Critics of New Alaska Field Fear Oil-Shipping Mishaps : Environment: They point to past pollution, safety and other problems of Alyeska Pipeline Service Co.

By PATRICK LEE

Sept. 16, 1991 12 AM PT

TIMES STAFF WRITER

VALDEZ, Alaska —

The argument over oil drilling in the Arctic National Wildlife Refuge begins with worries over its effects on Alaska’s northern wilderness. But it shouldn’t end there, environmentalists say.

If Congress in the next few weeks gives its blessings to drilling, oil from the refuge will come under the control of the Alyeska Pipeline Service Co. once it leaves the oil field.

Anchorage-based Alyeska will sluice the piping hot oil into its 800-mile trans-Alaska pipeline, ship it south, load it onto tankers and escort it on its way through Prince William Sound.

Yet, the debate over the effects of drilling in the ANWR (pronounced an-wahr ) has focused too little attention on the pollution, safety and other problems caused by the company during the 14 years that it has transported the oil produced on Alaska’s North Slope, critics say.

And that unsettles environmentalists and others who argue that--despite major improvements in recent years--Alyeska’s past performance record offers a taste of what to expect should the company begin transporting oil from the Arctic refuge as well.

For its part, Alyeska--owned by the seven major oil companies operating on the North Slope--points to improvements in its operations since the disastrous 1989 Exxon Valdez oil spill in Prince William Sound.

Officials say that the company is committed to operating in an environmentally sound manner.

But environmentalists, state and federal officials and other observers point to a wide array of outstanding problems with Alyeska’s performance:

* Alyeska has been a major source of water, air and soil pollution in Alaska.

* Despite assurances to the contrary, the trans-Alaska pipeline and other major Alyeska systems have become riddled with corrosion, necessitating major repairs.

* Alyeska--chastised for delays in the initial cleanup of the Exxon Valdez spill--remains unprepared in some ways to deal with oil spills, fires or other disasters.

Meanwhile, allegations have surfaced that Alyeska aggressively pursued a campaign of spying aimed at ferreting out internal whistle-blowers and silencing outside opponents.

The firm is alleged even to have asked its security contractor, the Wackenhut Corp., to target Rep. George Miller (D-Martinez), chairman of the House committee that oversees environment and resource development issues.

Alyeska denies any wrongdoing. But for some, the alleged black-bag operation conjures up disturbing echoes of the consortium’s past.

Before the spill, Alyeska “certainly acted, in my opinion, as if they were immune from any responsibility in acknowledging the broader public interest,” says Douglas Baily, who as Alaska’s attorney general at the time of the Exxon Valdez spill filed several court cases against Alyeska and Exxon Corp., one of Alyeska’s owner companies.

The company’s conduct is little better now, he adds.

A congressional report this summer concluded that Alyeska until recently has been allowed to operate with near impunity--virtually unregulated by understaffed or undertrained state and federal agencies.

The General Accounting Office’s 5 1/2-year review of the oversight of Alyeska’s operations, released in July, concluded that “the five principal federal and state regulatory agencies have not had the systematic, disciplined and coordinated approach needed to regulate” Alyeska and the trans-Alaska pipeline system.

Regulators have denied that, adding that oversight has improved.

The company, too, rejects all the negative characterizations and allegations of pollution or other wrongdoing. Alyeska argues that it has made dramatic improvements in its operations since the 1989 spill that so underscored the company’s shortcomings.

Alyeska officials maintain, too, that the company continues to live up to all of its many state and federal safety, environmental and operating permits. Alyeska is owned by British Petroleum, Atlantic Richfield Co., Exxon Corp., Mobil Corp., Amerada Hess, Phillips Petroleum Co. and Unocal Corp.

Moreover, the recent changes in operations were made “to show the company’s commitment to environmental protection,” says Gene Dickason, manager of the two-year-old environmental department at Alyeska.

The issues have special meaning here in Alaska, a state still trying to balance the enormous financial benefits of oil development with its environmental and human costs--particularly now that pressure is on both the state and the nation to find new sources of domestic oil.

For Alaskans, the issues crystallized in the 1989 Exxon Valdez spill, which made Alyeska the industry’s lightning rod.

More than two years after the spill, Alyeska by all accounts has, indeed, improved its safety and environmental preparedness, including changing several top managers.

