Monday, November 8, 2010

State, BP reports paint different pictures of aging Alaska oil fields (Alaska Dispatch)

| Nov 7, 2010
1025-dec-slope-docsThe Alaska Department of Environmental Conservation recently finished a draft report, three years in the making, that concludes aging oil infrastructure on the North Slope is basically in good shape and there's not much reason to be concerned that oil spills will increase substantially as production facilities get older.
But last week the investigative news siteProPublica published a story that suggests a much more serious situation. Data from an internal BP maintenance report shows a significant problem with corrosion in pipelines that are part of BP's North Slope operations, according to ProPublica. The story also cited oil field workers who contend "the company's fire- and gas-warning systems are unreliable, that the giant turbines that pump oil and gas through the system are aging, and that some oil and waste holding tanks are on the verge of collapse."
Alaska Risk Assessment North Slope Spills Analysis
BP now says the ProPublica story is overblown and that the corrosion documented in the maintenance records is part of the company's corrosion-control program that identifies and repairs high-priority spots. The company says the fact that corrosion has been identified does not mean a spill is imminent but just the opposite -- that the company is fixing the most worrisome spots before they cause trouble and has reduced its corrosion-related leaks by more than 40 percent in the past few years.
Still, the vastly differing pictures of the physical condition of the state's largest oil production facilities has critics wondering how the state could have spent more than $2 million and three years on a study and not uncovered the significant maintenance issues that ProPublica got through a relatively simple computer database printout.
"Obviously we've got a very dangerous situation on the North Slope right now," said Rick Steiner, a longtime Alaska marine conservation professor who's been deeply involved in oil industry operations here and overseas and, since the Deepwater Horizon blowout, the Gulf of Mexico. "We've heard all sides saying Alaska's regulatory system is the best in the world and it isn't. That simply is not true."
The state's "risk assessment" was put into motion by the Alaska Legislature in 2007 at the urging of then-Gov. Sarah Palin after a series of small spills on the North Slope was followed by a major spill in 2006 that caused the field to be shut down for a few weeks. Oil taxes, fees and royalties, primarily from the North Slope, fund more than 85 percent of the state government. Corrosion has been a major concern at the oil production facilities, which have operated for more than 30 years on the North Slope.
The state's risk assessment was funded by a $5 million budget and was supposed to go far beyond the North Slope. Initially it was to also cover the 800-mile trans-Alaska oil pipeline and the Valdez oil-tanker terminal, as well as Cook Inlet oil and gas production facilities.
But the scope of the project was scaled back to, in essence, a review and analysis of previous spills and incidents on the North Slope alone. State officials brought in the National Academy of Sciences to help shape the risk assessment and eventually concluded the scope was too big to get meaningful results. The oil companies also were reluctant to provide detailed information on their operations that would have been necessary to do a deeper look, something the NAS realized, and the state chose not to put up a legal fight to force the companies to cooperate, DEC officials have said.
The draft report has not been officially released but was obtained and published by the Alaska Dispatch on Oct. 25.
"The data does not indicate that the petroleum infrastructure is nearing its 'end of life,'" the draft North Slope Statistical Analysis says. "There is no significant change in spill trends which would indicate an increase in random failures."
It identified flow lines -- which carry a mix of oil, gas and water -- as the most potentially problematic and suggested those might need more monitoring. However, a "paradigm shift" in the way DEC regulates and oversees North Slope infrastructure isn't necessary, the report concluded.

'We need a watchdog, not a lapdog'

The draft study is the first look at the state's thinking, and environmental advocates were surprised by the reduction in scope as well as the conclusions and recommendations.
"My initial reaction is severe disappointment, bordering on disgust," Anchorage environmental attorney Peter Van Tuyn wrote in an e-mail. "Four and half years after the BP spills at Prudhoe Bay, and after so many layers of promises from Palin, (U.S. Sen. Lisa) Murkowski and (current Gov. Sean) Parnell that something would be done to ensure the integrity of North Slope and TAPS infrastructure, and Alaska can't even accomplish an assessment of the state of that infrastructure?! Why is it that the oil companies can simply say 'we're not going to provide you info' and the state accepts that? We need a watchdog, not a lapdog."
Larry Dietrick, the longtime DEC official who is director of the agency's Spill Prevention and Response Division and who oversaw the risk assessment process, said last week the report is still just a draft. "We're working pretty diligently to sort through and come up with proposed mitigation measures to do the best job to reduce the severity and frequency of spills," he said.
There's still not a firm date for a final report but the agency hopes to have it done in a few weeks, he said.
The draft documents "are a snapshot of our current thinking," he said.

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