FinebergResearch.com - Updated Periodically - Contact: Richard A. Fineberg

 

(Archived Apr 9, 2006)
 

Commentary
Documents Reveal Trans-Alaska Pipeline In Trouble; Monitors Punt

By RICHARD FINEBERG
November 2, 2005

Operational and management problems on the 800-mile Trans-Alaska Pipeline System (TAPS) pose a serious risk to Alaska's environment and a major source of the West Coast's crude oil supply, according to internal documents written by senior personnel before they left their positions on the pipeline. Alyeska Pipeline Service Company, the oil company-owned consortium that built and operates TAPS, portrays the criticisms as routine. But the pipeline company is in the midst of a major revamping that is more than a year behind schedule and, reportedly, hundreds of millions of dollars over budget. The pipeline makeover adds a major workload for a work force that insiders say is already stressed by normal operations. The documents were written by the pipeline company's second in command and two veteran field engineers who had been with the pipeline company for 30 years. During 2005 all three left Alyeska soon after voicing their individual concerns. The record they left behind provides a rare opportunity to penetrate the public façade of a troubled company that has carefully sought to rebuild its image after the 1989 Exxon Valdez spill.

State and federal officials responsible for environmental oversight on TAPS don't seem very interested in pursuing the problems identified by former Alyeska Chief Operating Officer Dan Hisey, who held various senior field positions at Alyeska before becoming second in command in 2000. Although TAPS may be the most closely monitored pipeline in the world, government monitors reportedly are under pressure from state of Alaska and Bush Administration officials to minimize problems whose disclosure might harm chances for opening the Arctic National Wildlife Refuge to oil drilling the wake of hurricanes and high oil prices.

[Home Page]

Three transnational oil giants - BP, ConocoPhillips and ExxonMobil - own approximately 95 percent of TAPS and more than 90 percent of Alaska North Slope production, which provides about a one-fourth of the West Coast's oil supply. In recent years, the North Slope producers have been hit with a spate of fines for explosions, illegal dumping of hazardous materials and air pollution on the North Slope. At the other end of the pipeline, problems on the tankers that ply the route between Valdez, Alaska and West Coast ports were disclosed in a series of reports in the Seattle Post-Intelligencer during March 2005. In combination with the situation on TAPS, the North Slope production and tanker problems confirm this irony: ln their haste to pocket record profits from petroleum operations, much of it at the expense of the American consumer, major oil companies are short-changing the public by compromising environmental protection and operational safety.

The written record left by the departing Alyeska veterans also confirms the concerns of environmental critics - this writer included - who have long contended that Alyeska is slow to recognize safety problems on TAPS and takes too long to fix problems after they are identified, jeopardizing the safety of pipeline operations and threatening the West Coast oil supply. They attribute the problems on TAPS to owner-ordered cost-cutting and lax law enforcement by government monitors.(1)

A Strange Disinterest

On August 16, Hisey presented the pipeline owners with a list of approximately 100 current and potential problems that threaten the safety of the 800-mile pipeline that crosses the 49th state to link North Slope oil fields to the tanker terminal at Valdez. Problems on Hisey's list include inadequate training and staffing, insufficient project funding, weaknesses in the pipeline's oil spill prevention and response program and deferred maintenance that could compromise safe operations on the pipeline. According to the September 17 Wall Street Journal, which disclosed the existence of the list, one week after Hisey gave the list to owner company representatives, Alyeska abolished his position.

Many of the problems Hisey listed relate to the pipeline's major makeover, known as Strategic Reconfiguration. That project, originally estimated to cost $250 million, includes automating remote pump stations, relocating maintenance and spill response personnel who formerly lived at those pump stations to urban centers and switching from fuel-driven to electric pumps. According to Hisey's problem list, the schedule for completing the delayed Strategic Reconfiguration makeover has not been set, due to problems such as the following:

  • Shortages of skilled craft and management resources due to job opportunities elsewhere;
  • delays in engineering;
  • late material deliveries;
  • communication and control software delivery problems;
  • problems with control of project drawings - an essential part of operational records;
  • delays in the companion Strategic Reconfiguration program at the Valdez Marine Terminal;
  • delays in key decisions and funding by the TAPS owners

In addition, Hisey wrote, the "original vision of SR [Strategic Reconfiguration] simplicity" and the accompanying work force reductions has not been achieved. As Alyeska deals with problems such as these, the project budget, originally set at $250 million - reportedly has more than doubled. Meanwhile, the project, which was supposed to be completed by year-end 2005, is now more than a year behind schedule About half of the items on Hisey's list dealt with problems already encountered; the other half dealt with potential SR implementation problems - an indication that SR is proving more difficult to effect than originally anticipated.

Although Hisey's list includes nearly 20 regulatory and statutory compliance issues, as recently as Oct. 24 - more than two months after the list of risks to the pipeline was prepared and one month after it was disclosed - the Joint Pipeline Office (JPO, the state-federal umbrella group of 11 agencies that monitors TAPS) had not obtained a copy of the document. On October 24, a JPO spokesperson said Alyeska had briefed JPO officials on the list, but that JPO did not ask to see it because they did not think the list related to their oversight responsibilities. (2)

Like JPO, Alyeska spokesman Mike Heatwole portrays the list compiled by former Alyeska chief operating officer Hisey as a routine review. But Hisey's sudden departure nine days later was followed by the retirement of Alyeska President David Wight two weeks later. The management change at the top level comes as Alyeska struggles to gain cost and management control of the Strategic Reconfiguration project.


