Alyeska Pipeline Service Co. continues to grapple with a tightening state regulatory squeeze over air emissions from the Trans-Alaska Pipeline System (TAPS) and Valdez terminal it operates for a group of companies in Alaska.
In the latest development, Alaska Department of Environmental Conservation (ADEC) has said the TAPS pipeline and terminal emit considerably more air pollution than expected.
The U.S. Environmental Protection Agency stepped into the fray by issuing a notice of violation against Alyeska, alleging the company made changes in operations at pump stations along the pipeline and at the terminal without first obtaining ADEC permits.
The upshot of all this still is unclear, but Alyeska's concern is that the state agency will seek to stiffen air quality regulations for the pipeline and terminal to the point of requiring costly best available control technology (BACT) to curb emissions.
Alyeska is negotiating with ADEC and EPA to work out their differences and stressed it intends to comply with regulations that emerge from those efforts. It has 90 days to respond to ADEC's findings.
Alyeska recently said ADEC's proposed regulations governing hydrocarbon emissions during tanker loading operations at the terminal would cost the industry more than $100 million (OGJ, June 25, p. 18).
ADEC CLAIMS
Based on a 2 year review, ADEC said it has determined TAPS and Valdez facilities are emitting significant levels of sulfur dioxide, nitrogen oxides, and volatile organic compounds (VOCS) in excess of originally permitted levels.
If confirmed, the emissions increases are the most extensive ADEC has recorded, the agency said.
ADEC said the review was prompted by declines in air quality measured around the Valdez terminal in 1988. The study was later broadened to cover all Alyeska facilities and identified 30 sources at pump stations and the terminal where allegedly significant increases in air pollution have occurred.
ADEC suspects equipment changes and changes in fuel burned at pump stations caused the emissions increases.
Further, while Alyeska told the state about some of the equipment changes as required by law, other changes were not reported, the agency said.
Specifically, ADEC believes the pollution increases were caused by:
- Modifying the maximum fuel consumption at each of the main gas turbines at Pump Stations 1-4 and five turbines at Pump Station 12 by adding rim cooling units to the turbines.
- Increasing the release of VOCs from crude oil storage tank vents at the terminal by a volume of more than 40 tons/year.
- Increasing the maximum rated capacity of waste gas incinerators at the terminal, resulting in more than 40 tons/year of SO2 emitted beyond permit levels.
ADEC contends the pollution increases occurred without Alyeska first seeking a Prevention of Significant Deterioration (PSD) permit, a possible violation of state and federal law.
EPA NOTICE
EPA said its notice came in support of ADEC efforts to increase stringency of its air pollution permits issued to Alyeska.
The PSD permits would require Alyeska to conduct air quality analyses of its operational changes and to apply BACT standards, EPA said.
"Our action is a step that will add the force of federal law to upcoming ADEC permits that will tighten air pollution control at Alyeska facilities," EPA said.
Alyeska said the EPA move lends ADEC the federal government's litigator mechanism to allow it to implement federally enforceable permits.
ALYESKA'S RESPONSE
Dick Mikkelsen, Alyeska environmental permits supervisor, said, "We have done nothing that would require us to file under PSD notification."
He contends that the claims are essentially a regulatory technicality rather than an increase in pollution, adding that the company is "baffled" over some of ADEC's claims.
Alyeska burns turbine fuel from topping plants at pump stations along the mainline system in the giant jet engine turbines that run the TAPS pumps.
Before TAPS was built, Alyeska projected the turbine fuel would have a 0.17% sulfur content. Instead, the fuel started out with a 0.25% sulfur content and that has crept up to 0.35%, which ADEC maintains should have triggered notification for a PSD permit.
"That came out of a 1974 planning document that had an air quality analysis in which we guessed at the composition of the turbine fuel. A change in the fuel is not a PSD trigger," Mikkelsen said.
That planning document also described a vapor recovery system that would capture and incinerate all fugitive hydrocarbon emissions.
"The incinerators were getting pretty old and weak and couldn't handle the vent gases from crude storage tanks," Mikkelsen said
As a result, maintenance problems led to occasional overpressures in unusual circumstances, resulting in the venting of crude storage tank vapors.
"Because we hadn't anticipated these circumstances in the planning document, that Was deemed a promise not to release vent gases and thus a violation of the permit," Mikkelsen said.
Further, Alyeska earlier this year signed a consent decree with the state agreeing to repair the incinerators. It was put under a tight deadline and faced fines of $100,000 initially and $5,000 for each day of violation thereafter if it didn't complete the incinerator repairs on time. It completed the job on time.
"The agreement was to put the incinerators back in the condition they were in 1974," Mikkelsen said. "We did not increase their capacity.
"We did what we were told, then we were considered in violation for repairing it without a permit."
As to the rim cooling complaint, Alyeska in 1974 projected how much horsepower it would take to run 2 million b/d of crude past Pump Station 4. Because the pipeline was successful in using drag reduction agents, it eliminated the need to build the fourth pump station.
In the pump stations, the jet engines drive reaction turbines that in turn drive pumps. The engines were not allowed to run at maximum capacity because they were limited by capacity of the reaction turbines, which tended to overheat and fail when the engines ran full out.
Alyeska hit upon the solution of taking cooling gas off the jet engines and putting it on the rim of the reaction turbines. It could thus run the jet engine at 24,000 hp vs. 18,000 hp and increase pump power.
"Just by increasing the horsepower of the turbines, we technically increased capacity of the system to generate more pollutants," Mikkelsen said.
"But we never exceeded the level of pollutants originally projected."
Mikkelsen said the real concern for Alyeska is that ADEC might require BACT for NOx control at the pump stations. That could call for water injection to control NOx emissions on all mainline pump station turbines, an extremely costly solution.
However, Alyeska thinks it is exempt from BACT standards for NOx control at pump stations because the original legislation included an exemption for gas turbines in remote locations.
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