Testimony: Richard A. Fineberg, “Final Comments,” Aug. 20, 2002
Alaska Forum for Environmental Responsibility
Alaska Center for the Environment
Northern Alaska Environmental Center
August 20, 2002
BLM TAPS Renewal Scoping
Argonne National Laboratory, EAD/900
9700 South Cass Avenue
Argonne, IL 60439
State of Alaska
Department of Natural Resources / JPO
Joint Pipeline Office
411 West 4th Avenue, Suite 2
Anchorage, Alaska 99501-2343
Re: 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).
Dear BLM and State of Alaska:
The Alaska Forum for Environmental Responsibility has closely monitored and actively participated in the recent hearings held in seven Alaska communities on TAPS Grant and Lease renewal. Three factors compel us to submit this supplementary comment at the close of the 45-day public review process: the importance of this issue to the citizens of Alaska, the inadequacies of the review process and the shortcomings of the documents that support proposed agency recommendations to renew the TAPS right-of-way Grant and Lease agreements without modification. The Northern Alaska Environmental Center and the Alaska Center for the Environment endorse these comments.
Many of those testifying at the recent hearings criticized the timing of the hearings for two principal reasons: The hearings took place at the height of the summer, when many persons were engaged in hunting, fishing or were otherwise engaged in customary summer activities. Moreover, many who testified requested more time to review the documents on which they were asked to comment. These documents, totaling more than 1,900 pages, were made public on July 5, only three weeks before the first hearing. More than twenty public interest, environmental and Native organizations formally requested an extension to the public comment period, but the request was denied by state and federal officials July 31. One indication of the importance with which many people regard this issue is the fact that approximately 150 people testified at seven statewide hearings that ended August 9. In three communities, the hearings ran past midnight; at Barrow, elders waited more than five hours for the opportunity to express their concerns about the renewal terms. Although we believe the procedural flaws in the public proceedings that end August 20 compromise the entire process, our process objections are already part of the record and will not be repeated here. Rather, this comment will focus on TAPS and the operating, maintenance and management procedures of the TAPS Owners.
Representatives of the Alaska Forum observed and testified at each of the seven hearings. Principal issues discussed by Alaska Forum representatives at the seven hearings included the following:
č the pernicious effect on the safety of TAPS operations resulting from chronic cost-cutting pressure by the TAPS Owners;
č the effectiveness of the Reliability Centered Maintenance (RCM) process, which both the state and federal monitors constituted a major reason to assume the adequacy of the TAPS Owners’ program for assuring adequate maintenance on TAPS;
č the citation of the RCM process as a basis for finding the TAPS Owners to be in compliance with certain Grant and Lease requirements;
č failure of the government monitors to devote sufficient attention to risks associated with human factors and shortcomings in operating procedures;
č Alyeska’s failure to identify and abate conditions adverse to safe operations in a timely manner;
č failure of the government documents to deal with demonstrated inadequacies in the required TAPS mainline oil spill prevention and response program;
č failure of the government documents to deal adequately with Alyeska’s efforts to deal with the risks associated with climate change;
č failure of the government documents to deal adequately with Alyeska’s efforts to deal with the risks associated with seismic events;
č failure to provide details as to how (or whether) Alyeska has dealt with the problem of restarting TAPS after an extended winter shutdown – a design requirement that Joint Pipeline Office (JPO) identified in 2001 as the most significant operational compliance issue on TAPS.
In addition to these concerns, the Alaska Forum also submitted for the record its June 2002 report, The Emperor’s New Hose: How Big Oil Gets Rich Gambling with Alaska’s Environment, by Richard A. Fineberg. That report and our previous testimony contain strong evidence to support each of the points to which the Alaska Forum has previously testified. The testimony we have presented during these hearings provides both documentation for the concerns of that have been raised during the public review process. This final comment provides perspective.
The Alaska Forum (and most of those advocating modifications to the Grant and Lease) do not seek to terminate TAPS operations. The guiding purpose of the Alaska Forum’s efforts in the Grant and Lease renewal process has been to institute improvements in the governance of TAPS that will protect Alaska’s land and watersheds – and continued, uninterrupted delivery of this vital commodity -- during the proposed period of renewal.
