Supplement #1 to Background Report on TAPS Lease Renewal
How Public Officials Manipulated Mountains of Paperwork to Avoid Tough Issues
RICHARD A. FINEBERG
This supplement to the background report on Trans-Alaska Pipeline System (TAPS) right-of-way renewal ("TAPS Lease Renewal - Opportunity Lost") provides additional information regarding the failure of the Bureau of Land Management (BLM), its contractor, the Argonne National Laboratory, the Joint Pipeline Office (JPO) and the Alaska Department of Natural Resources (ADNR) to respond meaningfully to public concerns about the condition of the pipeline during the TAPS right-of-way renewal process.
To evaluate the
mountains of paperwork under which officials buried public concerns about the
safety of TAPS, it is necessary to know a bit about the mechanics of the right-of-way
renewal process. (1) The BLM Environmental Impact Statement
(EIS), prepared by Argonne under procedures established by the National Environmental
Protection Act (42 U.S.C. 4321), was the centerpiece of the many documents prepared
for right-of-way renewal. But it was just one of many. Ancillary documents included
a bevy of government reports to the heads of the JPO - the federal Authorized
Officer and the State Pipeline Coordinator - to assure that TAPS builder and operator
Alyeska Pipeline Service Company was in compliance with the federal Trans-Alaska
Pipeline Authorization Act, as well as provisions of the state right-of-way leasing
act. Other agency officials participated in the NEPA review process to assist
the BLM and ADNR in making their respective determinations on whether to grant
lease renewal. Concurrently, on the federal side officials were reviewing compliance
with the relevant terms of the Coastal Zone Management Act and formally consulting
with Alaska Natives.
The EIS Scoping ProcessJPO had already announced its intention to complete the renewal process on an accelerated basis by year-end 2002 (more than a year before the expiration of the original 30-year agreements issued prior to TAPS construction in 1974); (3) renewal was a foregone conclusion. Under these circumstances, some questioned whether the agencies would seriously seek to identify issues that might upset the apple cart. Nevertheless, concerned citizens brought their concerns about TAPS to Argonne during the scoping process. Among them, this writer prepared testimony for the Alaska Forum for Environmental Responsibility (AFER), providing detailed materials that:
The picture of TAPS that AFER presented to Argonne during the scoping process was implicitly critical of JPO for its failure to require Alyeska to measure up to the highest standards of safety and environmental protection. But the AFER comments did not call JPO on the carpet; asking Argonne to investigate its client it would not enhance the slim possibility that Argonne would approach its task independently and objectively. Nevertheless, AFER's message to Argonne was clear: Despite the fact that the agencies were pushing the renewal train down a fast track, AFER and other concerned citizens wanted Argonne to conduct an independent investigation to determine whether original construction standards and current oversight procedures were working together to ensure the safety of present and future TAPS operations.
Two events on the pipeline during the scoping process confirmed central points in AFER's scoping presentations: (1) In its testimony Sept. 20, 2001, this writer, consulting for AFER, told Argonne about risks associated with restarting the pipeline after maintenance shutdowns, noting that since 1995 "there has been at least one significant problem restarting the pipeline every year." (5) Coincidentally, on the day of the scoping meeting in Anchorage, Alyeska officials announced that a maintenance shutdown would take place that very week-end. Ignoring Alyeska's record of botched restarts, Bill Howitt, Alyeska's vice president in charge of field operations, praised a "well structured and carefully thought out maintenance plan." He predicted that a 12-hour shutdown and restart would go smoothly and "unnoticed by almost everyone." (6) But two days later, the restart was delayed for eight hours by oil spills at three different pump stations, with major chemical dumps to prevent fire and explosion at two of them. In all three instances, Alyeska later confirmed, the procedures heralded by its officials heralded as part of a careful and well-structured maintenance plan were in fact poorly planned and executed. (7) (2) In its initial scoping comments, AFER also asked, was TAPS able to "provide response that limits spill effects to the maximum extent possible?" (8) Two weeks later, this question was answered when a bullet fired by a miscreant put a hole in the pipeline. The TAPS spill response plan boasted that "Alyeska maintains a variety of clamps and sleeves for emergency patching or repair that can be used to stop a leak." According to the spill response plan, these items, which were supposed to be readily available, included a bullet hole clamp and larger hydraulic clamps. But when paperwork ran into reality, the key response equipment could not be used. For approximately 36 hours after the pipeline was shot, a thick, black stream of crude oil - approximately two gallons of crude oil per second - arced through the air, unchecked, into the nearby trees and tundra. (9)
Agency Failure to Respond to Public Concerns Regarding TAPS Safety Issues During the TAPS Right-of-Way EIS Review
