From Mark Swanson
Council Executive Director
Everywhere we turn, we see fiscal belt tightening. State budgets are the leanest we have seen in almost three decades. Federal budgets are also lean.
We all know the conversation around the kitchen table when home finances become tight. When unexpected expenditures exceed projected revenue, something’s got to give. We ask ourselves what’s needed and what’s discretionary. The house looks like it needs paint but maybe that could wait a year. Can we delay without incurring expensive damage to increasingly exposed wood? Can we get another year or two out of those already four year old tires without risking an expensive or dangerous accident?
For many of us, when budgets are tight, the wished-for turnaround to a time of budgetary ease is probably not just around the next corner. When we cannot afford a broken-down car, we get meticulous about maintenance, we use the brakes gently, we get out the touch-up paint, and we change the oil a bit more rigorously.
The oil industry and our state budgetary coffers have a long history of boom and bust cycles in Alaska, often in rapid fluctuations. When money is tight, budgetary pencils get sharpened, wages get frozen, and personnel vacancies go unfilled. Maintenance projects and safety upgrades can get deferred or cancelled. If everything is in great working order when the budgetary crunch hits, deferring discretionary expenditures is an obvious and reasonable cut.
As a council, we work with regulators and industry to prevent complacency and promote the environmentally safe operation of the Alyeska terminal and the associated oil tankers. That mission and goal persists in good economic times as well as in challenging ones.
Good news for the state
We rely upon Alaska’s Department of Environmental Conservation and in particular the Spill Prevention and Response division to monitor industry. With its direct linkage to a decreasing volume of crude oil produced in the state, the current funding was no longer sufficient to pay for current operations and response capacity. To help fix this deficiency, legislation was recently introduced in both the House and the Senate, by Representative Munoz and Senator Micciche. Governor Walker’s leadership, together with the good work and tireless advocacy of the department’s commissioner and staff were ultimately successful in persuading this legislature that protection of citizen’s interests require that Alaska sustains a robust, fully funded prevention program and be prepared to respond to spills immediately and with full vigor. A combined version passed both houses and is scheduled to become law.
Good news at the terminal
Oil prices are down dramatically. Important and needed inspections of buried terminal crude oil piping are expensive and arguably discretionary from a regulatory standpoint. Our concern, and one clearly shared by Alyeska, is that nobody actually knows what kind of shape some sections of those deeply buried pipes are in after 37 plus years in the ground. The planned modifications needed to render that pipe inspectable will be expensive. This expense pales in comparison to the probable cost of an oil leak that could shut down the whole system.
The good news is that Alyeska reports they are proceeding with planned projects to make the terminal’s piping inspectable and may even be accelerating that implementation. Alyeska reports that recently developed internal pipeline inspection technologies, in use at the pump stations, may be used on buried terminal piping in combination with pigs similar to those already used by Alyeska to inspect the main 800 mile pipeline. This is excellent news for all of us who have an interest in preventing an accident.
In these tight budgetary times, it seems everything in the state budget is on the chopping block. It would have been easy for a less thoughtful legislature to justify a substantial downsizing of the state’s spill prevention and response. It would have been equally easy for a less forward thinking industry to justify shelving or deferring pipe inspection enhancement activities at the terminal. Neither is happening. Instead, the legislature re-affirmed their commitment to protecting the Alaskan environment and Alyeska re-affirmed their commitment to wisely manage pipe corrosion risks with innovative newer technologies. Both are good news indeed.