The company--whose name comes from an Aleut word meaning “mainland”--was formed in 1970 to build the trans-Alaska pipeline, then to operate it after start-up in 1977. Alyeska’s main facility--besides the pipeline and its 11 pump stations, is the 1,000-acre marine terminal on the southern side of Port Valdez.

In the shadow of the Chugach Mountains, the terminal consists of four oil tanker berths that serve up to 70 tankers a month, a ballast water treatment plant and 18 storage tanks that can hold a total of 9.18 million barrels of oil.

On a recent summer morning, sea otters could be seen floating on their backs in the fog-shrouded water near the terminal. Not far away, a visitor could see the black wall of an Arco oil tanker loading crude oil at Berth No. 5.

Since the Exxon Valdez spill, which dumped 11 million gallons of crude oil into Prince William Sound, Alyeska has implemented a state-of-the-art oil spill prevention and response program, called SERVS, or Ship Escort/Response Vessel System.

Two vessels now escort every tanker in and out of the sound. Skimmers, barges, booms, vacuum trucks and other equipment stand at the ready in Valdez and other locations in the sound to deal with spills.

But environmentalists--looking ahead to ANWR’s possible opening--worry about Alyeska’s performance, based on problems they say remain:

* A June, 1990, report done for the state by Bennett Environmental Consultants Ltd. of Vancouver, Canada, praises Alyeska’s new response plan.

But it adds: “In spite of these laudable efforts, it is still most unlikely that Alyeska can yet meet the state’s response standards” of collecting 300,000 barrels of crude oil from the sea--slightly more than spilled from the Exxon Valdez--within the first 72 hours of a spill.

* A May, 1990, draft report by Daniel J. Lawn, an environmental engineer with the Alaska Department of Environmental Conservation, concluded that the collection capacity of Alyeska’s oil-skimming equipment was dramatically overstated. Except in extremely calm seas and with fresh, very deep, oil, the capacity was probably exaggerated by 80% to 90%, Lawn found.

Since the two reports were written, Alyeska has added even more spill equipment. But it is still short of what the studies say it needs to meet the post-Valdez-spill state requirement.

Alyeska officials argue that the company has the best spill prevention and response system feasible and is adequately prepared.

* More recently, Valdez fire officials have raised concerns that Alyeska is not prepared to deal with an on-board tanker fire like the one that devastated the Norwegian ship Mega Borg in the Gulf of Mexico in June, 1990.

That ship burned for eight days, releasing 4.3 million gallons of oil in the Gulf of Mexico. A similar conflagration could mean disaster in Port Valdez, city fire officials say.

Alyeska officials say the consortium’s employees are prepared to deal with any fires. Fortunately, there have been no major tanker fires so far in Port Valdez, says Duane Taylor, Alyeska’s manager of corporate fire and safety in Valdez.

But local fire officials, who praise some of Alyeska’s fire preparedness, question the city and industry’s ability to help fight such a tanker fire--particularly one that breaks out below decks, as in the Mega Borg disaster.

“If (the crew) was unable to extinguish or control a fire and the on-board systems were to fail, we would not be able to do a whole lot more than relocate the vessel to minimize damage from a spill . . . and call a salvage company to come in and put out the fire,” said Valdez Fire Chief Charles E. Lundfelt.

In the Mega Borg incident, it took days to get equipment from such a company on board, said Richard Golob, publisher of Golob’s Oil Pollution Bulletin in Cambridge, Mass.

“We would see the same situation here,” Lundfelt said. “It would be a very tough situation to try to handle”--particularly in the winter, with Valdez’s unpredictable weather, he added.

* Safety questions aside, Alyeska continues to pollute the air and water around Valdez, environmentalists say.

Last month, the Environmental Protection Agency proposed fines of $20,000 against Alyeska and two owner companies--Exxon and British Petroleum--for allegedly disposing of ballast water contaminated with oil into the terminal’s ballast-water treatment plant. Alyeska denied the allegations, and the EPA is continuing to investigate the matter.

A draft report by state engineer Lawn--released last month by state Sen. Curt Menard, concluded that it is common industry practice to mix engine-room sludges, fuel-tank washings, diesel sludges and other oily wastes into ballast water. Most if not all of the liquid is dumped at the ballast-water treatment plant, the report says.

Environmentalists say that the plant--which essentially separates oil from water--was never designed to handle such wastes, nor to handle the volume of material that routinely comes into the plant.