Despite the clear validations of AFER concerns discussed in the preceding section, the draft EIS BLM issued nine months later contained no indication that the people who prepared 1,300-page draft EIS had listened to the TAPS critics or paid attention the events and field information AFER and others presented during the scoping process, or to the questions arising from that record. (10) Instead, Argonne relied on JPO paperwork to put a Pollyana gloss on the pipeline operations. With regard to the central points AFER made the preceding autumn, the draft EIS:
The main hearings - the second chance for public input - were scheduled for the summer of 2002. While Argonne was preparing the draft EIS, AFER was preparing its own status report on TAPS for the second phase of the review. Despite the need to update information about recurring mishaps on TAPS and delayed JPO reports, the AFER report was published in June 2002 and served as the primary basis for AFER testimony during the public hearings on the draft EIS. The AFER report followed the points of the earlier scoping presentations, with one significant difference: At this point, in order to validate AFER's arguments it was necessary to document JPO's oversight failures. Therefore, the AFER status report devoted a chapter to the contradictions and gaps in JPO's Comprehensive Monitoring Program (CMP) reports. To the five recommendations made nine months earlier, in the June 2002 report AFER added a sixth - the suggestion that the technical stipulations drafted 30 years ago should be updated to reflect technological and scientific developments and operating experience. (11)
Under NEPA requirements, the agency must respond in writing to each public comment. Hoping this process might force the agencies to a more substantial response to citizen concerns, two AFER board members - usually Stan Stephens, a Valdez tour operator and member of the Prince William Sound Regional Citizens' Advisory Council, and Walter Parker, a former member of the Arctic Science Commission and Chair of the State of Alaska's Exxon Valdez Oil Spill Commission - each presented testimony at four hearings in the pipeline corridor, while two other board members testified at other hearings. In addition, this writer testified on behalf of AFER in a consulting capacity at each of the seven hearings and presented wrap-up testimony for AFER and two other Alaska environmental organizations. (12)
The AFER representatives had plenty of company at the hearings. Argonne recorded testimony from more than 300 individuals and organizations at hearings in seven Alaska communities. Residents of the pipeline corridor, other concerned citizens, Native leaders and environmental organizations sought changes to the right-of-way terms to deal with concerns regarding the condition of TAPS and the management practices of Alyeska, the pipeline operator. In the urban communities of Anchorage and Fairbanks, representatives of a somewhat smaller group assured officials that TAPS was in tip-top shape; many in the latter group identified themselves as industry officials or oil field workers and said that tinkering with lease terms might jeopardize jobs. (13)
This assessment of the right-of-way renewal process does not repeat the arguments laid out in AFER's 2002 TAPS status report or the testimony presented during the 2002 hearings on the draft EIS. Rather, the focus here is on the manner in which state and federal agencies sidestepped or ignored important pipeline safety issues raised by concerned members of the public during that process. Although the comments and responses filled 2,315 pages, review of that voluminous record reveals numerous instances in which the reviewers failed to consider public concerns about the safety of TAPSpresented in good faith by members of the public. The following four examples, taken from the official response to issues raised by this writer during the public hearing phase of the right-of-way renewal process, are representative of agency failure to consider citizen concerns during the EIS process:
Argonne never spoke to the AFER concern that both Alyeska and the JPO are slow
to identify and slower still to respond to conditions on TAPS that placed the
pipeline - and, consequently, the environment and a significant portion of the
West Coast oil supply - at needless risk. For example, at the Glennallen hearing
July 31, 2002, the author of this report stated that "one of my principal
concerns is that Alyeska is chronically too slow to identify and mitigate problems
of three kinds; operational, physical facilities and management problems."
The agency response to this concern was, "Thank you for your comment."
At that hearing, testimony on the arguably slow problem identification and response
was supported by an example: the nine-year hiatus between identification of support
system problems needing remediation at Squirrel Creek and JPO intervention in
1999. The JPO action requiring repairs in 2000 came only after an Alyeska risk
assessment found no need to repair. This example concluded with the statement,
"I suggest that nine years is too slow." In response, Argonne wrote:
"What you point out is the authority of the BLM and the JPO member agencies
to ensure that operation and maintenance is properly performed. . . . This area,
as well as other locations having slope stability concerns, has been addressed
in several JPO reports." (14) This response was
off target since the comment did not question either JPO's authority or the existence
of agency reports. Argonne made no attempt to tell the reader how an agency report
- rather than a physical "fix" - could mitigate the earthquake risk
to an already damaged support system during the nine-year hiatus between problem
identification repairs at Squirrel Creek. Rather, Argonne relied on JPO paperwork.
