ALYESKA VOWS TO CORRECT PIPELINE'S PROBLEMS

Alyeska Pipeline Co. owners have told a congressional investigating committee they will correct management and repair problems with the Trans-Alaska Pipeline System. Their pledge came at a House energy subcommittee hearing on a report prepared for the Bureau of Land Management which was highly critical of the oil pipeline. BLM Director Jim Baca ordered the report on the basis of whistleblower complaints against Alyeska (OGJ, July 26, p. 32). BLM is the key federal agency overseeing operation

Nov. 22, 1993

6 min read

Alyeska Pipeline Co. owners have told a congressional investigating committee they will correct management and repair problems with the Trans-Alaska Pipeline System.

Their pledge came at a House energy subcommittee hearing on a report prepared for the Bureau of Land Management which was highly critical of the oil pipeline.

BLM Director Jim Baca ordered the report on the basis of whistleblower complaints against Alyeska (OGJ, July 26, p. 32). BLM is the key federal agency overseeing operation of the pipeline, built under an act of Congress.

Baca told the hearing, "We are going to hold Alyeska's feet to the fire as far as operating a safe pipeline."

BLM plans to recommend changes to Congress by yearend on how the pipeline could be run better and order Alyeska to make specific changes in the pipeline's operations by mid-April.

Baca said, "We don't know exactly how much the corrections are going to cost. Certainly, however, it's going to be a big ticket-perhaps in the tens of millions of dollars. But the bottom line is that if that pipeline is going to continue operating, I intend for it to do so in a safe and environmentally sound manner."

BLM has hired three new pipeline inspectors and plans to hire two more. It has let contract for a study on the issue of TAPS corrosion. It also has established a confidential hotline so TAPS employees can inform the government of problems.

Officials of the major Alyeska owners -- Exxon, BP, and ARCO -- pledged to strengthen Alyeska's leadership and correct problems in a timely manner.

FINDINGS

The 300 page audit, conducted by Quality Technology Co., Lebo, Kan., praised Alyeska for some aspects of its operation and noted the pipeline effectively delivers one fourth of the U.S. oil supply.

The report found that "weeping" wires are not a fire hazard. Weeping wires are aging electrical wires that are seeping impregnated mineral oil that was meant to lengthen the life of the wire.

The condition exists at the Valdez terminal and several pump stations, particularly Stations 6, 8, and 10.

The audit concluded that air and water pollution from Station 6 is not affecting the Stevens Village native settlement. It found no danger in operation of the Valdez marine terminal loading arms and found no misuse of emergency breakout tanks.

However, the study cited a number of deficiencies in the quality assurance and quality control areas.

It found "a lack of properly maintained and calibrated equipment, lack of professional standards and criteria for inspection, lack of inspection record keeping and documentation, inadequate inspector certification and training, an inadequate inspection regime, and inadequate inspection of pipe girth welds."

The report said Alyeska has an inadequate control program in the event of a major earthquake.

It found "inadequate or missing documentation of all types, including labeling of equipment and drawings that might be needed in an emergency.

It said electrical systems are out of compliance with the National Electrical Code to an unacceptable degree. Major problems are that trays carrying electrical cables are overloaded, and supports might fail during an earthquake.

The audit said at many points the pipe is touching above ground support posts, with the potential for rupture during an earthquake.

Owen Thero, president of Quality Technology, complained that Alyeska's management has failed "to listen to what (problems with) the hardware is telling them."

BLM'S COMPLAINT

Baca was harsh on Alyeska at the hearing, blaming it for "an adversarial attitude that bred contempt for the concerns of the public interest."

He said there has been "a destructive disunity among the owner companies in their approach toward running Alyeska that has hurt the way Alyeska has dealt with these important matters."

Baca said there has been poor quality assurance and control and "grave deficiencies in all types of documentation and a poor understanding of its relation to a quality operation and safety considerations. This concern is aggravated by an apparent cavalier attitude by Alyeska that has resulted in what we believe to have been document destruction and falsification."

Further, he said, there has been "a repressive atmosphere at Alyeska that punishes or intimidates those who are aware of problems and who try to shed light on them so they can be corrected."

Baca said, "One thing is certain: The old strategy involving dueling experts and competing audits can no longer be tolerated. This has gone beyond the acceptable dialogue of experts that disagree and has become a means to delay and confuse.

"There can be no excuse for Alyeska or the owners continuously looking for problems instead of addressing the large stack of problems already known to exist. There can no longer be any excuse for repeatedly, challenging details when whole systems are inadequate or lacking."

OWNERS RESPOND

Mike Bowlin, president and chief executive officer of Atlantic Richfield Co., conceded, "TAPS has management and operational problems which will require broad based solution. It also has become clear that owners of TAPS must decide on a course of action to accelerate improvements in the pipeline system and its operation."

Bowlin said TAPS owners stand ready to take the necessary steps to restore confidence in the pipeline.

He noted TAPS has retained Arthur D. Little Inc. to conduct an assessment of the pipeline system and recommend changes. Alyeska also has drafted a TAPS improvement plan that reduces operating committees and improves the decision making process. The plan names a quality assessment executive with the job of improving health, safety, and environmental compliance on the pipeline.

Richard Oliver, CEO of BP Exploration, said, "We are proud of Alyeska's history of safe and reliable operations, but current performance falls short of the standards we all expect."

He said the owners' oversight organization is far too complex for today's operating mode, although it was appropriate during the years when the pipeline was built.

He said that's why the owners have reorganized its committee structure, transforming the owners' committee into a more traditional "board role" while retaining a strengthened audit subcommittee.

H.J. Longwell, president of Exxon Co. U.S.A., said, "To the extent there have been shortfalls and problems have occurred, I can assure you this situation is contrary to our expectations.

"We have every incentive to see that this pipeline is operated properly and that it is not put at risk. We expect all problems to be corrected promptly.