Hilcorp moves forward on plan to close volcano-threatened oil tank farm

Hilcorp Alaska is moving ahead with its $75 million plan to transport oil across Cook Inlet by subsea pipeline and close a tank farm that is dangerously close to Redoubt Volcano, according to a permit application filed with the U.S. Army Corps of Engineers.

Hilcorp has proposed moving oil by subsea pipeline instead of by tankers that load oil at the Drift River terminal and tank farm on the west side of Cook Inlet.

The Army Corps announced last week it had received the application, dated June 20. The company's request addresses a portion of its plan, which would rely on a mix of existing and new pipelines.

In the application, Harvest Alaska, a subsidiary of Hilcorp, proposes putting soil and other excavated material into 3 acres of wetlands in order to build about 2 miles of 10-inch oil pipeline. The pipeline addition would be located about 7 miles southwest of Tyonek. The application is required under the Clean Water Act.

To make the plan possible, a new section of gas pipeline must be built in the Inlet, northeast of Tyonek. That section is not part of the current application, according to plans publicized by the Corps of Engineers.

[Hilcorp announces plan to eliminate tank farm]

Conservation groups that complained about the company's months-long gas leak in Cook Inlet this winter have applauded the pipeline plan, saying it will remove the threat of a tank-farm spill when, as likely, Redoubt erupts again. Capt. James Cook noted activity at the volcano in 1778.

Constructed half a century ago, the tank farm sits 22 miles downriver from Redoubt. Eruptions in 2009 sent dangerous floods of water, mud and huge ice chunks past the farm, where two tanks held 6.2 million gallons of crude. Dikes built after a previous eruption held back the surge, but the danger was so high the terminal was shut down and crews could not stay on site.

At the time, Chevron operated the terminal. It was later acquired by Hilcorp.

[Volcano forces Chevron to suspend oil production]

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or