2. During the hearings AFER and others suggested that the pace of problem resolution on TAPS was tied to budget constraints imposed by the pipeline owners. For example, at the Fairbanks hearing this writer acknowledged the dedication and skills of the TAPS workers, then asked, "are those individuals constrained by imposed budget cuts that make it difficult, if not impossible, to carry out those assignments in a manner that ensures the safe operation we all seek. In response, Argonne wrote that Alyeska "retains the sole responsibility for committing sufficient and appropriate resources to meet its obligations under the Federal Grant and its stipulations." However, Argonne noted, "JPO does have the opportunity to evaluate the adequacy of APSC's operating practices and does consider resource commitments (both equipment and personnel, including levels of training) as part of the root cause analyses." (16) Another fundamental question went unanswered as Argonne placed its reliance on JPO instead of investigating the issue.
3. Throughout the EIS, Argonne touted the efficacy of the Alyeska maintenance system known as Reliability Centered Maintenance (RCM). Responding to AFER's argument that recurrent problems at the Valdez Marine Terminal presented in The Emperor's New Hose provide strong indication that RCM may not function effectively to abate hazards associated with TAPS operations, maintenance and management, Argonne responded (somewhat obscurely)"The BLM and member agencies of the JPO use an adaptive management approach to evaluate the effectiveness of stipulations and regulatory oversight. Ongoing monitoring programs, as identified in the 12 Comprehensive Monitoring Reports published since 1996, provide the BLM and JPO with the necessary information to evaluate the effectiveness of stipulations in the grant and lease." (17) Once again, the Argonne response relied on unspecified portions of JPO reports and failed to address the specific issue.
In response to AFER's request for an independent audit to investigate the marked
differences between the AFER status report and government agency reports supporting
grant and lease renewal, Argonne responded: "The reader is referred to Section
2.5 of the FEIS, in which audits are addressed under Alternatives and Issues Considered
but Eliminated from Detailed Analysis." In fact, audits are considered and
rejected at Sec. 2.6 of the EIS, which describes the JPO oversight system and
concludes that "BLM does not see a need to conduct an immediate independent
audit of TAPS facilities and the associated management and operation processes,
or to conduct a continuing series of third-party audits at predetermined intervals."
(18) Again officials turned a deaf ear to citizen concerns.
Once again - you guessed it - there was no response.
How JPO Ducked Lease Requirements Regarding TAPS Tariffs
One of the most curious and telling examples of the manner in which the renewal process failed to deal with issues that might prove embarrassing to the TAPS operators is the way in which JPO handled the issue of pipeline tariffs. As discussed elsewhere on this web site, the Regulatory Commission of Alaska (RCA) issued a long-awaited, landmark ratemaking decision on TAPS rates less than 24 hours after the state issued its right-of-way renewal. The state lease specifies that the TAPS owners "transport crude oil without unjust or unreasonable discrimination" during all phases of TAPS, and that the pipeline owners comply with all state laws and regulations. (20) One year earlier, the RCA had advised JPO that a decision against the TAPS owners in the pending case would place them in violation of state law. (21) But no such finding had been made at that time. Therefore, the State Pipeline Coordinator reported in his July 2002 recommendation for right-of-way renewal, "JPO had reviewed RCA records from 1999 to present and had no finding of any violation of Alaska Statute 42.06 by the TAPS Carriers during that period." On the basis of this information, JPO reported seven months later in its June 2002 compliance report for TAPS lease renewal, although "the State Pipeline Coordinator views any violation of Federal Energy Regulatory Commisson or RCA certificates as adversely affecting the public interest," the TAPS owners were in compliance with lease common carrier and rate provisions. (22)
The JPO paperwork trail on compliance with pipeline rates may have passed a clever attorney's red-faced test at the moment the right-of-way renewal was signed on Nov. 26, 2002. But when the RCA order was issued on the following day, the carefully contrived assurances regarding pipeline tariffs were no longer valid.
