BLUEPRINT FOR DISASTER: TOO LITTLE, TOO LATE
PROMISES RING HOLLOW

By PATTI EPLER
Daily News reporter

ANCHORAGE- Alyeska Pipeline Service Co. promised to protect Prince William Sound with the best equipment and expertise in the world, but consistently failed to deliver on those assurances, documents and interviews with government and industry officials show.

Alyeska's performance fell far short of the promises made to the nation 20 years ago by a company desperate for permission to build an oil pipeline from Prudhoe Bay to Valdez.

Alyeska said it would be able to clean up any spill, including multimilliongallon disasters like the Exxon Valdez. Company officials promised to stockpile stateoftheart cleanup equipment at the Valdez terminal and train workers to use it.

But for much of the 12 years of its existence, Alyeska chose not to replace aging and outdated spill equipment with more sophisticated skimming and booming systems. It discarded an oilstorage barge to save money and disbanded a special oilspill team.

Rather than invest in equipment to handle catastrophic spills, as one Alyeska official pledged in 1971, the company purchased only enough gear to meet the minimum state requirement of cleaning up a relatively small 2,000barrel spill. Yet loaded tankers routinely carry a million barrels.

Two years ago, after two of the oil companies that own Alyeska each had major spills outside the Sound, Alyeska awakened to the danger and began a slowpaced effort to improve its ability to deal with spills.

But Alyeska's realization that it needed a better spill response program came too late to spare Prince William Sound. Just after midnight on March 24, the Exxon Valdez, carrying 1.2 million barrels of oil, plowed into Bligh Reef while maneuvering around ice in the shipping lanes. Nearly 260,000 barrels 11 million gallons of North Slope crude spewed from ruptured tanks.

It was the test that graphically demonstrated Alyeska's inability to cope with a major spill.

Word of the grounding came from the Coast Guard at 12:30 a.m.

Eight marine technicians assigned to load tankers, but also trained to respond to spills, ran to find equipment and ready boats. At least two technicians continued to load a pair of tankers still at the terminal.

After being told of the spill, Alyeska's terminal superintendent went back to sleep, leaving direction of the initial response to a subordinate.

The "contingency" barge designated to transport spill equipment had been emptied weeks before and never reloaded. Workers had to dig huge protective fenders out from under 14 feet of snow. Thousands of feet of deepwater boom were buried under stacks of other equipment in a warehouse. Boats had to be fueled, booms patched and anchors rigged.

Loading the barge was dragged out by hours because only one of the workers knew how to operate the crane and forklift. He dashed back and forth between the two machines, snagging containers with the forklift then climbing into the crane to swing them onto the barge.

Most oil from the ruptured tanks had escaped by the time cleanup crews reached the slick, about 25 miles from the terminal, some 14 hours after the accident. They confronted a spreading sea of thick black crude that clogged their skimmers and overwhelmed their booms.

NO FAULT OF ALYESKA'S

"We are sure we did our best," thenAlyeska President George M. Nelson told the Anchorage Rotary Club about three months after the spill. "We complied with the (contingency) plan so carefully worked out over many months in cooperation with state authorities."

"Complied with the plan" is Alyeska's principal defense in facing the wrath of a nation deeply angered by the spill and failed cleanup. In testimony at federal hearings and in speeches to civic groups, Alyeska argues that the plan was good, and the company executed it just as promised.

But employees of the state Department of Environmental Conservation in Valdez had warned for years that the plan wouldn't work. They said a major spill was sure to be a disaster if Alyeska wasn't made to improve its equipment and crews. Top DEC officials approved the plan anyway.

The plan has now been shelved. Under a threat by Gov. Steve Cowper to close the terminal, which could have shut down the pipeline, Alyeska has vastly increased the amount and quality of spill response gear in Valdez.

Where once Prince William Sound was protected by four skimmers and six miles of containment boom, now 200footlong escort ships, brimming with cleanup gear and crews, follow each tanker through the Sound. Two sophisticated oilskimming ships are stationed at the terminal and barges with even more equipment are anchored at remote sites. More than 80 people run the ships and work on oilspill response teams.

