Richard Fineberg has reported on Alaska petroleum development for more than three decades for newspapers, public agencies, environmental and other public interest groups and even occasional developers. He has served three governors - the first as a budget and policy analyst, the second as a senior advisor on oil and gas and the third as a consultant. The third was Sarah Palin. In 1977, three months after the start of North Slope production, he wrote the cover piece for The Nation, "Promise and Betrayals - the Trans-Alaska Pipeline." That article concluded that the Alaska pipeline and its owners, by their mismanagement in the exploitation of Alaskan oil, have severely tarnished the image of corporate responsibility, while the government has failed to protect the public interest by responding to corporate misdeeds with vigorous and effective policies. Less than twelve years later, the tanker Exxon Valdez sailing with North Slope crude oil, ran aground in Prince William Sound, causing the worst oil spill in the nation's history. Documentaton and additional background at finebergresearch.com.
Alaska: Under a Rogue Star
Small oil spills across Alaska during the last six weeks of 2009, while Sarah Palin barnstormed the nation to sell Going Rogue, call the former governor's environmental record into question and underscore the dangers of Arctic oil development.
When Santa answers letters from North Pole, Alaska, millions of kids picture gingerbread homes lit by cheery candles in bright windows beneath snowy roofs where reindeer might land. What they do not picture is tanks and towers of the Flint Hills oil refinery, looming garish on the edge of town. Located on the banks of the Tanana River, the refinery is silhouetted in the long winter night against harsh, glaring light and a maze of piping. Many of this town's several thousand souls live within a mile of this facility, which processes Alaska North Slope crude oil from the Trans-Alaska Pipeline System (TAPS).
Just prior to the recent Christmas season, a new Alaskan image appeared in the Lower-48 states. On a big, blue bus custom-fitted for Sarah Palin's multi-state book tour, her smiling face looks out - next to an oversized autograph, superimposed against mountains and evergreens toward the back of the bus and the legend "Going Rogue . . . Book Tour" toward the front. Add the big blue bus - a modern day version of the old covered wagon - to the seemingly inexhaustible list of Alaska images. Missing from this picture is the private jet that flew Palin from city to city while her road crew drove the bus to the next stop. There, Palin would climb aboard at the airport for the short ride to her venue, where she would step down on cue to greet throngs and sign books for her admirers. According to press accounts, after signing hundreds of books in a couple of hours, she might invite carefully selected, friendly reporters for a rolling interview before departing by bus for a short ride back to the plane.While Palin was barnstorming in the Lower-48, back in Alaska reality was colliding with her oft-repeated claims that, as governor, she "promised to protect the environment - and we did," and that Alaska demonstrates that "it is possible to be both pro-environment and pro-resource development." But during the six weeks between the Nov. 17 release of Palin's book and the end of the year, a somber, petroleum-stained picture of Alaska was emerging. Largely overlooked by the headlines and celebrity gossip that swirled around the former governor, the Alaska North Slope petroleum system spawned, in rapid succession, no less than five separate spills.
Although none of these events were environmental disasters, they etched two clear messages in stark relief against Alaska's icy winter background: Each spill is a reminder of the potential for human failure to foil the best laid plans of petroleum system operators and government oversight personnel who are charged with responsibility to protect the public interest. While confirming this reality, the spills also spotlight the potential consequences of Palin's failure, during her 32-month tenure as governor, to put Alaska's petroleum system on a safe, positive course.
Five Oil Spills and a Book Tour
Five Oil Spills and a Book Tour
Less than a week after Palin's book tour began, synchronicity began to fuse the conflicting images from North Pole and the former governor's safari. On Nov. 23, Palin was signing books at Ft. Bragg, North Carolina and Birmingham, Alabama. Meanwhile, back in Alaska, at the Flint Hills refinery in North Pole workers discovered a spill of approximately 3,000 gallons of oily water leaking into the gravel bed along the railroad spur loading facility. The overhead 6" pipeline was immediately shut down and a 16-person spill response team, laboring at temperatures near zero, deployed a boom to stop the spread of the product, then used vacuum trucks to recover the oily water from the gravel pad. Refinery officials estimated that the spilled mixture contained only one percent oil. Even that amount could have filled the crankcase of about 25 automobiles. From a site photograph, it appears that the spill area, running along the refinery railroad track, was more than a football field long.
