Online Observer

Sustaining our resolve to push for improvements in the face of lingering complacency

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From the Executive Director

By MARK SWANSON

Another year has passed marking yet another anniversary of the Exxon Valdez oil spill. That spill changed everything about the way spills are prevented and cleaned up, not only for the U.S. but worldwide.

24 years later, much has changed for the better, but we are still confronting many familiar concerns about industry, regulatory and even public complacency. We have a great system of spill prevention and response. We also have many areas where we have unaddressed vulnerabilities where we can and must do better. Often, there doesn’t seem to be sufficient interest or an obvious mechanism to drive the needed improvements. Here are just a few examples.

We know there are internationally recognized best practices available to make the Prince William Sound escort tugs safer and significantly increase their capabilities in rough conditions. Unfortunately, both industry and regulators have expressed their comfort with the current system and have questioned the timing and definition of best available.

Both regulators and industry acknowledge that existing regulations requiring routine inspections of the 800 mile pipeline do not apply to pipes at the terminal. As a result, many pipes at the terminal have gone uninspected for three and a half decades, allowing, in one instance, corrosion to consume almost 70% of the original steel on a few overwater piping welds. Regulators feel compelled to accept assurances of rigorous maintenance and inspection processes in lieu of explicitly requiring actual maintenance and inspection.

We still cannot effectively clean up oil at night, pick up oil in rough weather, or achieve anywhere near the recovery rate that our contingency plans assume. However, many regulators fret that there is insufficient leverage to challenge long standing assumptions and require substantial amendments to these cleanup plans.

We have cold oil in the pipeline with associated issues that have resulted in damage to cleaning pigs and elements of the safety systems at the Valdez Marine Terminal. Many of these risks of cold oil and some potential solutions, including heaters, were identified over 25 years ago. Alyeska is starting to address these risks by recirculating oil at pump stations, which helps, and by studying longer-term solutions.

The terminal has 18 crude oil tanks that can each hold half a million barrels of oil. The tank roofs are not rated for the heavy snows routinely seen in the Valdez area and often must be shoveled to stay within safety margins. While only 14 tanks are still in active use, routine once-a-decade inspection of internal tank structures does not actually include a detailed verification of the internal tank roof structures.

We have a terminal designed for magnitude 8.5 earthquakes in a region that has historically experienced magnitude 9.2 and greater earthquakes.

Sometimes, the known remaining risks are being comprehensively addressed albeit slowly. Objectively, older ships are riskier to operate than newer ships. As a result, most major oil companies will no longer charter oil tankers over 20 years old. In Prince William Sound, a few carefully maintained but nonetheless 35 year old tankers still continue to operate. Brand new tankers are currently being constructed to replace these older ships and should be in service in Prince William Sound sometime in the next 2 or 3 years.

The council continues to work to bring issues and concerns to the attention of the public, regulators and industry. Objectively, we can be glad that overall we have a good prevention and response system in place. We also have areas of complacency with well-known vulnerabilities and risks that industry and regulators and even the public have been unable or unwilling to address.

It’s not a question of just endlessly pushing for additional prevention and response measures. Many risks have been understood for a long time and are still inadequately addressed. So, how does one sustain the resolve to push for improvements and to patch the known holes and thin spots in an otherwise sound system of prevention and response?

Perhaps the answer is by focusing on the stark reality of the consequences if we don’t.

Another spill could happen.

The achievements of the oil industry in Alaska and its contributions to the state are tremendous. We should all be justifiably proud of what has been achieved and optimistic about what we may continue to achieve, but we shouldn’t get overly comfortable that all risks of oil spills have been reduced or eliminated. They have not. Overcoming complacency is seldom easy. We need to simply remember that accepting and living with complacency has costs. Let’s continue to work hard and work together with regulators, industry, and the public to try to avoid another real life reminder about the tremendous costs of getting complacent with undermanaged risks.

  • Mark Swanson is executive director of the Prince William Sound Regional Citizens’ Advisory Council.