Nelson, Alyeska's president for five years until he retired earlier this month, and other oil company officials say they simply never thought they needed such a system in Valdez. More than 4,000 tankers had made it safely through the Sound since shipping began in 1977. The Exxon Valdez proved them wrong, they say.

"We weren't trying to lowball this thing," said Nelson. "We just didn't think it was necessary."

"It wasn't a matter of saying, "The law doesn't make you do that so don't,' " he said. "We didn't because we thought that event was so remote."

Past and present Alyeska executives defend the company's commitment to protecting Prince William Sound from the ravages of spilled oil. They say they did everything required by law and DEC, and that spill preparation was a priority for the company.

But there is little evidence that Alyeska's corporate behavior extended beyond the letter of the law and whatever concessions a weak DEC could obtain.

"They ought to take any steps necessary, based on their own expertise, to avoid an oil spill . . . like the Exxon Valdez," said Alaska Attorney General Doug Baily. "That's their moral responsibility in an enlightened world."

A "BIG SPILL?' NO WAY

Regulations written by the Department of Environmental Conservation and adopted in 1981 require oil terminal operators to maintain "sufficient oil discharge containment and removal equipment to rapidly contain" the "most likely" spill. Equipment must be sufficient to remove that oil within 48 hours, the rules say.

That regulation is the fulcrum on which Alyeska balanced its spill response program. In 1986, based on a consultant's report, Alyeska defined the "most likely" spill as between 1,000 and 2,000 barrels, the kind that might occur from a common hull crack or dockside accident.

Moreover, Alyeska said, a catastrophic spill wouldn't occur for 241 years, based on a computer model that factored in the size and frequency of spills worldwide.

DEC never challenged those assertions, even though tankers carry far more than 2,000 barrels in a single cargo tank, and a tanker carrying North Slope crude oil had run aground the year before in Puget Sound, spilling more than 5,500 barrels.

Alyeska has always based its response program on smaller spills. The company never tried to put in place the kind of system the industry had described to Congress in the early 1970s.

That system, company spokesmen said, would be designed to handle any spill, not just small ones.

In 1971, L.R. Beynon, a top pollution specialist for British Petroleum, the majority owner of Alyeska, testified at Interior Department hearings that Alyeska would promptly and effectively handle "any spill," including disasters that might reach tens of millions of gallons.

"The contingency plan," Beynon said, ". . . will detail methods for dealing promptly and effectively with any oil spill which may occur, so that its effect on the environment will be minimal. We have adequate knowledge for dealing with oil spills, and improvements in techniques and equipment are continuing to become available through worldwide research.

"The best equipment, materials and expertise which will be made available as part of the oilspill contingency plan will make operations in Port Valdez and Prince William Sound the safest in the world," he assured the government panel.

But Alyeska never tried to develop new and better oil spill cleanup gear, company officials say. The state of the art in oilspill response progressed very little between 1977 and 1989, Nelson said.

When the Exxon Valdez smashed into Bligh Reef, Alyeska had trouble even mustering the 12yearold equipment it had earmarked for a 2,000barrel spill, let alone the 260,000 barrels that gushed from the stricken tanker.

"It is already abundantly clear to me that much more than simple human error is behind the worst oil spill and most inept cleanup in our nation's history," Rep. George Miller, DCalif., said in June.

"Over the course of two decades the world's major oil companies have taken home a profit estimated at $45 billion from development of Alaska's North Slope. Yet at the same time, (Alyeska) has systematically cut back oilspill response capabilities and resisted virtually every attempt to get them to operate the pipeline and terminal in the stateoftheart fashion that they promised the Congress and the people of Alaska prior to construction."

The state says Alyeska stonewalled DEC's attempts to require better cleanup capability. In a lawsuit filed in August, the state accused Alyeska of a "deliberate, negligent and reckless decision to save money by reducing manpower, training, equipment and maintenance" at the terminal.

"Horse hockey," Nelson says. "That simply wasn't the case."