That evening, as Palin was flying to Florida for appearances at three carefully chosen conservative-voting communities the next day, approximately 80 adults gathered glumly at the North Pole High School auditorium to learn about a more serious refinery problem. State officials were going to tell them what they knew - and didn't know - about a potentially hazardous refinery chemical, apparently released into North Pole's water table by a refinery spill decades before but only recently discovered seeping into some North Pole household water systems.
During its lifetime the North Pole refinery has experienced numerous spills, including what the Alaska Department of Environmental Conservation (ADEC) describes as "very large but unknown amounts of petroleum" that leaked from storage tanks in the late 1970s and early 1980s. After several decades of spills and cleanups ordered by state and federal monitors, in 2002 an industrial chemical known as sulfolane (tetrahydrothiophene 1, 1-dioxide) was identified as a North Pole ground water contaminant. Sulfolane is a man-made industrial solvent, commonly used in refining gasoline, among other manufacturing processes. While sulfolane causes neurological disorders in laboratory animals exposed to high dosage, the U.S. Environmental Protection Agency has never determined a safe drinking water level. Sulfolane gets by on a pass because laboratory animals excrete low levels of the compound before it can do harm. In 2006, ADEC approved a new corrective action plan for Flint Hills, the refinery's third owner. The plan set the acceptable groundwater cleanup level target for sulfolane at 350 parts per billion - nearly two orders of magnitude higher than the allowable level for dangerous carcinogens like benzene. ADEC said it derived this figure from standard analytical review of a study done in British Columbia. At that time, it was assumed that North Pole ground water was not carrying the potentially poisonous compound beyond the confines of the refinery toward nearby homes.
In October 2009 Flint Hills discovered that sulfolane had been identified in groundwater beyond the refinery perimeter. Samples of drinking water in nearby homes contained traces of the industrial chemical in well water in some. Small quantities of sulfolane were also discovered in the city water system's wells. Not to worry: the well was shut off. At that point, the state environmental agency called in public health colleagues, who asked the federal government to come up with a safe drinking water level that would protect the refinery's neighbors. By Nov. 23, Flint Hills was providing approximately half a dozen homes with bottled and was expanding its testing of household wells and groundwater.
Some people at the North Pole High School auditorium on the evening of Nov. 23 wondered why the government monitors had assumed that ground water was not following the path of the nearby Tanana River. No answer. Nor was it clear why ADEC set the sulfolane level so high back in 2006 instead of bringing in public health specialists in a more timely manner to determine the human health hazard posed by sulfolane,. "What are we, guinea pigs?" one nervous North Pole resident asked.
Since that night, traces of sulfolane have been found in 57 private wells and ground water as far as 2-1/2 miles from the refinery. Flint Hills is now supplying bottled water to approximately 55 nearby homes while state officials wait for federal specialists to provide a safe drinking water guideline for the toxic chemical.
It was only after the public meeting that word reached State of Alaska of a sulfolane contamination episode several decades ago near Stockton, California that reportedly led California to set an acceptable sulfolane level for drinking water of 57 parts per billion. Differences between this target level and the much higher level ADEC adopted from the Canadian study in 2006 have not been analyzed because the state was unaware of and has not been able to obtain the records on the earlier California study. Although residents are understandably worried about the health risks posed by sulfolane in their drinking water (as well as the possible effects on their property values) at this time North Pole's sulfolane problem seems to be a more akin to a worrisome headache than to a health crisis. Nevertheless, this episode raises serious doubts about the vigor and the effectiveness of Alaska's oversight of its golden petroleum goose.
