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In Recent Years Alyeska
Has Lost Two Pigs on TAPS;
Pig Problems Point to This
Question: If NTSB Applied the
"Four-R" Test to TAPS, Would
Alyeska Pass the Test, or
Would Alyeska Flunk?

Can Alyeska Learn from Past Mistakes?

By Richard A. Fineberg
Dec. 20, 2012
(Revised Post Dec. 29, 2012)

1. Enbridge and Alyeska - Introduction

Despite Alyeska Pipeline Service Company efforts to turn chronic problems on the Trans-Alaska Pipeline System (TAPS) into management success stories and commercials for more North Slope oil development, analysis of recent events on TAPS suggests that if the standards the National Transportation Safety Board (NTSB) has applied to the 2010 Enbridge pipeline spill in Michigan were used to evaluate TAPS operations today, Alaska's flagship pipeline might not pass that test.

The national safety board's report on the Enbridge spill, discussed at a board meeting in Washington, D.C. last July, sharply criticized Enbridge management practices that led to a spill two years ago, spewing 20,000 barrels of toxic crude oil into a treasured waterway and causing the illness of more than 300 residents near Battle Creek. Excoriating Enbridge, NTSB Chair Deborah Hersman declared, "You can't help but think of the Keystone Kops….Why didn't they recognize what was happening? What took so long?" Hersman answered this question by analyzing the Enbridge spill in terms of what she called "the four Rs of a rupture:"

• recognition of a problem,
• response planning and preparation,
  
• responsibility for prevention, and
  
• regulatory oversight. [1]

The safety board's critical analysis of the causes of the 2010 Enbridge mishap and the NTSB chair's caustic comments drew national headlines from newspapers such as the Detroit Free Press, the Washington Post and the Los Angeles Times. [2]

The lessons of Enbridge's poor performance were very much on the minds of three veteran Alyeska Pipeline Service Company observers interviewed for this report. While most sources requested anonymity, facts gathered for this analysis show striking similarities between Enbridge pipeline problems on Line 6B in Michigan and recent mishaps on TAPS. This analysis of TAPS operations raises serious questions about the current safety of the 800-mile, 48-inch diameter pipeline that carries roughly 500,000 barrels of crude oil per day across Alaska.

Sections 2 and 3 of this report review operational problems that have triggered recent major shutdowns on TAPS - the relief tank overflow incident at Pump Station 9 in May 2010 and the January 2011 leak and shutdown at Pump Station 1. This analysis shows that the four elements of the Enbridge spill identified by NTSB Chair Hersman were also visible on TAPS and evident in Alyeska's emergency shutdowns. This report's analysis also shows that these shutdowns share troubling management failures:

• Both events resulted from Alyeska's failure to apply lessons learned by executing timely corrections to known problems; and
• Alyeska's emergency response planning - an important element of pipeline safety - appears to be inadequate.

Regulatory oversight on TAPS - the NTSB chair's fourth category - is the subject of Section 4. This report notes a fragmenting of the Joint Pipeline Office (JPO), which was initially formed to offer pipeline owners one-stop shopping among various government agencies, as well as an apparent shift in dealing with regulatory problems from penalties to a cooperative approach.

On a subject Hersman did not explore in her review of the Michigan spill, Section 5 also notes a general congruence between Enbridge and Alyeska: company celebrations of prizes and statements of principle that may not translate into safe practice. In drawing this Alyeska-Enbridge parallel, this section also notes this important distinction between the two pipeline companies: Where Alyeska sometimes appears to be withholding information from the public record, Enbridge leaves a clear record of its public statements on its web site.

Section 6 examines the difficulties Alyeska continues to experience handling pigs -- the large, bullet-nosed devices that pipeline operators send through the line to perform internal cleaning and inspection tasks. This section reveals that in the last three years Alyeska has lost control of pigs on at least two occasions. Also discussed in this section are the difficulties Alyeska encountered with pigs that weren't lost during the January 2011 emergency shutdown at Pump Station 1.

