The U.S. Coast Guard has recertified the Council as meeting its responsibilities under the Oil Pollution Act of 1990. In a February 25 letter to the Council, Rear Admiral M. T. Bell, Commander of the Coast Guard’s District 17 in Juneau, notified the Council of recertification. The Act requires the Council to be recertified annually as the official citizens’ advisory group to the oil industry in Prince William Sound. Guidelines established in 2002 streamlined the recertification process for two out of three years, with every third year requiring stricter procedures. The more extensive process was used this year. The new recertification expires February 28, 2021. At that time, the Council is scheduled to undergo the streamlined version of recertification.
The council received almost 70 letters of support from organizations, agencies, businesses, Native corporations, and members of the public during the recertification process. Copies of the Council’s application for recertification or letters of support received can be obtained by contacting Brooke Taylor at firstname.lastname@example.org.
Public trust in our oil spill prevention and response system took many years to rebuild after the 1989 Exxon Valdez oil spill. It took a commitment to transparency, listening, and engaging stakeholders in developing and maintaining the system of safeguards for the Valdez Marine Terminal and associated tankers that we have today.
This system is now widely regarded as one of the best in the world. Strong State of Alaska statutes and regulations have supported this robust system. The lack of significant spills in Prince William Sound over the last 30 years indicates the effectiveness of industry meeting or exceeding regulatory requirements.
Trust in the system is at risk
Over the past few years, the Council has been seeing a steady erosion in regulatory oversight, staffing, funding, and coordination among many of the federal and state agencies responsible for enforcing strong laws and regulations. This alarming erosion has already started to reduce public trust in our prevention and response system.
In enacting the Oil Pollution Act of 1990, Congress determined that only when local citizens are involved in oil transport will the trust develop that is necessary to change the system from confrontation to consensus, and so the Act called for creation of citizen councils. Our Council is a unique partner for industry and regulators, giving them a platform to provide information, answer questions, listen to stakeholders, and cultivate the long-term relationships that are necessary to establish public trust.
While the Council has had disagreements with industry over the years, there have been numerous examples of industry, regulators, and citizens working cooperatively and collaboratively to find solutions. The success of these collaborative processes has been founded upon the transparent sharing of technical and scientific information; stakeholders felt informed, heard, and included in the process, resulting in trust and acceptance of the results.
It is unreasonable to claim now, decades later, that existing requirements are too onerous on industry. Industry has demonstrated a commitment to the environment through safer operations, implementing new technologies, and integrating lessons learned. Alyeska Pipeline Service Company and the Trans Alaska Pipeline System tanker operators have worked with regulators and citizens for 30 years to continuously improve the system and operate profitably. Any perceived financial burden to industry should be weighed against the devastation and enormous burden another major oil spill would place on the people, fish, wildlife, and environment of our region.
It appears that some may not fully understand or appreciate the legacy they have been entrusted to protect. Without transparency about what direction this potential regulatory reform may be going, it is difficult for those with historical knowledge, like the Council, to respond and advise.
Transparency is the antidote to mistrust
The Alaska Oil Spill Commission found that starting in 1981 there was a dramatic decline in regulatory oversight, and that decline contributed to the Exxon Valdez oil spill. An official recommendation to the Alaska legislature after the 1989 Exxon Valdez oil spill was, “The nation and the state need strong, alert regulatory agencies fully funded to scrutinize and safeguard the shipment of oil.”
As those who experienced firsthand the devastation of the 1989 spill are retiring or are no longer with us, the Council has increasingly become a repository of the knowledge and lessons from that disaster.
We hope that any movement towards regulatory changes will include a thorough public input process with adequate time for information to be shared, reviewed, and commented on. Only through active citizen engagement and community relationship building can public trust in the oil spill prevention and response system be upheld.
The Council will do everything possible to make sure the safeguards put in place over the past 30 years are not weakened, and to protect the region’s stakeholders who would be most impacted by another catastrophic spill. The Council was created for this role, in anticipation of the time when enough of the memory of Exxon Valdez oil spill had faded such that the robust system put in place to prevent an accident like that from ever happening again begins to look overbearing and burdensome. The Council continues to raise awareness and provide reasonable and justified resistance to regulatory and statutory changes that could weaken existing protections.
Lack of public information about BP to Hilcorp sale leads to concerns
Late last year, Hilcorp Energy Company announced that they intend to purchase all of BP’s Alaska-related assets. These assets include approximately 49% interest of the Trans Alaska Pipeline System and Alyeska Pipeline Service Company.
Assuming the deal goes through, Hilcorp will take over BP’s facilities on Alaska’s North Slope and their affiliate Harvest Alaska LLC will take over BP’s share of the pipeline and terminal. Harvest’s specialty is “midstream” operations, which means moving oil from the production site to a destination such as a refinery or shipping terminal.