North Pole's Nov. 23 double-header marked the start of a strange rash of Alaska spills. Six days later, as Palin was heading for Richland, Washington to resume her tour after a Thanksgiving week-end break, a new spill was reported at the sprawling Prudhoe Bay complex on the edge of the continent, 450 miles to the north of North Pole. An 18-inch pipeline froze and split, releasing an a mixture of water, oil and natural gas estimated at 46,000 gallons that spewed out under pressure, spreading a petroleum mist that covered approximately half an acre at the Lisburne oil field, a Prudhoe Bay satellite operated by international oil giant British Petroleum (BP).
Once again, state oversight officials were caught flat-footed - in part because the state does not station full-time environmental monitors at the nation's largest oil field. "Why do lines on the North Slope have temperature probes if BP isn't going to check them?" a state official wondered in retrospect. Without full-time oversight personnel on the ground at the aging Prudhoe Bay petroleum complex, he said he was unable to hazard a guess how BP had come to miss the ice plugs in the line that are believed to have caused a two-foot-long gash in the field pipeline that was carrying the mixture to the Lisburne processing facility for separation.
BP's apparent North Slope operational lapse was nothing new. The international oil giant was already on criminal probation for lax management practices at Prudhoe Bay, having pleaded guilty to a federal misdemeanor charge and paid $20 million in fines and restitution for corrosion problems in 2006 that caused the largest spill in North Slope history. Documents revealed that BP's penchant for cost-cutting was probably the root cause of the oil company's failure to deal effectively with that well-known nemesis of aging oil fields - corrosion. ADEC, which had allowed technical reports to be altered to support BP's claims it was taking appropriate anti-corrosion actions in 2001, was either incredibly naïve or a witting accomplice. In hearings Washington, DC, in September 2006, stalwart industry advocates in both the U.S. House and the Senate excoriated BP. "BP's policies are as rusty as its pipelines. I am very concerned," declared Rep. Joe Barton (Rep., Texas), Chairman of the U.S. House Committee on Energy and Commerce. "Shame, shame, shame." BP and chastened state officials dutifully declared that they would improve maintenance procedures at the nation's largest oil field.
On Dec. 2, three days after the Lisburne spill, Palin arrived in Springfield, Missouri, fresh from Roswell, New Mexico. She boarded the big blue to head for the Borders bookstore, where she stepped off to greet her fans, some of whom had camped out all night in freezing weather to see her. She spent three hours autographing books at the largest signing the store owner could remember, then left to give a lecture at a nearby university.
That afternoon Alaska's North Slope suffered yet another spill at a well housing in the Prudhoe field itself, about ten miles west of the site of the much larger Lisburne spill. BP estimates that approximately 7,140 gallons of produced water was released inside a manifold building, with 5,040 gallons (120 barrels) flooding the building and 2,100 gallons (50 barrels) spilling on to the gravel pad outside.
The latest oil discharge was not discussed at an Alaska community meeting that was focused other petroleum development issues. Kevin Hostler, the President of the Alyeska Pipeline Service Company, the TAPS operator, was in Fairbanks to drum up community support for the pipeline company's latest drive to cut costs on behalf of its owners. (North Slope producers BP, ConocoPhillips and ExxonMobil own 95% of Alyeska.) For the coming year, Alyeska planned to save $100 million by not filling approximately 60 positions left open by retirement and postponing the completion of the pipeline's strategic reconfiguration (SR) program. SR is the massive pipeline overhaul, now in its sixth year, that involves transition to an automated pipeline with electric-powered pumps replacing the original jet engines. Hostler was pitching that day for additional long-term savings Alyeska hoped to realize by replacing approximately 300 veteran union workers from Fairbanks and Valdez with younger, non-union workers based in Anchorage. "We're trying to be as efficient and effective as we can," Hostler explained, in order to meet the economic challenge posed by the increasing costs associated with declining North Slope throughput.