Although downplayed by Alyeska and unnoticed by the press, veteran TAPS observers viewed the first lost pig event - in November 2010 at Pump Station 5 - as a demonstration of a continuing lack of situational awareness on the part of TAPS operators. Six months earlier, the same operating deficiency was identified by Alyeska's internal investigation report as a root cause of the Pump Station 9 relief tank overflow. News of the latest lost pig, in May 2012 at Valdez, finally made the press four months after the fact. But the belated press coverage of this incident did not explain what happened or explore the striking similarities between this event and its under-reported November 2010 predecessor.

Section 7 reviews the performance record of Alyeska president Tom Barrett as he finishes his second year as Alyeska's chief executive. Barrett came to Alyeska with a strong reputation as a regulator, having served as the first administrator of the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) between 2006 and 2008. He was highly regarded by federal agency staffers, who credit him with establishing pro-active, data-based programs to support the agency's pursuit of pipeline safety goals. Today, however, he devotes much of his energy and skills to defending and praising the company he now heads as it clashes with PHMSA. There is a notable contrast between Barrett's testimony before Congress in November 2006 (after British Petroleum's corrosion management problems temporarily shut down operations at Prudhoe Bay) and his testimony to the state House Finance Committee in March 2011 (after the TAPS emergency shutdown at Pump Station 1 occurred in Barrett's second week as Alyeska's president). In his 2006 testimony, Barrett focused on BP's shortcomings; five years later Barrett overlooked the history of the problems Alyeska had created for itself at Pump Station 1. Instead, he called for increased North Slope production to increase TAPS throughput in the interest of pipeline safety. In making this plea, Barrett effectively converted his concerns for safe pipeline operations into political fodder for the advocates of reduced state oil taxes.

The recent TAPS operational problems detailed in this report indicate that Alyeska under Barrett is still slow to learn from experience and slow to address important problems. These management deficiencies result in the exposure of TAPS, its workers and its environment to unnecessary risks. In addition to the parallels between Alyeska and Enbridge, the under-reported pigging problems on TAPS emerge in this report as a significant red flag warning regarding the current safety of Alyeska's operations.

To continue reading sections 2 through 7 of the original December 2012 TAPS Lost Pig report, READ MORE. (For a condensed summary of operational issues covered in this report, including parallels between recent TAPS problems and Enbridge Pipeline's performance shortcomings in Michigan, click here.)

To download a complete copy of the December 2012 report in PDF format, click here.

TO READ THE FOLLOW-UP NEWS ANALYSIS that appeared on TRUTHOUT (Feb. 25, 2013, on-line) and the FAIRBANKS DAILY NEWS-MINER (Mar. 10, 2013), as submitted, CLICK HERE.

--------------

(August 2004 -- Updated Decemer 2012)

Over the last eight years FinebergResearch.com has gathered and presented fact-based information and commentary about economic and environmental aspects of oil industry operations in Alaska, with special emphasis on the North Slope oil fields and the Trans-Alaska Pipeline System (TAPS). Due to the oil industry's power, political clout and media skills, much of the information you will find here is not widely reported or readily available elsewhere.

Three major petroleum companies -- BP, ConocoPhillips and ExxonMobil (originally Sohio, ARCO and Exxon) -- control more than 95 percent of North Slope production and, in 2012, are in the process of increasing a similar share of the Alyeska Pipeline Service Company (the builder and operator of TAPS) to 100%. The sprawling North Slope complex centers around Prudhoe Bay, where oil is pumped from beneath the frozen Arctic substrate and prepared for the 800-mile journey across Alaska to the ice-free port of Valdez; at the Alyeska terminal, oil is loaded on tankers bound for the West Coast. Although the North Slope was by far the nation's largest producing complex at its peak of two million barrels per day a quarter century ago, North Slope production has been in decline for two decades and is now between 500,000 and 600,000 barrels per day.

While declining production and its consequences for the future rightly draw major attention from a policy standpoint, the current dialogue often suffers from exaggerated fears of dependence on foreign crude supplies and failure to recognize, among other things, the recent dramatic reduction in petroleum imports due to conservation, induced in large measure by high oil prices. Moreover, even at today's reduced production levels, those high oil prices still bring producers significant revenue from North Slope crude oil.