A proposed improvement recommended by many – but given little consideration in the renewal process – is the establishment of a citizens’ oversight group (COG) for the pipeline similar to the organizations established by Congress in 1990 for Prince William Sound and Cook Inlet. Noting that the Bureau of Land Management already has a mechanism for citizen oversight of all lands under its management, the federal Draft Environmental Impact Statement (DEIS) dismissed this suggestion. The state’s Proposed Determination simply ignored the proposal. In response, we renew our request for consideration of this proposal and make the following points:
· a multi-purpose, statewide group dealing with diverse lands issues is clearly different from a technical advisory body whose focus would be limited to the pipeline, the TAPS corridor and potentially affected downstream areas;
· the existence of other institutional mechanisms does not preclude the establishment of a COG by contractual agreement;
· the failure of government monitors to apprehend and address citizen concerns about the operation, maintenance and management of TAPS in a timely manner demonstrates the need for a formal entity that would improve the interaction between government and concerned citizens;
· during this hearing process, the need for such an entity was recognized by representative governments at both ends of the pipeline; and
· the efficacy of citizen oversight groups has been demonstrated by the experience in Cook Inlet and Prince William Sound. In view of the positive impacts these groups have exercised on environmental issues in their respective regions, we believe this issue falls clearly within the scope of the DEIS and Proposed Determination.
In order to focus on the environmental consequences of TAPS operations, maintenance and management in the limited time available for comment, during this hearing process the Alaska Forum decided not to develop detailed materials on TAPS economics or North Slope operations, which are served by the pipeline and dominated by the three major owners of TAPS. However, during the scoping process last fall the Alaska Forum submitted several economic reports dealing with the profitability of North Slope operations and the effects of TAPS on competition, a factor that is generally recognized as crucial to continued North Slope development. Additionally, our June 2002 report quantifies both the high of return that TAPS delivers to its owners and the separate – and equally extraordinary – windfall benefit the TAPS Owners have received through pre-collection of cash for the future dismantling of TAPS. The federal DEIS arbitrarily ignored these economic issues, considering only economic literature that excluded analysis of profitability, cash flow, competition and the windfall gains the TAPS Owners realize through the dismantling provision of the TAPS tariff (shipping charge). We question the logical and legal bases for this approach, as well as the results. While we have noted, as a technical matter, apparent contradictions in the aggregate data on which the authors of the DEIS explicitly relied, in this wrap-up testimony we are concerned with three broader issues that flow from the selective approach to economics taken by the DEIS:
· Based on (1) investment in the existing infrastructure, (2) the marketing system served by that infrastructure and (3) analysis of North Slope profitability previously submitted by the Alaska Forum, we believe the COG – and the other measures we have proposed – may have net economic benefit because these measures tend to reduce the likelihood of a disastrous shutdown of oil flow. Moreover, we have seen no analyses to indicate that environmental mitigation measures we have proposed are not viable economically.
· In Anchorage and again at Fairbanks, some persons suggested that a COG for TAPS might jeopardize the competitiveness of North Slope oil on the global market. Many of those individuals noted present or past or affiliation with firms employed on TAPS, on the North Slope or in support services; their testimony was typically unsupported by data such as that previously submitted by the Alaska Forum. As Walter Parker of the Alaska Forum Board later observed, the opposition to a citizens’ oversight group by individuals who believe this modest proposal jeopardizes their livelihoods precisely demonstrates the Alaska Forum’s concern that the perceived (but unquantified and possibly mis-perceived) need to hold down costs tends to threaten safe and environmentally sound operations.
· Both the high rate of return on TAPS investment and the demonstrated windfall benefit that the collection of approximately $1.6 billion for the future dismantling of TAPS have potential environmental consequences, as well as harmful effects on competition. The Alaska Forum finds the determination that these issues are beyond the scope of the DEIS incomprehensible and therefore requests explanation.
