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General News    H2'ed 8/4/10

Confidential Report Blames BP Executive For Distress at Alyeska Pipeline

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Jason Leopold
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Originally published at Truthout.org

Alyeska Pipeline, the BP-led consortium that operates the 800-mile Trans Alaska Pipeline System (TAPS), has implemented deep budget cuts, deferred work on a number of important maintenance and upgrade projects, failed to study how relocating engineers would impact the safe operations and long-term integrity of the pipeline and is led by a chief executive who was described by the company's five vice presidents as "intimidating," "demeaning," "aggressive," "confrontational," "unpredictable," "polarizing," "withering," "edgy," "vulgar" and "inappropriate."

Those are just some of the critical findings contained in a closely-held report, obtained exclusively by Truthout, that was prepared by two attorneys hired by Alyeska to investigate widespread safety concerns raised by a senior employee in an anonymous letter to BP's Office of the Ombudsman alleging TAPS is vulnerable to a catastrophic spill.

Click here to listen to Jason Leopold discuss this report on Alaska Public Radio.

Charles Thebaud and Jane Diecker of the law firm Morgan, Lewis & Bockius, conducted the four-month probe and turned over their report in mid-June to TAPS' owners BP, ConocoPhillips Transportation Alaska, ExxonMobil Pipeline Company, Unocal Pipeline Company and Koch Alaska Pipeline Company.

Truthout documented some of the findings of Thebaud's investigation and the safety and integrity concerns raised by nearly a dozen Alyeska and BP officials in an investigative report published last month.

Alyeska has not shared a copy of Thebaud's report with its employees and the company downplayed many of the report's conclusions in a company-wide email distributed June 30 signed by TAPS' owners.

Thebaud's report paints a picture of a company where employees suffer from low morale, have a deep mistrust of senior executives and fear retaliation if they openly discuss or raise concerns about safety and integrity issues with them.

The harshest criticism was reserved for Chief Executive Officer Kevin Hostler, a BP executive "on loan" to Alyeska who admittedly uses "anger" to "obtain results," in violation of Alyeska's own code of conduct. Hostler announced his retirement from the company, effective in September, one day after the publication of Truthout's report last month.

"Although lawful, [Hostler's] leadership style and demeanor have affected the work environment," the report's executive summary says. "Employees at various levels of the organizations, in [Fairbanks, Anchorage and Valdez], have either witnessed or heard about [the CEO's] interactions with his executives. Their observations or perceptions have adversely affected some employees' willingness to raise concerns to [Hostler] and senior management, particularly for non-core issues."

Hostler's "conduct has had consequences, even among the executives," the report added. "The group is admittedly 'consciously cautious' and 'wary' in how they approach [Hostler] and in the topics they raise. In fact, some are hesitant to raise 'non-core' issues with [Hostler], given his unpredictability and demeanor."

The five Alyeska vice presidents who were critical of Hostler are:Mike Joynor, Greg Jones, Jordan Jacobson, the company's general counsel, Mike Muckenthaler, Alyeska's chief financial officer, and Kristi Acuff, who recently retired as senior vice president, employee external relations.

In his own defense, Hostler told Thebaud, "he can become particularly angry if he believes that 'safety has been ignored.'" That statement, according to a dozen senior BPand Alyeska officials who were interviewed for this story and reviewed Thebaud's report, said is "laughable" and "a flat out lie."

"It's when you discuss safety concerns that he lashes out," said one top Alyeska executive who has interacted with Hostler over years. "Raising safety concerns means Alyeska will have to spend money and Kevin Hostler and BP do not want to invest money to make sure this pipeline operates safely. That's a fact."

Prior to being named chief executive of Alyeska, Hostler spent 27 years with BP, most recently as senior vice president of BP's global human resources organization. Before that, Hostler was head of BP's subsidiary in Colombia.

The report said employees have been lodging complaints against Hostler since 2007, which senior officials in Alyeska's human resources (HR) department failed to address.

In fact, Thebaud's report also documented widespread problems in the human resources division.

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Jason Leopold is Deputy Managing Editor of Truthout.org and the founding editor of the online investigative news magazine The Public Record, http://www.pubrecord.org. He is the author of the National Bestseller, "News Junkie," a memoir. Visit (more...)
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