Alyeska frequently tries to cut costs at the direction of its owners. To veteran pipeline workers and former Alyeska employees, the company's latest plan raised serious safety concerns; old hands worried that their lower-paid replacements would lack both pipeline experience and familiarity with local conditions necessary to ensure safe operations. To the few observers familiar with the billions of dollars TAPS had siphoned from the state (and the few independent producers operating on the North Slope) through excessive shipping charges, the necessity for cost-cutting seemed sadly ironic. During Palin's first year in office, her administration had promoted and enacted legislation that would have enabled state officials to correct the long-standing pipeline revenue problem, but the provisions were never implemented. On this day, however, the Fairbanks press and community were focused on jobs - not safety, spill prevention or equitable revenue. In a community concerned about the loss of high-paying oil industry jobs, Alyeska had stirred up a hornet's nest. Local phones were buzzing as politicians, union leaders tried to figure out how to respond to the complaints of pipeline workers. Spill issues were not addressed.
That evening Palin, no longer burdened by current contretemps of the state she had recently governed, was bound for Fayetteville, Arkansas. The next morning she would step sprightly from the bus to start another round of book signing by greeting folks who had camped out overnight to see her before she left for an engagement in Oklahoma City, Oklahoma. The following day would find Palin in the heart of Texas. Two days later a long zig-zag between Ft. Hood and Sioux City, Iowa would take Palin back to Fairfax, Virginia. Although Palin's recent peregrinations would not have been possible if she had chosen to fulfill her responsibilities as governor, she had resigned and was now free as a bird.
It was not necessarily wrong to fly to engagements on a book-signing tour. Author Joe McGinniss, who is following Palin closely, recalls that has done that himself. But McGinniss contends that there is a big difference between Palin's travel arrangements and his. Not the renting of a private jet, which McGinniss could not afford on his tours. The critical distinction is that McGinniss never tried to pretend he was on a bus. "What's wrong in this instance," he writes, "is the apparent fakery created and sustained for the sake of building pseudo-populist appeal--and selling books."
Palin's book tour ended in mid-December, but there seemed to be no end to the Alaska spills. On December 21, a six-inch pipe just outside a well house building at Prudhoe broke apart. The force of the spill put a small hole in the back of the building, blew the doors open at the front and released a mist of oil, water and natural gas that covered an area nearly the size of a football field. BP estimated that the mist may have contained as much as 700 gallons of the oily mixture, including about 100 gallons of oil, plus about 135 gallons of corrosion inhibitor.
Two days after the fourth spill in a month on Alaska's North Slope delivery system, ADEC issued an $8-million request for consulting services, specifying that the applicants should provide the department with a range of engineers and safety specialists. "That's expertise," comments Lois Epstein, an environmental engineering consultant, "that the state responsible for the largest oil field in the nation should have had on the staff decades ago."
On December 23 - the day that ADEC issued its RFP for assistance - a tug from the Valdez tanker escort fleet, on a routine ice patrol mission, somehow ran into the infamous Bligh Reef in Prince William Sound, approximately 850 miles south of Prudhoe Bay. In 1989, the underwater spires of the same reef had impaled the tanker Exxon Valdez, resulting in the worst oil spill this nation ever experienced. The estimated 7,000 gallons of diesel fuel spilled into the sound December 23 amounts to less than one-tenth of one percent of the crude oil the Exxon Valdez is known to have dumped into the clear waters of this wildly beautiful fishery 20 years earlier. Nobody could explain how this craft managed to hit what must be considered one of the best known, best marked and most closely watched navigation hazards in the nation.
The day after the grounding in Prince William Sound, Governor Sean Parnell, Palin's replacement, issued a press release indignantly deploring the outbreak of spills. Asked about the spills on a statewide radio talk show Jan. 5, he fumed, "I think that's crazy; that's too much." Borrowing from the scripts of past political leaders and contrite oil industry officials, the new Alaska governor said he had asked his commissioners to make sure the state's level of inspections is adequate, adding that he had called BP and that company officials had assured him they were doing everything possible to stop this outbreak of spills.