Harvest representatives have stated that their company has grown mostly through acquiring existing facilities and operating them through the end of the facility’s life. They have said that their experience with issues that occur in aging facilities, such as corrosion, would be a benefit for the pipeline and terminal, which is now over 40 years old.
The pipeline, the Valdez terminal, and the tanker escort system are all managed by Alyeska Pipeline Service Company. Currently, Alyeska is jointly owned by BP Alaska; ConocoPhillips Transportation Alaska, which owns 29%; ExxonMobil Pipeline Company, which owns 21%; and Unocal Pipeline Company, which owns a little over one percent. Alyeska is directly responsible for all maintenance, operations, legal, accounting, and personnel activities in these facilities. Hilcorp and Harvest have stated that Alyeska will retain control and responsibility over these facilities. They also said that decisions would still be made by consensus between the three majority owners: Hilcorp, ConocoPhillips, and ExxonMobil.
Overseas Shipping Group is planning to purchase Alaska Tanker Company, from whom the new owners will charter tankers to transport oil from the terminal. This means the current tankers are expected to remain shipping oil from the Valdez Marine Terminal for Hilcorp.
Sale pending approval
Before the sale can be completed, the Regulatory Commission of Alaska must approve the transaction. This commission regulates utilities and pipeline carriers in the State of Alaska. Other state agencies will weigh in on the transaction as well.
After the announcement, questions arose about whether Hilcorp has the financial and organizational capacity to safely operate the system and to prevent and respond to oil spills and other safety or environmental incidents.
Hilcorp and Harvest requested that the commission keep their financial documents and the sale agreement confidential. The companies are private, meaning they do not sell shares of stock to the public and are subject to less oversight. The companies provided all requested financial documents to the commission, but argued that because they are private, divulging financial information to the public would put them at a competitive disadvantage during future business negotiations.
Many of the submitted comments, including the Council’s, recommended release of financial documents and a more transparent process. The commission has not made the decision whether to grant this request.
Concern over incidents and regulatory citations
The commission held a public comment period on the sale in late 2019.
“The Council is concerned over Hilcorp’s documented track record of significantly reducing operating costs,” the Council stated in their comments. The Council cited Alaska Department of Environmental Conservation’s online spill records, which shows that over the course of Hilcorp’s operations in Alaska, which began in 2012, over 90 crude oil spills or discharges were attributed to the company. These incidents included the death of an employee in 2018, and a 2017 gas leak in Cook Inlet that lasted over four months.
The Council pointed out that Hilcorp’s disproportionately high number of incidents were during operation of systems much smaller than the pipeline system they plan to purchase and recommended heightened scrutiny of the sale.
Implications for end of life of the pipeline system
Part of the lease agreement for the pipeline includes an obligation on the part of the owners to dismantle and remove the equipment and restore the land to a satisfactory condition after the system is shut down. This includes the pipeline and the terminal. As part of the sale agreement, BP will retain the responsibility to pay for these expenses. It is not clear what regulatory agency will have the authority to ensure BP’s resources are available at that time.
The Alaska Department of Environmental Conservation recently began a process to review and potentially change oil spill laws and regulations in Alaska. The department’s first step, a public scoping, opened on October 15, 2019.
The department is currently asking for input from stakeholders, the public, and industry on areas where Alaska’s oil discharge prevention and response contingency plan laws and regulations could be streamlined. In the department’s official announcement for this review process, Commissioner Jason Brune stated that “I’ve heard from many Alaskans that contingency plans are unnecessarily burdensome while lacking corresponding environmental benefits. To achieve Governor Dunleavy’s goal of being open for business, today we are beginning a fully transparent scoping process seeking the public’s input.”
The department is taking comments on all of its regulations on oil discharge prevention and contingency plans. In addition, the department is accepting comments on Alaska’s laws on oil and hazardous substance pollution control. These laws, or statutes, are the foundation of oil spill prevention and response regulations. Regulations can be changed by the agency that oversees them, however state law can only be amended by the legislature. While no specific revisions are being proposed by the department at this time, the Council sees this effort as having the potential to lead to a weakening of oil spill prevention and response requirements put in place after the Exxon Valdez oil spill.
Once the current public scoping is complete, the department plans to review the submitted comments and then propose specific revisions to the regulations. If changes are proposed, the department will provide an opportunity for public review and comment. Public comment periods on specific changes are required to be open for a minimum of 30 days.
Strong statutes and regulations are one of the main reasons why Prince William Sound has not had a major oil spill since the Exxon Valdez disaster. The world-class oil spill
prevention and response system for the Valdez Marine Terminal and associated tankers is a direct result of post-Exxon Valdez spill laws and regulations, which were designed to protect Alaskans and our environment, as well as commercial and sport fishing, aquaculture, recreation, tourism, subsistence, and cultural interests.
These laws and regulations help prevent oil spills and ensure that there are enough trained responders and equipment in place should prevention measures fail.