In retrospect, it is tempting to speculate on what a JPO finding that the TAPS owners were out of compliance with lease terms due to tariff overcharges would have meant. For purposes of environmental monitoring, JPO took the position that 100% compliance with all laws was not an attainable goal. Therefore, JPO reasoned, a good-faith effort, coupled with an effective system of problem identification and resolution, was sufficient to permit renewal. (23) While this flexible definition of compliance enabled JPO to cut Alyeska some slack out on the right-of-way, it would be difficult to apply this notion in the rate-making arena. At the very least, such a finding would have required the JPO to issue a conditioned approval of the right-of-way renewal agreement. But if a condition could be attached to the renewal to deal with rate-making issues, why not attach similar conditions regarding environmental compliance issues? Thus, a finding of non-compliance due to tariff overcharges might have called critical attention to JPO's shaky notion of environmental compliance, one of the cornerstones of right-of-way renewal.
One wonders whether it is coincidence that these two momentous decisions on TAPS - the state of Alaska's right-of-way lease renewal on Nov. 26, 2002 and the RCA's tariff decision the following day - occurred within 24 hours of each other. It is also worth noting that both occurred in the final week of the administration of Governor Tony Knowles, who was about to step down after eight years to launch his campaign bid for the United States Senate.In January 2003, in her ninth day in the United States Senate, Senator Lisa Murkowski introduced a rider to the long-delayed omnibus 2003 appropriations bill that declared congressional satisfaction with the flawed TAPS EIS. (24) The new Senator, recently appointed by her father, who had relinquished his Senate seat to replace Knowles as Governor of Alaska, explained that she took this unusual action because she had been told that environmentalist wanted to sue to shut down TAPS. When informed that the record shows that the overwhelming majority of those who had testified about their concerns during the TAPS renewal process wanted the same thing she wanted - a safe delivery system for Alaska's oil - she seemed surprised. (25) Even more surprisingly, former Governor Knowles later pleaded ignorance of right-of-way renewal issues. When Stan Stephens told Knowles that many of those concerned about the safety of TAPS believed that Knowles, as governor, had squandered the opportunity to make procedural improvements in the TAPS right-of-way agreeement that would keep the pipeline safe for decades to come, Knowles responded, "Pat (Department of Natural Resources Commissioner Pat Pourchot) didn't tell me." (26) The normally press-conscious Knowles did not explain how he missed the many front-page headlines and guest editorials on right-of-way renewal issues during the summer of 2002 (see links).
After listening to the testimony of the rural dwellers who gathered at the Glennallen Junior High School on that summer evening in 2002 to voice their concerns about TAPS, Wilson Justin, a Native leader from Chistochina, stepped forward to speak. Just before the start of the hearing, word had reached Glennallen that state and federal officials had rejected the request from more than a dozen environmental groups for more time to review the draft EIS and companion documents - more than 1,700 pages in all - that had been released for review less than four weeks earlier. For three hours, a small group of people from the Copper Center region had expressed their concerns about the condition of the pipeline and about the review process that brought them in from summer activities to discuss a thick stack of documents they had been given insufficient time to review. In measured tones, Justin asked the officials to consider their role in these proceedings:
Although Justin's views were probably shared by most of the people in the room, officials did not respond to his characterization of their role in the right-of-way renewal proceedings. But their response took pains to assure Justin that BLM "has consulted with affected Tribal and Native organizations through the TAPS ROW renewal and EIS process," that appropriate procedures were followed, and that Section 5.3 [Government-to-Government Consultation] had been "significantly re-written to clarify the extensive government-to-government process followed by the BLM." (28) A major part of this four-page expansion and rewrite of this section in the final EIS was a list of interactions with Alaska Natives that included, by date, specific phone calls made and items mailed. If these details were significant, why weren't they included in the draft EIS in the first place? The discontent expressed by other Natives in Cordova, Fairbanks, Anchorage, Minto and Barrow suggests that once again Argonne was burying the concerns of the people affected by TAPS beneath a pile of expensive but ineffective paperwork.
At the outset of the scoping process, JPO declared that this was "your opportunity to tell the government your views on the appropriate scope of issues to be addressed in the EIS, and to identify what you believe are the significant issues related to renewal of the TAPS right-of-way." They invited testimony, but they didn't promise to listen.
Notes to "How Public Officials Manipulated Mountains of Paperwork"
1. This description is based on Joint Pipeline Office (JPO), TAPS Renewal EIS Newsletter, August 2001 and a briefing to environmental groups by JPO officials on renewal process, Anchorage, circa May 10, 2001. Some of the official documents are available at the JPO web site under the heading "TAPS Right-of-Way Renewal."
