Alyeska Pipeline Service Co. faces a $145,000 civil penalty in connection with a highly disruptive oil spill in January 2011 at Pump Station 1 of the trans-Alaska pipeline.
The Pipeline and Hazardous Material Safety Administration, an agency of the U.S. Department of Transportation, proposed the fine in an Aug. 1 letter to Alyeska.
The letter contends Alyeska failed to address a known corrosion issue in sections of pipe known as deadlegs, which see only occasional or low oil flow.
Internal corrosion caused the 2011 oil spill from piping at Pump Station 1, the letter said. The spill forced several days of pipeline shutdowns as Alyeska investigated the leak and made repairs.
Alyeska spokeswoman Michelle Egan told Petroleum News on Oct. 16 the company had not yet responded to the PHMSA letter, saying it was “still under review.”
She noted Alyeska and the agency in August 2011 signed a “consent agreement” to guide improvements along the line, particularly with respect to underground or inaccessible piping of the sort that leaked at Pump Station 1.
The company is “investing a significant amount in projects that address underground piping and other related issues,” Egan said.
“Since this event occurred nearly three years ago and resulted in no environmental or safety impact, we hope that PHMSA has considered all potential fines with this letter,” she added.
Winter shutdown danger
Whether the proposed $145,000 fine is the only punishment PHMSA imposes on Alyeska for the 2011 spill remains to be seen.
The spill was significant not only for the corrosion issue it raised, but also Alyeska’s ability to restart the pipeline after a prolonged shutdown in winter. The concern is that the temperature of idle oil within the pipe could drop enough to cause freezing and other problems, conceivably preventing a safe restart until summer.
Such a scenario would be calamitous not only for North Slope oil producers, but for the entire Alaska economy, which relies on the pipeline for an irreplaceable stream of revenue.
Alyeska was able to restart the flow of oil on the pipeline following the 2011 spill, but PHMSA compelled the company to revise its cold restart plan.
The 800-mile pipeline has been in operation since 1977.
Alyeska is an Anchorage-based company that runs the line on behalf of owner companies BP, ConocoPhillips and ExxonMobil. Chevron also owns a very small stake in the pipeline.
Long struggle with corrosion
PHMSA’s Aug. 1 letter recounts several years of history with Alyeska and the problem of internal corrosion.
“In 1988, Alyeska discovered internal corrosion in sections of pipe known as deadlegs which experienced only occasional or low flow movement of oil,” the letter said. “Alyeska reported that the cause of this internal corrosion was water that was deposited by the crude oil and settled in the bottom of the pipe.”
In 2010, Alyeska told PHMSA that since 2007 it had been analyzing the corrosivity of the oil and water in the pipeline system, and that it planned to switch to a stronger additive for inhibiting harmful bacteria. The company said it planned to treat all deadlegs in the system, the letter said.
On Jan. 8, 2011, crude oil was discovered flowing into the basement of a booster pump building at Pump Station 1, which is located at Prudhoe Bay.
The leak forced an initial three-day shutdown of the pipeline as Alyeska looked for the source of the leak, followed by another 58-hour shutdown to complete repairs. An Alyeska manager said oil temperature in the pipeline fell to “dangerously low levels” during these shutdowns.
The leak was traced to a failed booster pump manifold. A manifold is an arrangement of piping or valves designed to control or distribute fluid flow.
The mainline, 48-inch pipe was not involved.
An Alyeska contractor, Det Norske Veritas, performed a root cause analysis, concluding that the direct cause of the oil leak was “microbiologically influenced corrosion,” the PHMSA letter said.
‘Did not take adequate steps’
“Alyeska did not take adequate steps to mitigate internal corrosion in deadlegs and areas of low flow” in the trans-Alaska pipeline system, the agency charged. “Alyeska was aware of this problem by 2008, but failed to adequately mitigate internal corrosion.”
PHMSA, the Joint Pipeline Office and Alyeska’s contractors “voiced numerous concerns” about Alyeska’s internal corrosion mitigation efforts, including those being taken at Pump Station 1, between 2008 and 2010, the letter added.
In addition to the $145,000 fine, PHMSA is proposing a “compliance order” against Alyeska. It would require the company to, among other things, “optimize procedures for microbiological monitoring, especially effectiveness in deadlegs and low flow areas.”
Alyeska would have to contract with a PHMSA-approved third party to complete the steps called for in the compliance order.
The agency also is asking Alyeska to keep a tally of the “total cost associated with replacements, additions and other changes to pipeline infrastructure.”
