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Vol. 15, No. 19 Week of May 09, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Is Alaska prepared for a big oil spill?

There is a huge inventory of oil spill response equipment around the state and companies have to prepare viable contingency plans

Alan Bailey

Petroleum News

When it comes to oil spills, most people would agree that prevention is the best cure. But, as the tragic accident in the Gulf of Mexico has emphasized, it is always necessary to plan for the possibility of disaster. So, just how well prepared is Alaska for a major oil spill, should one occur?

The game changer for Alaska oil spill response came in 1989 when the tanker Exxon Valdez ran aground on Bligh Reef, spewing at least 10.8 million barrels of crude oil into the pristine waters of Prince William Sound. That accident spawned a rapidly growing and evolving oil spill response industry in Alaska, with a huge stock of spill response equipment now staged at various locations around the state.

Large inventories

Two spill response organizations own especially large equipment inventories: the Ship Escort/Response Vessel System, or SERVS, based in the Port of Valdez and Alaska Clean Seas, or ACS, on the North Slope.

SERVS, a part of Alyeska Pipeline Service Co., the operator of the trans-Alaska oil pipeline and Valdez marine oil terminal, provides oil spill response services for the marine terminal and for the operators of oil tankers that ship Alaska oil from Valdez. ACS operates as a cooperative, with North Slope oil companies as its members. The ACS equipment is staged in Deadhorse, the logistical hub for the North Slope oil industry, and at strategic sites at each operating North Slope oil field.

Other oil spill response organizations with equipment inventories include Cook Spill Prevention and Response Inc., at Nikiski on the western Kenai Peninsula, Anchorage-based Alaska Chadux Corp., and Seapro in Southeast Alaska. It is also possible to ship response equipment from out of state, from organizations such as the Marine Spill Response Corp., a national spill response company.

Government jurisdictions

The Alaska Department of Environmental Conservation has jurisdiction over oil spill response contingency planning for onshore oil operations in Alaska, and in state waters up to three miles offshore. The U.S. Minerals Management Service performs a similar role for oil operations, including exploration drilling, on the outer continental shelf. The U.S. Coast Guard oversees the marine transportation of oil.

Although each of these government agencies has different oil spill response regulations, all government regulation works in a broadly similar fashion, centering on the requirement for approved oil spill prevention and contingency plans. A company planning to drill for oil, for example, must prepare a spill contingency plan and have that plan approved by the appropriate government agencies.

And the regulating agencies have standards that the contingency plans must meet.

Worst-case scenario

A key feature of any oil spill contingency plan is a specified worst-case oil spill scenario that the business preparing the plan can envisage and that the government regulator can accept. Then the plan must document a credible set of actions for responding to that worst-case scenario, together with estimates of what equipment, people and other resources would be needed to put the plan into action.

In addition, the company must provide evidence that it has access to the equipment and resources needed to execute the plan. On the North Slope, for example, an oil company would normally pay to become a member of ACS, thus gaining access to the ACS equipment inventory.

And finally, there needs to be some assurance of the availability of funds to pay for the potentially massive cost of launching a response to a worst-case oil spill — the operator of an oil and gas lease, for example, carries responsibility for dealing with any oil spill resulting from lease activities. The government agencies require proof of financial responsibility from lease operators, and there are also government-mandated bonding requirements.

As a financial backstop, the state maintains a spill response account, funded from a surcharge on oil produced in the state and from money recovered from any entities responsible for oil spillages. If necessary, the state can also access federal funds through the U.S. Coast Guard’s National Pollution Fund Center.

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Alaska DEC monitoring the Gulf of Mexico situation

The Alaska Department of Environmental Conservation, the state agency with jurisdiction over oil spill contingency planning on state land, is monitoring the evolving situation in the Gulf of Mexico and, as more information becomes available about the spill and its cause, will see what lessons can be learned for Alaska, ADEC Division of Spill Prevention and Response Director Larry Dietrick told Petroleum News May 5.

ADEC has offered assistance to the Gulf of Mexico response effort, he said.

“Our hearts go out to everybody down there, not just to the people impacted but to the people responding as well. … The stress on everybody — the owners, the operators, the federal agencies, the state — it’s very tough on everybody,” Dietrick said.

Following significant upgrades to response capabilities in Alaska following the Exxon Valdez oil spill, the state is now at the forefront of oil spill response capability, he said.

“We have some of the strictest standards in the country and in the world now,” Dietrick said.

Dietrick said that he is confident that companies operating in Alaska comply with the state’s rigorous rules for contingency planning. ADEC conducts drills and inspections to verify that compliance, he said.

But, as generally happens following a major incident, ADEC will see if the Gulf of Mexico experience points to any new requirements in Alaska.

“We’ll be looking at what comes out of this and comparing it to what we have … and seeing if … we need to take any steps then to strengthen what is already on the books,” Dietrick said.

—Alan Bailey