Pipeline Service Co., will also attend the hearing.

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