Federal regulators have gone back and forth with BP and Alyeska Pipeline Service Co. for more than three years over replacing a North Slope oil transit line that went untested for three decades.
The "short but critical pipeline" is scheduled for replacement by the end of the year to appease regulators' fears (prompted by two leaks in 2006 from similar lines nearby) that the section of pipeline could be prone to failure, with replacement the only viable option. But Tuesday, more immediate concerns -- actual spills -- were on the minds of Alyeska and BP. While BP continued to struggle with its ongoing spill in the Gulf of Mexico, Alyeska found itself dealing with an oil spill at Pump Station 9 near Delta Junction that forced the shutdown of the entire trans-Alaska oil pipeline -- of which BP, with a 46.9 percent share, is the majority owner.
Alyeska estimates the spill, which was contained to the pump station's overflow tank and containment facilities, to be "up to several thousand barrels."
Meanwhile, on the North Slope, a tiny little section of pipe is causing yet another headache for co-owners BP and Alyeska and the federal agency charged with making sure oil stays in the pipe and off the ground.
It's been more than three years since federal regulators warned BP Alaska and Alyeska Pipeline Service Co. there could be problems with the short but critical section of aging pipe that feeds into the trans-Alaska oil pipeline. Citing concerns that the short section of pipeline was subject to the same failures that caused oil spills in Prudhoe Bay in 2006, one of which resulted in the largest spill in the history of the North Slope -- more than 200,000 gallons -- the Department of Transportation's Pipeline and Hazardous Materials Safety Administration asked the companies to either repair or replace the pipe and to step up their monitoring.
In June 2008, DOT pipeline regulators formally expressed concerns about the integrity of the 0.4-mile-long pipeline, which carries approximately 400,000 barrels of oil per day gathered from Prudhoe Bay's eastern and western transit lines and transports it to the start of the trans-Alaska pipeline. BP owns the upper segment leading out of the gathering center. Alyeska owns the lower portion leading into the pump station. Inspectors were particularly concerned that in nearly 30 years of operation the line had never undergone cleaning or internal tests, according to PHSMA.
Because little information was available about whether corrosion had eaten away at any of the pipeline's walls, and because it, like the failed transit lines feeding into it, was at increased risk for corrosion and oil spills, PHMSA urged BP and Alyeska to take corrective action.
But PHSMA was merely reiterating concerns of which BP was already aware. In fact, the company had pledged to replace the line in question by the end of 2008, and had acknowledged that it is "one of the most important sections of pipeline on the North Slope," as "the entire flow from the Prudhoe Bay unit is transported through this pipeline just before it enters the Trans Alaska Pipeline," according to the notice by PHMSA.
Yet in February 2008, BP signaled to PHSMA it had suspended the plan, citing a problem obtaining funding approval from all of the pipeline's owners. The next month BP turned over information to PHMSA indicating that the pipeline in question did indeed show signs of corrosion. Tests performed in 2006 revealed four areas in which corrosion had thinned the walls by 40 percent, and more than 20 areas that had deteriorated by as much as 20 percent. For reasons unknown, BP withheld the results of other tests it had performed on the line, according to PHMSA's June 2008 letter, and therefore the overall condition of the pipe largely remained a mystery. For its part, Alyeska reported wall losses of up to 24 percent on its section of pipe.
While much of the ongoing discussion between BP, Alyeska and PHMSA about the situation is occurring outside of public view (only limited documentation is available from PHMSA), it appears the replacement plan is again underway. Pipe will be replaced, with the new pipe located above ground coming into Pump Station 1, said Michelle Egan, a spokeswoman for Alyeska. BP is in control of the project and will end up owning the full length of the pipe, while Alyeska will still operate the section that travels within its jurisdiction, Egan said.
"The Prudhoe Bay owners and Alyeska are on track to replace the line by the end of the year (2010)," BP spokeswoman Dawn Patience wrote in an e-mail. "The replacement of the full line was underway prior to receiving (the June 2008) letter from DOT. A commercial agreement between the Prudhoe Owners and Alyeska will be jointly submitted to the Regulatory Commission of Alaska for approval in June, allowing the project to move forward."
PHMSA said it can't talk about open cases, but did indicate BP is complying with PHMSA's requests.
"We expect the pipeline to be fully replaced by the end of the year," said agency spokesperson Damon Hill, reached by phone on Tuesday.
While the old pipeline had no mechanism for routine testing, the new segment is supposed to be designed to undergo internal cleanings every three months, with more comprehensive inline testing, known as "smart pigging," once every three years. Until the work is done, BP and Alyeska have been advised by PHMSA to monitor the pipeline with daily patrols capable of surveying the site for potential leaks.
Contact Jill Burke at jill(at)alaskadispatch.com.