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Challenges for trans-Alaska oil pipeline Barrett outlines the current status of the 800-mile oil artery that delivers product to tidewater from the North Slope fields Alan Bailey Petroleum News
At this stage in its life the trans-Alaska pipeline, the line that ships oil from the North Slope oil fields to the Valdez Marine Terminal, faces four key issues: declining oil throughput, aging infrastructure, the challenges of operating in the rugged Alaska conditions and cybersecurity, Tom Barrett, president of Alyeska Pipeline Service Co., told the Commonwealth North Energy Action Coalition on June 2. Alyeska operates the pipeline on behalf of the oil companies that own the line. Oil throughput From the perspective of oil throughput, Barrett reported some good news, in that oil production from the North Slope has increased somewhat over the last couple of years. However, that represents a bright spot in an otherwise relentless decline in North Slope production. And, with throughput far below the levels seen during the years of peak North Slope output, the oil flow in the line has slowed to a point where the cooling of the oil in the frigid temperatures of Alaska’s Interior are causing problems. Last winter saw temperatures drop to minus 40 F to minus 50 F for a couple of weeks in the Interior, Barrett said. And the pipeline is above ground, exposed to the winter weather, for half of its length.
Faced with problems of wax and ice formation in the line in the low temperatures, Alyeska has had to increase the frequency with which it pigs the line. The company now applies heat to the oil at some pump stations, through techniques such as recirculating the oil through pump station piping. A major risk stems from the possibility of a hard shutdown during the winter, Barrett said, commenting that the challenge would be to restart the frozen line. To mitigate this particular risk, Alyeska has installed five methanol injection stations along the line, so that the methanol could act as an antifreeze for the fluids in the line. So far, Alyeska has not had occasion to use this system - methanol cannot be injected continuously because the chemical would have to be subsequently removed, to enable the oil to be processed in refineries.
Low flow limitations Although the pipeline can handle current oil flow rates at about 500,000 barrels per day, at some point, if the rate drops below about 350,000 to 400,000 barrels per day, it would become harder and harder to keep the pipeline running, Barrett said. He also cautioned that any significant modification to the pipeline infrastructure to address low flow issues would likely take two to three years to design and install.
The simple solution to the various problems would be to push up the throughput by bringing more North Slope oil into production. Barrett wondered how the current strong opposition from some people to development in Alaska could be addressed. He expressed some optimism based on remarks made by Ryan Zinke, the new secretary of the Interior, about encouraging North Slope oil development conducted in an environmentally responsible manner.
One new challenge in recent years has come from competition from shale oil production in the Lower 48, Barrett commented.
Aging infrastructure In terms of the pipeline system’s aging infrastructure, Alyeska has had to increase its spend on inspection and maintenance programs in the past few years. One maintenance challenge is obtaining spare parts for equipment installed decades ago, Barrett commented.
He said that the main pipeline is in general in pretty good shape. At the Valdez Marine Terminal Alyeska is now conducting a project using self-propelled “crawler pigs” to inspect sections of pipeline that had previously been inaccessible. The use of this new inspection technology at locations such as pump stations has probably saved Alyeska about $200 million so far, Barrett said.
The Alaska challenge Operating in Alaska poses particular challenges, especially given the extreme remoteness of much of the territory that the pipeline crosses. Everything needed for a repair or maintenance job, including equipment and a camp, has to be transported to site. And, because of the need for 100 percent reliability of communications for people operating at remote locations along the pipeline, Alyeska has had to continue to maintain its expensive radio communication system that spans the pipeline’s length. New digital and satellite communications technologies, while not as expensive, do not have the required level of reliability in northern latitudes, Barrett said. Alaska is an expensive place to operate in, he added.
On the other hand, the strength of the pipeline infrastructure and the capability of people in the industry to operate in Alaska’s harsh environment present advantages for the pipeline, Barrett commented.
Cybersecurity Cybersecurity, the need to protect the pipeline’s digital monitoring and control system, and the company’s business systems, from digital attack, represents a new risk for Alyeska, Barrett said. The control system is isolated from the Internet. And the company tests all digital equipment for viruses before installation. During these tests Alyeska has found infected equipment. And the company detects perhaps 600 to 800 penetration attempts on its systems every month - the company works closely with law enforcement in addressing these problems. And, following the recent worldwide cyber attacks, the company issued a warning to its employees, cautioning them about the need to protect their own computers through actions such as ensuring the installation of up-to-date software, Barrett said.
The use of social media, and the possibility of inappropriate or discriminatory postings, is also a new challenge for Alyeska, Barrett commented.
Marine transition One major project that Alyeska is currently conducting is the transition of the marine services for the Valdez Marine Terminal from Crowley Marine Corp. to Edison Chouest Offshore, planned for completion in July of next year. Edison Chouest, a global marine operator, is building a fleet of new state-of-the-art tugs and barges, to replace most of the vessels of the current decades-old fleet, Barrett said. The fleet provides tanker escort services to and from the Valdez terminal across Prince William Sound, and support for offshore oil spill response capabilities.
Although there has been some debate over questions of local hire for the Edison Chouest personnel, Barrett said that Alyeska cannot legally require local hire as part of the marine services contract. However, he noted, Edison Chouest is building new houses and offices in Valdez for people who will be involved in its operations.
Business ethics Barrett said that he feels particularly proud that for the last five years Alyeska has been recognized as one of the world’s most ethical companies. It is unacceptable to cut corners in operations where people’s lives are on the line, he said. There is an institutional aspect to setting organizational conditions that motivate personal integrity, encouraging people to do the right thing. Perhaps this is an issue that needs more attention, in a world where trust in government, media, business and non-governmental organizations appears to be the lowest it has ever been, he suggested.
For long term success, industry in Alaska needs to address questions of integrity and trust, as well as tackle issues arising from the competitive oil market, Barrett said.
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