As a result, contaminants--including carcinogens such as benzene and toxic materials such as heavy metals--are ending up in the waters and sediments of Port Valdez, state studies show. That is raising concerns among experts about the effects on the environment.

John Sandor, Alaska’s commissioner of environmental conservation, says Lawn’s report has been turned over to the state departments of public safety and law for further evaluation, with a final version expected in the next few weeks.

In tests since last March of liquid from eight tankers, the state Department of Environmental Conservation has found oil, petroleum products and water, with some heavy metals, but nothing out of the ordinary, according to Art Ronimus, an environmental engineer with the Department of Environmental Conservation in Anchorage.

The tests do, however, raise concern about levels of a heavy metal--zinc--which can be toxic at certain concentrations, Ronimus says.

Alyeska’s Dickason says the company’s own tests show no adverse effects from the treatment plant’s discharges into Port Valdez. Environmentalists and others have questioned the validity of Alyeska’s test data.

Opponents of ANWR drilling also question other Alyeska operations:

* The terminal at Valdez continues to be the source of high levels of vapor emissions, including cancer-causing benzene, according to a state environmental official.

Vapors rise from tankers as hot crude oil is loaded into the cold ships. Storage tanks and the ballast-water treatment plant also emit some vapors, says the official, Bill MacClarence, an air quality engineer with the DEC.

Alyeska is now testing the air in and around Valdez to see if there are any adverse environmental or health effects from the vapor emissions. Company officials doubt there are, but, in any case, are studying vapor-recovery systems.

Those efforts, however, don’t mollify fearful residents.

“This is not a knock down and kill you problem,” says Riki Ott, a marine toxicologist and president of the Oil Reform Alliance, a coalition of fishing and environmental groups in Alaska. “It’s more like a 20 year from now cancer problem.”

* Corrosion is already eating away at the 800-mile trans-Alaska pipeline, pump stations along the route and storage tanks in Alyeska’s system, despite early assurances that such systems would withstand rust better.

Federal officials attribute the problems in part to hasty construction and unexpected flaws in corrosion-protection systems.

In one storage tank, corrosion was severe enough to warrant replacement of the tank’s entire floor. Along the pipeline, rust has meant replacement of an eight-mile underground segment.

Though no leaks have been attributed to the corrosion, Alyeska officials now acknowledge that it will be an ongoing problem for the life of the pipeline.

“But it’s not an escalating problem,” adds Bill Howitt, Alyeska’s vice president of engineering and projects.

* Perhaps most troubling to people familiar with Alyeska’s operations are recent allegations of a covert investigation of outside opponents, conducted at Alyeska’s request by Florida-based Wackenhut Corp.

Sworn court statements and interviews with sources familiar with the probe paint a picture of electronic surveillance, lies, phony offices, burglaries and other questionable behavior aimed at silencing critics.

Alyeska, which has acknowledged the existence of the investigation, denies any wrongdoing. Miller’s House Interior and Insular Affairs Committee is probing Alyeska’s conduct.

* Former employee Robert Scott has filed a complaint with the U.S. Labor Department charging that Alyeska illegally fired him for leaking information that detailed problems with the company’s vapor-emission incinerators. Alyeska has denied the charges.

In general, Alyeska officials maintain that they are being unfairly characterized. They argue that they have proven they are not causing any environmental problems, and won’t cause any if ANWR is opened.

“A lot of what we find ourselves with today is this perception that something is wrong, and it doesn’t matter how many studies we do to show that we’re not causing any problem; the perception is still there that we are,” Dickason says with some exasperation.

“If there is a problem,” he adds, “we will do whatever we need to do to fix it.”

Alaska’s Oil Port

Alyeska Pipeline Service Co.’s marine terminal in Valdez is the embarkation point for 1.8 million barrels of Alaskan oil every day. It is also the focus of concerns by environmentalists and other industry critics for a variety of alleged pollution and safety problems, as detailed below.

Ballast Water Treatment Facility

* EPA fined Alyeska for improper disposal of oily ballast water from tanker into this plant and Port Valdez

Berths

* Environmentalists worry about air pollution from loading tankers

* Fire officials worry about fires aboard tankers

Offshore

* Oil spill response equipment may be inadequate, critics argue

Tank Farms

* Corrosion affecting bottoms of steel storage tanks

* Concrete sumps leaking

Trans-Alaska Pipeline

* Corrosion eating at pipe