In January, as the former governor moved on to become a Fox news commentator, the Alyeska jobs issue was resolved when Alyeska agreed to preserve union positions in exchange for pay cuts. Meanwhile, the Lisburne transit line that had frozen and burst back in November sprung another small leak - a reminder that the environmental effects of cost-cutting on Alaska petroleum operations have not been addressed. The cumulative effects of spills from petroleum operations and the possibility that a major operating error could have serious environmental consequences worry veteran observers. "The point is," declares former ADEC monitor Dan Lawn, "they shouldn't be having spills like that. BP is on probation and they promised to fix their maintenance procedures." Lawn ought to know: Based in Valdez in the years before the 1989 Exxon Valdez spill, he tried to warn superiors of the undue risk posed by shortcomings in the TAPS terminal and tanker systems.
What Palin Says, And What (If Anything) She Actually Did
The Alaska spill sequence that unfolded during the final weeks of 2009 suggests that Palin's claims to be a protector of the environment are phony. Consider, for example, this passage from Going Rogue:
Prior to the election it had been revealed that BP had been trying to save money for years by cutting corners on oil pipeline maintenance on the North Slope. This was very serious: leaks and spills from corroded pipelines were all too common and harmed the environment plus led to production slowdowns. So one of my first priorities was to establish the Petroleum Systems Integrity Office (PSIO). With the creation of the PSIO, Alaska became the first state to require industry operators to document their compliance with maintenance and quality assurance standards, and to share that information with the state. Unfortunately, the next year the House Finance subcommittee gutted more than a third of the PSIO budget. I fought to get it restored and finally succeeded.
The preceding excerpt - one of Palin's few curtsies to environmental considerations in her autobiography - is a mixture of fact, wishful thinking and empty rhetoric. Demonstrating her characteristic failure to follow through, Palin abruptly ended this snippet without telling readers what - if anything - the new agency accomplished during its two years under her tenure. The Alaska spill sequence that silently shadowed her Lower-48 book tour in late 2009 clearly suggest that the oversight procedures Palin claims to have established to insure safe production and transport of Alaska petroleum were either not in place or not working as intended.
Review of state documents reveals further evidence that Palin's new unit has not been able to fulfill the tasks or deal with the problems that Palin outlined in the passage above. According to the executive order establishing the PSIO in April 2007, the new agency's first major assignments were to conduct a gap analysis to identify redundancies and holes in the government monitoring process, and to "evaluate industry oversight of . . . facilities, equipment, infrastructure, and activities." When Palin left office two years later, the gap analysis had yet to be completed and there was no sign of a PSIO evaluation of industry management oversight programs.
Palin also cited the establishment of the PSIO as proof that Alaskan petroleum development was environmentally friendly in her farewell speech as governor in Fairbanks in July 2009, and in the October 2009 article quoted above that urged aggressive oil drilling in Alaska in October 2009. Both references area shorter than the passage quoted above; neither provided any information to support Palin's oft-repeated brag.
In Going Rogue, Palin neglected to tell readers about the failure of another closely related project she initiated, the Alaska oil and gas infrastructure risk assessment. When Palin announced that project on May 1, 2007, two weeks after establishing the PSIO, she proclaimed:
For our new Petroleum Systems Integrity Office (PSIO) to do an effective job, it must have access to comprehensive, thorough, and objective assessment data to tell us the status of the infrastructure and what it should be. No such system-wide risk assessment has ever been conducted of this complex system.
