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August 09, 2006

BP = Big Pigs

By now we've all heard about the leaky Alaska pipeline that supplies Oregon with 20% of our gasoline. When I went to fill up yesterday, I groaned at the overnight increase of14 cent a gallon. And now they're talking like it's going to go on for months. That's why I'm pretty P.O.'d today by this: "BRITISH PETROLEUM'S "SMART PIG": The Brilliantly Profitable Timing of the Alaska Oil Pipeline Shutdown," by Greg Palast.

Palast tells us how clear back in 1989 government inspectors and pipeline workers were trying to call attention to the corrosion problem. As a result, they faced retribution from BP that was described by a federal judge as "reminiscent of Nazi Germany." Blackmail, falsified evidence, harassment – it reads like an overdone movie script. So here we are, 17 years later, and suddenly now, in the middle of summer, in the middle of a Middle East war, suddenly BP discovers there is a problem with the pipeline. How convenient.

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.

And I thought the $400 million oil executive salary thing was outrageous. But wait, the BP scandal gets worse:

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.

Of course, like Enron, BP has watched out for its own interests by kozying up to the Bush Administration and dishing out the cash; hence, the renewed efforts to allow BP to drill in ANWR. And then we have that wonderful Exxon Valdez crisis that follow-up reports concluded was at least as much BP's fault as Exxon's. See, BP had filed four volume's worth of fake safety reports and claimed containment equipment was there when it wasn't. Reliance on that false information slowed the clean-up effort dramatically.

I really hate being forced to buy anything from people who behave like this. Especially when they're costing me $15 per day just to drive to work.

Posted by Becky at August 9, 2006 01:55 PM