Alaska Pipeline Regulators Were Lax, GAO Says : Energy: Inadequate oversight by state and federal agencies led to environmental and safety problems on the huge oil conduit, the congressional watchdog says.

The 800-mile Trans-Alaska Pipeline, which carries about 25% of the nation’s oil supply, has suffered from safety and environmental problems because of inadequate oversight by state and federal regulators, according to a General Accounting Office report scheduled for release today.

The lack of oversight contributed to corrosion along the pipeline and in storage tanks, as well as leaks from the pipe that went undetected, the report by Congress’ watchdog agency says. In addition, regulators failed to ensure that the system could withstand earthquakes or that the pipeline’s operator--Alyeska Pipeline Service Co.--could clean up a massive oil spill.

The Times reported 18 months ago that corrosion was eating through crucial sections of the pipeline, which snakes its way across three mountain ranges, 800 rivers and three seismic fault zones to deliver 1.8 million barrels of crude a day from the frozen tundra of Alaska’s north to tankers in the port city of Valdez.

Requested by Rep. George Miller (D-Martinez), the report--itself a 1 1/2-year study--concludes that five state and federal agencies ceded much of their oversight responsibilities to Alyeska, a consortium of seven oil companies.

“These agencies relied on Alyeska to police itself,” the report says. “For example, the regulators did not systematically or independently assess Alyeska’s corrosion prevention and detection or leak systems, nor did they require that Alyeska demonstrate that it can respond adequately to a large-scale oil spill.”

Only after the disastrous 1989 oil spill in Prince William Sound--and the subsequent discovery of corrosion along the pipeline--did regulators begin to focus more attention on the system, the report says. Alyeska came under sharp fire in the wake of the Exxon Valdez spill for a lack of preparedness that delayed cleanup efforts.

The report recommends stronger central leadership and secured funding to ensure adequate oversight.

“While increased (pipeline) oversight will require more up-front costs, comparing these costs with the costs associated with mitigating the environmental impacts of a major oil spill or the disruption of 25% of the nation’s oil production may show the value of spending additional funds now,” the congressional investigators say.

The GAO adds, however, that if a joint state and federal oversight office--established in January, 1990--proves effective in overseeing the pipeline, its findings will be addressed.

Officials of the regulatory agencies declined to comment directly on the report. But while several concurred that their agencies needed more funding, they defended their oversight in general terms.

“I definitely agree it was less coordinated before we established the joint office, but I would not agree it was lax,” said Mead Treadwell, Alaska’s deputy commissioner of environmental conservation. “The safety record was pretty good. But it never hurts to improve.”

Added Treadwell: “The basic problems they talked about were discovered in time and have been dealt with properly.” As an example, he pointed to an oil spill training drill Friday in the Atigun Pass, along a steep stretch of the pipeline.

Harold Geren, chief of the Environmental Protection Agency’s water permits and compliance branch in Seattle, insisted that it was sensible for regulators to rely on the oil industry, through Alyeska, to police itself.

“It wouldn’t make sense to increase the level of our oversight in the sense of having employees looking over the shoulders of Alyeska,” Geren said. “That wouldn’t be the best use of taxpayers’ dollars.”

For its part, Alyeska denied that it fell short of any understandings it had with regulators. George Wuerch, an Alyeska vice president, praised the report’s recommendations that regulators have central leadership and secure funding.

Among the findings in the GAO report:

* Regulators failed to turn up shortcomings in the pipeline’s leak-detection system.

None of six spills that exceeded 750 barrels per day triggered a computerized leak alarm, as designed; they were discovered visually, the report says. Since it went into operation in 1977, 14 spills have occurred along the pipeline.

* Regulators did not ensure that Alyeska corrected problems in its own oil-spill drills.

In drills, Alyeska employees had recurring trouble with radios and vehicles while trying to find simulated leak sites, particularly in bad weather, the report found.

* Regulators failed to make independent checks on Alyeska’s system for detecting pipeline corrosion.

Corrosion problems became apparent in the late 1980s, despite assurances before the pipeline’s construction that such problems could be avoided. Federal officials have blamed the corrosion problems on inadequate or faulty corrosion prevention systems and mistakes during construction, some of it during winter storms.

“None of the regulators independently examined the adequacy of these systems until after Alyeska reported corrosion along the pipeline, at the pump stations and in crude oil storage tanks at the Valdez terminal in 1989,” the report says. “Instead, the regulators essentially relied on Alyeska’s assurances that it was meeting . . . requirements.”

Alyeska officials deny that the corrosion problems were overlooked. To date, 1,422 corrosion “anomalies” have been detected, 706 have been investigated and 134 have required repairs, said Bill Howitt, Alyeska’s Anchorage-based vice president of engineering and projects.

The most extensive repairs involved replacement of a nine-mile length of buried pipeline in the precipitous Atigun Pass. Final “tie-in” of the replacement segment is scheduled for the middle of this month. Two other sections of pipe may have to be replaced later, Alyeska said.

None of the corrosion problems has resulted in the release of oil.

* The report also accuses regulators of lax oversight of Alyeska’s marine terminal at Valdez, the focus of questions about air emissions, water pollution and corrosion problems.

Corrosion has turned up in massive storage tanks at the terminal. Nine of the 18 tanks have been inspected since 1987; the bottoms of two tanks were found to be corroded.

In one case, the corrosion--attributable to construction debris left underneath the tank--was severe enough to warrant replacement of much of the tank’s bottom. The other required patching. In each case, no leaks were detected as a result of the corrosion, Alyeska officials said.