Plains All American has boosted pipeline integrity spending: CEO
By Kristen Hays HOUSTON (Reuters) - Plains All American Pipeline LP has more than tripled spending on pipeline maintenance and integrity since 2007 as the company's operations grew, Chief Executive Greg Armstrong said on Thursday. Those efforts didn't prevent a California pipeline from rupturing May 19, spilling up to 2,500 barrels of crude along the coastline that fouled beaches and oiled wildlife, including sea lions and pelicans. Armstrong told analysts the company has increased spending to keep pipelines in good condition to $491 million in 2014 from $135 million in 2007. That includes running devices with sensors and other technology, so-called "smart pigs", through them to detect corrosion and thinning pipe. However, an inspection of the California line by Plains-hired contractors before the spill showed extensive corrosion with metal at the ruptured part having thinned by nearly half, according to preliminary findings released on Wednesday by U.S. regulators. Plains informed the Pipeline and U.S. Hazardous Materials Safety Administration of the results. But the PHMSA also noted in those findings that metallurgists the agency brought in to inspect the damaged pipe said the metal was thinner than that. Armstrong said at Plains' annual analyst meeting on Thursday that he was giving a presentation to the company's safety group the day the pipe burst, and insisted the company was focused on safe operations long before the spill. "We were walking the walk before it ever occurred," he said at the meeting. "If we can't do it the right way we don't want to do it at all. I don't care how profitable it is." He acknowledged that Plains' various entities have reported 229 incidents at pipelines and other operations to U.S. pipeline safety regulators since 2006. Of those, 64 - or 28 percent - involved spills of more than 20 barrels, he said. He also noted that Plains is 10 times larger than 90 percent of the 1,600 companies that report such incidents to regulators, and the bigger the company, the more incidents could happen. "Size matters," Armstrong said. The ruptured pipeline, Line 901, could carry up to 48,000 barrels per day of offshore California crude from Las Flores to Gaviota. The line has been shut since the rupture, and cannot be restarted until regulators give their approval. Shares of Plains have fallen nearly 7.5 percent since the spill. (Reporting By Kristen Hays; Editing by Terry Wade and Alan Crosby)
