The Observer, January 2008

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Alyeska Viewpoint 2007: A year of challenges and accomplishments

By Greg Jones, Valdez Vice President, Alyeska Pipeline Service Co.

As we begin the new year, I would like to take this opportunity to reflect on our accomplishments over the past 12 months and share a few of those in which we worked closely with the citizens’ council.

In 2007, we celebrated 30 years of operating and maintaining the pipeline and the Valdez Marine Terminal.

Over that time, we safely delivered over 15.5 billion barrels of oil. Celebrations were held at every facility on the pipeline and in Anchorage, Fairbanks, and Valdez. This past year we achieved a reliability rate of 99.83 percent with an average daily throughput of over 740,000 barrels per day.

In the annual spring and fall Ship Escort Response/Vessel System fishing vessel training program, a total of 305 fishing vessels with over a thousand crew members were safely trained in the use of equipment and in oil spill response tactics. Alyeska relies heavily on the resources and local knowledge of fishermen from the communities in Prince William Sound and beyond.

After a plan holder review of storage capacity, an additional oil recovery barge and tug was added to the existing fleet. Decant piping (a system to discharge sea water from barge cargo tanks after the recovered oil has been separated) was installed on four barges to maximize storage capacity in the event of a spill on the water. A lot of hard work by mariners, SERVS employees, and stakeholders went into the successful submittal and approval for the Prince William Sound Tanker Contingency Plan.

BP was the sponsor of the annual tanker plan drill held in May. Alyeska’s performance received praise from the council and other stakeholders, successfully meeting all objectives.

A drill was also held at the Valdez Marine Terminal, focusing on sensitive areas in Port Valdez. This drill also met all objectives.

As the first phase of major work scheduled for the Ballast Water Treatment Facility, the vapor recovery system on the 90s tanks (used for ballast water storage) met the scope and schedule requirements of the project. For a variety of reasons to maximize the opportunity for a successful startup, the terminal operations management team decided to postpone the start-up of the vapor system until after the holidays, and that process is in the beginning phase at this writing. We are especially proud of this milestone. Completion of this project will eliminate a major emissions source and a substantial safety hazard presented by flammable vapors in the storage tanks.

Other work at the terminal included the cleaning, inspection, and repair of crude oil storage tank Number 8, which has now been returned to service.

The council and others raised concerns around the structural integrity of the door sheet for diesel storage tank Number 55. Alyeska and the council worked collaboratively to identify a third party consultant and scheduled a field inspection and review of this tank. Upon delivery of the report, no structural integrity issues were identified, although there were lessons learned surrounding engineering documentation issues for Alyeska. We appreciate the constructive manner in which the council worked with us to resolve these concerns.

We were flattered in that the council recommended Alyeska for the Legacy Award. Though Alyeska did not win the award, this recognition by the council reinforces the confidence and positive relationship that has developed over the years. We know we had to earn this nomination on the merits of our performance, and we remain strongly committed to comply with environmental laws and regulations and proactively minimize environmental impacts.

Alyeska community contributions included the staging of the annual health fair throughout Prince William Sound, and the company generated over $590,000 for the United Way Campaign, including employee contributions and the company’s dollar-for-dollar match. The impact this generosity has on Alaskan communities is huge and greatly appreciated and the employees in Valdez were a big part of the success for this campaign.

Finally, we greatly improved on our safety performance when compared to prior years. It is no surprise that good safety performance carries over into many facets of the business.

In summary, the Valdez Operations teams accomplished their key goals in 2007 and we are looking forward to a safe and successful 2008. We will continue working closely with the council and do all we can to move oil safely and be responsible stewards of the environment.