Alyeska meets new challenges, reinforces safety
Alyeska Viewpoint
By: GREG JONES, Senior Vice President, Valdez Operations and Health, Safety, Environment, and Quality, Alyeska Pipeline Service Co.
Alyeska Pipeline Service Company is adapting and reshaping its business to manage the challenges connected to declining throughput, or the amount of oil that flows through the pipeline, while staying focused on safety and integrity.
All employees in the Trans Alaska Pipeline System have been asked to look for inefficiencies in the company and to watch for ways we can simplify business. This includes analyzing operations at urban offices, along the pipeline, and in Prince William Sound.
Change can be difficult and we recognize that it can cause anxiety when it has the potential to impact our people. The point of this movement is that we want Alyeska and the pipeline to remain viable in our communities and to be around to serve Alaska's economy for many years to come."
Why does declining throughput affect the pipeline system? Throughput peaked in 1988 when 2.1 million barrels a day flowed from the North Slope. Then, the challenge was figuring out how to move all that Alaska crude through the line.
Times have changed. Throughput today is about 700,000 barrels a day and declining every year. The lower the throughput, the slower the oil moves, the longer it takes to get to the terminal in Valdez, and the colder the crude is when it arrives. This collection of facts makes for challenges in operations, and for more expensive operating costs.
Throughput is projected to dip to 500,000 barrels within the next five years and to 300,000 barrels a day sometime around 2023.
We can't wait and react to these conditions later. The time to act is now, and as a company, that is what we are doing.
Our leaders are working within the company and with representatives from the owner companies, BP, ExxonMobil, ConocoPhillips, Unocal, and Koch Alaska, to strengthen the pipeline's future. One step included developing a 2010 budget that is lower than in 2009.
To meet this challenge, Alyeska cut sixty jobs and is spending less on contractors and businesses. This included adopting a new contracting strategy that bundles a number of contracts and saves tens of millions of dollars each year.
We are also assessing our facilities footprint in Anchorage, Fairbanks and Valdez. In some cases such as Fairbanks, we have significant excess capacity. With spare room at each site, We will be consolidating and looking for efficiencies in delivery of support functions. We anticipate that some form of consolidation is anticipated, and some employees will be could likely have their positions reassigned to other job sites.
We are making all changes with the utmost care. Alyeska will become more efficient, but we won't compromise our relationships, or our commitment to safety, integrity and the environment. We are very proud of winning the 2008 API Distinguished Operator award and want to build on this foundation of excellence. We know that being a prudent operator of TAPS is our utmost responsibility.