Alaska Oil Co-op Accused of Plan to Ignore Spills : Energy: Rep. George Miller contends that before the Exxon Valdez disaster, the Alyeska pipeline consortium decided against cleaning up slicks. The group denies the charge.

A year before the disastrous Exxon Valdez oil spill, a consortium of oil companies secretly decided that it would not respond to spills in Alaska’s Prince William Sound as required by a government-approved cleanup plan, according to documents released Tuesday by a leading congressional critic of the oil industry.

Based on an investigation by his subcommittee, Rep. George Miller (D-Martinez) also charged that the consortium--the Alyeska Pipeline Service Co.--knew that it could not respond effectively to such a spill despite previous assurances to the contrary, and that it made little effort to improve its readiness.

“The oil industry betrayed its own promises and deceived the Congress with respect to operations of Alyeska and the Exxon Valdez,” Miller wrote in a 12-page letter to federal judges reviewing challenges to the Justice Department’s proposed $1.1-billion agreement with Exxon Corp. to settle litigation arising from the spill.

At Anchorage-based Alyeska, spokeswoman Marnie Isaacs vehemently denied Miller’s charges, insisting that Alyeska never intended to evade its responsibility to clean up spills, to mislead regulators or to break the law.

“Congressman Miller’s attention is fairly selective,” she said. “He is not acknowledging the present. . . . The standards (for spill response) have escalated enormously, and Alyeska has kept up with the heightened responsibility.”

Miller, who opposes the proposed settlement with Exxon, objects to any agreement that would preclude further criminal or civil action against the consortium, which operates the trans-Alaska pipeline and the marine terminal at Valdez, Alaska.

“If after making agreements with the state of Alaska and the United States with respect to their ability to clean up an oil spill . . . the Alyeska Co. then unilaterally and secretly changed its operations . . . that’s a major misrepresentation,” Miller, chairman of the House Subcommittee on Water, Power and Offshore Energy Resources, said in an interview.

Justice Department officials declined to comment on Miller’s charges.

Alyeska is owned by seven oil companies, including Exxon, British Petroleum and Atlantic Richfield Co. Miller based his allegations on internal Alyeska documents obtained during congressional hearings.

The Exxon Valdez spill, the nation’s worst, dumped 11 million gallons of crude oil into Alaskan waters on March 24, 1989. It fouled about 700 miles of Alaska coastline in Prince William Sound, killed as many as 580,000 birds and 5,500 sea otters and polluted tidal zones up to depths of 300 feet, according to a summary of 58 federal and state environmental studies filed late Monday in U.S. District Court. Those estimates are worse than previously believed.

Alyeska came under heavy criticism for its handling of the spill. The U.S. Coast Guard eventually assumed control of cleanup operations, for which Exxon paid $2.2 billion.

On Tuesday, Miller’s sharpest accusation concerned an apparently secret 1988 decision by Alyeska’s owners not to clean up an oil spill in Prince William Sound, despite their promises to do so in a so-called Oil Spill Contingency Plan.

In the plan, which was approved by regulators as a condition of the permit to operate the 800-mile trans-Alaska pipeline, Alyeska promised that it would assume responsibility for cleaning up spills from tankers operating in Prince William Sound and other areas.

But in a July 6, 1988, telex, Stanley Factor, a vice president at Arco’s marine subsidiary, wrote: “At the owners committee meeting in Phoenix, it was decided that Alyeska would provide immediate response to oil spills in Valdez Arm and Valdez Narrows only. Further efforts in the Prince William Sound would be limited to the use of dispersants, and any additional effort would be the responsibility of the spiller.”

Alyeska’s Isaacs said the telex referred to ongoing discussions about changes in future oil spill contingency plans, not to the existing one. She denied any intent to evade the law.

“That’s absolutely false,” she said. “(Miller) is basing that conclusion on conversations between Alyeska and our owner companies . . . (that are) a slice of a very long-term give-and-take between Alyeska and the owners on how to craft, design and manage oil spill responsibilities for the 1990 contingency plan,” not the plan in effect at the time.

Daniel Weiss, a spokesman for Miller, said, however, that it was clear from the subcommittee’s review of Alyeska documents that Factor’s comments were part of a discussion about equipment purchases to satisfy the existing contingency plan. None of the documents refers to an update of that plan, he added.

Miller also alleged that Alyeska knew it was ill-prepared to deal with an oil spill--despite assurances otherwise--and that it did little in the years before the Valdez spill to improve its preparedness.

In a 1984 letter obtained by Miller’s subcommittee, former Coast Guard Commander James K. Woodle, then Alyeska’s marine superintendent at its Valdez terminal, issued a warning to Alyeska President George M. Nelson: “Serious doubt exists that Alyeska would be able to contain and clean up effectively a medium- or large-size oil spill. . . . Response to any spill beyond the limits of Valdez narrows should not be attempted with present equipment and personnel.”

Theo Polasek, Alyeska’s vice president of operations, said in a 1988 company briefing document, also obtained by the subcommittee: “Immediate, fast response to (the) midpoint of Prince William Sound (is) not possible with (the) present equipment complement.”

Yet Alyeska’s Oil Spill Contingency Plan assured regulators that the “estimated time of completion of spill cleanup of a 100,000-barrel spill (in Prince William Sound) would be less than 48 hours.” Among other items, Alyeska said equipment, including a barge, would be in place within five hours of a spill. In fact, Miller’s subcommittee found, when the Exxon Valdez ran aground, fewer than 3,000 barrels were recovered in the first 72 hours. And an equipment barge failed to reach the site for more than 14 hours.

Isaacs said she couldn’t comment on the documents, other than to say that some equipment was purchased in the years before the Valdez spill.

Tight budgets contributed to the situation, Woodle said in an interview Tuesday.

“It was a cut, cut, cut operation,” said Woodle, who left Alyeska in 1984 in a disagreement over the company’s spill preparedness. “The bottom line: It was impossible to maintain readiness.”

Woodle said Alyeska asked him to sign letters assuring the state of Alaska that the consortium had sufficient manpower, equipment and readiness to comply with the Oil Spill Contingency Plan. He refused.

“When I left, I don’t know who signed them,” Woodle added.

Isaacs said she did not know whether anyone else at Alyeska signed such letters.

It is unclear what effect Miller’s allegations will have on the proposed settlement with Exxon.

The settlement, which would require Exxon to pay $100 million in criminal fines and up to $1 billion in damages, has drawn criticism from environmentalists and some Alaskans on grounds that it is too easy on the oil company.

Alaska Atty. Gen. Charles Cole said Tuesday that he doubted Miller’s concerns would torpedo the settlement.

Cole added that the settlement would preclude further state action against Alyeska only for natural resource damages, not for other damage claims.

“And we intend to vigorously continue the prosecution of those claims,” he said.