As Americans emptied their wallets to pay for gas over the weekend, BP p.l.c. ADS (NYSE: BP), London, hurried to fix a problem in Alaska that is contributing to the consumer price spike.

BP officials at America's largest oil field -- Prudhoe Bay on Alaska's North Slope -- cut oil production by a quarter last week after they found a hole about the diameter of a pencil in a water pipe. On Sunday, after several days of round-the-clock repair work and tests to the damaged area, they restored full production. BP is in the process of replacing 16-miles of pipe after corrosion caused the North Slope's largest oil spill in August of 2006.

A detailed report in the Chicago Tribune traces problems at BP to cutbacks during the days of cheap oil in the late 1990s. Tribune chief business correspondent David Greising says that the scrimping of a decade ago has left the oil industry ill-prepared to deal with even small problems, such as pencil sized holes in pipes in the wilds of Alaska. He writes that the company's inability to handle technological challenges has forced it to delay pumping from one of its best prospects for the future -- the Thunder Horse platform on the Gulf of Mexico.

Last month I wrote about the possibility that BP p.l.c ADR (BP) may have knowingly turned a blind eye to conditions in its Prudhoe Bay pipelines that could have prevented the whole mess from occurring in the first place. At the time, these reports were mainly coming from employees, but now accusations have resumed and things aren't looking to great for the oil mogul.

Today the country's top regulator for pipelines backed up these accusations, saying that the company failed to take steps common in the industry to repair corrosion that they were warned about in their pipelines. I must admit that I am not too surprised with this recent news. I have written a lot of BP and the more I have read about the company the more I have become weary of just what exactly has been going on up in Alaska.

The company was hit with a couple pretty nasty statements today from lawmakers on both sides of the aisle:

• Rep. Joe Barton, R-Texas (chairman of the full regulatory committee): "BP's policies are as rusty as its pipelines." And he further went on to raise the question of whether or not BP should be allowed to continue to run the Prudhoe Bay pipeline
• Rep. Gary Welden, R-Ore. : was quoted as saying that BP actually stood for "broken pipeline."
• Rep. Diana DeGette, D-Colo.: "I applaud BP for trying to move beyond petroleum, but maybe it should start by sticking to the basics and begin to focus on rudimentary pipe maintenance."

More bad news today for oil giant BP p.l.c ADS (BP). According to the Wall Street Journal, BP and its energy traders have been issued subpoenas looking into the possibility that the company may have been a part of price manipulation of crude-oil and gasoline markets in 2003 and 2004. The Commodity Futures Trading Commission is looking into the company's over-the-counter market, which includes trades conducted over the phone or electronically in products not listed on exchanges, or in marketplaces that regulators are not able to see.

BP has definitely seen better days. Next week the company is set to appear before Congress to talk about the events that led up to the shutdown of a large portion of their Prudhoe Bay oil field in Alaska. According to some employees, company officials knowingly manipulated test results in the area to make the field appear to be in better operating shape that it actually was.

This is not the first time that BP has been under review for the company's pricing. It already is facing a complaint filed by federal commodities regulators for allegedly manipulating much of the U.S. market for propane and, in 2003, BP agreed to pay $2.5 million in a settlement with the New York Mercantile Exchange over charges of improper crude-oil trading. The Exchange cited 10 oil violations in 2001 and 2002. Among the allegations were charges of wash trades, or simultaneous swaps of the same amount of a commodity for the same price.

It is kind of hard to think that BP's current legal problems are "just a misunderstanding" given the company's history, but I really do hope that it is learning from its ongoing mistakes.

On Wall Street today BP is currently trading down 1.8% to $67.10, down $1.20.

As oil has been on the climb again today, shares of ExxonMobil (XOM) traded up to a new 52-week high. The stock hit a high of $70.83 before finishing out the session at $70.72, up $1.09.

Oil moved higher on two main factors today. First, BP (BP) has hit some more unexpected problems in the Prudhoe Bay which has forced the company to cut another 90,000 barrels of crude output after discovering a failure in a natural gas compressor. With this reduction, output has now fallen to 110,000 barrels per day for the country's largest oilfield (from around 400,000 a month a ago). While today's shutdown should only last a couple more days, it has to raise more concerns over just what exactly is going on with BP in Alaska. Earlier this week I wrote about how the company has been accused by its own employees of deliberately manipulating data to show the Prudhoe Bay field better off than it actually proved to be. As we continue to see more problems unraveling for the company we have to start to wonder what is next?