Yet Nelson and other Alyeska officials provide no evidence to counter accusations that the company increased its profits at the expense of spill preparedness. Nelson and other executives are hardpressed to cite a single action they took to substantially improve Alyeska's spill cleanup program for the first 10 years of operations.

A "TRUST US' PHILOSOPHY

Alyeska is a partnership of seven of the world's biggest oil companies. British Petroleum owns just over 50 percent; Arco and Exxon each own about 20 percent. The presidency of Alyeska and chairmanship of the committee that oversees company operations rotates among the three major owners. Smaller owners, with 1 to 4 percent interest, are Union Oil, Phillips, Mobil and Amerada Hess.

Alyeska's business is conducted in a private world, its corporate secrets closely guarded by company executives. A Daily News request to attend a meeting of the owners committee several weeks after the March 24 spill was denied.

Alyeska will not provide budget figures showing how much it spent over the years for spill response, including training, equipment purchases and maintenance. Alyeska spokesman George Jurkowich said it is too difficult to separate spill response from other expenditures at the terminal.

Alyeska employees, including a former oilspill program manager and the head of one of the cleanup teams, say that in the past the company has been ordered by its owners to hold down costs, especially when oil prices fell in the mid1980s.

But Fred Garibaldi, a British Petroleum vice president who chairs the Alyeska owners committee, said the owners have never pressured Alyeska to cut corners. He and other top Alyeska officials insist the pipeline company receives whatever it needs, within reason, to operate the pipeline and terminal. Spending on spill response did not suffer when other expenses, like repair of corroded pipe, cropped up, they say.

"We're not going to build a $9 billion pipeline and let a $50,000 boom (disrupt) an entire transportation system," he said.

Alyeska also will not provide historic staffing figures for the terminal. Jurkowich said such numbers would give a false impression of the work force because the company relied on contract labor for many jobs.

Alyeska did provide the Daily News an accounting of equipment it has overhauled, purchased or ordered in recent years. The summary shows that Alyeska did nothing to significantly improve its response system before 1987, although it slowly started to change.

In 1987, according to Alyeska, two 26foot boats were added to the response fleet, communications gear was upgraded in 1988, and four 21foot boats were replaced earlier this year.

But the heart of the system four large skimmers, a contingency barge, 11 work boats and 29,000 feet of containment boom was essentially the same early in the morning on March 24 as it had been on the day the first tanker sailed out of Valdez in 1977, the summary shows.

TOO MUCH FOR TOO LITTLE

"Oil spills are a firstclass pain," Nelson said. "Not only do they harm the environment, they detract from our operations up here, they cost money and they hurt our reputation."

State records, including memos from DEC staffers in Valdez, describe a much different corporate attitude. One DEC inspector described the "disemboweling" of Valdez operations, including its oilspill response effort, beginning in 1981 with the disbanding of a special oilspill response team.

"My observations have been that Alyeska has been highly resistant or intransigent in all areas that I have dealt with them . . . in many ways that I think any other company would have been embarrassed," DEC Commissioner Dennis Kelso told the Alaska Oil Spill Commission this summer.

Public documents show that Alyeska frequently ignored government suggestions to improve cleanup capabilities, particularly in the early years of shipping operations. Alyeska often complained that changes in the response operation would cost too much for too little benefit.

For instance, DEC and the Coast Guard urged Alyeska in 1977 to stockpile cleanup equipment on barges at remote sites around the Sound so it could be deployed quickly. Alyeska resisted the idea, saying it would be expensive and difficult to maintain and protect equipment from vandalism.

DEC pushed for at least 50,000 feet of boom for the Valdez area; Alyeska complained that to deploy that much boom would be like "the Normandy invasion," state officials wrote in 1977.

"We were more concerned about pipeline leaks than tanker leaks," recalls Frank Turpin, Alyeska's president from 1978 to 1985. Turpin is now president of the stateowned Alaska Railroad.

Turpin says he can't remember many specifics about Alyeska's spill response program under his management. He said he let George Nelson, then a vice president, supervise terminal operations while he concentrated on getting oil from the North Slope to Valdez.

Turpin said he thought the federal government regulated oilspill contingency planning and couldn't recall "much state involvement." But DEC has had clear authority over Port Valdez and Prince William Sound since 1981.