Trans Alaska pipeline important to Alaska’s economy

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From Alyeska Pipeline

By THOMAS BARRETT

A central topic of this year’s Legislative session in Juneau is what to do about declining throughput in the Trans Alaska Pipeline System. This ongoing problem drives much of our daily work at Alyeska Pipeline Service Company. We all want the pipeline to safely transport Alaskan crude oil long into the future. That’s the best outcome for both our owner companies and for Alaska. From our pump stations, to our Valdez Marine Terminal, to our urban offices in Anchorage and Fairbanks, to the Capitol in Juneau, there is a shared understanding among Alaskans that bringing on more oil production from new and legacy fields is the best way to extend the life of the pipeline, maintain the health of the Alaska economy and sustain domestic crude oil supply.

The challenges from declining throughput confront us today. Until new production is on line, Alyeska will continue to apply our professional expertise and innovation to address the pipeline’s unique challenges, as we have for decades. We will research the smart paths forward and implement effective solutions.

Because the pipeline is so critical for all Alaskans, we all have a role to play toward its successful future. For the people of Alyeska Pipeline Service Company, that means continued commitment to safe operations, environmental stewardship, reliability and efficiency. For Alaskans, it means understanding our challenges and the importance of the pipeline to our state. For our elected officials, it means enacting laws that will help drive an increase in production and reinforce the prosperity of Alaska. At Alyeska, we will continue to do our job every day.

We look to our fellow Alaskans to help us out by supporting steps needed to stop the decline in the line.

  • Thomas Barrett is president of the Alyeska Pipeline Service Company.

Citizens’ council calls for increased oil spill funding

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Guest Opinion

By RICK STEINER

Rick Steiner
Rick Steiner

A universal truth in all major oil spills is that once the oil is spilled, the damage is done. In Alaska, damage from the 1989 Exxon Valdez persists today, 24 years later. In the Gulf of Mexico, serious impacts from the 2010 Deepwater Horizon blowout are well documented, and will almost certainly persist for decades as well. Despite the billions of dollars spent on these two response efforts, both failed to prevent severe, long-term impacts.

It is important to admit that spill response and restoration are largely ineffective, so we need to do everything possible to prevent spills from ships, pipelines, and drilling.

But although we know exactly how to better reduce spill risks, we are continually told that there is not enough money available to do so, particularly with current federal budget problems. The federal government’s Oil Spill Liability Trust Fund, which collects 8 cents per barrel on oil nationwide, is authorized to pay for spill prevention measures, but such requests must first go through a politicized congressional appropriations process. Because of this, the fund is virtually never used for spill prevention, and almost always just for after-spill response costs – a politically easier lift in Congress. Thus, many necessary prevention measures are either left to be paid from government general funds (e.g. us taxpayers), or are left unfunded altogether. Clearly, this is bad economics, and needs to be fixed. It is high time that industry begins to pay its spill prevention bill in full.

Last month, the Prince William Sound Regional Citizens’ Advisory Council took a big step toward fixing this long-standing problem, by unanimously adopting a resolution proposing to amend the fund and the Oil Pollution Act of 1990, in four ways:

  1. Increase the oil fee paid into the fund;
  2. Institute a spill fee on cargo ships, which are covered by the fund but do not currently pay into it;
  3. Make the fund easily accessible for spill prevention measures nationwide;
  4. Increase the Act’s financial liability limits for spills.

If the U.S. Congress passes legislation based on the council’s resolution, it would constitute the most significant increase in oil spill prevention and response preparedness funding in U.S. history, while actually reducing government costs.

The expanded fund would support additional safety measures in Prince William Sound, Cook Inlet, the Aleutians, the Arctic, and all the nation’s waterways. It could pay for such safety measures as risk assessments, vessel traffic systems, continuous ship tracking, routing agreements, rescue tugs, escort tugs, weather buoys, enhanced ship inspection, aids-to-navigation, enhanced oversight of offshore drilling facilities and pipelines, additional citizens’ councils, expanded response capabilities, and so on.