4. Richard A. Fineberg, "Comments on Trans-Alaska Pipeline System Operations," prepared for the Alaska Forum for Environmental Responsibility; presented at Scoping Meeting for TAPS Right-of-Way Renewal, Anchorage, Sept. 20, 2001.
9. For summary discussion and references to government reports on the TAPS 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.
10. U.S. Department of the Interior, Renewal of the Federal Grant for the Trans-Alaska Pipeline System Right-of-Way, Bureau of Land Management (Draft Environmental Impact Statement; BLMAK/PT-02/026+2880+990), July. 2002.)
12. See: Renewal of the Federal Grant for the Trans-Alaska Pipeline System Right-of-Way, Vol. 6, Comment Documents, Parts 1 - 4 (Parker comment nos. 117, 154, 162, 216, 227; Stephens comment nos. 118, 151, 160, 182 and 225; Dave Lacey comment no. 252; Riki Ott comment nos. 96, 190; Fineberg comment nos. 61, 122, 156, 164, 184, 246, 271, 278.)
15. For the author's testimony regarding delays between occurrence of a problem on TAPS and the identification and remediation of that problem, see: "Comments on Trans-Alaska Pipeline System Operations," pp. 7-8 (Scoping meeting, Sept. 20, 2001; restart problems); "Comments on Trans-Alaska Pipeline System Operations (Part II)," pp. 5-7 (Scoping meeting, Oct. 10, 2001; replacement of RGV-39, cold restart); Volume 6: Comment Documents: Part 1 (comment no. 61, pp. 224-225 [Alyeska and JPO failure to identify and remediate in a timely manner]); Volume 6: Comment Documents: Part 2 (comment no. 122, pp. 1086 [Cordova, July 26, 2002; restart problems]; comment no. 156, pp. 1301-1302 [Valdez, July 30, 2002; RCM at Valdez Marine Terminal]; Volume 6: Comment Documents: Part 3 (comment no. 184, pp. 1464 [Fairbanks, Aug. 5, 2002; cold restart and wet insulation]). The eighth reference to this problem does not appear in the spoken comments. In written testimony submitted at Anchorage August 5, 2002, the author posed these questions:
19. Richard A. Fineberg, "Public Comment on Draft Environmental Impact Statement, Renewal of the Federal Grant for the Trans-Alaska Pipeline System Right-of-Way (BLM/AK/PT-02/026+2880+990, U.S. Department of Interior, Bureau of Land Management, July 2002) and Commissioner's Statement of Reasons and Proposed Written Determination for the Renewal of the Trans-Alaska Pipeline Right-of-Way Lease (ADL 63574, July 5, 2002)," Aug. 20, 2002 (testimony submitted on behalf of the Alaska Center for the Environment, the Alaska Forum for Environmental Responsibility and the Northern Alaska Environmental Center), pp. 4-7.
20. Right-of-Way Lease for the Trans-Alaska Pipeline between the State of Alaska and Amerada Hess Corporation, ARCO Pipe Line Company, Exxon Pipeline Company, Mobil Alaska Pipeline Company, Phillips Petroleum Company, Sohio Pipe Line Company, and Union Alaska Pipeline Company (circa March 7, 1974' renewed Nov. 26, 2003), Secs. 4 ("Common Carrier") and Section 9 ("Compliance with State Laws and with Regulations and Orders of the Alaska Pipeline Commission" [predecessor to the Regulatory Commission of Alaska]).
21. "Regulatory Commission of Alaska Report," in: Alaska Department of Natural Resources, The State Pipeline Coordinator's Report for Renewal of the Trans-Alaska Pipeline Right-of-Way Lease, Attachment I, July 2002, pp. 183-186.
22. The State Pipeline Coordinator's Report for Renewal of the Trans-Alaska Pipeline Right-of-Way Lease, pp. 30 and 33 (citing JPO Assessment Report ANC-02-A-006 and Surveillance Reports ANC-02-S-025 and ANC-02-S-030).
23. See: Joint Pipeline Office, The Trans-Alaska Pipeline System: A Comprehensive Monitoring Program Report Examining Grant & Lease Compliance, April 2002 (released May 28, 2002; CMP-02-C-001 [Report #11]), p. 1-2; and Trans-Alaska Pipeline System Owners, TAPS Right-of-Way Compliance Review, March 2001, p. 2.
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