The Alaska Forum has found agency efforts to redress various problems on TAPS to be insufficient. The rejection of public concerns about specific issues on TAPS by the agencies that are supposed to address those concerns is a subject that warrants further attention. As we request again that the renewal process consider these previously-documented issues in detail before a 30-year renewal for the TAPS right-of-way is authorized, we suggest a possible explanation for agency intransigence and the polarization between JPO and concerned citizens. Consider in this regard the alleged failure of the TAPS operators to abate in a timely manner the risks associated with recurrent pipeline restart problems after planned and unplanned shutdowns. The Alaska Forum provided reviewers with an information packet documenting restart problems with potentially significant consequences in each of the last seven years. However, these concerns have been dismissed by state and federal monitors and were ignored by the documents released in support of the proposed Grant and Lease renewal. Informally, JPO officials have told the Alaska Forum that TAPS restart procedures are safe and that each incident was an isolated event. In other words, JPO believes that because it cannot identify a single causal mechanism, these events are unrelated. As indicated by the documentary package, the Alaska Forum believes that because each event occurred during a restart, Alyeska has demonstrated its inability to manage restarts safely.
In assessing this difference of opinion, it may be useful to consider the lessons of the ill-fated Challenger launch in 1986. The space shuttle, carrying a crew of seven including its first civilian passenger, exploded 73 seconds after blast-off, killing all on board. The Challenger decision seriously damaged the credibility of the National Aeronautic and Space Administration (NASA) and resulted in a Presidential Commission to determine the cause of this tragedy. The final, fatal mistake was the decision to launching at temperatures far below that specified as safe for the critical joint between the solid rocket motor and its booster. The critical O-rings that comprise that joint failed during the launch. Moreover, engineers from Morton Thiokol, the rocket manufacturer, had specifically warned launch managers of the danger. Had an arrogant and amoral bureaucracy, intent on enhancing its reputation and ensuring congressional funding by meeting its schedule, ignored these technical concerns? After reviewing the event industrial sociologist Diane Vaughan came to a different but equally disturbing conclusion: She found there was no intentional managerial wrongdoing. Rather, she concluded, the disaster resulted from the failure of a complex organization to deal appropriately with an unprecedented and uncertain technology in an environment of scarcity and competition.
What went wrong? The problem of charring and erosion of the critical O-ring seal had been clearly identified well in advance of the fatal launch. With no cold-weather launch experience, as early as 1982 the NASA engineers began to develop a set of makeshift guidelines designed to deal with the problem. With each successful launch, they became more confident about their complex compromise with safety. In retrospect, physicist Richard Feynman, a member of the Presidential Commission, felt the warning flags should have been clear. The O-rings were not supposed to char and erode at all. Six months before the fatal launch, an independent observer within NASA had concluded that the partial failure of the O-rings on previous launches immediately defined as “deviant and risky” a problem that people in the launch decision chain regarded as “normal and acceptable.” But that warning flag was discounted, in part because the author was not an engineer. An investigating group was formed to consider the problem; despite the concerns of the engineers within that group, the investigation languished, at least in part due to inadequate resources. Consequently, the issue was not resolved in a timely manner.
Several months later, as the weather in Florida approached freezing on the eve of the January 1986 launch, the unresolved problem became critical. At that point, all of the appropriate rules were followed. After an unusual pre-flight teleconference meeting failed to resolve all doubts, flight managers even extended their rules to allow the concerned engineers additional time to marshal their arguments. By then it was too late. Operating within the accepted the norms of cost, scheduling and safety satisficing, the engineers were further handicapped by partial information. Moreover, they were attempting to communicate among themselves from three separate locations. In the short time available they were unable to present an argument that met the required standards of scientific excellence. Only later was it discovered that the critical technical rule regarding temperature constraints had been misread, misinterpreted and misused for years. In sum, the concerned engineers were unable to combat a mind-set that unintentionally discounted critical arguments while highlighting confirming information. According to Vaughan, the engineers reluctantly acceded to the launch decision, contributing to a tragic mistake whose “origins were in routine and taken-for-granted aspects of organizational life that created a way of seeing that was simultaneously a way of not-seeing.”  Reflecting further, Vaughan noted that some analysts believe that accidents are normal or inevitable in certain technological systems. The root of those accidents, she writes, may lie within the system, rather than its component parts.
