The Observer, May 2004

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Big changes loom for Valdez tanker terminal

Alyeska Pipeline Service Co. has begun disclosing some specifics of likely changes at its Valdez tanker terminal as the company pursues the project it calls Strategic Reconfiguration.

While the information released so far is preliminary and the details will likely change as planning and design work are completed, recent briefings from Alyeska indicate some of the main projects will include the installation of floating roofs on the terminal’s oil storage tanks, ending onsite power generation, simplifying the vapor control system, switching from salt water to fresh water for fighting fires, and revamping the Ballast Water Treatment Facility.

The goal, according to company officials, is to simplify operations, reduce costs, and end up with a terminal better suited to the ever-smaller volume of oil produced on the North Slope.

Oil storage tanks

The terminal has 18 huge tanks for storing up to 9 million barrels of North Slope crude until it can be loaded onto tankers.

Alyeska plans to take some of these tanks out of service, as reduced oil flow means 9 million barrels of storage capacity is no longer needed. It is virtually certain, according to Alyeska, that the four tanks in a cluster at the west end of the terminal will be removed from service. And it is possible that two of the 14 tanks in the East Tank Farm will be decommissioned as well.

The remaining tanks will be equipped with floating internal roofs. Because such roofs remain in continuous contact with the oil, there are no potentially explosive hydrocarbon vapors in the space above the oil, assuming the seals function properly, and consequently there is no need for vapor management. This will allow simplification of the vapor control system at the terminal.

Vapor control and power generation

The terminal now handles oily vapors forced out of the onshore storage tanks as crude flows in from the pipeline, and oily vapors forced out of tanker holds during loading. These vapors are burned to produce electricity, or simply incinerated to get rid of them. Alyeska regards the vapor handling equipment and the related electric power plant as one of the most complex systems at the terminal.

With the amount of vapors that need to be handled reduced by the switch to floating roofs on the storage tanks, Alyeska plans to simplify the process by using incinerators to burn vapors from tanker loading. The new incinerators will be modular, meaning additional units can be brought in if future operations at the terminal generate more vapors.

Alyeska believes these changes will result in a reduction in air emissions.

The company hopes to get out of on-site power generation by switching to commercial power from Copper Valley Electric Association with emergency diesel backup, although the company could install conventional diesel generators if that idea doesn't work out.

Alyeska is also exploring the idea that some power for the terminal could be generated by a novel technology akin to hydroelectric power. Crude oil descending through the pipeline from Thompson Pass arrives at Valdez under considerable pressure. This technology would use the high-pressure oil to drive an electric turbine, just as water does at a hydroelectric dam.

Firefighting system

The terminal now relies on salt water pumped from Port Valdez to fight fires. This is a problem because the salt water tends to corrode the metal pipes, pumps and valves in the system. Alyeska wants to switch to fresh water, which is less corrosive.

To achieve this, the company plans to create a freshwater reservoir on the hillside above what is now the West Tank Farm. The reservoir would be filled from nearby Sawmill Creek, and would contain enough water to meet emergency firefighting requirements, and to allow for the fact that stream flow is reduced at certain times of year and thus might not be able to speedily refill the reservoir, should it be drawn down. Because of the reservoir’s elevation, no pumps would be required. Gravity would supply adequate pressure for fighting fires.

Ballast Water Treatment Facility

Alyeska believes the terminal’s Ballast Water Facility needs to be reworked because the advent of double-hull tankers will greatly reduce the amount of water to be treated in a few years.

(The ballast water facility is also the subject of a rulemaking proceeding by the federal Environmental Protection Agency, which may require the company to reduce hazardous air pollution from the facility.)

The company plans to modify two of the three major components of the system.

One is the Dissolved Air Flotation cells, which make up the second phase of the treatment process. These will be replaced by a different technology called an induced gas flotation system, which Alyeska says will largely eliminate the emissions now coming from the Dissolved Air Flotation cells.

Alyeska is also studying possible replacement of the Biological Treatment Tanks, big open-air ponds designed to allow bacteria to consume oily residue in the ballast water before it is discharged into Port Valdez. These tanks, which comprise the third and final phase of the treatment process, may be replaced by a treatment process called carbon adsorption.

The first phase of treatment occurs inside closed tanks, where oil separates out of the ballast water by gravity and is skimmed off. No change is envisioned for this phase of the process.

Tanker loading berths

The terminal has four loading berths for oil tankers, only two of which are operational. Alyeska believes those two will be able to handle any reasonably likely level of oil flow through the pipeline, and so plans to remove one or both of the other berths.

Other likely changes in Valdez include consolidation of all office personnel into a new building at the east end of the terminal; a new system for metering oil flow into the terminal from the pipeline; new control, data acquisition and communications systems capable of operating the pipeline and terminal remotely; and consolidating maintenance into a single shop at the terminal.

The net effect of the changes envisioned at the terminal would mean it would not be able to handle as much oil as is now the case, though it would be able to handle all oil currently projected for coming years. If a major discovery should change those projections, Alyeska officials say, there would enough time between discovery and production to allow the terminal’s capacity to be expanded as needed.

The citizens’ council has been pressing for details of Strategic Reconfiguration at the terminal and for the opportunity to participate in the process since last year. The council’s aims in monitoring Strategic Reconfiguration are to ensure that environmental safety is preserved and that the terminal remains in compliance with all regulatory requirements.

The work at the terminal is the second phase of Alyeska’s Strategic Reconfiguration. The first phase, approved recently by regulators, involves upgrading many of the facilities along the trans-Alaska pipeline, especially the pump stations. Alyeska has put the price tag for that work at $250 million over the next two years and estimates it will result in 350 jobs being cut from the work force of the company and its contractors.

Alyeska has indicated the changes at the terminal are also likely to result in job cuts, but has not released any estimates of the number.

Alyeska is also studying the possibility of changes at its Ship Escort/Response Vessel System, but has not yet disclosed the details of any changes under consideration. SERVS operates the fleet of tugs and other craft charged with escorting loaded tankers out of Prince William Sound and responding to oil spills.