Pipeline Corrosion Repairs to Cost $1 Billion, Alaska Claims : Environment: State official tells a House panel of ‘serious’ problems. Oil executive questions the figures.

The cost of repairing or replacing corroded sections of the trans-Alaska oil pipeline will top $1 billion, a figure far above the highest estimate offered by the industry group operating the 800-mile system, Alaska’s pipeline coordinator said Thursday.

The state’s investigation shows that “serious corrosion problems” exist through the system, including portions of the terminal at Valdez, Jerry Brossia, the pipeline coordinator, told a congressional hearing.

“Neither the state nor the federal government nor anyone else knows the full extent of corrosion on the pipeline,” Brossia said.

Even so, a special investigation by the state disclosed that, “at a minimum,” expenses “may exceed $1 billion in repairs and replacement of the pipe,” Brossia told the water and energy resources subcommittee of the House Interior Committee.

James P. Hermiller, president of the Alyeska Pipeline Service Co., told the panel that the organization plans to spend a lesser amount--$600 million to $800 million--on corrosion detection and repair over three to five years.

“I don’t know what they’re using in their numbers,” Hermiller said in a later interview, referring to the official Alaska estimate.

Meanwhile, the General Accounting Office, the investigative arm of Congress, presented the subcommittee with a critical portrait of confused and indifferent regulation of the pipeline by federal and state agencies.

Officials of two federal agencies and the state of Alaska knew that the pipeline’s protective coating had been damaged in some instances during the original pipeline construction, but did nothing, according to James Duffus III, director of GAO’s natural resources division.

The regulatory departments “have not required increased monitoring for corrosion, and have not independently assessed the corrosion detection data, instead relying on Alyeska’s judgment,” Duffus told the subcommittee. “This inattention has now resulted in a scramble to determine the extent, severity and cause of the corrosion problem.”

No oil has been spilled because of pipeline corrosion. But the massive 1989 spill caused by the wreck of the Exxon Valdez focused intense scrutiny on the safety of oil transportation from Alaska. The trans-Alaska pipeline carries 1.9 million barrels of oil daily.

“The confidence level (of the public) has got to be improved,” said Rep. George Miller (D-Martinez), the subcommittee chairman, vowing that Congress would vote to increase the fees paid by pipeline users, with the money going to pay for expanded inspection efforts.

“There is no question the users of the pipeline will pay, and (eventually) consumers of petroleum products will pay,” Miller said.

“As with the Exxon Valdez, we paid when it ruptured, we’ll pay to prevent this thing,” he said. “They fooled us once; I’m not prepared to be fooled twice,” he said, referring to industry assurances that accidents were virtually inconceivable.

Hermiller said his company “does suffer . . . a credibility problem. We intend to be as open as we can be.”

The cost of repairs will be borne by Alyeska, a consortium of oil companies that pump oil through the pipeline. Hermiller said the projected budget of $600 million to $800 million should cover the repair of the corrosion already located.

“Because corrosion is a continuing phenomenon, corrosion detection and repair expenses will likely continue thereafter, although at a reduced rate for the life of the facility,” Hermiller said.

The trans-Alaska pipeline is being corroded by the natural oxidation of steel. An epoxy coating that protects the line has failed in spots, allowing a microscopic film of water to enter and touch the pipe. “The ultimate cause of the corrosion, the reason for the failure of the coating on the pipe, is under study but is not yet known,” Hermiller said.

Improved technology has enabled pipeline operators to detect far more pitting, scarring and erosion of the pipeline than previously was recognized.

The corrosion is detected by “pigs,” electronic sensing devices that are propelled through the pipeline. The pigs bounce sound waves off the half-inch-thick steel pipe, seeking corrosion. Alyeska officials said the latest model of the pig, able to detect irregularities of .05 inch, had uncovered 827 corroded spots.

Nearly half the rust spots are located in a 9-mile stretch of pipeline in the Atigun River region, and the Alyeska company plans to bury a new replacement section of pipeline there. Next year, the entire trans-Alaska line will be shut down for two days while the corroded section is bypassed and the new 9-mile loop is connected to the main pipeline.

It is cheaper to replace the corroded section than to fix it, Hermiller told the subcommittee. “This is because pipeline repair is very time-consuming and expensive, and because such a high percentage of the corrosion exists in this section,” he said.