BP’s Day of Reckoning

Later today, some of BP’s most senior executives will face their first Congressional grilling over their corrosion problems at Prudhoe Bay. Although BP’s embattled CEO Sir John Browne won’t be testifying, Bob Malone, the new head of BP America will be grilled by the House Committee on Energy and Commerce. The hearing is called “BP’s Pipeline Spills at Prudhoe Bay: What Went Wrong?”

According to the Wall Street Journal: “While much new evidence isn’t expected this week, the intensified scrutiny risks a further public-relations backlash from consumers and politicians against BP and its chief executive, John Browne”. Things aren’t going to get any easier, either. Next week the Senate Energy and Natural Resources Committee will hold their own hearings.

Meanwhile, the company’s long-term adversary and conduit for the whistleblowers on the North Slope, Chuck Hamel has vehemently criticised the company again. After years of being ignored, Hamel is obviously enjoying his day in the media spot-light. Speaking at the National Press Club, Hamel said: “BP lies about everything. They lie even when they don’t have to lie.”

Hamel also said Alaskan regulators have for years been “complicit” with BP and helped BP cover-up its problems. Because of the problems at Prudhoe Bay in upcoming years we will see “spill after spill after spill,” said Hamel. “It’s like an old garden hose that leaks,” he continued. “And a patchwork won’t fix it.”

In the first signs of a coordinated counter-attack, BP has hired former CIA general counsel and federal judge Stanley Sporkin to be the company’s U.S. ombudsman to look into the corrosion problems. Ironically it was Sporkin who heard Hamel’s lawsuit against Alyeska Pipeline Services Company in 1993, when Alyeska – of which BP is the controlling interest – was found to have spied on Hamel. At the time, Sporkin accused the company for using tactics “reminiscent of Nazi Germany.”

I wonder what Sporkin will say about BP and Alyeska now. I also wonder how truthful Bob Malone will be defending BP’s disastrous last few weeks. Last month, for example, Hamel and Malone appeared together on the ABC Evening News. When asked “Were you ever warned about a serious corrosion problem at Prudhoe Bay?” Malone replied “Not that I’m aware of”. However, Hamel says he e-mailed Malone about the problems in 2003, three years ago.

I hope Bob remembers “to tell the truth and nothing but the truth”.