To do such, the fund needs to become easily accessible by the Coast Guard and other federal agencies, coastal states (including Alaska), and local governments without having to go through the congressional appropriations process. The Coast Guard needs discretionary authority to put the fund to work implementing necessary spill prevention measures.
And while there is presently about $2.7 billion in the fund, if the council’s proposal is adopted and the fund becomes available for enhanced spill prevention measures nationwide, it would be depleted fairly quickly. Thus, it will be necessary to increase the revenue into the fund. On specifics, I would suggest the following:

  1. Increasing the current oil fee from 8 cents per barrel to say 20 cents per barrel (only 0.2% of current oil price, or less than one cent per gallon of gasoline)
  2. Instituting a fee on cargo ships, say 10 cents per ton of cargo shipped through U.S. ports.
  3. Tar sands oil and shale oil projects, which are now exempt from the fee, need to begin paying into the fund.

These three enhancements would more than double income into the fund from the current $500 million per year to over $1 billion per year, and again, at no cost to the federal budget. In fact, this additional industry funding would help offset and replace current government spill prevention budgets. This would transfer the current costs of spill risk reduction from government and the taxpayers, directly to the industry posing the risk, something that should resonate with both sides of the political aisle. Reducing the risk of spills while reducing government costs – a win-win.

The council’s resolution also proposes that the current Act’s financial liability limits be significantly increased, as they do not currently provide sufficient incentive for responsible corporate behavior. Many suggest that spill liability limits be eliminated altogether.

Through this resolution, the council is again providing exemplary leadership in securing the safety of the seas and coasts of Alaska, and the rest of the nation. If Congress and the administration adopt the proposal, then we won’t have to just sit around waiting to mount a multi-billion dollar, ineffective response to the next Exxon Valdez or Deepwater Horizon – we may just be able to prevent such costly disasters in the first place.

  • Rick Steiner was a marine conservation professor from 1980-2010, and is now an environmental consultant with Oasis Earth, based in Anchorage.

New deputy director for administration to lead council staff in Anchorage

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Former Coast Guard commander Stephen Rothchild has been hired as administrative deputy director for the council. Rothchild began work in the Anchorage office on April 1.

He replaced Stan Jones, who retired after 17 years with the council.

“We are delighted to have someone with Steve’s knowledge of Prince William Sound taking over this position,” said Mark Swanson, executive director of the council, “Stan will of course be a hard act to follow, but Steve is so easy going and brings such a great skill set, I’m sure everyone will enjoy working with him.”

Rothchild comes to the council from Juneau where he has been a tour boat captain for the past several years.

In 2008, Rothchild retired from the Coast Guard after 23 years, ten of those years stationed in Alaska. While in Alaska, he spent time as captain of Coast Guard Cutters Sweetbrier and Sycamore in Cordova.

His career experiences include a broad mix of management, vessel operation, strategic planning, and leadership roles.
Patience Andersen Faulkner, council representative for the Cordova District Fishermen United, remembers Steve and his family from his days in Cordova fondly.

“Steve brings with him great skills working with communities,” Andersen said, “In Cordova, he led a crew of Coast Guard recruits who joined in and became part of the Cordova/Prince William Sound community.”

Rothchild combines his familiarity of Prince William Sound with his management skills to fill the critical role of administrative deputy director at the council. He oversees staff administration, provides media relations and public information for the council, and leads the Anchorage staff office.

“Steve’s leadership on the Sycamore was reflected in his crew’s involvement and engagement with Cordova and Prince William Sound residents,” Faulkner said, “I know he will be bringing those relationship and leadership skills to the council.”

Rothchild is a native of New York City. He graduated in 1985 from the U.S. Coast Guard Academy with a Bachelor of Science degree in Chemistry and holds a Master’s degree in Business Administration from the University of Phoenix.

His first taste of Alaska was as a senior Coast Guard academy cadet on a vessel patrolling fisheries in the Bering Sea and Bristol Bay during the summer. As his last duty with the service, he patrolled king crab fisheries on board the Munro, which had just moved to Kodiak.

Rothchild and his wife, Mimi, will be finishing their relocation to Anchorage this summer and are looking forward to learning all about what Alaska’s only big city has to offer.

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