During the 4½ decades since the discovery of the nation's largest oil field at Prudhoe Bay on Alaska's North Slope, events from Watergate to the collapse of energy companies such as Enron and, subsequently, financial institutions in the recent the financial crash demonstrate that large institutions frequently fail -- often by grotesque margins -- to live up to legal and moral obligations and to deliver on their public pronouncements. Concurrently, the major Alaska oil companies that play a predominant role in Alaska development have displayed a chronic and troubling discrepancy between promise and practice.

Despite lavishly funded advertising campaigns and public relations efforts urging that Alaska's oil companies can be trusted as the avatars of social salvation, closer examination reveals a profound gap between what these companies say and what they do. With equally disturbing regularity, when confronted with evidence of those failures, government has failed to protect the public interest.

Against this backdrop, Alaska's North Slope development and its pipeline link to market continue to provide unusual opportunities to observe the actions of decision makers, as well as greater access to the central participants than most other places afford. The information presented here points to
two significant conclusions:

• (1) petroleum developers can and frequently do use pipelines to maximize profit and inhibit competition, to the detriment of host populations; and
• (2) the chronic discrepancy between promise and practice on major oil projects frequently places the populace and the environment at significant and needless risk.

Reports on pipeline and petroleum development issues on this web site may be understood as case studies providing insight into the relationships among powerful corporate and government institutions. This web site explores the economic and environmental impacts of these interactions in concrete terms in the hope that well-informed individuals can and will make a positive contribution to the course of human development. A premise underlying this research is that it falls to each of us, as citizens, to keep our policy dialogue fact-based as we inform ourselves, analyze and respond appropriately to the events that shape the issues we face. Based on the factual information presented here, readers can come to independent judgments regarding the authenticity of the content, the significance of the relevant facts and the logic and appropriateness of the conclusions. In any event, the topics reported here should be capable of standing for themselves as a documented case studies in petroleum development and public policy.

The studies presented here have beenresearched and compiled by Richard A. Fineberg, founder and principal investigator of Research Associates of Ester, Alaska. Fineberg has observed Alaska petroleum development for more than three decades as a prize-winning reporter, as an advisor to the Governor of Alaska on oil and gas policy and as an independent consultant to investors, government agencies and non-profit organizations.

In recent decades, Fineberg's research horizons were expanded to include observation of oil development in two oil provinces iat opposite ends of the Former Soviet Union -- the Caspian Basin and Sakhalin Island. Collectively, these forays suggest the possibility that exploration of Alaskan oil issues may produce case studies that will inform the general understandings of the politics of oil. Whether or not this proves to be the case, conclusions from the studies conducted in the northwest corner of the North American continent will validate the significance of the Alaskan oil research presented on this web site.

The Reduced Oil Imports Report:

Conservation Gains (2012 - 2030):
46.9 billion barrels

Arctic Refuge Drilling (2012 - 2030):
1.8 billion barrels

Updated Report on EIA Data
(Jan. 14, 2012)

First-Hand Looks at Sarah Palin's Wacky World

The following were archived Aug. 25 and are still available for viewing (many in downloadable PDF format):

Under a Rogue Star chronicles Sarah Palin's late-2009 book tour and the Alaska oil spills that silently accompanied her -- a clear demonstration of the results of her general failure as governor to pay attention to what she was doing and her particular failure to protect the environment.

ACES in Palin World, from December 2009, takes a clear look at what really happened during the Special Legislative Session of October-November 2007, in which the Legislature (reversing Governor Palin's proposal) established progressivity for the state's production tax.

A November 2009 post covers the Alaska Risk Assessment project, a Palin administrative wreckage that has attracted little national attention to date.

Completing the Palin package on this web site, the following articles were previously archived:

Click here to review July 2009 posts providing more information on the Alaska Risk Assessment project and other problems Palin left behind when she resigned as governor.

In July 2008, I prepared a report for the Alaska Public Interest Research Group on major unanswered questions regarding Palin's Alaska Gas Line Inducement Act (AGIA) and the natural gas pipeline tariff regime. Following up, I put together a packet of documents ("The Palin Papers") that I gave to Governor Palin. During that brief encounter, I requested a sit-down meeting to explain my respectful disagreement with her natural gas team. The governor was either unwilling or unable to meet with this former member of her consulting team and never responded to these concerns. Two weeks later, she ascended to the national stage. Click here for the story.