SHIPPERS PROTEST NEW OIL-SPILL RULES

By TOM KIZZIA
Daily News reporter

ANCHORAGE- Oil shippers say it would be prohibitively expensive to meet new federal oil-spill rules that went into effect Thursday to protect unguarded stretches of Alaska coast such as Southeast and the Aleutian Islands. Companies that ship fuel by barge to western Alaska villages say it could cost hundreds of millions of dollars to set up oil-spill response facilities along the remote Alaska coast. They have asked the Coast Guard for an exemption from some of the new requirements.

Tankers that carry Cook Inlet oil to Asia will also need a way to respond to spills along their route past Kodiak and the Aleutians. Tesoro, a Cook Inlet refiner, said it is worried the cost of preparing for spills could drive away tanker companies they depend on.

New oil-spill contingency plans are required throughout the United States under the federal Oil Pollution Act, passed in 1990 after the Exxon Valdez spill. Oil shippers will be required to have cleanup equipment readily available to live up to the plans by August. The new rules also require spill plans at smaller oil terminals.

The government's slow progress in putting the 1990 law into effect has stirred controversy. Environmentalists have criticized the Coast Guard for not moving faster to require escort vessels and establish tanker-free zones off environmentally sensitive areas. Industry has its own complaint: Federal regulators still haven't adopted final rules describing what should be in the plans, even though the plans themselves some of them six inches thick were due to the Coast Guard on Thursday.

The new federal plans will have little effect in Prince William Sound and Cook Inlet, where oil shippers are already operating under state rules that were toughened after the Exxon spill.

"The state contingency plans are very comprehensive. They covered most of the bases," said Capt. Max Miller, head of the Coast Guard marine safety office for western Alaska.

But the federal law could have a major effect on shipping in remote parts of Alaska like the Aleutians, which one regulator referred to as a "black hole" for shipping safety. Shippers would be required to have skimmers and booms ready to reach oil spills within 24 hours, with more available the following two days.

Such a requirement is impossible to meet in western Alaska without spending hundreds of millions on response facilities, said Bill Schoephoester, manager of planning and projects for Petro Marine Services, a company that ships refined fuel to villages.

"When you're out in western Alaska, there's nothing there," Schoephoester said. "Reality is reality, regardless of what laws Congress writes."

Lobbyists with the American Waterways Operators met with the Coast Guard in Washington, D.C., on Feb. 5 to seek exemptions from the law for barge operators. One of their arguments was that the law was written out of concern for carriers of crude oil, which does not evaporate and disperse as quickly as refined products.

In southeast Alaska, refined-oil shippers are also seeking exemption from the act's requirements, said Chip Mullen of Seapro, a spill-response cooperative based in Ketchikan. Full compliance with the law would mean spending $20 million on new equipment the first year, with more for training and insurance, he said. Passed along to the consumers, those costs would drive the price of fuel in Southeast sky-high, he said.

Miller said the Coast Guard is willing to consider exceptions to the new rules.

"Maybe they don't have to meet the full intent of the law, but we'll see how far along we can move them," he said.

Schoephoester said barge shippers have agreed to carry more spill response equipment on board, though such equipment may be unusable if a barge suffers an accident.

Miller said an effort is being made to establish a private spill-response contractor in Dutch Harbor, where ships, fishing boats and barges all pose spill risks. Schoephoester agreed that special attention is needed there.

"Dutch Harbor is probably the most neglected area that has the worst problems with pollution by non-crude products," he said.

Tanker operators face similar costs in attempting to cover their passage through western Alaska.

"It's a very, very tough problem," said Jim Meitner, manager of contingency planning for Tesoro, which charters occasional tankers to send low-value oil byproducts to Asia. "We have a real concern that tanker operators might drop the route."

The law covers ships inside the 200-mile territorial limit, but less response equipment is required farther offshore. "It's having a great bearing on the way people are laying out their routes," said Miller.

Marathon shifted a proposed tanker route from one side of Kodiak to the other when questioned by the state about how it would respond to a spill in Shelikof Strait, according to Joe Sautner, a spill plan specialist with the state Department of Environmental Conservation.

Tanker traffic through the Aleutians is fairly light. Miller said about a dozen tankers a year travel west from Cook Inlet. That traffic could increase, however, as Arco develops a new oil field in the Inlet. Unlike North Slope crude shipped from Valdez, Cook Inlet crude can be exported to Asian markets.

Tankers coming from Cook Inlet would be subject to the new rules because they are coming from a U.S. port. So-called innocent-passage tankers passing through U.S. waters from foreign ports are not required to have spill plans, or even to report their presence to the Coast Guard. It was such a tanker that wrecked last month off Scotland's Shetland Islands, catching local authorities by surprise.

Miller said he did not know how many tankers pass through Unimak Pass in the Aleutians, a popular shipping route between the American west coast and Asia. But he said the route is not much used for shipping oil.

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