Field Engineers Confirm Concerns of Former Alyeska COO

JPO's failure to acquire and review the Hisey in detail list strikes Ronald D. Miller, a former Alyeska Pipeline Service Co. field engineer, as mind-boggling. Miller is one of two senior field engineers who left Alyeska this spring after 30 years with the pipeline company. Prior to their departures, both field veterans pointed out problems similar to those identified by former chief operating officer Hisey in his August compilation.

Miller will not discuss his retirement. But during the two years before he left Alyeska, Miller filed formal concerns about the pipeline Strategic Reconfiguration program with government agencies. Those documents reveal that Miller thought the program was being implemented in a manner that would compound problems created by numerous shortcomings in the pipeline's aging physical facilities, and by company management practices. To Miller, the nub of the problem was that the removal of seasoned field hands from their permanent field bases at remote pump stations leaves the pipeline without the eyes and ears that (1) prevent oil spills by identifying items that require maintenance before problems develop and (2) should a spill occur, are immediately available and trained for the rapid response that is key to minimizing its effects. In his view, the margins of safety in the operating, maintenance and spill response systems on TAPS were already eroded by chronic underfunding and delay of planned maintenance projects as available funds were diverted to deal with emergencies. How, he worried, would the existing inadequate systems deal with the massive physical and organizational changes that were being planned? (For background on Miller, click here.)

In his 2004 employee concerns complaint, Miller wrote that Alyeska had not established a rigorous testing program to ensure that all pipeline valves can function effectively in an emergency to minimize spill damage by enabling rapid shutdown of the pipeline and isolation of the spill location from the remainder of the pipeline. In 1995 Miller wrote the first repair notice on the failed mainline valve that protects the Yukon River; it was four years before Alyeska got around to replacing the defective valve.

One of the delayed repair projects identified by Hisey and discussed by the Wall Street Journal Sept. 17 was the replacement of the mainline valve on the south side of the Klutina River, a fast-flowing river in southcentral Alaska that feeds into the salmon-rich Copper River. Whether the valve would work in an emergency is uncertain. In any event, Alyeska identified the need to replace the faulty Klutina River valve, known as Check Valve 109, several years ago but failed to implement the replacement plan. According to Hisey's list, the valve replacement project will cost $4 million to $6 million. Miller says it is typical for Alyeska to delay major projects by shifting the funds to deal with emergencies that crop up. In the wake of the Wall Street Journal article discussing Hisey's departure and Check Valve 109, in late October Alyeska and government officials announced that the problem valve would be replaced as soon as practicable.

A second Alyeska field engineer, Jon F. Globig, who claims that prior to his departure from Alyeska this spring, his superiors gave him an unfavorable personnel evaluation "for the sole purpose of intimidation and harassment" because he was an outspoken friend of Miller's. Like Miller, Globig had been with Alyeska since the pipeline was under construction in the 1970's. Both men say that prior to 2004, their annual company evaluations consistently rated them at or near the top of their employee group.(3)

The departure and critical written comments of former chief operating officer Hisey and veteran field personnel Miller and Globig support each other to suggest that things may be seriously wrong on TAPS. But according to Alyeska spokesmen and government monitors, this is not the case.

Faulty Follow-Up to TAPS Bullet Hole Spill: A Case In Point

The slow pace at which Alyeska has been allowed to proceed in remedying spill response problems identified more than four years ago lends support to the dissident former employees and the environmental critics. This narrative updates the story of the events that transpired after TAPS was punctured by a bullet from a high-powered rifle in October 2001.(4)

When he put a hole in TAPS at a remote location 75 miles northwest of Fairbanks in October 2001, Daniel Lewis also put holes in the Alyeska oil spill contingency plan (C-plan), a massive document, required by law, that lays out the plans for oil spill prevention and response. Alyeska's C-plan boasts that the company maintains a variety of clamps, including a bullet hole clamp, for just such an emergency.(5) But there is a big difference between a plan on paper and an actual response. When the time came to implement the paper plan, it turned out that the oil was spewing from the bullet hole with such force that the bullet-hole clamp could not be used without jeopardizing worker safety. Despite the fact that TAPS had been shot at more than 50 times before it ever carried a drop of oil, responders were unable to stop the flow for more than 24 hours (see picture).


This is the front page of the Fairbanks Daily News-Miner on Oct. 5, 2001, approximately 24 hours after a bullet from a high-powered rifle put a hole in the Trans-Alaska Pipeline northwest of Fairbanks. Although the pipeline operators claimed to have a device called a bullet-hole clamp readily available, the clamp could not be used and the pipeline continued discharging oil for another 12 hours.