As Palin left office last summer, the $5-million risk assessment project she had launched two years earlier was stuck in a bureaucratic ditch. Some observers (including this writer, who observed and reported on this project for environmental groups) would argue that this bureaucratic fiasco wasn't PSIO's fault; Palin had assigned the project to ADEC, an agency with a troubled history of arguably ineffectual oversight of Alaska petroleum operations on the North Slope, on TAPS and on Prince William Sound. In any event, after receiving vociferous public criticism of its proposed project game plan in June 2009, ADEC sacked its contractor and put the project on hold.
The game plan ADEC and its contractor had devised would have ignored small spills and minor incidents, reasoning that such incidents do not cause serious problems. Project critics pointed out that the approach the state was taking overlooked cumulative damage effects. Moreover, industrial disasters are typically the product of multiple causes that do not give advanced warning as to which presumably minor problem will combine with others to turn into a catastrophe. The Palin administration had wasted more than two years and $1 million on preliminaries without getting into the field to evaluate operations, or even making plans to do so.
Although the environmental community spearheaded public criticism of the project, negative comments also came from other quarters. A strong critic of the ADEC plan was a former Alyeska spill prevention and response manager. To its credit, ADEC sought an independent, professional evaluation of its proposed project. A peer review panel appointed by the National Research Council's Transportation Review Board (TRB) undertook this task, concluded that ADEC's risk assessment plan simply would not work and recommended that the state start over. The panel's report was issued in October 2009, one month before Palin would begin her barnstorming tour. She would be silently accompanied by exactly the kind of spills the risk assessment devised under her administration would have overlooked altogether.
The strange rash of oil Alaska oil spills that quietly accompanied Sarah Palin's book tour during the last six weeks of 2009 calls attention to the failure of the Alaska oil industry and the state oversight system to live up to their oft-repeated promises that they can develop Alaska petroleum resources safely. How could a tug on a routine patrol in Prince William Sound hit the same rocks that ripped holes in the tanks of the Exxon Valdez 20 years ago to unleash the worst spill in this nation's history? In the interior Alaska town of North Pole, 400 miles to the north, with groundwater providing drinking water for folks in close proximity to a refinery that experienced large oil spills more than two decades ago that released unidentified contaminants, why was the state caught flatfooted when drinking water samples recently began to show traces of a potentially toxic chemical compound the refinery has used? Another 400 miles north, on the continent's Arctic edge, how did the nation's largest oil fields suffer three unexplained spills in just four weeks in late 2009 under the management of BP, already on criminal probation after drawing a $20-million fine for performance failures in 2006 at Prudhoe Bay?
These questions about the recent rash of spills call for a closer look at the troubled state monitoring system, and more questions emerge: Why doesn't the state's main environmental unit station full-time monitors at the sprawling Prudhoe Bay complex at the northern edge of the continent? Why did the two programs that Palin proudly established as governor in response to BP's embarrassing North Slope performance failure in 2006 - programs that were supposed to identify the gaps in the state-federal regulatory system and the risks associated with petroleum operations - both fail to produce substantive results during her two-and-a-half years as governor? What role did these oversight failures play in the recent rash of spills that sullied Palin's brag that she has delivered environmentally responsible development? Despite the increasing risks associated with an aging oil production and delivery complex, has complacency set in once again to increase the chances of another major environmental disaster in Alaska?
Largely unnoticed by the throngs that gathered to greet Palin on her book tour, the series of spills in Alaska during the last six weeks of 2009 undermined Palin's attempt to portray herself as an effective environmental protector. These developments converge with a review of her administrative record to illuminate significant portions of the mess Palin left behind when she abandoned public office in mid-stream and took her show on the road. Palin's misleading and superficial brags concerning her environmental performance mask the reality Alaska revealed during her Lower-48 book tour: "Drill, Baby, Drill" really means "Spill, Baby, Spill." Beyond the competence of a rogue politician, a close look at Alaska's recent environmental record suggests that is there is little reason to believe the industry can safely explore for oil and develop whatever deposits may be discovered in the Arctic National Wildlife Refuge and beneath the Beaufort and Chukchi Seas of the Arctic Ocean.