House speaker warns tanker owners

Anchorage Daily News
March 19, 2008

House speaker warns tanker owners
LETTERS: Firm hauling BP oil may be skimping on maintenance, he fears.
Published: March 19th, 2008 12:05 AM
Last Modified: March 19th, 2008 02:09 AM

JUNEAU — House Speaker John Harris is threatening to hold hearings on whether owners of the shipping company that hauls North Slope crude oil for BP are skimping on tanker maintenance.

Harris, R-Valdez, recently fired off letters to top executives of three firms that jointly own Alaska Tanker Co., the Oregon-based operator of BP’s troubled tanker fleet.

Harris, in an interview this week, said he wrote the letters after ATC’s president, Anil Mathur, came to him and said he was having difficulties with the company owners.

The toughest of the letters went to Donald Kurz, president of Philadelphia-based Keystone Shipping Co., one of ATC’s owners. Kurz is chairman of ATC’s board of directors.

Harris wrote that he understood Mathur had been “warned and put on notice by you … for poor behavior” after a funding request for tanker work was denied.

Harris goes on to say to Kurz: “Should there be a failure of the … tankers because Anil has not been given the resources and support necessary to maintain operations integrity, I will recommend to my colleagues that you present yourself in front of the Alaska Legislature.”

ATC uses its ships to carry oil from the trans-Alaska pipeline tanker dock in Valdez to refineries on the West Coast.

Since 2004, BP has upgraded its fleet with four new double-hull ships at a cost of $250 million each. Congress mandated oil companies replace their single-hull oil tankers with double hulls after the Exxon Valdez oil spill in Prince William Sound in 1989.
The new BP tankers, however, have been plagued with problems since they were launched into service, including cracked rudders, anchors that have fallen off during rough crossings of the North Pacific, a mooring post snapping off the deck of one ship while docking, and two known cases in which engine power or control was lost.

Harris, in his letters, makes reference to these “mechanical integrity issues.”

While BP paid for the tankers, it owns only 25 percent of ATC, the company that runs them. The other owners, at 37.5 percent apiece, are Keystone Shipping and New York-based Overseas Shipholding Group Inc.

Mathur declined comment Tuesday on his relations with his bosses or the letters Harris wrote. He did, however, tout his company’s safety and environmental record, saying, “We have operated over five years without a crude oil spill at sea.”

Kurz did not immediately return a phone call Tuesday seeking comment.

However, he penned a reply to Harris last week that says in part: “One of the processes which we have successfully employed in achieving our favorable results is that of ‘corrective action.’ The internal situation to which your letter refers regarding Mr. Mathur is not one of budgeting or operations integrity, but one of personal behavior and comportment.”

Exactly what precipitated the apparent disciplinary action against Mathur remained unclear Tuesday.

Steve Rinehart, BP’s spokesman in Anchorage, deferred to a response the company’s U.S. president, Bob Malone, sent Harris.

Malone’s letter says Mathur “has played a significant role” in ATC’s “impressive” performance.

Malone added he believes BP and the other ATC owners “have supported both the management and financial obligations” of safely running the tankers.

In recent months, London-based BP has come under fire from members of Congress and regulators for cost-cutting they say contributed to disasters including the Prudhoe Bay pipeline leaks in 2006 and a Texas refinery explosion in 2005 that killed 15 workers.

The Alaska Legislature in 2006 gave ATC and Mathur a citation for tanker safety and environmental performance.

Harris said he’s known Mathur for years and has great confidence in him and his efforts to fix the problems with the new tankers. He said he doesn’t plan to hold hearings now but will if he hears more negative reports about ATC.

“I’m confident they got the message and they’ll do the right thing and put the money in that’s needed,” Harris said.

John Devens, head of the Prince William Sound Regional Citizens’ Advisory Council, a Valdez-based oil industry watchdog group, had not seen the letters until a reporter provided them Tuesday.

“This feels serious to me,” Devens said.

Like Harris, Devens said he has faith in Mathur.

“I knew there was some friction over budget for maintenance,” he said. “I would hate to see Anil leave. He has a heck of a good record, and he really works well with us.”

Devens said he’ll be meeting with Mathur today in Oregon.

“To me, if he thinks he needs money for maintenance, I think he needs money for maintenance,” Devens said.

Find Wesley Loy online at or call him in Juneau at 1-907-586-1531.

~ by fredfelleman on March 19, 2008.

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