At approximately the same time that this picture was taken at the spill site 24 hours after the leak begin in October 2001, Alyeska officials were boasting to reporters that they had begun to implement an experiment aimed at reducing the pressure that was forcing the oil out of the pipeline: In their efforts to lower the pressure at the leak site so that a clamp much larger than the ineffectual bullet-hole clamp could be applied, Alyeska was reversing the flow in the pipeline - something that had never been tried before.

A major purpose of the C–plan is to spell out the mechanics of the various possible spill responses. Those responses are supposed to be tested in practice drills that identify problems in the plan and familiarize responders with the techniques they may need to use. Why, then, was Alyeska improvising? There was no blueprint in the TAPS C–plan for this reason: The spill plan warned against reversing the flow on TAPS because reversing the flow can damage check valves and cause other problems. And in fact, the reverse-flow experiment wound up damaging pipeline supports 125 miles to the north of the spill location.

By any objective standards, the bullet-hole response was a fiasco. Oil continued to shoot into the tundra for 36 hours, destroying approximately two acres of trees, despite the claim that a bullet-hole clamp was readily available. And an experiment that the C-plan specifically cautions against was tried, resulting in damage to the pipeline. Nevertheless, Alaska's governor praised the response and less than three months later pliant state officials approved Alyeska's C-plan for another three years. The new document contained the same false promise that bullet-hole clamps are readily available and the same proscription against reversing flow.

Alyeska bought time with a promise to clean up the problems identified in October 2001, but four years later that has not happened. The pipeline company has developed a new bullet-hole clamp, but four years after the spill, the C-plan says nothing about the new device. The emergency response plan does not tell the emergency responder where the new clamp might be found - or even that it exists. As for reversing flow, Alyeska has been working for four years developing guidelines for how to do it - guidelines that should have been written and tested before it was ever tried. But the reverse-flow procedures have not been codified, either. In October 2005, the TAPS C-plan contains only the same brief proscription against reversing flow it contained in 2001.

Conclusions

During hearings on the renewal of the state and federal pipeline right-of-way grants in 2002, the bullet hole spill response fiasco drew critical public comment from this writer and others. At that time, Alaska and national environmental groups unsuccessfully sought creation of a citizens' oversight group for TAPS. Although the proposal gained support from a loose coalition of environmental, public interest and Native organizations, it was rejected by government officials.(6) It is worth noting that in the massive environmental impact statement compiled for right-of-way renewal, the Strategic Reconfiguration project was treated as hypothetical, despite the fact that during the summer of 2002 - while the impact statement was still under review - Alyeska had already completed an internal "white paper" on the plan to align its C-plan with the massive personnel cuts and relocations associated with the project.(7)

In 2003 authorities approved the modified C-plan; it was the second plan approval that failed to correct the inaccurate language regarding clamps and reverse flow identified in October 2001. Two years later, that incorrect language is still part of the approved plan. As veteran spill responder Miller has pointed out, problems in the system should be ironed out before - not after - a spill response emergency occurs; one could not ask for a clearer example of Alyeska's failure to identify and remedy potential problems in a timely manner. In light of Alyeska's failure to follow up competently on these details, one must wonder: If Alyeska can't even get this basic information straight, what other problems might be overlooked on the remote pipeline? Meanwhile, the written comments of the departing Alyeska personnel suggest that as Alyeska struggles with Strategic Reconfiguration, the massive pipeline overhaul is causing problems such as these to linger longer while compounding their complexity.


Notes to "TAPS in Trouble"

1. Although the press and the general public typically have little access to this kind of information, one example of owner-dictated cost-cutting on TAPS was reported in 2002 (Sam Bishop, "Alyeska urged to trim costs: Pipeline owners call for more 'efficiency' on maintenance," Fairbanks Daily News-Miner, June 12, 2002, p. A-1; included on this web site with the second supplement to Background Report: TAPS Lease Renewal - Opportunity Lost, August 2004).

2. Telephonic response to the author's query from Rhea DoBosh (Information Officer, Joint Pipeline Office), Oct. 24, 2005.

3. Ronald D. Miller, personal communication; Jon F. Globig, "Subject: J.F. Globig Response to 2004 Performance Appraisal," May 17, 2005.

4. For more on the bullet hole spill, see Richard A. Fineberg, The Emperor's New Hose: How Big Oil Gets Rich Gambling with Alaska's Environment, Alaska Forum for Environmental Responsibility, June 2002, pp. 75-80.

5. Trans Alaska Pipeline System, Pipeline Oil Discharge Prevention and Contingency Plan – General Provisions, Dec, 31, 2003 (Ed. 4, Rev. 1) , pp. 1-375-376. (The version of the TAPS C-plan approved three months after the Oct. 4, 2001 spill [Rev. 0, Dec. 31, 2001] contains identical language at pp. 179-180.)

6. More on the TAPS lease renewal process can be found on this web site at The Trans-Alaska Pipeline System: Environment.

7. Alyeska Pipeline Service Company, "Oil Spill Contingency Response Under Strategic Reconfiguration" (White Paper, Revision 1), July 24, 2002.

 

     
[Home Page]
The Oil Patch
Reports & Research Memoranda
Archives
About Richard A. Fineberg
Contact Information