The failure of the Challenger team, despite the best intentions of its members, calls attention to the danger that any system designed to manage new technology may develop an inappropriate resistance to warning signals generated outside that system. This lesson may help explain the marked differences between the analysis of the restart issue by the JPO and that of the Alaska Forum, discussed and documented in statements in this forum, and in The Emperor’s New Hose. The fact that potentially serious problems have occurred during TAPS restarts year after year suggests the existence of a condition adverse to safe operations – a problem that exists whether or not JPO has identified the warning signal.
The various issues identified in previous Alaska Forum testimony in which the Alaska Forum has differed from government monitors suggest that three lessons from the history of the Challenger may be applicable to TAPS:
· engineering experts do not have an iron-clad grip on truth;
· a complex system may contain the seeds of its own downfall; and
· cost constraints may have unanticipated consequences for system safety.
The lessons of the Challenger appear to have particular relevance to the arbitrarily-defined concepts of compliance and abatement employed by the TAPS monitors and relied upon by the DEIS and the documents supporting the Proposed Determination. As noted in previous testimony, when the records clearly indicate recurrent failures to abate hazards and conditions adverse to safe operations, we do not believe that the TAPS Owners are in compliance with the requirements of the Grant and Lease. Further, we believe this discrepancy is evident in the documentary record, as demonstrated by ongoing agency enforcement actions that have been taken and are underway precisely because identified compliance issues remain unresolved.
At the broadest level, the history of the Challenger suggests the need for independent review of agency conclusions regarding the immediate and long-term safety of TAPS. The following questions, raised in previous testimony, are foremost among those that should be answered by an independent inquiry before the TAPS Grant and Lease are renewed:
· Has JPO demonstrated that the Reliability Centered Maintenance (RCM) can serve to identify and eliminate unanticipated problems caused by human error on TAPS?
· Has JPO demonstrated that RCM can function effectively when top managers seek budget reductions that may reduce the ability of field personnel to participate in the RCM process?
The discussion of recurrent problems at the Valdez Marine Terminal in The Emperor’s New Hose provides strong indication that RCM may not function effectively to abate hazards associated with TAPS operations, maintenance and management.
In conclusion, we reiterate that the purpose of these questions is to underscore the importance of the specific issues discussed in the Alaska Forum’s status report on TAPS, and in our previous testimony.
Alaska Forum for Environmental Responsibility
Submitted on behalf of the Alaska Forum for Environmental Responsibility, the Alaska Center for the Environment and the Northern Alaska Environmental Center.
(Comments and BLM responses included in BLM Final Environmental Impact Statement, Vol. 6, Part 1, No. 61.)
 This summary is not intended to replace testimony submitted previously by representatives of the Alaska Forum. The points and concerns raised by the Alaska Forum and requiring formal response can be found in the oral and written testimony submitted for the record at each of the seven public hearings. Since those materials, The Emperor’s New Hose and our comments during scoping last September all contain documentary references for the concerns presented, that documentation is not repeated in this commentary.
 Interview with Gary Reimer, Deputy Authorized Officer, BLM, at Anchorage, Aug. 14, 2002.
 Diane Vaughan, The Challenger Launch Decision: Risky Technology, Culture, and Deviance at NASA (University of Chicago Press, 1996), pp. xi-xv.
 Vaughan, pp. 9, 395.
 Richard Feynman, The Pleasure of Finding Things Out (Perseus Publ., 1999), pp. 155-156.
 Vaughan, p. 417.
 Vaughan, pp. 450-455.
 Vaughan, pp. 2-6.
 Vaughan, pp. 396-399.
 Vaughan, p. 391.
 Vaughan, p. 354.
 Vaughan, p. 394
 Although the purpose of this commentary is to provide perspective rather than to document, we note two examples from the Alaska Forum’s previous testimony and reports: Enforcement actions by the U.S. Department of Transportation and actions by the Alaska Department of Environmental Conservation to resolve the inadequacies in the TAPS mainline oil spill contingency plan that became evident during the response to the MP 400 bullet hole spill last October.