Sparring over oil pipeline

Industry seeks lease renewal; concern comes from environmentalists

Posted: Sunday, July 29, 2001

The head of the company that runs the Trans-Alaska Pipeline System told local business leaders Friday that the pipeline is ready for a new lease on life.

As state and federal agencies grapple with whether to renew contracts to lease public land beneath the massive pipeline to the industry, the head of Alyeska Pipeline Service Co., David Wight, told the Juneau Chamber of Commerce all the reasons why the government should.

"The pipeline is in as good a shape today as it was 25 years ago - both internally and externally," said Wight, president and CEO of Alyeska.

However, environmentalists are cautioning against a new lease agreement that spans a great number of years.

"I think the state of Alaska and federal agencies should look seriously at what the real life of the pipeline is at this point," said Sara Callaghan-Chappel, Alaska representative of the Sierra Club.

The pipeline is operated and maintained by Alyeska but owned by Amerada Hess Pipeline Corp., BP Pipeline Alaska, ExxonMobil Pipeline Co., Unocal Pipeline Co., Williams Alaska Pipeline Co. and Phillips Transportation Alaska.

The owners filed notice in May to renew their leases of the property beneath the 800-mile pipeline, which moves crude oil from the North Slope to Valdez. The 30-year agreement expires in 2004, and the owners want another 30-year lease on some 375 miles of federal land and 344 miles of state land.

In response, federal and state agencies with the Joint Pipeline Office, which regulates the pipeline, have launched an effort to determine whether to renew the lease agreements and for how long.

The office is drafting an environmental impact statement and hopes to have a final document in November 2002. In August and September, the office will gather public comments on what issues it should consider when writing the environmental study, then present alternatives to the industry's proposal.

Although the environmental impact statement will include an alternative to cancel the leases, Rob McWhorter of the Joint Pipeline Office said it's unlikely the agency would approve that option. If the leases were not renewed, oil would stop flowing in the pipeline, cutting off the largest source of revenue to the state's general fund, which pays for state government.

"That will be examined in the EIS in detail, but obviously a lot of bad things would happen economically" if the leases were not renewed, McWhorter said.

Callaghan-Chappel, the environmentalist, said it's not a question of whether to renew the leases, but whether to renew them for 30 years. The environmental group has "major concerns" about leasing the land another three decades, she said.

"We have an aging system with major corrosion problems," Callaghan-Chappel said. "We need to really think about what the consequences could be for a blanket authorization of operating the pipeline for 30 more years. It might not hold up that long."

Alyeska's Wight strongly disagreed. Wight said Alyeska uses state-of-the-art technology to monitor the steel pipeline for problems, dispatching electronic devices through the system to detect weaknesses in the pipe's walls. Wight said the 25-year-old pipeline has some corrosion, but the company routinely repairs or replaces sections that show signs of wear.

"It's in great shape. I do not believe corrosion is a significant threat to the pipeline itself," he said.

The Joint Pipeline Office is scrutinizing the pipeline to determine its life expectancy, said McWhorter. The agency has hired two consultants to analyze the reliability of key systems of the pipeline, including the pipe itself, valves, storage tanks and fire suppression systems.

The analysis will be part of a report separate from the environmental impact statement called the Trans-Alaska Pipeline Authorization Act report, which also will determine whether the industry has stayed in compliance with environmental laws and terms in the current leases two conditions for renewal. The commissioner of the Alaska Department of Natural Resources also will issue a report on whether to renew the lease on state land.

The Joint Pipeline Office has scheduled public hearings for the first phase of the environmental impact statement in communities along the pipeline. The meetings begin Sept. 12 in Barrow and end Sept. 20 in Anchorage. The draft is due July 2002, and the timeline to issue a final lease is December 2002. The Joint Pipeline Office has a Web site about the lease renewal proposal at www.tapsrenewal

Kathy Dye can be reached at

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