Under Turpin's leadership, Alyeska in 1981 canceled a contract with a company that provided dedicated teams to respond to oil spills. Many of the workers went onto the Alyeska payroll and some four per shift remained assigned to spill cleanup, although they had other jobs, too, Alyeska said.

Turpin recalls complaints from the dedicated spillresponse workers: "The problem was it was a very dull job and they had very little to do. People were unhappy with it. They did everything they could to get out of it."

In 1984, the company decided it wasn't effective to have those employees "so dedicated to a job they couldn't do other things," said Bill Howitt, Alyeska's engineering manager who ran the Valdez terminal from 1985 until last year.

Alyeska began training the workers for other jobs, eventually absorbing them into a marine technician program, he said. Technicians help dock ships, unload ballast water and load crude oil, among other tasks.

Howitt acknowledges that some longtime Alyeska employees think dedicated teams are better. "But I really frankly believe the terminal has never been better prepared for an oil spill" than with crosstrained workers, he said.

On March 24, about 120 of the terminal's 220 workers were trained in spill response, according to Howitt.

But on June 1, under pressure from the governor, Alyeska reestablished the dedicated team, with 12 workers per shift whose only job is to respond to spills, train for spill response and maintain cleanup equipment.

Under Turpin's management, Alyeska saved $600,000 in eight years by getting rid of an oil barge, a crucial piece of spill equipment because it would hold oil scooped from the water. Turpin said recently he doesn't remember Alyeska owning a barge or trading it for one less expensive to operate. Nelson said he couldn't remember the barge either.

The barge, with a capacity of 5,000 barrels, had to be certified by the Coast Guard. To keep its certificate, the barge had to be towed to drydock in Seattle for inspection every other summer. Jurkowich says that cost about $150,000 each time.

So in 1981 Alyeska traded the tank barge for a deck barge that didn't require Coast Guard certification, said Howitt, the former terminal superintendent. The new barge could carry equipment on its deck, but it wasn't safe or legal to put oil in its hold.

If a big spill occurred, Howitt said, Alyeska hoped it could get emergency permission from the Coast Guard to put oil in the barge anyway or that an empty tanker would be nearby.

Former Valdez Coast Guard Cmdr. Steve McCall, who moved to a new job in July, said he warned Howitt and other Alyeska officials in 1985 that putting oil in the barge was illegal and dangerous.

When Alyeska asked permission to use it as an emergency holding tank during the Exxon Valdez spill four years later, McCall said no.

Fortunately, two other tank barges were in the area on other business and Alyeska was able to hire them, Howitt said.

A new 12,000barrel tank barge was sitting in Seattle, waiting for a spring delivery. Howitt won't say what had prompted the company to order it. "We decided for a number of reasons it was a prudent thing to do," he said, but wouldn't elaborate.

FORECASTING DISASTER

Since at least 1984, Alyeska employees have complained about the company's ability to deal with a major spill. Some employees took their fears to DEC's Valdez staff, which reported the concerns in memos now in state files.

One of those was James Woodle, a former Valdez Coast Guard commander who went to work for Alyeska as its marine superintendent when he retired from the Coast Guard in 1982. He was fired from Alyeska for insubordination in 1984 and later lost a lawsuit in which he claimed he was wrongfully terminated.

Shortly after he was fired, Woodle delivered a memo to Nelson and the companies that own Alyeska. The memo detailed Woodle's concerns about spill response, which he had managed in his job at Alyeska.

"Due to reduction in manning, age of equipment, limited training opportunities and lack of experienced personnel, serious doubt exists that Alyeska would be able to clean up effectively a medium or largesize spill," Woodle wrote in April 1984.

"Recent manning reductions have affected all operating areas, while efforts to cut costs have limited purchase of new oilspill recovery equipment."

"Response to any spill beyond the Valdez Narrows should not be attempted with present equipment and personnel." Bligh Reef, where the Exxon Valdez ran aground, is several miles past the narrows.

