Commentary: Fairbanks Daily News-Miner, March 11, 2004, p. A6


Alaska at risk in pipeline changes


By Richard Fineberg


            A recent glimpse of the ugly, automated future of the Trans-Alaska Pipeline System (TAPS) was soft-pedalled by government monitors and unreported by the press. 


            On January 24, an Alyeska Pipeline Service Co. electrician at Valdez tripped the wrong circuit breaker, causing the pipeline’s nearby Operations Control Center (OCC) to issue an automatic command to stop pipeline flow. 


            According to Alyeska’s Feb. 25 report to government monitors, that’s when the real fun began.  On the 800-mile pipeline, ninety-five mainline valves – approximately one every nine miles – are supposed to close in sequence to limit oil spills. 


            At Pump Station 12, in the Chugach Mountains 65 miles from Valdez, the pipeline valves closed.  But north of Pump Station 12, the valves didn’t respond over a 150-mile stretch.


            If the valves do not close in sequence, pressure from continuing oil flow blocked by a closed valve might cause the steel pipeline to swell like a sausage and rupture. 


            At Pump Station 12 there was no place to divert incoming oil safely: the relief tank was taken out of commission in an earlier economizing move.


            At the OCC, controllers hurriedly opened the Pump Station 12 relief system.  Then they dispatched a security officer to an abandoned pump station in Isabel Pass to try to close the balky valves by toggling the switches in the defunct control room.  


            The valves didn’t respond, but a technician who happened to be working in the area  drove to the pump station.  Three hours after the initial shutdown command was given, he finally got the valve controls to work.


            Alyeska personnel now believe that aging control boards at the pump stations may have failed.  It will take months to build replacement boards and install them.  Until this is done, Alyeska is testing the unreliable control boards weekly.


            In 2002, when government monitors approved Alyeska’s request to renew its pipeline leases for another 30 years, they assured the public that rigorous maintenance procedures would detect worn components before they failed, preventing this kind of problem.  In granting approval,  state and federal officials ignored public concerns regarding operational and maintenance problems on the pipeline. 


            Late last year, pipeline monitors again paid little attention to public concerns and approved Alyeska’s poorly crafted oil spill plan revisions for automated pump stations and personnel reductions at remote pipeline sites.  After approving the plan, the federal Bureau of Land Management released a report acknowledging that the approved changes will result in slower spill response over more than 25 percent of the pipeline.


            On March 4 Alyeska announced that the pipeline owners have approved plans to automate pump stations on the pipeline and relocate spill response personnel in regional response centers, reducing pipeline work force from 1,600 persons to approximately 1,250. 


            Upgrading pump stations sounds like a good idea.  But in fact this is a triple whammy for the state.


            First:  Alyeska is reducing field personnel, but people are critical to rapid and effective  oil spill detection and response.


            Second:  This plan has the cart before the horse.  In November 2003, almost as an after-thought to appease public concerns, Alyeska promised to do a risk assessment and study of the fate and effects of oil on inland streams.  This basic planning work should have been done before this massive overhaul was authorized. 


            Third: Alyeska says it wants to cut costs, but what the TAPS Owners are really after is a handsome rate of return on new capital investments.  Under the 1985 TAPS tariff agreement, profit on capital investment is added to an inflation-adjusted per-barrel profit allowance that already makes the pipeline incredibly profitable.  I estimate that the capital improvement bonus to the TAPS Owners is more than 18 percent per dollar invested.  Moreover, the automation plan gives the major North Slope producers, who also own more than 90 percent of the pipeline, a deduction that reduces their federal income tax on profits from high oil prices.


            Without aggressive government oversight on TAPS, automation and cost-driven management will continue to place Alaska’s environment at needless risk.




Richard A. Fineberg of Ester is an independent consultant who reports on economic and environmental issues related to oil development.