Woodle noted that oilspill workers were not getting needed training. Alyeska had considered sending crews to other Alaska and West Coast spills for handson training, but didn't because it was considered too costly, Woodle said.

BECOMING BELIEVERS

The pipeline company and its owners say they were first roused from their complacency about a big spill in 1985 when the ARCO Anchorage ran aground near Port Angeles, Wash., spilling more than 200,000 gallons of North Slope crude oil.

A few months later, in 1986, Arco sent a team to Valdez to share with Alyeska cleanup crews what it had learned in the Puget Sound spill.

That year, when Howitt was terminal superintendent, the company purchased two new work boats and built pontoon platforms for cleaning oil from the hulls of ships.

The next summer, in July 1987, a tanker under charter to BP hit bottom in Cook Inlet, dumping about 150,000 gallons of oil just as salmon were schooling for a run up the Inlet. The Coast Guard had to take over cleanup of the spill, which was complicated by the Inlet's strong tides and currents.

"The last thing we were was complacent after the (Cook Inlet) spill," Nelson said. "That heightened our awareness that oil spills are a fact of life."

About that time, according to Nelson, Howitt and other company officials, Alyeska began to talk seriously about beefing up the spill response program.

In May 1988, Arco sponsored a spill drill at Alyeska, a computersimulated classroom exercise rather than an onthewater trial. Arco wanted to reiterate lessons it had learned from its Puget Sound spill, including how to coordinate cleanup efforts with regulatory agencies, according to Jerry Aspland, the head of Arco's tanker fleet.

Also that May, a new barge capable of holding 12,000 barrels of spilled oil was purchased for $700,000. It made a slow trip from Houston, through the Panama Canal and up to Seattle, where it sat through last winter, waiting to cross the Gulf of Alaska in the spring. The barge arrived in Valdez a few weeks after the Exxon spill.

Alyeska also turned its attention to dispersants, chemicals sprayed on slicks from the air, which cause the oil to break apart. To use dispersants, Alyeska needed to buy an airborne dispensing system, contract for a standby charter with an Anchoragebased air service and store 50,000 gallons of the chemical at the Anchorage airport, Howitt said.

He estimated dispensing gear would cost about $500,000. Dispersant would be another $750,000, plus storage and maintenance charges.

But one of Alyeska's seven owner companies refused to approve the deal. That company was BP, which with 50.01 percent ownership can overrule the other six companies.

Garibaldi, the BP vice president and owners committee chairman, said he decided to put off purchasing the dispersant equipment in an effort to force federal and state agencies to finally approve guidelines for the use of dispersant. There had been much debate over the environmental effects of dispersants and much delay in establishing guidelines, he said.

"Our only bargaining chip was to say we were prepared to buy the package but not until the (guidelines) were in place," Garibaldi said recently.

The guidelines were approved March 9, just two weeks before the Exxon Valdez spill. The new dispersant equipment had been ordered, but didn't arrive until shortly after the March 24 spill. It is now stored at Anchorage International Airport, Alyeska officials said.

Just last January, three months before the spill, Alyeska decided to buy a new hightech, 122footlong skimmer, at a cost of $5 million. But the JBF Scientific Skimmer, under construction in Maine, isn't scheduled for delivery until August 1990.

For this year, Alyeska budgeted to buy an extra 12,000 feet of containment boom, and to replace outdated "seapacks" selfpropelled containers that hold 1,600 feet of boom each with more modern devices, according to the company.

CREDIBILITY AT STAKE

Alyeska's Valdez terminal today boasts an exemplary, $50millionayear spill response system.

Officials of Alyeska and the owner companies acknowledge it took a catastrophic 11milliongallon oil spill to convince them a substantial improvement in cleanup capability was needed.

James Ross, president of BP America, told employees at a meeting a few weeks after the spill that the Exxon Valdez could become the Three Mile Island of the oil business unless industry acknowledges its mistakes and corrects public misperceptions.

"In the wake of Exxon's calamity, the entire industry is now being attacked as uncaring, irresponsible and slow to respond to emergencies, and as gasoline pricegougers at the pump," Ross said. "Our credibility is very much at stake."

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